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Speaker 1: Welcome to another episode of Strictly Business, the podcast in

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Speaker 1: which we speak with some of the brightest minds working

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Speaker 1: in the media business today. I'm Andrew Wallenstein, chief media

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Speaker 1: analyst at Illuminate Intelligence and a Variety contributor. Earlier this month,

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Speaker 1: Illuminate released its Film and TV Year End Report, an

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Speaker 1: annual look back on the US market for original content

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Speaker 1: on the leading video streaming platforms. I know this because

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Speaker 1: I'm one of its authors, and on this episode, we'll

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Speaker 1: dig deep into some insights that will really shape how

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Speaker 1: to think about the recently concluded year. Now that the

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Speaker 1: full results are in. There's some distinct trends to take

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Speaker 1: note of in a year that offered more than a

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Speaker 1: few departures from years past. And there's no better person

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Speaker 1: to help you walk through the year in streaming originals

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Speaker 1: than my Illuminate colleague, Media list Tyler Aqualina, lead author

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Speaker 1: and editor of the Film and TV Year End Report.

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Speaker 1: Thanks for joining me, Thank you for having me cool

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Speaker 1: So I mentioned there off the top, there were more

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Speaker 1: than a few surprises when our team Illuminated completed their

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Speaker 1: data digging for the numbers that give context to twenty

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Speaker 1: twenty five. I'll tell you the one that surprised me most.

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Speaker 1: I wanted us to run a number that we hadn't

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Speaker 1: run before in previous editions of this report, and I'm

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Speaker 1: glad I followed that instinct because it reveals something very

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Speaker 1: distinctive about twenty twenty five. For the first time we

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Speaker 1: calculated an original content viewing our total. We broke out

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Speaker 1: film and TV into separate totals as well, and I'll

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Speaker 1: be damned if we didn't see some interesting trend deviations.

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Speaker 1: And the first thing we noticed was that between twenty

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Speaker 1: twenty two and twenty four that number had essentially plateaued

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Speaker 1: at varying levels. Between twenty one and twenty two billion,

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Speaker 1: along comes twenty twenty five. We see an eighteen percent spike,

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Speaker 1: driven largely by TV series, which like twenty one percent.

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Speaker 1: So what do you make of this increase? It'd take

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Speaker 1: you by surprise and what do you credit it to.

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Speaker 2: It did take me a little bit by surprise up

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Speaker 2: just because, as you'd said, those levels of kind of

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Speaker 2: plateaued in the year's pre past. But you know what

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Speaker 2: was really notable about twenty twenty five was that there

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Speaker 2: were just more massive streaming hits across more platforms than

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Speaker 2: we've seen in the past, and I kind of credit

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Speaker 2: that to consumers are continuing to spend more time with

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Speaker 2: streaming and less time with traditional platforms. And also just

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Speaker 2: there were some really strong slates of original content, again

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Speaker 2: just across multiple different platforms this year. It wasn't all

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Speaker 2: just big hits at Netflix driving the growth, which a

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Speaker 2: lot of times in the past, I think these numbers

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Speaker 2: can kind of rise and fall on like what's the

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Speaker 2: biggest Netflix hit of the year, And it was really

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Speaker 2: just a case of kind of a rising tide lifting

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Speaker 2: all boats in twenty twenty five.

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Speaker 1: And I couldn't disagree with that. But I also feel

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Speaker 1: like it's so important to say that this number should

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Speaker 1: not be taken for granted, because yes, there were hits

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Speaker 1: this year, we'll talk about those, but you know, nothing

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Speaker 1: that remarkable that ensured we were going to see this

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Speaker 1: you know, sizable year over year left. And then I

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Speaker 1: think we also have to step outside of the streaming

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Speaker 1: original silo. We're talking about a year where clearly there's

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Speaker 1: an investment shift happening into sports, in streaming and otherwise,

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Speaker 1: and you know, linear TV is still it maybe diminished,

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Speaker 1: but a real alternative and let's not even get into

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Speaker 1: social video, where you know it has to be eroding

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Speaker 1: some viewing time. So remarkable stuff. Okay, But the next

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Speaker 1: surprise was the top show of the year did not

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Speaker 1: belong to Netflix. Double surprise. It wasn't even a scripted show.

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Speaker 1: So Tyler, help us understand the phenomenon that was and

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Speaker 1: is Love Island.

