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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 Variety Intelligence Platform. One of the many hard

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Speaker 1: questions the city of Los Angeles finds itself asking, in

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Speaker 1: the wake of the devastating fires that swept through the

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Speaker 1: region last month, what will the impact be on the

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Speaker 1: film and TV production business was already struggling. Analyzing the

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Speaker 1: state of that business was the subject of the latest

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Speaker 1: report from Variety Intelligence Platform. So I am glad to

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Speaker 1: be joined by the authors of that report to dig

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Speaker 1: into this complicated subject. We'll be back with them in

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Speaker 1: just a moment. We are back with Tyler Aquillina and

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Speaker 1: Corey ericson analysts with Variety Intelligence Platform. They are the

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Speaker 1: authors of Production Pipeline TV and Film in Flux. It's

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Speaker 1: a report that when they began, it was far before

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Speaker 1: the fire started, but now with so much damage done

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Speaker 1: in the heart of Los Angeles that is the home

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Speaker 1: of the entertainment business, it's where we must start this

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Speaker 1: conversation with Tyler. Tyler, thanks for being with.

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Speaker 2: Us, Thank you for having me.

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Speaker 1: So it's a two part question for starters, lay out

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Speaker 1: for us, first the toll these fires have taken on

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Speaker 1: the business, but also what was the week in state

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Speaker 1: of production before that first spark ever burst into a flame.

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Speaker 2: Well, yeah, you know, the immediate toll of the fires

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Speaker 2: is really on the below the line workers who crew

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Speaker 2: these projects. These are workers who were, as you alluded to,

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Speaker 2: facing a lot of struggle before this, from the pandemic

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Speaker 2: through strikes last year that shut down production for much

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Speaker 2: of the year, and now they're facing additional financial burdens,

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Speaker 2: many of them who may have you know, lost their

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Speaker 2: homes or possessions in the fires at a time when

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Speaker 2: work was already scarce thanks to both the post peak

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Speaker 2: TV contraction that we've seen that has resulted in a

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Speaker 2: major drop off in the levels of films and TV

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Speaker 2: shows being produced, along with the general production exodus away

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Speaker 2: from LA. And you know, that's really been That's a

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Speaker 2: reason why, like the impact on production immediately in LA

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Speaker 2: wasn't as substantial as you might think. Actually, only reportedly

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Speaker 2: only two major studio films were affected and had to

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Speaker 2: pause production during the fires, and that's just because of

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Speaker 2: this sustained exodus away from LA that's been going on

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Speaker 2: for you know, the last decade or so.

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Speaker 1: So in the report, were there any particular data points

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Speaker 1: that captured this, you know, let's putting the fires aside,

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Speaker 1: that really captured for you sort of what the state

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Speaker 1: of LA's production business was like even before the fires hit.

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Speaker 2: Yeah. So, well, let's start with the overall numbers. So

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Speaker 2: overall film and TV production remained pretty depressed last year

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Speaker 2: relative to peak TV years compared to twenty twenty two.

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Speaker 2: Last year saw about thirty percent fewer movies and shows

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Speaker 2: actively filming per week in the United States on average.

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Speaker 2: That's according to data firm research firm prod Pro, which

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Speaker 2: tracks how many titles are filming on a kind of

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Speaker 2: a week by week basis. As for LA specifically Film LA,

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Speaker 2: which is the nonprofit that overseas and monitors production in

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Speaker 2: the Los Angeles metro area. They recently reported that twenty

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Speaker 2: twenty four was the second lowest annual level of LA

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Speaker 2: production in terms of total shoot days, in terms of

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Speaker 2: you know, the total number of how many days are

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Speaker 2: film and TV projects shooting in the LA area. That

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Speaker 2: was the second lowest for a year that Film LA

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Speaker 2: has ever observed. Twenty twenty was the only one that

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Speaker 2: was lower. Of course, when the pandemic shut down occurred.

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Speaker 1: And now you talk about the exodus, what was again

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Speaker 1: putting fires aside. We'll get back to that in the

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Speaker 1: second What was data telling us about what this exodus

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Speaker 1: was looking like?

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Speaker 2: Essentially, what the data tells us is that production has

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Speaker 2: kind of dispersed across many different locations, reducing not eliminating,

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Speaker 2: but vastly reducing LA's status as a production hub. There

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Speaker 2: was a study by the Otis College of Art and

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Speaker 2: Design that looked at Bureau of Labor Statistics data. In

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Speaker 2: twenty twenty three, Los Angeles had thirty two percent of

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Speaker 2: film and TV employment in the US. By twenty twenty

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Speaker 2: three that was down to twenty seven percent, and no

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Speaker 2: one location really emerged to take over. It was really

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Speaker 2: more a matter of production has bred to various different locations.

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Speaker 2: George is a big one that has emerged, but you know,

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Speaker 2: their share in twenty twenty three was still just two

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Speaker 2: percent of film and TV employment. Or that's in the

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Speaker 2: Atlanta area. That's not Georgia as a whole. But you know,

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Speaker 2: Georgia has really spent a lot of money to try

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Speaker 2: to lure productions. Louisiana's another big one. But really, thirty

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Speaker 2: eight out of the fifty US states have some form

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Speaker 2: of financial incentive for film and TV productions. So, you know,

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Speaker 2: many states are competing and jostling to bring these projects to,

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Speaker 2: you know, their locales to try to benefit their local economies.

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Speaker 1: Now let's get back to the fires. How I poorly

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Speaker 1: I almost hesitate to use this metaphor, But does it

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Speaker 1: pour gasoline on the fires of this problem of the migration.

