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Hollywood’s CEOs are suffering. Not primarily from labor disputes or industry disruption or public-relations issues, but from vincible ignorance, which seems to

Hollywood’s CEOs are suffering. Not primarily from labor disputes or industry disruption or public-relations issues, but from vincible ignorance, which seems to be endemic in C-suites of all industries. Under pressure to deliver to Wall Street, too many CEOs have lost the plot of their own movie. They are not running companies to profitably deliver a good product, such as a book or a cup of coffee or, in this case, a movie or TV show. They are running companies to deliver good profit. The quality of their product has ceased to matter. I blame the general stagnation of our current age and its associated rent seeking on the MBA. MBAs have spent decades teaching and preaching that what the business does doesn't matter. All that matters is financial alchemy. "Forget building a better mouse trap! Take on venture debt, buy out all the mouse trap makers in your area, make their products worse (or keep them the same and sell them under a different brand name - whatever doesn't matter anyway) and jack up the prices. What are they gonna do? Go to someone else?" "Content business? What content business? Those old Hollywood studio executives were hacks! They still cared just a tiny bit (a vanishingly small bit) about making a 'great movie.' What phooey! Buy up licenses, sell them for as cheap as possible for a while and then flood the zone with generic content. They won't know the difference! It's all the same!" The reality? People do care. They might like slop, but they like well produced slop. Not just any generic, store-brand slop. No matter what the artistic merit of Friends and The Office is; hundreds of thousands to millions of people subscribed to Netflix to watch them over and over again. When those properties were gone, they slowly began to ebb away from the platform. Starting in 2019, when Netflix first lost the IP, "Netflix suffers first major loss of US subscribers, blames price hikes," https://www.theverge.com/2019/7/17/20694711/netflix-friends-the-office-earnings-q2-2019-subscribers-disney-hbo-apple-amazon-stock-drop https://www.theverge.com/2019/7/17/20694711/netflix-friends-... and continuing (with some ups) into 2023, "Netflix loses almost a million subscribers," https://www.bbc.com/news/business-62226912 https://www.bbc.com/news/business-62226912 Their response to their decline wasn't to create better series or a better experience, but to crack down on sharing passwords. It made their subscriber numbers net positive for one or two quarters (so far), but you don't have to Fermi to predict how this will end. https://www.theverge.com/2023/6/9/23755156/netflix-subscriber-increase-paid-password-sharing-crackdown https://www.theverge.com/2023/6/9/23755156/netflix-subscribe...

polygamous_bat 3y ago
Beautifully written: my personal feeling is that the decline in the quality of everything around our lives are strongly correlated with the increased focus on value capturing rather than value creation. It's a weird prisoner's dilemma, since value creators will always be bled dry by value capturers, but if value creators stop existing, value capturers have no value to capture anymore. Then they start flinging crap at the wall hoping something sticks, because in their intense drive to capture value they ignored to learn how to distinguish truly valuable content.
ggm 3y ago
I fundamentally agree with this. When Netflix demonstrated there was value in the IPR, the IPR holders took it back to get that value themselves. Netflix had shown it could make amazingly good content, but at higher risk and cost. It's got scared of the risk side. Too many flops? cancel after 2 episodes, never mind a season. So what if "fans" are ballistically angry and unfinished story arcs, they don't pay our KPI! But, we also have short memory for the french metric kilometres of sheer dreck put out. I mean, "b movie" exists as a term because of it. hence D list celebrities exist because b list movies exist (kinda-sorta) "Barton Fink" tells the story well: get amazing talent, smash the joy out of their life by applying the old school hollywood machine. Disney has got scared too. It doesn't know if it will ruin the longterm income from Star Wars, by making more star wars. Its milked its goldmine of cartoons for 5 or more decades, and has a long term view (hence the remarkably bizarre disney thing about "putting it back in the vault" for a 5-10 year window so that a whole new cohort of consumers can be made to buy it)
- saghm 3y ago
  What always confused me about such a large number of networks/IP owners deciding to open their own streaming service was that even if every single streaming service was full of amazing content, there never was any indication that most people would want to subscribe to all of them. There's a big market for people willing to pay $15/month to get a ton of stuff to stream, but there's a lot fewer people willing to pay $75/month for five different streaming services; it doesn't matter if each of them had 20% of the "good" content from before if no one wants to pay 5x what they're already paying. Some of the wave of services coming out after Netflix's boom made sense; Disney probably has the largest set of IP of any company in the world for a streaming service, HBO already was a premium service that had demonstrated they were able to produce content people were willing to pay for but...is anyone really shocked that CNN didn't have enough draw to maintain a profitable streaming service? I suspected that the proliferation of streaming service wouldn't last forever, and that eventually there would be a consolidation into a much smaller number of major players, but I didn't think it would take so long that the people in charge would end up grinding the entire industry to a halt because they'd take so long to finally figure out that it wasn't sustainable.

polygamous_bat 3y ago

Beautifully written: my personal feeling is that the decline in the quality of everything around our lives are strongly correlated with the increased focus on value capturing rather than value creation. It's a weird prisoner's dilemma, since value creators will always be bled dry by value capturers, but if value creators stop existing, value capturers have no value to capture anymore. Then they start flinging crap at the wall hoping something sticks, because in their intense drive to capture value they ignored to learn how to distinguish truly valuable content.

ggm 3y ago

I fundamentally agree with this. When Netflix demonstrated there was value in the IPR, the IPR holders took it back to get that value themselves. Netflix had shown it could make amazingly good content, but at higher risk and cost. It's got scared of the risk side. Too many flops? cancel after 2 episodes, never mind a season. So what if "fans" are ballistically angry and unfinished story arcs, they don't pay our KPI! But, we also have short memory for the french metric kilometres of sheer dreck put out. I mean, "b movie" exists as a term because of it. hence D list celebrities exist because b list movies exist (kinda-sorta) "Barton Fink" tells the story well: get amazing talent, smash the joy out of their life by applying the old school hollywood machine. Disney has got scared too. It doesn't know if it will ruin the longterm income from Star Wars, by making more star wars. Its milked its goldmine of cartoons for 5 or more decades, and has a long term view (hence the remarkably bizarre disney thing about "putting it back in the vault" for a 5-10 year window so that a whole new cohort of consumers can be made to buy it)

saghm 3y ago
What always confused me about such a large number of networks/IP owners deciding to open their own streaming service was that even if every single streaming service was full of amazing content, there never was any indication that most people would want to subscribe to all of them. There's a big market for people willing to pay $15/month to get a ton of stuff to stream, but there's a lot fewer people willing to pay $75/month for five different streaming services; it doesn't matter if each of them had 20% of the "good" content from before if no one wants to pay 5x what they're already paying. Some of the wave of services coming out after Netflix's boom made sense; Disney probably has the largest set of IP of any company in the world for a streaming service, HBO already was a premium service that had demonstrated they were able to produce content people were willing to pay for but...is anyone really shocked that CNN didn't have enough draw to maintain a profitable streaming service? I suspected that the proliferation of streaming service wouldn't last forever, and that eventually there would be a consolidation into a much smaller number of major players, but I didn't think it would take so long that the people in charge would end up grinding the entire industry to a halt because they'd take so long to finally figure out that it wasn't sustainable.