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Speaker 2: So Love Island aka Love Island USA to distinguish it

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Speaker 2: from its UK counterpart, that's a series that moved from

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Speaker 2: actually broadcast TV. It was on CBS before moving to

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Speaker 2: Peacock in twenty twenty two, and it really just absolutely

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Speaker 2: exploded with its seventh season this year, it topped the

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Speaker 2: chart of our most watched streaming original TV seasons in

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Speaker 2: the US, with about eighteen billion minutes watched over the

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Speaker 2: course of twenty twenty five. That Love Island season was

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Speaker 2: just a huge phenomenon in the middle of the year,

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Speaker 2: and you know, there was just a lot of buzz

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Speaker 2: around it, and I think there were some just more

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Speaker 2: kind of compelling storylines. I don't watch the show myself,

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Speaker 2: but my understanding is that there was a lot of

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Speaker 2: high drama to be seen on this most recent season,

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Speaker 2: which really helped to drive that engagement, and I.

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Speaker 1: Think, you know, a lot of people may have looked

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Speaker 1: at this list and presumed Stranger Things, which recently concluded

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Speaker 1: with a lot of buzz that surely translated to big ratings.

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Speaker 1: Given how strongly this franchise has performed for now close

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Speaker 1: in the pat Netflix in the past, you knew it

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Speaker 1: was going to go out on a high note. But

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Speaker 1: it's a little lower down on the list that maybe

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Speaker 1: people expected. Also, a show that everyone's talking about right now,

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Speaker 1: Heated Rivalry on HBO Max that started last year, Why

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Speaker 1: doesn't that count? So help us make the math maths here.

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Speaker 2: Well to address the Heated Rivalry issue. I mean, it's

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Speaker 2: just the case that social media buzz is not always

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Speaker 2: proportional to actual viewership. The numbers on Heated Rivalry, they

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Speaker 2: are good for the type of show that it is,

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Speaker 2: but that was just nowhere close to top ten levels

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Speaker 2: in terms of the engagement that it's generating. But you know,

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Speaker 2: still a hit and still worth talking about, but just

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Speaker 2: not necessarily the phenomenon that you might expect from the

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Speaker 2: level of conversation that show has been generating. As far

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Speaker 2: as Stranger Things goes, there's a bit of a calendar

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Speaker 2: issue here in that the final season was released pretty

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Speaker 2: late in the year. Actually, the series finale was released

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Speaker 2: on the last day of our measurement window here, because

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Speaker 2: we were only measuring calendar year twenty twenty five. Obviously,

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Speaker 2: the series performed still very well. There's also a nuanced

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Speaker 2: to note here that we're ranking these seasons by minutes

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Speaker 2: watched rather than the estimated views metric, which you know

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Speaker 2: Netflix kind of prefers to use now, which is total

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Speaker 2: minutes watch divided by the total run time of the

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Speaker 2: season or the film, whatever the case may be. You know,

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Speaker 2: there's some controversy over what the best way to measure

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Speaker 2: streaming viewership is. I take the view that engagement and

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Speaker 2: time spent is the most important currency in streaming right now.

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Speaker 2: It's why you're seeing everyone kind of obsessed with how

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Speaker 2: well YouTube is doing, and you mentioned social video too.

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Speaker 2: You know, time spent is really a very important metric

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Speaker 2: in terms of keeping people on the platform, which is

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Speaker 2: why I think viewing time is kind of a valuable

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Speaker 2: way to rank performance of this content.

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Speaker 1: That's an important note well, speaking of heated rivalry, I

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Speaker 1: think that's a good title for another distinct, provocative narrative

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Speaker 1: that emerged in streaming originals. In twenty twenty five, we

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Speaker 1: are starting to see Netflix get stiffer competition from its

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Speaker 1: rivals in terms of originals. Now, before we expand on that,

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Speaker 1: I don't want to overstate it. Netflix is still the

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Speaker 1: clear market leader, but we saw more than a few

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Speaker 1: data markers that its stranglehold is slipping. What do you

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Speaker 1: account for this?

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Speaker 2: I mean, it really does just come down to stiffer competition.