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Speaker 2: It's sort of hard to tell. I mean, there's been

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Speaker 2: a lot of speculation that the costs of you know,

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Speaker 2: production insurance might rise. That's a factor, the costs of

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Speaker 2: you know, the raw materials you might need for building

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Speaker 2: sets and things like that. You know, certainly, I think

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Speaker 2: there's there's a case to be made that you know,

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Speaker 2: the fires may make LA seem like even less of

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Speaker 2: an attractive location to bring your you know, production to,

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Speaker 2: you know, if it's going to be unsafe or might

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Speaker 2: have to shut down because of these things. What it

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Speaker 2: has done, you know, in the immediate wake, is it's

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Speaker 2: really kind of galvanized the creative community in wanting to

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Speaker 2: keep more production in LA. There was already, California Governor

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Speaker 2: Gavin Newsom had proposed expanding the state's tax credit budget.

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Speaker 2: Right now, it's only three hundred and thirty million dollars

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Speaker 2: per year. Officials in the state Film Office have actually

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Speaker 2: said that they often have to turn away applicants like

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Speaker 2: people want to film in California, but the financial incentives

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Speaker 2: are not available to them because of the cap. So

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Speaker 2: Newsom has proposed expanding that to seven hundred and fifty

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Speaker 2: million dollars, and the creative community now many of them

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Speaker 2: have signed a petition calling for it to be uncapped

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Speaker 2: for the next three years, so there would actually be

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Speaker 2: no limit on the tax credit budget if that were approved. Now,

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Speaker 2: I don't know how likely that is. Obviously, the legislation

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Speaker 2: to uncap it would have to be introduced. I think

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Speaker 2: the seven hundred and fifty million dollar proposal is now

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Speaker 2: in the wake of the fires, actually almost certain to pass,

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Speaker 2: but it's not clear how much of an impact that's

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Speaker 2: going to have. It might keep slightly more production in

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Speaker 2: the state, but it's really not going to be enough

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Speaker 2: to build LA back to the levels that it had historically.

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Speaker 1: Now you also shine a light in this report on

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Speaker 1: the state of the UK and production levels there. What's

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Speaker 1: going on overseas, it's really a similar thing in the

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Speaker 1: UK that's happening in la. You know, the UK is

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Speaker 1: another area where it's kind of expensive to produce film

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Speaker 1: and TV, which has caused productions to migrate elsewhere in Europe.

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Speaker 1: Eastern European countries have really emerged as big production hubs

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Speaker 1: in the last several years. The Czech Republic and Hungary

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Speaker 1: are especially popular. There's some really skilled crews there and

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Speaker 1: their financial incentives are pretty advantageous, and also the cost

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Speaker 1: of labor and materials tend to be lower there, like

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Speaker 1: your dollar can go further, whereas that's really not the

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Speaker 1: case in the UK. You know, it's obviously it's still

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Speaker 1: a very popular The UK is still a very popular location.

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Speaker 1: There are a lot of, you know, very popular titles

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Speaker 1: that come out of there. Fool Me Once in Baby

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Speaker 1: Reindeer where two of the most popular shows on Netflix

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Speaker 1: last year. Those were both UK imports.

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Speaker 2: But you know, really the UK's is facing a similar contraction.

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Speaker 2: They are. The government there has recently reformed its own

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Speaker 2: financial incentive program to really try to be more advantageous

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Speaker 2: toward independent productions. I think lower budget productions have a

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Speaker 2: more kind of advantageous structure built in now. So really,

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Speaker 2: this is something that's happening across the world. These you know,

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Speaker 2: production hubs that have been the centers of film and

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Speaker 2: TV for so many years are kind of struggling to

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Speaker 2: hold on to these productions.

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Speaker 1: So how does this relate to You have data in

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Speaker 1: here about overall content spending levels across the biggest media companies,

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Speaker 1: the biggest tech companies that are in this space as well.

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Speaker 1: What patterns are we seeing.

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Speaker 2: Well, it's an interesting case, you know, of looking at

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Speaker 2: kind of the big picture and how that trickles down

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Speaker 2: to you know, ground level decisions. You know, we've heard

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Speaker 2: over and over again that these major media companies are

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Speaker 2: becoming more cost conscious. That's very true. Ampere Analysis just

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Speaker 2: put out a new forecast projecting that total global content

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Speaker 2: spend by all the major companies will increase by only

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Speaker 2: zero point four percent this year. That's one billion dollars

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Speaker 2: from two hundred and forty seven billion dollars in twenty

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Speaker 2: twenty four to now and expected two hundred and forty

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Speaker 2: eight in twenty twenty five. Disney just announced that they're

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Speaker 2: actually reducing what they're expecting to spend on content this year.

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Speaker 2: They had projected twenty four billion. Now they're projecting twenty

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Speaker 2: three billion dollars, which is about in line with what

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Speaker 2: they spent in twenty twenty four. Netflix is only modestly

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Speaker 2: increasing what they're spending this year from about seventeen billion

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Speaker 2: to about eighteen billion, I believe. And you know, the

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Speaker 2: effect that has is that, you know, when these budgets

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Speaker 2: are being managed, you know this this carefully, your dollar

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Speaker 2: on you know, a project by project basis has to

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Speaker 2: go a lot further and that can cause you to,

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Speaker 2: you know, when you're looking at where to produce something,

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Speaker 2: say well, you know it's maybe maybe it's too expensive

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Speaker 2: to shoot in LA or the UK. Where where can

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Speaker 2: our dollar go further?

