Workers feel the pain of Hollywood restructuring after the streaming wars

Contraction. Withdrawal. Market correction.

However you want to describe what's happening in the Hollywood economy right now, there is a potentially brutal long-term consequence of the current entertainment industry recession (to call it what it is).

What if a generation of artists, workers, and artisans decided that a career in film and television simply wasn't as viable a path to a middle-class lifestyle as it used to be? formerly ?

There have been hints of this kind of sea change in the industry in recent months, as production continues to painfully and slowly recover from writers' and actors' strikes and as media and entertainment companies take notice. considers the consequences of overspending during the streaming wars. .

My colleagues Don Lee and Samantha Masunaga clearly identified the dizzying array of multifaceted issues at play in an in-depth article examining the state of employment in the entertainment sector.

They compared Hollywood to other industries, including manufacturing and agriculture, which have experienced their own versions of disruption from technology, changing consumer preferences and globalization. The likely outcome, they write, is a possible return to prosperity and prosperous times for some, increasingly tense times for others.

There's something of an existential question mark over large swathes of Hollywood's traditional economy, Stuart Ford, chief executive of Los Angeles-based production company and financier AGC Studios, told the Times.

The numbers are grim.

Employment in Los Angeles County's motion picture and sound recording industries remained stubbornly low at around 100,000 through April, down about 20% from pre-pandemic levels . That doesn't account for tens of thousands more people in Southern California who work for Hollywood as freelancers and contractors but aren't counted in government payroll data.

Aside from the early months of 2020 and last summer's strikes, employment is at its lowest level in more than 30 years, according to the U.S. Bureau of Labor Statistics. It's not just Los Angeles that has seen signs of trouble. Global film and TV production in the first quarter of 2024 was 7% behind the same period in 2023, according to ProdPro.

We talked about why studios are feeling this pain right now. The rush to create seemingly endless content to feed the insatiable streaming beast was unsustainable for traditional media companies, who set up their own direct-to-consumer services and thus cannibalized box office and television revenue. already precarious television networks.

As a result, they reduced costs. The annual number of scripted series for 2023 was 516, up from 600 in the Peak TV year of 2022, according to an FX Networks study. This year, the domestic box office is only three-quarters of what it was in 2023, which, despite Barbenheimer's boom, had not even recovered from the COVID-19 pandemic.

Additionally, generative artificial intelligence technology is poised to become an increasingly disruptive force, with studio heads including Sony Pictures' Tony Vinciquerra openly saying the innovations will help them. save money by streamlining production. One of the major studios, Paramount, is about to be sold.

All this uncertainty appears to be having a psychological effect on industry executives and workers, with growing concerns mounting as Hollywood crew members' unions negotiate with studios for better wages and salaries.

On Monday, Teamsters Local 399 and the rest of Hollywood Basic Crafts, which collectively represent 7,600 members, including animal handlers, casting directors, drivers, stage managers, mechanics, cement masons and plumbers, have launched their major contract negotiations with the Alliance of Motion Picture. and television producers.

In addition to key pay issues, Teamsters are concerned about AI and autonomous vehicles. The International Alliance of Theatrical Stage Employees, or IATSE, the largest union representing Hollywood crew members, is continuing its own contract negotiations with major studios.

When I got into this business 22 years ago, you could be a location manager and your partner could stay at home. It was a good job, location manager Jason McCauley told my colleague Christi Carras. These days I can barely pay our bills working 60 hours a week or more.

According to Lindsay Dougherty, chief negotiator for Teamsters Local 399, the wage increases are even more necessary than in previous contract negotiations, after years of financial difficulties.

The Hollywood ecosystem will eventually emerge from this period of financial difficulty, even though it is changed from what it was and likely smaller in many ways. Businesses and industries can reorganize. As we have already seen, this will lead to significant displacement of workers.

Stuff we wrote

Skydance speaks for Paramount near the finish line, but the Redstone family's decision looms. Shari Redstone and her children must decide whether to accept a deal that provides $1.7 billion to their family members.