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Speaker 2: There is more competition among the very top ranks of

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Speaker 2: streaming hits. Now, you know, Stranger Things I think was

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Speaker 2: number four on our top ten, so it wasn't just

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Speaker 2: below Love Island. There was also the Pit on HBO Max,

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Speaker 2: which has obviously been a massive phenomenon back for season

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Speaker 2: two now that's already doing very very well, and then

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Speaker 2: a Landman over at Paramount Plus the Taylor Sheridan series

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Speaker 2: has also proven itself to be just to this massive

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Speaker 2: breakout success. And actually the estimated views for that when

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Speaker 2: you run those numbers are really quite strong, even just

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Speaker 2: beyond it's viewing time engagement. So you know, there are

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Speaker 2: just more services that are producing these really top shows

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Speaker 2: that more consumers want to see. Netflix is not necessarily

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Speaker 2: the only place you're going to see the top most

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Speaker 2: series on streaming anymore.

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Speaker 1: And with Netflix, we noted a share decline. It was

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Speaker 1: above sixty percent, hovering around sixty three for several years,

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Speaker 1: and then it dipped to fifty nine this year. You know, small,

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Speaker 1: not tiny, And again just like the original viewing hours

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Speaker 1: holding steady for several years before taking this noticeable shift.

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Speaker 1: So you know what's going on, because I'll tell you

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Speaker 1: what it's not. It's not as if we're seeing any

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Speaker 1: one clear rival share shifter. In fact, you also noticed

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Speaker 1: Disney Plus seems to be making an interesting decline of

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Speaker 1: its own.

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Speaker 2: You know, with Disney Plus, I think it ultimately comes

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Speaker 2: down to kind of a slate issue. They've seen a

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Speaker 2: real reduction in the number of original series they're putting out,

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Speaker 2: went from about twenty five to thirty series a year

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Speaker 2: to about ten to fifteen, So that's not to be

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Speaker 2: counted in terms of that decline. Disney, of course, has

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Speaker 2: also been pushing Hulu pretty hard as a place to

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Speaker 2: find you know, general entertainment, adult content, so that has

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Speaker 2: maybe picked up a bit of the slack. And you know,

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Speaker 2: I think that platforms like Hulu, like HBO Max and

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Speaker 2: even Paramount plus Now and Peacock as well. These have

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Speaker 2: become more mature platforms. Consumers are familiar with them now.

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Speaker 2: You know, most of these platforms we're talking about launched

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Speaker 2: like just about a half decade ago, and now they

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Speaker 2: have really finally gotten to a point where they have

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Speaker 2: been established identity. Consumers know the types of shows, the

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Speaker 2: types of content that are available there, and they are

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Speaker 2: more willing to, you know, cycle through different subscriptions and

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Speaker 2: move between services in a way that we haven't seen before,

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Speaker 2: in a way that you know, maybe hasn't eliminated Netflix

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Speaker 2: as the default, but has certainly brought other services forward

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Speaker 2: in terms of maybe you know, the second or third choice.

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Speaker 1: Sure, And you know, look, it's hard not to connect

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Speaker 1: what we're seeing here to some of the larger narratives

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Speaker 1: in the business. And by that I mean, obviously the

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Speaker 1: big story in entertainment right now is Netflix's pursuit of

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Speaker 1: Warner Brothers Discovery. Do you think what we're seeing here,

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Speaker 1: in terms of Netflix's slipping share and perhaps the need

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Speaker 1: to bring an HBO Max and a lot more into

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Speaker 1: its portfolio, is relevant?

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Speaker 2: I do. I mean it's certainly speculative, but you have

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Speaker 2: to think that if Netflix leadership is seeing these same numbers,

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Speaker 2: they're thinking about, Okay, how can we you know, start

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Speaker 2: to or how can we gain even more market share

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Speaker 2: than what we already have, And obviously acquiring that great

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Speaker 2: Warner Brothers IP library is a great way to do that.

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Speaker 2: There's a lot of potential there to leverage many of

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Speaker 2: those great properties and titles for future series and films.

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Speaker 2: And you know, Netflix, I will say, has not really

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Speaker 2: succeeded in terms of franchise building to the degree that

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Speaker 2: they have succeeded at many of their other endeavors. You know,

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Speaker 2: things has come to an end. There is a spin

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Speaker 2: off series in the works, at least one, probably more,

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Speaker 2: but you know those aren't due to arrive for a while.