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Speaker 1: Sure, but you know, to bring us full circle, it

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Speaker 1: just makes me wonder about the challenges of shooting back

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Speaker 1: in Los Angeles.

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Speaker 2: Yeah, I mean there are certainly, Like I was saying,

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Speaker 2: I think there are further reforms than just increasing the

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Speaker 2: tax credit budget that would need to happen in order

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Speaker 2: to reinvigorate production in the LA area. You know, I

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Speaker 2: think an underdiscussed factor in this is a permit fees

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Speaker 2: It's really expensive to shoot in LA. It's more than

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Speaker 2: nine hundred dollars just to apply for one permit through

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Speaker 2: Film LA that only covers up to seven days of shooting,

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Speaker 2: that only covers up to five locations. So if you're

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Speaker 2: planning to do like a major, large scale film production

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Speaker 2: in Los Angeles, you know, those fees can really add up,

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Speaker 2: especially for projects with tighter budgets. So there's really a

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Speaker 2: lot of factors that need to be looked at in

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Speaker 2: order to figure out, you know, how can we economically

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Speaker 2: incentivize production to return.

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Speaker 1: To this area. Is that being looked at?

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Speaker 2: Certainly? You know, as I said, the creative community is

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Speaker 2: really banging the drum for it. This petition that I

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Speaker 2: mentioned earlier has also called on studios and streamers to

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Speaker 2: pledge at least ten percent more production in LA over

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Speaker 2: the next three years. But we're really still in very

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Speaker 2: early phases of you know, dealing with the wake of

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Speaker 2: the fires and figuring out how the industry is going

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Speaker 2: to respond to this. I think it's it's going to

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Speaker 2: be a long process of seeing really how the industry

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Speaker 2: mobilizes and if it mobilizes to actually you know, do

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Speaker 2: the work necessary to restore production to the region.

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Speaker 1: The title of this report is, you know, production pipeline,

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Speaker 1: film and TV in flux. So what exactly when when

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Speaker 1: we talk about this business being in flux, what are

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Speaker 1: the pieces of the production puzzle that we're talking about

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Speaker 1: that we're in flux. I just want to sort of

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Speaker 1: underline that for the readers.

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Speaker 2: You know, I, you know, I don't want to be

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Speaker 2: too high falutint here, but we're really talking about every

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Speaker 2: phase of the process. You know, every phase of creating

220
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Speaker 2: a film or a TV show requires just many, many

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Speaker 2: decisions about how you're going to shoot it, where you're

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Speaker 2: going to shoot it, when you're going to shoot it,

223
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Speaker 2: you know, where you can place it to reach its

224
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Speaker 2: ideal audience, Whether you're going to send a movie straight

225
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Speaker 2: to streaming, how much of a theatrical window you're going

226
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Speaker 2: to give it. You know, all of these processes are

227
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Speaker 2: really in flux right now. As we've discussed, there's a

228
00:13:07,600 --> 00:13:10,319
Speaker 2: lot going on in terms of production moving from these

229
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Speaker 2: hubs to other locations. There's a rethinking of distribution going

230
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Speaker 2: on in terms of there are more movies going to

231
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Speaker 2: theaters now, the kind of straight to streaming era of

232
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Speaker 2: filmmaking is not entirely winding down, but certainly it's being

233
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Speaker 2: reduced from what we've seen in the past. So the

234
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Speaker 2: entire industry is really recalibrating and rethinking where's the money going,

235
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Speaker 2: where's the content going, and how is it flowing through

236
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Speaker 2: these various pipelines.

237
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Speaker 1: Well, we will talk more about the film pipelines when

238
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Speaker 1: we come back and talk a bit with Corey Ericsson.

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Speaker 1: Tyler Aquallina. Thanks for walking through the report. Thank you,

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Speaker 1: and we are back with another of the variety Intelligence

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Speaker 1: platform analysts, Corey eric Sincore. You worked on the film

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Speaker 1: portion of this report, and you've obviously been following the

243
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Speaker 1: space very closely. Before we even just dig into the

244
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Speaker 1: data stuff, I'm just curious to get your impressions as

245
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Speaker 1: we sit here in early February about the state of

246
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Speaker 1: the box office. You know, I guess a little bit

247
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Speaker 1: of month in here in twenty twenty five. How are

248
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Speaker 1: you feeling about the health of the US box office

249
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Speaker 1: right now?

250
00:14:28,920 --> 00:14:32,640
Speaker 3: From this year alone? There's still you know, a lot

251
00:14:32,680 --> 00:14:35,480
Speaker 3: to come throughout the year. January is typically you know,

252
00:14:36,080 --> 00:14:38,440
Speaker 3: a less active month for the box office. You have

253
00:14:38,480 --> 00:14:40,920
Speaker 3: a lot of carryovers from the holiday season that are

254
00:14:40,960 --> 00:14:44,880
Speaker 3: still drawing in audiences as well as a lot of

255
00:14:44,920 --> 00:14:48,920
Speaker 3: you know, awards focused releases starting to open up the

256
00:14:48,960 --> 00:14:50,960
Speaker 3: amount of theaters they play in, so it's not the

257
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Speaker 3: best time to release, you know, new movies. I think

258
00:14:55,600 --> 00:15:00,840
Speaker 3: what is already forming what could be the normality of

259
00:15:00,880 --> 00:15:04,600
Speaker 3: this year after last year, is that one film, dog

260
00:15:04,680 --> 00:15:09,400
Speaker 3: Man from Universal, an animated family oriented film, not exactly

