- Original Article: Andy Serwer / Yahoo
Only a few months ago we were complaining there were too many TV shows to watch, and that it was impossible to keep up.
Now is the time to catch up.
The coronavirus has stopped the production of movies and TV shows cold. In a matter of weeks we’ve gone lickety-split from peak content to trough content, i.E., no new shows.
What does this shutdown mean for Disney, Netflix, YouTube, and HBO et al., and never mind the media-entertainment-complex, what about all of us couch-potatoing our lives away during the pandemic?
I put those questions to legendary media investor Mario Gabelli, and he suggested all this was going to engender some serious seismic change.
“You have a lot of stuff that was put in the pipeline,” Gabelli said with his usual rapid-fire sagacity. “But who has the library and content and how do they keep it fresh? And you will get some strange things, and there will be those that structurally change. Will movie studios look to go direct to the consumer and bypass the theaters? Those are the questions we ask.”
This wither-the-entertainment-world question is no small potatoes, sideshow matter. Hollywood (writ large) is one of America’s last great businesses. (Software being another.) The United States doesn’t make the most steel or the most ships or the most cars anymore, but we do make the most content. And not only do we make the most, we make the best. Our story-telling, narratives, visual motifs and production values are emulated around the world. And we’re not going to relinquish that leadership position anytime soon. (Yes, I know Hollywood makes a ton of trash. And yes I love foreign films too.)
It’s also the case that entertainment has become vastly more important in our lives. BC (Before Covid), you’d ask someone what they were watching when the conversation flagged. AC, it’s pretty much the third thing you want to know. As in: “Are you and your family OK? How’s work? What are you watching?”
Watching content has become completely core.
And so thanks to fortuitous timing, shows like “Tiger King,” the Michael Jordan docuseries “The Last Dance,” and Season 3 of “Ozark” are literally off the charts. Here are the numbers: Some 6.1 million watched the MJ doc, according to ESPN, a record for the network. Netflix’s “Ozark” tripled its viewership so far over Season 2 and according to Indiewire, is “projected…[to] have a viewership of 29 million within its first four weeks.” As for “Tiger King,” Netflix is saying 64 million households chose to watch Joe Exotic et al. (That’s a global number, but just for a point of reference there are 128 million households in the U.S.)
That’s an insane amount of eyeballs.
A man looks at a mural depicting Joseph Maldonado-Passage, also known as "Joe Exotic," in Dallas, Friday, April 10, 2020. The Netflix series "Tiger King," has become popular watching during the COVID-19 outbreak. Maldonado-Passage was convicted in an unsuccessful murder-for-hire plot. (AP Photo/LM Otero)And guess which company’s benefiting?
“The best positioned is Netflix,” says Deana Myers, research director at media & communications for S&P Global Intelligence. “They spend a lot on fresh content and have a vast library of acquisitions or older content. The company has so much in production and can hold out for the longest period. For another six months they could have significant fresh content.”
In case you missed it, Netflix reported beyond-boffo growth this week, adding 15.8 million new subscribers in the first quarter, more than double the expectation. The question now is how do CEO Reed Hastings and chief content officer Ted Sarandos proceed?
You can’t just flip a switch to make a show. These babies typically take many months to make, (especially since Netflix typically releases its shows in one fell swoop.) Take “Ozark” for instance. There was a 13-month gap between Season 1 and Season 2, and a 19-month gap between 2 and 3. Season 4 hasn't even been greenlit (though it almost certainly will), so we’re talking a release date of late 2021 or 2022 even.
Neflix gave details in its just released letter to shareholders: “...We’ve paused most of our productions across the world. No one knows how long it will be until we can safely restart physical production.”
But the release continued, “In Q2, there is only a modest impact on our new releases…we are working hard to complete the content we know our members want and we’re complementing this effort with additional licensed films and series.” And: “Since we have a large library with thousands of titles for viewing and very strong recommendations, our member satisfaction may be less impacted than our peers’ by a shortage of new content.”
If Netflix is in the catbird seat, relatively speaking, who’s not?
Myers has concerns about traditional TV. “Streaming services in general are in a better position than broadcast or cable networks, which rely on sports programming — that’s a tough position. [And they] don’t have vast [amounts of] new programming. There wasn’t a lot teed up right now.” BTW, Netflix never getting into sports looks pretty smart—or lucky—right now.
Adds Alan Wolk, co-founder and lead analyst at TV[R]EV, author of “Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry”: “If the economy goes really bad we think cord cutting will pick up tremendously. People will say I don’t have $50 to $100 to spend on stuff I hardly watch, versus pay $40 and have four services.”