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Speaker 2: And it's really difficult for Netflix to kind of establish

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Speaker 2: really premium ip that consumers have the same sort of

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Speaker 2: level of love for as these really established Warner Brothers

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Speaker 2: titles like say Harry Potter or the DC superhero Stable.

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Speaker 2: So I think this data is absolutely relevant to what

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Speaker 2: you're seeing Netflix do right now.

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Speaker 1: And that makes sense, and I could certainly see the

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Speaker 1: need to perhaps buy rather than build some more franchises.

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Speaker 1: Let's turn to movies, where getting back to what we

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Speaker 1: were saying about, overall total viewing hours watched TV series

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Speaker 1: way up. Movies actually declined a little, which again another surprise,

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Speaker 1: because I think we saw a strong year Wicked topping

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Speaker 1: the list, of course, but perhaps the bigger story perhaps

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Speaker 1: was that we're accustomed to seeing a top ten in

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Speaker 1: which the theatricals that you know, spend a lot of

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Speaker 1: time gathering audience and buzz, and theaters do really well

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Speaker 1: when they come to streaming as well, and of course

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Speaker 1: that didn't change, but we saw more entries, particularly from

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Speaker 1: Netflix in terms of original content, doing better than before.

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Speaker 1: I think there was four entries that cracked the top ten. So,

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Speaker 1: you know, I guess my mind tries to make sense

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Speaker 1: of what we're seeing here, and I'm wondering, do you

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Speaker 1: think the trends we're seeing here are at all attributable

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Speaker 1: to the distribution trends playing out in theatrical whether it

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Speaker 1: relates to the span of time movies are spending in

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Speaker 1: theaters these days, or whether movies are in theaters at all.

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Speaker 2: You know, I think that we've obviously seen a pretty

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Speaker 2: significant reduction in these theatrical exclusive windows. You know, often

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Speaker 2: that impacts more, you know, how quickly movies move to

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Speaker 2: premium video on demand universals. Titles will often go there

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Speaker 2: and become available for purchase a rental at home after

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Speaker 2: just a couple of weeks in theaters. As far as

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Speaker 2: how that affects, you know, kind of subscription streaming numbers,

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Speaker 2: I certainly think there is probably an increased willingness among

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Speaker 2: consumers to wait out movies that they might be interested in.

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Speaker 2: You know, they may not want to go out and

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Speaker 2: see them and pay to see them in theaters when

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Speaker 2: they can just wait and have it included you know,

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Speaker 2: quote unquote for free with a subscription that they're paying

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Speaker 2: for anyway. So it's certainly a factor. What I sort

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Speaker 2: of attribute the shrinking in film viewership on streaming this

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Speaker 2: year too, is that there were just fewer of these

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Speaker 2: kind of massive theatrical hits in twenty twenty five that

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Speaker 2: also tend to fuel a lot of streaming numbers. I mean,

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Speaker 2: Disney's big release of the year was Utopia two. I

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Speaker 2: would expect to see that do pretty huge streaming numbers

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Speaker 2: when it arrives on Disney Plus later this year. In

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Speaker 2: twenty twenty five, there wasn't necesscessarily, you know, a blockbuster

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Speaker 2: on the level of say Oppenheimer or even something like

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Speaker 2: the Super Mario Brothers movie that really fuels just pretty

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Speaker 2: massive streaming numbers on top of huge box office success. Yes,

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Speaker 2: there were big box office hits in twenty twenty five,

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Speaker 2: but just I don't think that there was anything quite

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Speaker 2: on the same level of what we've necessarily seen in

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Speaker 2: the past.

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Speaker 1: Yeah, I'm going to be curious to see how twenty

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Speaker 1: twenty six plays out, especially with there seems to be

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Speaker 1: out there some expectations that theatrical is going to be

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Speaker 1: stronger in twenty twenty six, which isn't even to suggest

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Speaker 1: that twenty twenty five was that week, although it just

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Speaker 1: did not, as you said, have the kind of clear

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Speaker 1: head and shoulders above the rest performers that we saw

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Speaker 1: in twenty twenty four. And I think that's sort of like,

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Speaker 1: for me, a trend line as I look across this

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Speaker 1: streaming originals field in general, this notion of twenty twenty

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Speaker 1: five percent a number of interesting deviations, whether it was

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Speaker 1: original content suddenly spiking, Netflix's slight but notable slippage, and

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Speaker 1: I'm just curious. You know, as you look ahead to

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Speaker 1: twenty twenty six, can you go out on a limb

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Speaker 1: and say, get based on what you perhaps see on

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Speaker 1: the programming schedules for respective streamers, how you think some

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Speaker 1: of the trends we've talked about could be playing out

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Speaker 1: in the future.

