Hollywood Isn’t Likely to Merge Its Way Out of Trouble

Plus: a bloody assignment!

Federal Trade Commission Chair Lina Khan testifies before the House Judiciary Committee (photo by Chip Somodevilla/Getty Images)

Over at The Ankler, Janice Min and Richard Rushfield talked to Federal Trade Commission Chair Lina Khan about antitrust measures as they relate to Hollywood. It’s a pretty interesting interview, and I recommend checking it out. There are two key takeaways, neither of which is terribly surprising to anyone who has been paying attention to either the FTC or Hollywood writ large.

The first is that it seems very likely that the FTC would be deeply skeptical of any effort by Hollywood to consolidate further:

I think for us as the FTC, what's really notable is just how many analogs and parallels there are between what's happening in this industry and what we see across all sorts of other industries where again, we've seen consolidation, vertical integration, and the rise of dominant middlemen, intermediaries and gatekeepers that sometimes are not always serving the best interests of the customers or the producers that they're connecting.

Whether or not the FTC is able to block Hollywood powers from merging is an open question; the commission recently failed to block the merger of Activision and Microsoft, though that decision is under appeal. But it’s something worth considering while those in the industry idly speculate about the odds of Apple buying Disney or making some similar move.*

The second is that the FTC appears—in my humble opinion, rightly—to be concerned that the influx of tech companies and the move to streaming have destroyed signals of success not only to consumers but to the studios and producers and writers and actors themselves. Here’s Khan again:

I think the other thing that we've heard and seen is that the advent of streaming seems to have broken key signals in the market where before you used to have this feedback loop between publicly accountable metrics of what content was actually doing well and that then led to who was getting to be paid on an ongoing basis, be it through residuals or other things. But as you've seen firms make that data unavailable, I think we are seeing complaints about that feedback loop being broken.

I think about this a lot because it gets to a real problem with the entire streaming phenomenon. In theory, good shows will lead to more subscriptions for a service and the success of those shows means that the shows will be renewed and emulated: success is rewarded. In practice, it doesn’t really work that way outside of a few monster hits like Stranger Things. And that’s because the business of television used to be set up in a way that rewarded multiple groups in multiple ways: TV networks sold ads on successful shows; the networks ordered shows from studios; the studios paid producers to make the shows; the studios were then rewarded when the shows went to syndication; etc.

But a Netflix original only goes to Netflix, where some people watch it, and if enough people watch it and it’s not too expensive, maybe it gets a second season, and we don’t really know how many people watched or how many finished or which metric Netflix values most or how the show compared to other specific titles in the specific way that Netflix measures success, specifically. The only goal is to grow Netflix; individual successes don’t really matter that much. And this goes for most of the streaming networks to some degree. We have a bunch of black boxes, which makes everyone’s job harder. And those black boxes, importantly, are all getting more expensive for consumers even as quality at best stagnates, and at worst seems to be in decline.

Cards on the table: I am, on principle, always hesitant to suggest government interference in how businesses choose to operate, and that applies here just as much as anywhere else. I’m not sure what, precisely, the FTC would even be able to do, legally, to force greater transparency. But something’s got to change before the entire system collapses in on itself.

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I was kind of hesitant to do this Friday’s Across the Movie Aisle on the tussle over the political meaning of Barbie—I just find these sorts of arguments so tiring and kind of beside the point—but I think it’s a pretty good episode, all told. Hopefully, you enjoy it as well.

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Links!

This week I reviewed Strays, which is funny enough.

Sounds like some movement is being made on the WGA strike. Fingers crossed this ends soon!

Enjoyed talking to Roy Price, formerly of Amazon Video and Amazon Studios, last week about what it would take to make a new movie studio in this day and age. Interestingly, comedies like Strays feel like the sort of pictures that have an opening in the marketplace.

It is very funny to me that when James Cameron made a pilgrimage to Stanley Kubrick’s home, Kubrick sat Cameron down, pulled out a print of True Lies, and started going shot-by-shot through the film to see how Cameron had pulled off certain sequences. I mean, it makes sense, since True Lies is great and Stanley Kubrick had great taste. Still. Funny!

Speaking of great directors with great taste, Christopher Nolan loves Talladega Nights.

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Assigned Viewing: 30 Days of Night (VOD, Blu-ray)

One of the great things about Oppenheimer is that it’s getting folks to take a second look at Josh Hartnett, who has a fine supporting performance. But I actually threw this disc in the other day because I was so disappointed by The Last Voyage of the Demeter. While 30 Days of Night—which chronicles the invasion of the town of Barrow, Alaska, by a pack of vampires during a month-long stretch where the sun never comes up—is undeniably a little goofy in places, it is much better paced and simply much more entertaining than the drab, dragging Demeter.

(Sorry, it’s not available for free on streaming, but the Blu-ray is only $6 from Amazon and is one of the best-looking discs I’ve ever seen: Despite coming out 15 years ago, it looked roughly as good as most of the 4K discs I’ve seen when upscaled through my 4K Blu-ray player onto my OLED TV.)

*For the record, I’ve always been deeply skeptical that Apple has any desire to purchase Disney even if they can afford it. That said, I could see Apple buying ESPN—which Bob Iger seems ready to spin off from Disney—and integrating it into Apple TV+ as a continuation of that streamer’s effort to get into sports. I’d be curious to see if this sort of merger would pass muster with today’s FTC.