BOOM TO BUST

It’s the pictures that got small.

Most consumers and industry insiders would agree that the film and TV industry is in a severe economic slump. To explain how it got there, academic media experts Banks and Fortmueller go back to 2013, when streaming services began producing their own programming. Before then, Hollywood was a monolithic industry, able to attract cash-rich investors with the promise of a share of the gross profits and proximity to the glamorous world of show business while restricting access to creative control. But when streaming services morphed into studios, the financial model changed. Suddenly Wall Street bankers and private equity firms became involved. They demanded higher profit margins and started leveraging intellectual property, licensing deals, and additional revenue streams. Tech companies from Silicon Valley joined in, bringing with them sophisticated data-driven methodologies for monitoring and measuring success, which was used to shape the creative process. “Amazon, Apple, and Netflix are all tech companies at their core, but they also adopt the logic of consulting firms and use data to optimize their business practices, create efficiencies, and reimagine workflows that privilege their models of innovation and cost saving,” the authors write. One example they cite is the algorithm used in the Netflix Recommendation System, which makes content suggestions to viewers “within a narrow range of choices and often obscure the range of available options, thus eliminating viewer agency.” But that’s just the first of many woes inflicted on the industry in the past 12 years. Banks and Fortmueller detail a series of events that occurred between then and now that created a perfect storm for destabilizing the industry, including the unsustainable rise of Peak TV, the Covid-19 pandemic, the #MeToo movement, and the 2023 back-to-back labor strikes by Hollywood writers and actors.

A dry but deeply researched, clearly delineated primer on how the film and TV industry dug itself into a financial hole.