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Speaker 2: I think that, you know, it's very possible Netflix ends

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Speaker 2: up bouncing back in a big way this year. They've

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Speaker 2: got a lot of big returning shows coming up. Just

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Speaker 2: to name a few, You've got Bridgerton coming out at

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Speaker 2: the end of this month, The Night Agent is back,

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Speaker 2: There's another season of that series Beef, which was a

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Speaker 2: pretty big hit a couple of years ago. You know,

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Speaker 2: the list goes on. They've just got a lot of

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Speaker 2: very popular series coming back. That makes for a pretty

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Speaker 2: robust twenty twenty six slate. But you know, again, I

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Speaker 2: think that there are some really promising titles across different services.

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Speaker 2: I think this year is likely that we'll see the

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Speaker 2: long awaited return of Ted Lasso at Apple. Season four

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Speaker 2: was in production throughout twenty twenty five, so very possible

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Speaker 2: we see that comeback, which obviously would be huge for Apple.

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Speaker 2: Those previous seasons have performed really just absolutely head and

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Speaker 2: shoulders above anything else on that service, and then, you know,

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Speaker 2: I think it's important to note that Netflix's rivals have

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Speaker 2: really started to invest in series that are big hits

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Speaker 2: and can come back every single year with a new season,

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Speaker 2: which obviously used to be you know, standard practice and TV.

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Speaker 2: But as we got into the streaming eras budgets got bigger,

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Speaker 2: productions got more complicated, it was more common to see

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Speaker 2: you know, two or even three year gaps between seasons.

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Speaker 2: I mean, Stranger Things is obviously a great example of that.

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Speaker 2: But you know, shows like The Pit. You know, season

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Speaker 2: two is rolling out right now. I'd say it's very

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Speaker 2: likely that Landman is back for three late in twenty

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Speaker 2: twenty six. You know, shows that can really produce a

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Speaker 2: new season every year and just hit at a very

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Speaker 2: high level of viewership. Those are really kind of the

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Speaker 2: new prize pigs of the streaming landscape.

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Speaker 1: So to speak. Let's go back to The Pit though,

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Speaker 1: because it's also representative of a trend that you spotted

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Speaker 1: with regard to the increase in the amount of procedural

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Speaker 1: dramas that we're seeing, which The Pit is sort of

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Speaker 1: a classic example of a throwback to the to the

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Speaker 1: shows like Er that did so well on broadcast television

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Speaker 1: as opposed to the shows that I think really streaming

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Speaker 1: Originals was built on, which were the so called serialized

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Speaker 1: series with episodes that you got to watch one after

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Speaker 1: the other in order to fully understand the plot. Like

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Speaker 1: I said, that used to be the stock in trade

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Speaker 1: for streaming. That's how Netflix was built. And yet we're

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Speaker 1: seeing a very clear data indication that those have fallen

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Speaker 1: out of favor. How did we get here?

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Speaker 2: Yeah, you know, I think that it's important to note

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Speaker 2: that that data also includes cable TV true, and you know,

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Speaker 2: cable has obviously moved pretty decisively away from making pricey

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Speaker 2: serialized dramas. I mean, you know, the days of mad

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Speaker 2: Men on AMC are pretty much over. But you know,

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Speaker 2: I think that also there's definitely an increased investment in

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Speaker 2: shows that can have just sort of a more widespread

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Speaker 2: or kind of quote unquote populist appeal. You know, I

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Speaker 2: think shows like the Pit, shows like Reacher at Amazon Prime,

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Speaker 2: these are kind of perceived to just have a greater

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Speaker 2: value in terms of reaching just kind of a wider

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Speaker 2: audience than some of these prestigee serialized dramas were perceived

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Speaker 2: to have reached. I mean really often the main object

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Speaker 2: of those types of shows was to win awards and

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Speaker 2: to drive critical buzz, which could help, you know, drive

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Speaker 2: buzz for your platform, but maybe doesn't always bring the

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Speaker 2: biggest audience. I mean, you know, the audience for say,

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Speaker 2: mad Men was never as big as the audience for

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Speaker 2: The Walking Dead on AMC. Right, So I think that

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Speaker 2: we're seeing a similar shift play out in streaming now,

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Speaker 2: where there is an interest in just continuing to grow

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Speaker 2: the audience more so than grow the prestige.

