Warner Bros. Discovery said this week it’s sacking 100 TV ad salespeople, Paramount Global acknowledged it may stop offering Showtime as a standalone streaming service, and Netflix, an industry gravy train for the last decade, announced yet-another round of layoffs.
A multiyear boom in film and TV production, driven by media companies racing to sign up subscribers for their new streaming services, has come to a painful halt, giving way to firings, introspection and hand-wringing. While much of the country only worries about a recession, major media companies are cutting jobs or consolidating. Their stock prices have collapsed.
“The very foundation that the streaming business sits on has been devolving on sand,” Walt Disney Co. Chief Executive Officer Bob Chapek said in a recent interview. “It’s all been shifting.”
Netflix, which shocked the industry and Wall Street earlier this year with its first subscriber losses in a decade, has let go hundreds employees and vacated office space. Warner Bros., which completed its merger with Discovery in April, has been in cost-cutting mode, with CEO David Zaslav working to deliver a promised $3 billion in savings from the deal.
Early on, Chapek said, he targeted profitability in 2024 for his Disney+ streaming service because he knew investors would tire of ongoing losses. The company reduced its forecast for content spending this year by about 10 per cent. Chapek said the current number is “steady state.”
Still, even experienced producers are finding it hard to get projects going at studios, unless they’re based on familiar material.
“Nobody wants to do anything other than sequels,” said Bill Mechanic, a former head of Fox Filmed Entertainment.
“There is a general sense of uncertainty of when things will pick back up,” said Sheenie Ambardar, a Los Angeles psychiatrist with many entertainment industry clients.
Under Zaslav, Warner Bros. will no longer approve movies for its HBO Max streaming service budgeted at more than $30 million to $40 million, agents and producers are being told. That’s half what it was before. The company has stopped ordering reality shows or live-action shows for kids on HBO Max.
The Discovery+ service could be folded into HBO Max and supply some of those programmes. Executives at other studios are canceling projects even with stars attached or putting them on the back burner.
They’re also regularly asking for 20 per cent reductions in budgets for series, according to talent agents Bloomberg News spoke with.
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