261
00:15:09,440 --> 00:15:11,480
Speaker 3: the biggest film, you know, it's not really tied to

262
00:15:11,640 --> 00:15:14,520
Speaker 3: a huge film franchise, but that opened to a little

263
00:15:14,520 --> 00:15:17,240
Speaker 3: over thirty million and basically made it the best film

264
00:15:17,240 --> 00:15:21,200
Speaker 3: of the month in one weekend. So clearly animation is

265
00:15:21,240 --> 00:15:25,600
Speaker 3: still going very very strong. The bigger animated movies that

266
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Speaker 3: you know, we're playing in theaters at the sort of

267
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Speaker 3: January where Mufasa the Lion King from Disney and Sonic

268
00:15:31,400 --> 00:15:34,920
Speaker 3: the Hedgehog three from Paramount, so you know, those are

269
00:15:34,960 --> 00:15:39,280
Speaker 3: still towering over a film like dog Man. But clearly

270
00:15:39,920 --> 00:15:43,320
Speaker 3: the trend of twenty twenty four with animated films really

271
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Speaker 3: drawing in the biggest audiences, you know, even before Inside

272
00:15:46,840 --> 00:15:50,800
Speaker 3: Out two took over the summer, I expect that's going

273
00:15:50,840 --> 00:15:51,960
Speaker 3: to continue throughout the year.

274
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Speaker 1: Okay, I mean once stat that did jump out at

275
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Speaker 1: me looking into twenty twenty five, was your slide of

276
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Speaker 1: a theatrical film output, a pretty solid rebound in the

277
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Speaker 1: total domestic releases wide release, I should say, one hundred

278
00:16:13,000 --> 00:16:16,840
Speaker 1: and ten titles over ninety five, just ninety five in

279
00:16:16,920 --> 00:16:20,240
Speaker 1: twenty twenty four. That's a pretty solid rebound. What do

280
00:16:20,280 --> 00:16:21,040
Speaker 1: you account for that?

281
00:16:21,560 --> 00:16:24,520
Speaker 3: And that's what's definitely estimated for this year at the

282
00:16:24,560 --> 00:16:28,760
Speaker 3: two thousand screen level. You know, it's not too difficult

283
00:16:28,800 --> 00:16:31,200
Speaker 3: to figure out the difference there between last year twenty

284
00:16:31,240 --> 00:16:34,480
Speaker 3: twenty four was a little under one hundred, but you know,

285
00:16:34,800 --> 00:16:37,240
Speaker 3: it's the impact of the strikes in twenty twenty three.

286
00:16:37,960 --> 00:16:42,360
Speaker 3: Production got pushed back, some releases were delayed from twenty

287
00:16:42,360 --> 00:16:44,600
Speaker 3: twenty four to twenty twenty five, and you know, throughout

288
00:16:44,640 --> 00:16:47,000
Speaker 3: twenty twenty four there was a lot of catch up

289
00:16:47,720 --> 00:16:50,440
Speaker 3: with you know, film shoots that had to take you know,

290
00:16:50,840 --> 00:16:54,240
Speaker 3: nearly half a year off. So twenty twenty five is

291
00:16:54,280 --> 00:16:58,280
Speaker 3: simply resembling what you know, a typical post pandemic year

292
00:16:58,360 --> 00:17:01,600
Speaker 3: looks like. And it's still well, at least for this year,

293
00:17:01,720 --> 00:17:03,640
Speaker 3: where there's going to be a little bit more than

294
00:17:03,640 --> 00:17:05,880
Speaker 3: we saw in you know, twenty twenty three. For instance.

295
00:17:05,920 --> 00:17:09,200
Speaker 3: But you know, this is the continue to scent out

296
00:17:09,200 --> 00:17:14,240
Speaker 3: of the COVID years, with studios returning to fairly robust slates.

297
00:17:14,800 --> 00:17:17,240
Speaker 3: You know, at least, you know, the current rate is

298
00:17:17,240 --> 00:17:19,399
Speaker 3: at least ten each but most of the studios have

299
00:17:19,440 --> 00:17:22,199
Speaker 3: a bit more than that at the wide level. So

300
00:17:22,280 --> 00:17:24,880
Speaker 3: it's nothing, it's nothing too complicated. It's just the reality

301
00:17:24,920 --> 00:17:27,840
Speaker 3: of what happens when the industry has to take time

302
00:17:27,880 --> 00:17:30,480
Speaker 3: off from production and now they're catching back up.

303
00:17:32,640 --> 00:17:35,920
Speaker 1: Give us your read on twenty twenty four, which from

304
00:17:36,040 --> 00:17:40,080
Speaker 1: my perspective looked like you know, I think when you

305
00:17:40,080 --> 00:17:42,480
Speaker 1: look at that top line number, you're like, oh, well,

306
00:17:42,520 --> 00:17:45,480
Speaker 1: you know, it didn't measure up to the previous year.

307
00:17:45,640 --> 00:17:49,480
Speaker 1: But I think also you could say probably did better

308
00:17:49,520 --> 00:17:51,840
Speaker 1: than a lot of people than expected it would.

