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Monday, December 31, 2018

Batten Down the Hatches for 2019 – A Media Storm Is Coming

There’s no one I know in media who isn’t scared of what the next 12 months will bring.

Here’s the general picture:

• Consolidation continues to chew up jobs and companies in the entertainment arena.

• We continue to navigate a world in which media and entertainment are both in flux, even as we see overall trends like the rise of streaming, the decline of cable, the explosion of television content, the squeezing of theatrical movies and the still-unstable business model around short-form video.

• Digital media hasn’t found a business model that guarantees stability or financial success: “Scale” doesn’t seem to work, “pivot to video” doesn’t work and God knows building your business plan around Facebook or Snap is a fool’s errand.

Which means that a couple of decades into the digital revolution we find ourselves in a world where a couple of big winners dominate in each sector: Google and Facebook in media (by which I mean advertising), Netflix and Disney in entertainment, Amazon and Apple in tech.

The more time goes by, the more that dominance seems to be institutionalized — though the fate of Facebook strikes me as unclear.

In 2018, Netflix nabbed former ABC entertainment chief Channing Dungey

Meanwhile the broader context around all this is an uncertain economy with a stock market on a downward slide under the leadership of a possibly criminal president who is only likely to get more unstable as multiple investigations box him in.

This is why most people I know in media are in super-cautious mode.

“A lot of bad businesses will go away” in 2019, Rob Goldberg, the CEO of digital video producer Fresno, told me last week. “A lot of investors will lose money, and already have.”

Other CEOs I’ve spoken to recently are focused on reinforcing their core businesses and hoping for not too much change. “It’s going to get rougher out there,” said one CEO, noting that raising capital is going to get harder in this climate.

Executives are honing their résumés as much of 21st Century Fox merges with Disney and AT&T makes its moves around the divisions of Warner Media.

Also contributing to the cautious mood is the broader cultural resonance of #MeToo. We’ve seen dozens of high-level male executives and creative talent publicly named, shamed and drummed out of the entertainment business. Harvey Weinstein, sure, but so many others — from Kevin Spacey to Matt Lauer to Louis C.K. to Charlie Rose.

Indeed, most of us thought that the wave of #MeToo accusations had passed when the New Yorker investigation into Les Moonves dropped last summer and led to what a year earlier would have been an unthinkable exit.

You can be sure that many others are still cringing at their desks, hoping the fateful finger of “the reckoning” does not wander their way.

On the bright side: It’s been a good year for diversity. For starters, we’ve never seen a year like this for African-American filmmakers — not just the success of a blockbuster movie like “Black Panther,” but a veritable parade of critical and commercial wins (think “Creed II,” “Spider-Man: Into the Spider-Verse” and “The Hate U Give”). Female filmmakers are feeling the love as they start to score more significant directing and producing projects. And a big shout-out to the new Hawaiian-born superhero, “Aquaman” star Jason Momoa.

Similarly, we’ve seen huge checks being written to grab key diverse talent — $100 million for Ava DuVernay to work at Warner Bros. TV, and similar deals for Shonda Rhimes and Kenya Barris to take their ideas to Netflix.

While those are exciting moments for those individual talents, the question is whether those huge checks amount to an overall boon for the creative side of the entertainment industry. So many young screenwriters and directors have confided to me that they are worried that their project will get lost if they give it to Netflix. And more established writers worry that the residual-free universe of streaming means they will have to work longer and harder to earn less.

The big picture is undeniable: Fewer, bigger winners and fewer, bigger players across the entertainment landscape. Every year that passes suggests that this is increasingly the case. We have yet to see Amazon make a convincing play for dominance in the content space, and ditto for Apple and Facebook. All of those companies could decide to invest much more heavily in quality story-telling, though Ava and Kenya and Shonda (and Ryan Murphy) are already spoken for. So far it’s a Netflix game.

I feel for the hundreds of hard-working executives who are being displaced by consolidation as there is no guarantee that they will find a soft landing. I feel for the entrepreneurs who have poured their hearts into inventing new ways to understand consumers and build relevant content — only to find that Facebook has eaten their business.

Simple concepts like “make good movies” (or shows, or series) don’t bring great comfort in this  context.

So if you haven’t prepared for a coming storm — then you should start battening down the hatches.

Related stories from TheWrap:

11 Media Winners of 2018, From Hope Hicks to Rachel Maddow (Photos)

Fresno’s Rob Goldberg on 2019: ‘A Lot of Bad Businesses Will Go Away’

Facebook’s Slide Continues as Stock Price Hits 2018 Low

Facebook’s Faceplant Year: Is This the Beginning of the End for Social Media Giant?

Source: the wrap feed

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