The Glitz and Gritter of Hollywood Fading

I co-wrote a book published in 2003 in which I suggested that traditional movie stars – overpaid leading men and women consistently playing charismatic roles – were about to become remnants of a bygone era. My premise was that hyper-accelerating change was moving younger consumers to search for the “new cool next”… knowing that trends passed quickly by an increasingly transitory present. Stars are; they are not “next.” The market for acting talent seemed to follow that prescription, more rapidly than even I could imagine.

Today, that notion of a movie star – a leading actor whose mere presence on the marquee would be enough to open a film – is gone. Dead. Even the biggest names have been associated with failures that would never have happened 25 years ago. And so in recent times, the hot actors became “character actors” – where they could create a new persona, and those who fulfilled traditional romantic leads rapidly fell into obsolescence. The real new film stars became hot underlying properties (best-selling books at the top of the list) with a very short list of few iconic directors. Actors… not enough to generate a greenlight anymore.

The biz also morphed into the world of “celebrities,” where outrageous and over-the-top (the old meaning of that term) personalities began to inhabit the fishbowl of reality television and “entertainment news” programming searching for a voyeuristic audience. They could be outspoken musical stars, lifestyle celebrities, dysfunctional but entertaining people with too much money… whatever. They made money, but they became merchandizing machines and fashion setters. Talent? Creativity? Not so much. They were content fodder for a new era.

What seemed to have changed in a digital era was just tsunami after tsunami of too much, too often, a cluttered world of way too much choice. Content competing with content as young faces disappeared into their smart phones. In big cities, owning a car was giving way to Uber and Lyft, but the latest and greatest smart phone became basic apparel. 5G capacity and driverless cars threaten to bury young heads even more deeply into those addictive small-screen devices.

What consumers might not see in all of this is the background of the business itself. The macro-trend is the disappearance of smaller content suppliers, the dominance of the biggest entities consumed within a roiling trend of mergers, acquisitions, roll-ups, content aggregation, staggering marketing costs to rise above the clutter, and what FastCompany.com (October 25^th) calls The Death of Hollywood’s Middle Class.

The value of individual pieces of content, with rare mega-hit exceptions, is so fractured (there were 487 scripted television series last year!) and spread out that even the best writers and producers are being marginalized. They are watching profits rise in companies where masses of content are aggregated but values drop for individual shows, often comprised of fewer episodes where even the most successful programming is reaching an audience size that would have resulted in instant cancellation 25 years ago.

The indie film business, with some very minor exceptions in genres like horror, is pretty much over. It has been consumed by heavy marketing costs and the difficulty of competing with escapist, high production value fare with budgets well-north of $150 million with parallel global marketing costs. However, the big changes began well before the digital era.

Prior to 1993, the big four broadcast networks were proscribed from owning the dramatic shows they aired (the FCC’s so-called Fin-Syn Rule, where aftermarket rerun rights were not controlled by the networks). When the FCC determined that the cable universe had introduced enough competitive availability that the rule was no longer necessary, networks of every kind began an accelerated process of insisting that they own and control as much of the aftermarket and parallel foreign market as they could. They wanted and increasing got complete worldwide ownership. The smaller and mid-level content suppliers were simply squeezed out of existence, a few willing to accept a vastly less lucrative role as “producers for hire.” The real assets were now mostly owned and controlled by the conglomerates.

FastCompany.com adds some details: “In 1993, the so-called fin-syn laws, which prevented companies from owning a production studio and a network, were abolished, ushering in an era of consolidation that reduced competition. Around the same time, cable television exploded, which diverted eyeballs and advertisers from the Big Four networks, which had been the most reliable providers of job security and good pay. In addition, most original programming on cable networks was produced on the cheap. In 2007, a Writers Guild strike, just as the global economic collapse began, led to a contraction from which workers have not fully recovered. Networks slashed their budgets for lucrative overall development deals for writers who were in any way associated with hit shows, and salaries were slow to return to pre-downturn levels.

“Then came the arrival of streaming, which has only accelerated the decline for workers.

“A Netflix innovation, such as releasing all episodes of a season all at once to encourage binge watching, has been good for viewers, but it’s spurred an industry-wide shift to drastically shorter seasons, from the traditional 22 episodes of broadcast networks to as few as 10 or even eight or six, which means landing a TV gig is no longer necessarily even a full year’s work. The tech entrants into Hollywood typically do not sell their shows to other platforms, which means there are no syndicated reruns, and networks, feeling the pressure to keep up, air far fewer reruns. Together, these developments have largely ended the residuals system. Hollywood operated on the principles of the gig economy well before it became fashionable, and talent has relied on those supplemental payments as a potential cushion in between jobs. (In addition, unlike in most of the creative economy, Hollywood employment means paying out the managers, agents, and lawyers who may have assisted you in securing it.)…

“Deep-pocketed digital players like Netflix, Amazon, and now Apple are willing, and have the means, to pay whatever it takes to build up their talent rosters. In the last year, Netflix has shelled out nearly half a billion dollars to lure three showrunners who made their names producing network TV: Shonda Rhimes (Scandal, Grey’s Anatomy), Ryan Murphy (Glee, American Horror Story), and Kenya Barris (Black-ish). Amazon is spending $1 billion just to produce a Lord of the Rings prequel series.

“For everyone else, the economic reality of TV is a struggle, and it’s not just affecting folks like [young staff writers] who are still relatively early into their careers. The pressure can be more acute on veterans as well. ‘It’s really hard to be a person in their mid-career and have financial obligations and be in show business,’ says Rob Long, whose writing and producing credits include Cheersand Kevin Can Wait.” The big talent money is very narrowly focused now. Sure there’s lots more in the way of writing gigs… with vastly less earning potential for all but a very few.

“First dollar gross” actors faded away in the theatrical business. Nine figure backends on successful television series were relegated to the history books. People were working twice as hard to make half as much, if that. For many, the hardest work was looking for the next assignment. Annual earnings for relatively successful writer/producers tumbled precipitously. Silicon Valley workers were chortling on how much more their average educated engineers were making over those legendary Hollywood premium jobs. Only a very, very few in Hollywood made the biggest bucks, and most of those ran/run studios and networks.

Yet given the exceptional pro-business tax and regulatory vectors of the federal government, even before the Trump administration’s explosive “business rules; consumers’ rights are irrelevant” era, isn’t Hollywood’s plight just a more visible reflection of the newest mega-plutocracy on earth? The United States of America… or as the Economist describes it, a “flawed democracy” that no longer really represents the totality of its constituency. Companies make the money… and individual talent just feeds that gaping maw.

I’m Peter Dekom, and the rest of the world thinks the entertainment business is above the economic fray that impacts the rest of the nation… when it nothing more than an example of the same slow transition that increasingly favors the privileged few.