309
00:17:52,280 --> 00:17:56,439
Speaker 3: Of course, yeah, it was a given last year that

310
00:17:57,040 --> 00:17:59,080
Speaker 3: at you know, the pure numbers level, it was never

311
00:17:59,119 --> 00:18:01,639
Speaker 3: going to match twenty twenty three just because of the

312
00:18:01,640 --> 00:18:05,639
Speaker 3: shrunken output. But as we talked about with Julie Sesnovich

313
00:18:05,840 --> 00:18:10,320
Speaker 3: over Illuminate last year, she was still very very optimistic

314
00:18:10,400 --> 00:18:15,280
Speaker 3: about you know, none of the big, big franchise releases

315
00:18:15,320 --> 00:18:17,119
Speaker 3: that were coming up, but you know, a lot of

316
00:18:17,680 --> 00:18:19,720
Speaker 3: you know, stuff that was a little bit more of

317
00:18:19,760 --> 00:18:22,920
Speaker 3: a gamble but proved to gross really well, like Beetlejuice, Beetlejuice,

318
00:18:23,240 --> 00:18:25,520
Speaker 3: and of course, you know the Wicked adaptation that did

319
00:18:25,520 --> 00:18:28,000
Speaker 3: tremendously well over Thanksgiving window. And by the end of

320
00:18:28,000 --> 00:18:31,560
Speaker 3: twenty twenty four, you know, the total domestic number really

321
00:18:31,640 --> 00:18:34,199
Speaker 3: wasn't far behind twenty twenty three. I think it was

322
00:18:34,240 --> 00:18:37,040
Speaker 3: only like a little less than four hundred million short.

323
00:18:37,640 --> 00:18:40,919
Speaker 3: So twenty twenty four did end on a pretty strong

324
00:18:41,040 --> 00:18:45,359
Speaker 3: note all things considered. Does that mean there's going to

325
00:18:45,359 --> 00:18:47,399
Speaker 3: be a repeat of that in twenty twenty five and

326
00:18:47,400 --> 00:18:49,520
Speaker 3: we're going to get, you know, the best number yet

327
00:18:49,560 --> 00:18:53,640
Speaker 3: since the pandemic. That's not necessarily a given, just because

328
00:18:53,760 --> 00:18:56,440
Speaker 3: even if you know, Disney is back in full force

329
00:18:56,520 --> 00:19:00,280
Speaker 3: with a robust slate full of franchises, a lot of

330
00:19:00,280 --> 00:19:04,320
Speaker 3: the other studios are showing a bit more diverse lates

331
00:19:04,320 --> 00:19:06,959
Speaker 3: this time around. Warner Brothers in particular, is not at

332
00:19:06,960 --> 00:19:09,399
Speaker 3: all heavy on the franchises. They have a lot of

333
00:19:09,440 --> 00:19:12,639
Speaker 3: more tour driven films hitting theaters, and a lot of

334
00:19:12,680 --> 00:19:15,959
Speaker 3: those films are also they have quite big budgets, like

335
00:19:16,160 --> 00:19:19,199
Speaker 3: Bond Juno, who won Best picture for Parasite his follow up,

336
00:19:19,240 --> 00:19:21,600
Speaker 3: Mickey seventeen, that's said to be around one hundred and

337
00:19:21,600 --> 00:19:24,200
Speaker 3: fifty million budget, and you know, that's a completely original

338
00:19:24,359 --> 00:19:27,800
Speaker 3: sci fi film. So there are still quite a bit

339
00:19:27,840 --> 00:19:31,000
Speaker 3: of gambles on the calendar. And I think the test

340
00:19:31,280 --> 00:19:33,399
Speaker 3: for this year versus last year is going to be

341
00:19:33,840 --> 00:19:36,840
Speaker 3: do we get a lot more of those surprise hits

342
00:19:37,240 --> 00:19:39,760
Speaker 3: that you know, help fill out the numbers that would

343
00:19:39,760 --> 00:19:42,639
Speaker 3: otherwise be you know, filled if we had a slate

344
00:19:43,080 --> 00:19:45,119
Speaker 3: as franchise driven as twenty nineteen.

345
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Speaker 1: For instance, we were talking in the first half of

346
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Speaker 1: the conversation, Tyler was referencing the difference between a theatrical

347
00:19:54,920 --> 00:19:58,240
Speaker 1: output and the output for films on the streaming side

348
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Speaker 1: of things. It seems like there's been a clear shift

349
00:20:02,560 --> 00:20:08,119
Speaker 1: in momentum pulling out of the streaming side. What do

350
00:20:08,160 --> 00:20:09,399
Speaker 1: you account for that shift?

351
00:20:10,119 --> 00:20:11,720
Speaker 3: I mean, what I count for that shit is just

352
00:20:11,840 --> 00:20:15,399
Speaker 3: you can't compete with Netflix on the streaming output side.

353
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Speaker 3: They you know, between their original films, you know that

354
00:20:19,119 --> 00:20:22,800
Speaker 3: they fully develop and produce themselves their acquired films, and

355
00:20:22,840 --> 00:20:26,200
Speaker 3: then all these international films that go you know, straight

356
00:20:26,240 --> 00:20:30,000
Speaker 3: to Netflix after playing you know, a very small theatrical

357
00:20:30,040 --> 00:20:33,400
Speaker 3: release for one weekend. You know, Netflix is still consistently

358
00:20:33,440 --> 00:20:36,280
Speaker 3: putting out, you know, around two hundred films each year

359
00:20:36,280 --> 00:20:39,440
Speaker 3: that you can't watch anywhere else but Netflix. So there's

360
00:20:39,600 --> 00:20:44,120
Speaker 3: really no point in competing with that on any other streamer.

361
00:20:44,200 --> 00:20:46,840
Speaker 3: I mean, Prime still has a good number of films,

362
00:20:46,840 --> 00:20:50,000
Speaker 3: but obviously they're not really even seen as Prime anymore.