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Speaker 1: You mentioned prime and we should probably spend the little

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Speaker 1: time on them. And I think what jumped out from

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Speaker 1: the year end report for film and TV here Illuminate

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Speaker 1: was that Amazon had a sizeable increase year over year

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Speaker 1: in the amount of original series it greenlight. I think

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Speaker 1: it was up from like forty two in twenty twenty

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Speaker 1: four way up to fifty nine. And that really was

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Speaker 1: in contrast to you know, clearly we saw production levels

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Speaker 1: for I think like the third or fourth straight year

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Speaker 1: make a very you know, steady dip, not a big surprise,

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Speaker 1: and that decline I think was also fairly evenly distributed

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Speaker 1: across all the streamers and I also noticed that Amazon's share,

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Speaker 1: which had been sort of like stuck at eight or

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Speaker 1: nine percent, inched up to ten percent in twenty twenty five.

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Speaker 1: Do you think that there is a real correlation between, Hey,

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Speaker 1: the more shows you get out there, the better you're

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Speaker 1: gonna do.

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Speaker 2: I don't think that that's necessarily true, you know. I

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Speaker 2: think we've also seen services like HBO Max, which had

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Speaker 2: a pretty immense drop off in terms of the number

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Speaker 2: of shows that it was putting out, actually increased its

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Speaker 2: share as well. I think it inched up from four

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Speaker 2: percent to six percent twenty twenty four to twenty twenty five.

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Speaker 2: So it's not necessarily just a recipe of make more

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Speaker 2: shows and you'll see more viewership often, I think, you know,

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Speaker 2: if it's not necessarily as simple as just the opposite

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Speaker 2: is true. I do think that there was a certain

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Speaker 2: kind of diffusion effect that happened in the PEAKTV era

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Speaker 2: of there just being so much content that consumers were

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Speaker 2: kind of splitting their time between a lot of different titles.

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Speaker 2: And you know, now that there are fewer shows to

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Speaker 2: pay attention to, maybe that's been funneling larger audiences toward

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Speaker 2: kind of a select number of these really huge hits.

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Speaker 2: Also important to note, I think that you know, as

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Speaker 2: we all know, Amazon is playing a very different game

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Speaker 2: in terms of its financial picture than these legacy studios

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Speaker 2: that are also running streaming platforms. You know, Amazon has

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Speaker 2: just you know, a near bottomless well of tech cash

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Speaker 2: to fall back on to continue to fund these slates.

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Speaker 2: They're maybe not as interested in, you know, throwing away

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Speaker 2: money on really expensive shows as they used to be,

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Speaker 2: but that is still you know, putting them on a

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Speaker 2: different kind of financial level than some of their rivals

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Speaker 2: in this game.

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Speaker 1: Sure, and they seem to be also increasingly interested in

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Speaker 1: the big sports packages absolutely.

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Speaker 2: I think, you know, the successive Thursday Night Football is

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Speaker 2: also probably not to be discounted in its ability to

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Speaker 2: get people onto the platform who then may become interested

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Speaker 2: in watching something else on that platform.

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Speaker 1: Well, if streaming was chock full of surprises, I would

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Speaker 1: say the stats that you corralled in terms of production

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Speaker 1: really were just a confirmation of all our worst fears.

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Speaker 1: I mean, you hear comparisons of what's happening to production

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Speaker 1: and its traditional home in Los Angeles to the decline

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Speaker 1: of the auto industry in Detroit, and when you see

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Speaker 1: these numbers that we reported on in the year end report.

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Speaker 1: It doesn't seem like a dramatic characterization at all. We are,

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Speaker 1: if anything, I would say, we saw a long term

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Speaker 1: collapse actually accelerate. Obviously, the LA fires at the start

403
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Speaker 1: of twenty twenty five a big reason for that, but

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Speaker 1: it's also just part of the story. And it's a

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Speaker 1: story that's been playing out for a very long time,

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Speaker 1: and it has a lot more to do, I think,

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Speaker 1: with competing financial incentives elsewhere, increasing pressures from rising production costs.

