Excellent analysis form Hollywood veteran director and writer John Nolte.
Experts have been predicting the demise of Hollywood for as long as Hollywood’s been around. Not me.
People love stories. They love movies and TV, and that will never change. But the entertainment industry is in serious trouble today, primarily because it has painted itself into several corners. There will always be a Hollywood, but what the industry looks like in five or ten years could be very different from what we see today.
Here’s why Hollywood’s in real trouble…
1. The Death of Cable/Satellite/Linear TV
“Cable/Satellite/Linear TV” is non-streaming TV, where you pay for a package of channels every month—ESPN, CNN, Turner Classic Movies, Fox News, etc.
For the sake of simplicity, I’ll use the term “pay TV.”
Although I’ve been writing about the imminent death of pay TV for more than a decade, no one else really has. There’s a reason why this consequential story has been deliberately underplayed: pay TV is the one-legged stool propping up the entertainment industry.
The importance of pay TV is rarely discussed in the media because the entertainment industry wholly owns the entertainment media. If the media covered this issue with the seriousness it deserves, stock prices would fall. Entertainment companies are judged solely by their stock prices, and the entertainment media will never risk damaging their patrons.
Entertainment companies made billions from pay TV for decades, year in and year out. But those dollars were not earned on merit. If you’re wondering why you pay $175 a month for a bunch of channels you never watch that still serve up 20 minutes of ads per hour, here’s why: a major chunk of your $175 goes to entertainment companies. So let me repeat my main point: none of that money is based on merit.
Merit means Hollywood makes money based on what people actually watch. Pay TV successfully circumvented merit with a rigged system where you pay for dozens of channels you never watch.
Want proof? Look here… That is last week’s list of 118 pay TV channels. The “P2+” column reveals the average number of total viewers in thousands. As you can see, out of 118 channels, only two(!) average more than a million viewers. Only 13 average more than 500,000. Only 33 average more than 250,000. Question: how many of these 118 networks could survive on merit—advertising revenue based on ratings? Maybe five? Nevertheless, Hollywood still makes a ton of money from over a hundred channels that fewer than a million people watch because pay TV customers pay for those channels.
How sweet is that?
Americans now want to stream, and the problem with streaming is that, unlike pay TV…
2. Streaming Services Are Merit-Based
Every entertainment corporation has launched a streaming service hoping the streaming boom will automatically replace those pay TV billions. Oops. Other than Netflix, those streaming services are losing billions. Disney alone has lost upwards of $10 billion on Disney+.
Two years ago … [Disney’s] stock price was a buoyant $176. On Friday, the stock closed at $87.
Over the same period, Shari Redstone’s Paramount Global has plummeted from $40 on July 21, 2021 to $15.50, and shares in Jim Dolan’s AMC Networks have slid from $52 to $13. Indeed, even factoring in the Netflix correction of last year, entertainment stocks are still down an additional 30-50 percent.
Without the financial affirmative action that is pay TV, these companies must survive on merit (e.g., people pay directly for the product), and these companies cannot survive—at least not at the same level—on merit because…
3. Pay TV Made Hollywood Lazy and Mean
When merit had nothing to do with Hollywood’s massive profits, three things happened to the industry: 1) it got lazy, 2) cocky, and 3) politically divisive.
Why put effort into creating great content if you make the same amount of money for no effort?
One of the primary reasons Hollywood content is so awful and repetitive (Fast & Furious 10, Indiana Jones 5, and all those Law & Order, CSI, and NCIS franchises that never die) is because “awful and repetitive” is good enough when 120 million households pay for all that “awful and repetitive” content (they do not watch) through their pay-TV bill.
There’s no reason to offer anything new or good when three million viewers are enough to describe your TV show (no one watches) as a hit.
Look at these viewership numbers from earlier this month.
Now look at these numbers.
Pay TV killed merit.
When all that unearned money flowed in, Hollywood also got cocky and arrogant. This is why Hollywood had no problem insulting, demeaning, and alienating half the country. When merit has nothing to do with profits, it is perfectly safe to make your content left-wing, gay, anti-Christian, and culturally bigoted. Why not? We rubes are so addicted to Fox News and live sports we’ll still pay for networks like CNN that propagandize for our destruction.
But now that streaming means profits can only be made through merit, Hollywood has painted itself into one corner where it has lost half the country as a potential customer base. The second corner is an industry without the talent to create quality content.
Look at this… Somewhere around 350 TV shows debuted just last year, and it’s almost all garbage no one watches—quantity over quality to fill the schedules of cable networks no one watches and streaming services that lose billions. Without pay TV’s affirmative action billions, that is not sustainable.
4. The Woke Prison
With billions and billions of unearned dollars pouring in from the old pay-TV model, Hollywood stopped worrying about quality, stopped worrying about serving Middle America, and felt secure turning their companies over to the Woke Nazis. Disney is so politicized it has openly embraced grooming and sexualized its children’s content.
EDITORS NOTE: This Geller Report is republished with permission. ©All rights reserved.