363
00:20:50,040 --> 00:20:52,800
Speaker 3: As much as Amazon MGM. You know, they're still trying

364
00:20:52,840 --> 00:20:55,960
Speaker 3: to get most of their theaters that are developed through MGM,

365
00:20:56,080 --> 00:20:58,879
Speaker 3: most of the films developed through MGM out into theaters. So,

366
00:20:59,560 --> 00:21:03,760
Speaker 3: you know, especially if Netflix is deciding it's not going

367
00:21:03,840 --> 00:21:07,840
Speaker 3: to be spending you know, two hundred or even three

368
00:21:07,920 --> 00:21:11,160
Speaker 3: hundred million on films anymore as of Dan Lynn replacing

369
00:21:11,200 --> 00:21:14,639
Speaker 3: Scott Stuber, if they're going to maintain their output, it

370
00:21:14,760 --> 00:21:17,840
Speaker 3: just doesn't make a ton of sense for any of

371
00:21:17,840 --> 00:21:20,040
Speaker 3: the other studios in the space to try to, you know,

372
00:21:20,200 --> 00:21:23,639
Speaker 3: even matter fraction of that you have theaters now, people

373
00:21:23,760 --> 00:21:25,600
Speaker 3: are still going to the movies. It's never going to

374
00:21:25,640 --> 00:21:28,960
Speaker 3: be what it was before the pandemic, but people still

375
00:21:28,960 --> 00:21:31,800
Speaker 3: go to movies. You can still make as much money

376
00:21:31,800 --> 00:21:34,960
Speaker 3: back as you can try to there versus putting it

377
00:21:34,960 --> 00:21:35,760
Speaker 3: all out in streaming.

378
00:21:35,760 --> 00:21:39,479
Speaker 1: First, of course you reference Dan Lynn. He did strike

379
00:21:39,520 --> 00:21:43,600
Speaker 1: an interesting and some might would some might have said

380
00:21:44,000 --> 00:21:51,160
Speaker 1: unexpected deal on Narnia to carve out a theatrical distribution

381
00:21:51,400 --> 00:21:53,840
Speaker 1: of what was it a week in theaters?

382
00:21:53,840 --> 00:21:55,359
Speaker 3: I actually think it's longer than its going to be

383
00:21:55,359 --> 00:21:59,359
Speaker 3: four weeks. Yeah, so it's uh, that's going to come

384
00:21:59,400 --> 00:22:02,960
Speaker 3: through Gretit is of course known for Lady Bird, Little Women,

385
00:22:03,119 --> 00:22:04,480
Speaker 3: and obviously.

386
00:22:04,080 --> 00:22:05,200
Speaker 1: Barbie Barbie movie.

387
00:22:05,240 --> 00:22:10,040
Speaker 3: Yeah, so yeah, that was a condition for her in

388
00:22:10,080 --> 00:22:12,080
Speaker 3: setting up that deal with a Narnia film. She wants,

389
00:22:12,119 --> 00:22:14,600
Speaker 3: you know, an exclusive theatrical release. So they're going to

390
00:22:14,640 --> 00:22:16,920
Speaker 3: commit to four weeks for that, which is going to

391
00:22:16,960 --> 00:22:20,439
Speaker 3: be longer than their last theatrical test, which was the

392
00:22:20,640 --> 00:22:24,520
Speaker 3: Knives Out sequel Glass Onion that you know, it was

393
00:22:24,560 --> 00:22:27,080
Speaker 3: in theaters for more than a week. I think that

394
00:22:27,160 --> 00:22:29,160
Speaker 3: was ultimately around two weeks.

395
00:22:29,440 --> 00:22:31,800
Speaker 1: But what is the significance of that deal? Does that

396
00:22:31,840 --> 00:22:36,840
Speaker 1: tell us Netflix is perhaps is this an outlier or

397
00:22:36,880 --> 00:22:40,240
Speaker 1: is this Netflix telling the community like, all right, maybe

398
00:22:40,280 --> 00:22:44,159
Speaker 1: we are gonna loosen our standards when it comes to

399
00:22:44,200 --> 00:22:47,359
Speaker 1: this supposed hard line on theaters for now.

400
00:22:47,480 --> 00:22:50,400
Speaker 3: I'd say it's an outlier simply because I think they

401
00:22:50,440 --> 00:22:53,679
Speaker 3: really just wanted Greta Gerwick. You know, they wanted to

402
00:22:53,720 --> 00:22:58,280
Speaker 3: have a flashy director attached to what. You know, after

403
00:22:58,359 --> 00:23:00,880
Speaker 3: this Electric State movie comes out in March, is going

404
00:23:00,920 --> 00:23:04,560
Speaker 3: to be sort of their next you know, massively budgeted

405
00:23:04,600 --> 00:23:07,560
Speaker 3: project project. But in this day and age, it just

406
00:23:07,600 --> 00:23:10,080
Speaker 3: doesn't make sense to commit that much money to a

407
00:23:10,119 --> 00:23:14,040
Speaker 3: film and not have it play in theaters. You know,

408
00:23:14,240 --> 00:23:18,080
Speaker 3: why not utilize every single revenue stream. But again, that's

409
00:23:18,200 --> 00:23:21,360
Speaker 3: just you know, one movie in a hopeful new franchise

410
00:23:21,359 --> 00:23:24,560
Speaker 3: for Netflix, and you know they're not even saying, Okay,

411
00:23:24,600 --> 00:23:26,639
Speaker 3: you know, we're going to put it out in theaters

412
00:23:26,680 --> 00:23:29,120
Speaker 3: exclusively and see how long that goes for They're already

413
00:23:29,200 --> 00:23:30,960
Speaker 3: they already seem to be putting a hard limit on

414
00:23:31,040 --> 00:23:33,919
Speaker 3: it with this you know, four week IMAX release. But

415
00:23:34,040 --> 00:23:35,760
Speaker 3: you know, it's a step up for sure. It's just

416
00:23:35,960 --> 00:23:38,400
Speaker 3: it's a step up we won't see until next year

417
00:23:38,400 --> 00:23:40,720
Speaker 3: at the very least, assuming you know, the project stays

418
00:23:40,720 --> 00:23:41,119
Speaker 3: on time.