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Speaker 1: So I mean, was there I guess what I'm looking

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Speaker 1: for here, Tyler, is give us some hope. I mean,

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Speaker 1: you pay attention, especially on the regulation side of things.

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Speaker 1: Is there anything to suggest that this really bad problem?

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Speaker 1: Which I think you should also add some context, is

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Speaker 1: it's not just about Los Angeles. There's a broader decline

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Speaker 1: across the US in relation to the international side. Is

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Speaker 1: there any hope?

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Speaker 2: There is not? No hope, is what I would say.

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Speaker 2: I think it's important to note that it is still

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Speaker 2: very early days. For the expanded California tax credit that

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Speaker 2: was passed last year. The government raised the cap for

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Speaker 2: that by I think over four hundred million dollars. So

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Speaker 2: there is a much larger pool of money available now

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Speaker 2: for projects to pull from, and we are seeing more

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Speaker 2: projects start to take advantage of that. Not to bring

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Speaker 2: in outside data, but Film LA just released a report

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Speaker 2: on the year twenty twenty five at large, and it

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Speaker 2: was interesting to me that the share of TV projects

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Speaker 2: filmed in LA that were subsidized by the California text

428
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Speaker 2: credit that went from six point five percent in Q

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Speaker 2: four of twenty twenty four to eleven percent in twenty

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Speaker 2: twenty five. So that's a good sign that, you know,

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Speaker 2: more projects are going to be able to take advantage

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Speaker 2: of these funds and these financial advantages that are becoming available.

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Speaker 2: So again, still very early days for that that was

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Speaker 2: just passed, you know, less than a year ago, So

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Speaker 2: I think we're going to see the impact of that

436
00:24:24,040 --> 00:24:27,639
Speaker 2: continue to ripple out, certainly this year and hopefully in

437
00:24:27,680 --> 00:24:28,639
Speaker 2: the years going forward.

438
00:24:28,840 --> 00:24:31,200
Speaker 1: And yet to be honest, as we looked at the

439
00:24:31,280 --> 00:24:33,240
Speaker 1: data there, I remember we've got a bunch of pie

440
00:24:33,400 --> 00:24:38,600
Speaker 1: charts that show the US versus overseas production split. Would

441
00:24:38,680 --> 00:24:40,560
Speaker 1: you be surprised at all in twenty twenty six if

442
00:24:40,600 --> 00:24:42,920
Speaker 1: we saw for the first time basically a fifty to

443
00:24:42,960 --> 00:24:44,040
Speaker 1: fifty split.

444
00:24:44,520 --> 00:24:46,280
Speaker 2: I would not be surprised. I mean we were already

445
00:24:46,320 --> 00:24:48,600
Speaker 2: pretty close to that in twenty twenty five. I believe

446
00:24:48,600 --> 00:24:52,560
Speaker 2: it was forty five percent of major US film and

447
00:24:52,920 --> 00:24:56,800
Speaker 2: scripted series projects that didn't even film in the US.

448
00:24:56,960 --> 00:24:59,800
Speaker 2: You know, these were projects that were funded by US money,

449
00:24:59,800 --> 00:25:02,760
Speaker 2: by you know, for whatever reason, just found it more

450
00:25:02,840 --> 00:25:07,600
Speaker 2: financially advantageous or more practical to shoot abroad instead. So

451
00:25:07,640 --> 00:25:09,800
Speaker 2: we're pretty close to that fifty to fifty split, and

452
00:25:09,880 --> 00:25:12,840
Speaker 2: if that finally inches over this year, I wouldn't be surprised.

453
00:25:12,880 --> 00:25:17,119
Speaker 2: I mean, financial incentives abroad just it really cannot be overstated.

454
00:25:17,280 --> 00:25:19,760
Speaker 2: Just they are often much much better than what we

455
00:25:19,800 --> 00:25:21,960
Speaker 2: get here. You know, the United States still doesn't have

456
00:25:22,119 --> 00:25:25,479
Speaker 2: a federal level film and TV tax credit program. All

457
00:25:25,560 --> 00:25:28,520
Speaker 2: those programs are administered on a state by state level,

458
00:25:29,119 --> 00:25:32,360
Speaker 2: So you know, there's an opportunity when you go abroad

459
00:25:32,400 --> 00:25:35,760
Speaker 2: to often kind of stack different financial incentives in a

460
00:25:35,800 --> 00:25:37,560
Speaker 2: way that you just can't in the United States.

