The entertainment industry is going through an unprecedented era of transition, with new-school executives who find hard to deal with the daily innovations. But exceptions are starting to emerge in the form of executives who are embracing the past.
The entertainment industry is going through a period of transition, from a well-oiled business model to the unknown. “Transition” is also code for “no one is making money” and “no one knows what to do.” The streamers are all losing money (with some AVoD exceptions); broadcast stations no longer have a “license to print money;” producers are making money, but lost back-end benefits; distribution companies are not making money; movie theaters are closing; trade shows are losing steam; and what is left of the trade press is barely surviving.
This is the picture in Y2.2K (to use the modern term for the year 2022), but let’s digress from this sad state of affairs for some trivia. The expression “license to print money” was often attributed to TV/film producer Lew Grade, who was said to have uttered this during the early years of television in the U.K., but it was most likely borrowed from a 1943 article about baseball in the sports section of Montreal’s Gazette. In England, the first use of the phrase is found in a July 8, 1958 edition of Manchester’s Guardian.
Now back to the “transitional” state of the industry. One of the problems is that the current management was formed and trained during the “years of plenty,” when the sector was making lots of money, and are therefore unaccustomed to the current uncertainties.
Over the years, entertainment — television in particular — went through several stages: from the “Golden Age” of the 1950s (in terms of popularity and innovative programming), to the “Event Television” of the 1960s (with the Vietnam War, the assassinations of JFK and Martin Luther King Jr., the Moon landing), and the “Riches of Television” of the 1970s-1980s, when the U.S. studios took notice of the large amount of money the TV networks were making with their programs, and the TV networks realized the golden pot the studios were sitting on because of syndication. Then, in the 1990s, the golden pot grew even larger with the advent of cable television, premium television, and home video. Those were the so-called “Years of the 500 channels.”
Entertainment reached its peak in the 2000s with the advent of digital television, when there were six main windows and 80 rights to manage. Executives became experts at slicing content (as programs are now referred to) to extract even more money, and the looming turmoil couldn’t be foreseen.
Then, over a period of just a few short years, the number of windows dropped down to two, just like during the 1980s.
Looking back before the “years of plenty,” veterans recall some “bumpy” periods, like when the TV networks weren’t making money, but they say that what’s going on today is “unprecedented.”
Some media executives have called 2022 a “transitional year,” indicating that this period of uncertainty will soon end, but my 2¢ are that, thus far, only David Zaslav has diverged from the “streaming first approach.” Recently, a headline on CNBC’s website stated: “Warner Bros. Discovery CEO David Zaslav embraces the past as he plans his company’s future.”
(By Dom Serafini)
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