419
00:23:42,320 --> 00:23:47,840
Speaker 1: Another data point you feature in the Production Pipelines report

420
00:23:47,880 --> 00:23:51,199
Speaker 1: from Variety Intelligence Platform, which we just put out in

421
00:23:51,280 --> 00:23:55,960
Speaker 1: early February, was a look at the so called dependency

422
00:23:56,320 --> 00:24:01,320
Speaker 1: on film franchises what did you charge out in terms

423
00:24:01,520 --> 00:24:04,600
Speaker 1: of the latest trends. I guess what I'm saying is

424
00:24:04,680 --> 00:24:09,200
Speaker 1: how dependent is the industry on franchises these days? And

425
00:24:09,440 --> 00:24:13,119
Speaker 1: what will twenty twenty five tell us in terms of

426
00:24:13,160 --> 00:24:14,040
Speaker 1: that dependency.

427
00:24:14,720 --> 00:24:19,960
Speaker 3: It's still quite dependent. Looking at what's currently scheduled and

428
00:24:20,000 --> 00:24:22,920
Speaker 3: you know, excluding films that are expected for twenty twenty

429
00:24:22,920 --> 00:24:25,800
Speaker 3: five but don't have a release date yet. The you

430
00:24:25,800 --> 00:24:28,960
Speaker 3: know number I got was around fifty four percent of

431
00:24:29,000 --> 00:24:34,280
Speaker 3: the current studio slates are tied to franchises some degree,

432
00:24:34,320 --> 00:24:36,600
Speaker 3: whether that's a new sequel and you know, a well

433
00:24:36,680 --> 00:24:40,240
Speaker 3: known franchise, a reboot or remake of something that came before.

434
00:24:40,760 --> 00:24:45,119
Speaker 3: It's definitely you know, nothing much has changed there. This

435
00:24:45,320 --> 00:24:49,199
Speaker 3: is going to be a little bit more of a

436
00:24:49,280 --> 00:24:52,359
Speaker 3: franchise a year than twenty twenty four, but not a ton.

437
00:24:53,200 --> 00:24:57,000
Speaker 3: What's most interesting is, you know, the attempt the continued

438
00:24:57,040 --> 00:25:00,160
Speaker 3: attempts to take old ip we haven't seen for some time,

439
00:25:00,920 --> 00:25:02,680
Speaker 3: and you know, try to make something new out of them,

440
00:25:02,720 --> 00:25:05,160
Speaker 3: like we saw with Twisters last year in Beatlejuice Beetlejuice

441
00:25:05,200 --> 00:25:08,280
Speaker 3: last year. This time around, it's really Sony that's taking

442
00:25:08,320 --> 00:25:11,760
Speaker 3: the biggest gambal on that regard, they're launching a film

443
00:25:11,800 --> 00:25:15,040
Speaker 3: called twenty eight Years Later, which is basically a reboot

444
00:25:15,080 --> 00:25:18,280
Speaker 3: sequel to twenty twos twenty eight days Later. They have

445
00:25:18,320 --> 00:25:20,960
Speaker 3: the same team from that, that's director Danny Boyle and

446
00:25:21,000 --> 00:25:24,200
Speaker 3: screenwriter Alex Garland, who is you know, at this point

447
00:25:24,400 --> 00:25:26,920
Speaker 3: more well known for films like Civil War that he's

448
00:25:26,920 --> 00:25:32,160
Speaker 3: directed himself. So they've got Killian Murphy back after he

449
00:25:32,240 --> 00:25:35,040
Speaker 3: won Best Actor for Oppenheimer. So you know, it's a

450
00:25:35,040 --> 00:25:37,560
Speaker 3: project that has a lot of flare. But they're not

451
00:25:37,640 --> 00:25:40,800
Speaker 3: even waiting to see how that film does in the summer.

452
00:25:40,840 --> 00:25:44,040
Speaker 3: They already greenlit it as a trilogy, so a second

453
00:25:44,080 --> 00:25:47,240
Speaker 3: film has essentially already been shot and it's slated for

454
00:25:47,320 --> 00:25:50,200
Speaker 3: January twenty twenty six. And I think the first film

455
00:25:50,280 --> 00:25:52,320
Speaker 3: has a budget of around seventy million, so you know,

456
00:25:53,280 --> 00:25:57,120
Speaker 3: they're not not taking it seriously, and they are giving

457
00:25:57,119 --> 00:25:59,919
Speaker 3: it a heftier budget than you typically see for horror films.