461
00:25:37,880 --> 00:25:40,960
Speaker 1: Yeah, and then there's and I almost hate to give

462
00:25:40,960 --> 00:25:44,080
Speaker 1: this any oxygen, the Trump factor. You know, he has

463
00:25:44,119 --> 00:25:47,879
Speaker 1: floated maybe more than once in the past twelve months.

464
00:25:48,200 --> 00:25:54,080
Speaker 1: You know, some sort of vague, possibly fantastical notion of

465
00:25:54,920 --> 00:25:58,920
Speaker 1: getting production back in the US. I mean, should we

466
00:25:59,080 --> 00:26:01,720
Speaker 1: put any read ins in this? Is this something people

467
00:26:01,760 --> 00:26:04,160
Speaker 1: in the business or even thinking about anymore?

468
00:26:05,080 --> 00:26:08,199
Speaker 2: Well, I don't think it's controversial to say that the

469
00:26:08,240 --> 00:26:11,840
Speaker 2: President has a notoriously short attention span, so I'd be

470
00:26:11,960 --> 00:26:15,200
Speaker 2: surprised if this was still, you know, top of mind

471
00:26:15,240 --> 00:26:17,760
Speaker 2: for him. I don't think the whole idea of a

472
00:26:17,800 --> 00:26:21,520
Speaker 2: tariff on you know, internationally produced films, that's not really

473
00:26:21,560 --> 00:26:24,920
Speaker 2: a practical idea. I'd struggle to see how that could

474
00:26:24,960 --> 00:26:28,159
Speaker 2: be implemented in any realistic way. I think what is

475
00:26:28,240 --> 00:26:31,159
Speaker 2: more likely is that federal tax credit program that I

476
00:26:31,160 --> 00:26:33,639
Speaker 2: had just mentioned. I think there is still, you know,

477
00:26:33,800 --> 00:26:36,359
Speaker 2: a drive within the industry to see that happen. I've

478
00:26:36,440 --> 00:26:39,960
Speaker 2: seen conversations about that beginning to crop up again at

479
00:26:40,000 --> 00:26:42,320
Speaker 2: the start of this year, So that may be something

480
00:26:42,320 --> 00:26:45,000
Speaker 2: that's a bit more likely rather than you know, any

481
00:26:45,080 --> 00:26:50,160
Speaker 2: kind of penalty or you know, punishment to be inflicted

482
00:26:50,160 --> 00:26:52,120
Speaker 2: on shows that film elsewhere.

483
00:26:52,359 --> 00:26:53,639
Speaker 1: You know what. I'm going to go out on a

484
00:26:53,680 --> 00:26:57,919
Speaker 1: limb with this one. My twenty thirty prediction. Greenland emerges

485
00:26:58,040 --> 00:27:01,359
Speaker 1: as a production haven, and we're going to thank Donald

486
00:27:01,400 --> 00:27:05,840
Speaker 1: Trump for it. Tyler Aculina, Media analyst at Illuminate, thank

487
00:27:05,880 --> 00:27:10,520
Speaker 1: you for walking us through the report that you authored

488
00:27:10,880 --> 00:27:13,320
Speaker 1: on the film and TV or End report. A pleasure

489
00:27:13,359 --> 00:27:15,280
Speaker 1: to work with you on at a pleasure to discuss

490
00:27:15,320 --> 00:27:17,680
Speaker 1: it with you today. For those of you who haven't

491
00:27:17,680 --> 00:27:20,080
Speaker 1: already seen it, I encourage you to go to Illuminate

492
00:27:20,240 --> 00:27:23,560
Speaker 1: Data dot com to download and thank you for listening

493
00:27:23,600 --> 00:27:26,919
Speaker 1: to this week's episode of Strictly Business. Thanks for coming in, Tyler,

494
00:27:27,119 --> 00:27:29,000
Speaker 1: Thanks very much, Thanks for listening.

495
00:27:29,600 --> 00:27:32,199
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496
00:27:32,200 --> 00:27:32,840
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497
00:27:32,880 --> 00:27:34,360
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498
00:27:34,680 --> 00:27:36,879
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499
00:27:36,960 --> 00:27:41,080
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500
00:27:41,119 --> 00:27:44,120
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