Apple announces agreement with OpenAI. Will this change things? The Cupertino, Calif.-based tech giant revealed its highly anticipated new AI-powered tools, known as Apple Intelligence, including a partnership with OpenAI that lets Siri surface responses from ChatGPT.

The Hollywood Teamsters show their pride ahead of contract negotiations. Teamsters Local 399, the union representing animal handlers, drivers, mechanics and other Hollywood crew members, is set to begin negotiations with the studios.

Will Netflix get into the TV news business? Here are the pros and cons. Netflix's embrace of live sports and commercials makes it more like traditional streaming and cable TV. Does adding an information division make sense?

An NFL trial begins. How This Could Affect the Future of Baseball Streaming. Times columnist Bill Shaikin writes that MLB should pay close attention to a lawsuit in which the NFL is the lead defendant against allegations that its Sunday Ticket package violates antitrust law.

ICYMI:

Number of the week: $56 million

Sony's Bad Boys: Ride or Die, with its $56 million domestic box office opening, has become the latest proof that a movie can draw a crowd to the theater as long as it has an audience that wants to see it.

This has never really been in doubt, despite the fact that the film industry has been in serious trouble lately, largely due to a lack of compelling content and real studio hiccups (hello Furiosa and The Fall Guy). But the strong start of the R-rated buddy-cop action comedy, with a reported production budget of $100 million, lends further support to the thesis.

Will Smith is still a movie star, despite the fallout from his onstage slap against Chris Rock at the Oscars in 2022. Smith's chemistry with longtime co-star Martin Lawrence continues to be a winning formula in the produced series by Jerry Bruckheimer. Once again, a film with popular black protagonists has exceeded Hollywood's expectations. Who would have believed it ? As my colleague Greg Braxton has convincingly argued, black and brown audiences could help save the entertainment industry if they allow it.

Bad Boys' fourth installment was marketed smartly, with major spots airing during the NBA Finals and showcasing the fun of summer moviegoing. The film grossed $48.6 million internationally, for a global debut of $105 million. It remains a legitimate franchise, almost three decades after the Michael Bay-directed original. Ride or Dies' predecessor Bad Boys for Life debuted with $62 million domestically in January 2020 and finished with $426.5 million worldwide on a production budget of $90 million. of dollars.

Walt Disney Co. has a chance to continue its momentum this weekend with Inside Out 2, a high-stakes release that could help Pixar break out of its recent funk. The Garfield Movie, another Sony effort, did good business with $192.7 million worldwide, showing that there is strong demand for animated family films, but it will be on its fourth weekend, so it won't pose any competitive threat to Pixar's sequel.

Box office optimists should hold on to their popcorn, however. Overall, revenue so far this year is down 26% from 2023, according to Comscore. Consumer appetite for theatrical releases is still strong for the right type of film, but the supply just isn't where it needs to be for the industry to be healthy. The second quarter is particularly weak, with Roth MKM analyst Eric Handler forecasting a 35% decline from a year ago.

The problem is the lack of depth. Besides the new Bad Boys, the only other film that did significant business over the past weekend was Garfield, which benefited from the near-total absence of direct competition. During the comparable weekend of 2023, there was a new Transformers movie, as well as some solid holdovers, Spider-Man: Across the Spider-Verse and The Little Mermaid. More, bigger and better films mean more cinema.

Film shoots

Speaking of low production numbers, here's FilmLA's tally from last week, compared to previous years.

Finally …

Who are the people shaping life in Los Angeles? Meet LA Influential, the Times' ambitious new project exploring the different pathways of power and influence that intersect in our dynamic city.

There are plenty of Hollywood A-listers on the list (including creators like Ava DuVernay and Eva Longoria, as well as connectors like Bryan Lourd and Fran Drescher) and more to come as we roll it out with additional stories published on Sundays. Don't just look for your own name, Wide Shot readers.

Finally, Ron Howard talks to The Times about the life and legacy of Jim Henson.