Now let’s turn to some streaming upstarts, where the jury is out.
-Take Quibi. The new mobile-only streaming app launched on April 6 is off to a respectable enough start with 2.7 million downloads. “Quibi is building nicely,” chairman Jeffrey Katzenberg told me. “Especially given how crazy the environment is that we’re all living with. Quibi will not have a content delivery issue. We are fully supplied into November.” Myers though wonders if that will be enough.
-NBC’s Peacock, which did a limited rollout on April 15, goes full bore on July 15, but without the Olympics which was to give it a boost. That might end up being a blessing though. “About a year from now, we may get a content drought,” says Wolk. “That could work to Peacock’s advantage if the Olympics go on, and people would be tuning into that.”
-What about Disney+? “They’re in a tougher position. They have a lot in production,” says Myers. “But they’re not going to be able to finish a lot and air it.” On the other hand, Myers says, Disney will benefit from its strong line-up of kids’ programming, as Myers notes, “children will watch the same video 800 times.”
-Apple TV+? “The service that might get hurt I think is Apple, in terms of nobody will subscribe,” says Wolk. “They don’t have a deep library.” Wolk worries value-conscious consumers will balk.
‘Creative people are, well, going to be creative’As for TV and movie producers who actually create the content, work has become a risky business. “We backed up all of our footage on drives and did a massive move of equipment to the editors’ and assistants’ homes,” says Daphne Pinkerson, producer at Blowback Productions, which has made a number of award-winning documentaries for HBO. “We had two films in The Tribeca Film Festival so it was pretty crushing when it was canceled. One was our Quibi series, “I Promise,” on the new school started by LeBron James and the other was an HBO film on Stockton, Calif.’s millennial mayor, Michael Tubbs.
“If we are not able to start new films soon because of social distancing, we are not going to survive,” she says. “Either that, or all our characters will have masks on. Maybe we can create transparent masks so we can see their lips move!”
Actually there are a few forms of media-making that continue unabated. If you’re a kid—or a fan of that, to my mind, awkward category of grown-up animation (“The Simpsons,” “South Park,” “Family Guy,” etc.) —good news, your game is still on. That’s not lost on Netflix which noted in its shareholder letter that “within two weeks of the shelter-in-place orders coming into effect in Los Angeles, most of our animation production team was back up and running, working from home.” Wolk thinks you may see even more animation coming out of Netflix. Disney too.
The Simpsons: (l-r) Bart, Lisa, Maggie, Marge and Homer with dog, "Santa's Little Helper", photoAnother category going full tilt is audio books. “Because we’re a virtual, digital platform we're in good shape,” Audible founder and executive chairman Don Katz told Yahoo Finance. “TV shows are being canceled, and movies and Broadway are closed down. We have a network of individual studios and actors and a lot of famous people who know how to do this at home. We're trying to put a lot of people to work.”
Even with most of the entertainment business closed, creative people are, well, going to be creative. “People will start rolling out things that can be produced,” says Wolk. “Hollywood is putting minds together, maybe people will double or triple down on animated series and documentaries, things that don’t require a cast. We may even see, I don't know how feasible it is, innovations with computer generated actors.” And who knows, something like John Krasinski’s at home show, “Some Good News” which gets some 10 million views, might have staying power.
Remember too, what Gabelli alluded to. You are likely going to see mergers and deals. Some big ones probably. (Think at the Apple, Disney, Netflix level.)
But here’s the rub for all of you at home (ha.) Given the crazy number of TV shows and movies made over the past decade, there is no way anyone is going to run out of things to watch. Good things too.
Netflix alone released more than one new show or movie a day (270) in 2019, according to an analysis by Variety, more than the entire industry created in 2005. Bet you haven’t seen 10% of it. (BTW, ‘South Park” parodied all that content creation in an amusing send up: “Netflix. You’re greenlit. Whom am I speaking with?” SNL did a similar bit.)
Look at this as a once-in-a-lifetime opportunity to catch up, an opportunity we hope to never see again. So go ahead and run through all those best streaming show lists. (I’ve seen only five on this one.) There’re a million shows out there. Seen “Giri/Haji?” Or “Stisel?” Or “Babylon Berlin?” Good stuff there.
Sometime in 2021 you may have had your fill and by then, with any luck, we will be back to some kind of normal. And soon enough, new shows will be on the way!
This article was featured in a Saturday edition of the Morning Brief on April 25, 2020. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.M. ET. Subscribe
Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter: @serwer.