458
00:26:00,160 --> 00:26:02,879
Speaker 3: But at the same time, there is you know, something

459
00:26:02,880 --> 00:26:05,879
Speaker 3: to be said there for wanting to create a new

460
00:26:05,920 --> 00:26:09,600
Speaker 3: franchise that you know is under one hundred million. I think,

461
00:26:09,720 --> 00:26:12,760
Speaker 3: you know, Sony recognizes that it can't solely rely on

462
00:26:12,800 --> 00:26:15,480
Speaker 3: its little chunk of Marvel with the Tom Holland Spider

463
00:26:15,480 --> 00:26:17,720
Speaker 3: Man movies. One thing that could be driving that is

464
00:26:17,760 --> 00:26:20,280
Speaker 3: that their own attempt at you know, their own Spider

465
00:26:20,320 --> 00:26:24,320
Speaker 3: Man universe with these movies based around villains like the

466
00:26:24,320 --> 00:26:26,760
Speaker 3: three Venom movies and then of course Morbus and Madam

467
00:26:26,760 --> 00:26:29,000
Speaker 3: Webb that hasn't really taken off of them and the

468
00:26:29,040 --> 00:26:31,320
Speaker 3: way they wanted it to. The new Venom film that

469
00:26:31,320 --> 00:26:35,720
Speaker 3: came out last fall, did you know, it didn't do terribly,

470
00:26:36,000 --> 00:26:39,280
Speaker 3: not like Madam Webb and Morbius, but definitely not as

471
00:26:39,280 --> 00:26:41,720
Speaker 3: well as the twenty twenty one Venom film. So I

472
00:26:41,720 --> 00:26:45,240
Speaker 3: think they're ready to try to figure out a new

473
00:26:45,280 --> 00:26:48,520
Speaker 3: path forward for franchises that is much more economical, but

474
00:26:48,960 --> 00:26:51,280
Speaker 3: you know, can still kick off with a lot of flair,

475
00:26:51,680 --> 00:26:53,560
Speaker 3: and you know, if they are willing to green light

476
00:26:53,600 --> 00:26:56,040
Speaker 3: a trilogy instead of just you know, one of these

477
00:26:56,080 --> 00:26:58,520
Speaker 3: twenty eight years later films, I think, you know, that's

478
00:26:58,520 --> 00:26:59,960
Speaker 3: a good example of their confidence there.

479
00:27:00,920 --> 00:27:03,240
Speaker 1: And just to go back to that stat you offered

480
00:27:03,240 --> 00:27:06,399
Speaker 1: earlier about the fifty four percent of the twenty twenty

481
00:27:06,400 --> 00:27:11,600
Speaker 1: five slate being franchise associated back in twenty twenty one,

482
00:27:11,680 --> 00:27:15,880
Speaker 1: would be the only time, going back on the six

483
00:27:16,000 --> 00:27:18,119
Speaker 1: years that you charted where there was a higher number,

484
00:27:18,280 --> 00:27:22,399
Speaker 1: which was fifty seven percent. Just throwing that out there.

485
00:27:22,359 --> 00:27:25,639
Speaker 3: Yeah, that one. I think that was mostly because of

486
00:27:25,680 --> 00:27:28,600
Speaker 3: the sheer amount of films from twenty twenty that were delayed.

487
00:27:29,520 --> 00:27:36,080
Speaker 1: I'd be remiss not alluding to the recently concluded Sundance

488
00:27:36,200 --> 00:27:41,000
Speaker 1: Film Festival, because we also have a slide from you

489
00:27:42,160 --> 00:27:47,600
Speaker 1: about the festivals, and so I was curious as you

490
00:27:48,480 --> 00:27:51,560
Speaker 1: looked at the Sundance Festival that just completed, there was

491
00:27:52,080 --> 00:27:56,600
Speaker 1: a lot of chatter about slow buying and although I

492
00:27:56,600 --> 00:27:58,440
Speaker 1: think it picked up a bit towards the end, any

493
00:27:58,480 --> 00:28:03,560
Speaker 1: impressions as you looked past the Sundance that just concluded,

494
00:28:03,600 --> 00:28:07,960
Speaker 1: did it conform with your expectations? Yeah?

495
00:28:08,600 --> 00:28:11,560
Speaker 3: At the you know, number level of the films that

496
00:28:11,880 --> 00:28:15,200
Speaker 3: you know, debut at the festival that hasn't changed. That's consistently,

497
00:28:16,040 --> 00:28:17,920
Speaker 3: you know, like been between eighty and one hundred in

498
00:28:17,920 --> 00:28:19,880
Speaker 3: the past few years. But yeah, as you pointed out,

499
00:28:20,400 --> 00:28:22,960
Speaker 3: and as you know, the press was really noting the

500
00:28:24,000 --> 00:28:26,200
Speaker 3: you know, there weren't a lot of flashy buys coming

501
00:28:26,200 --> 00:28:28,120
Speaker 3: out of it like there used to be. I think

502
00:28:28,520 --> 00:28:30,960
Speaker 3: one thing that could be driving that is just you know,

503
00:28:31,040 --> 00:28:34,200
Speaker 3: maybe the streamers are being a little bit more economical.

504
00:28:34,480 --> 00:28:37,600
Speaker 3: Netflix in the past has of course bought films, you know,

505
00:28:37,680 --> 00:28:40,320
Speaker 3: at the twenty million level of the twenty five million level,

506
00:28:40,600 --> 00:28:43,680
Speaker 3: but maybe this time, you know, if there's a strategy

507
00:28:43,760 --> 00:28:45,960
Speaker 3: to really bring those costs down on the film side,

508
00:28:46,000 --> 00:28:49,160
Speaker 3: that could be applying to the acquisition front as well. Obviously,

509
00:28:49,200 --> 00:28:51,360
Speaker 3: if you know, they don't get a lot of Oscars

510
00:28:51,360 --> 00:28:55,520
Speaker 3: from Amelia Perez this Oscar season, that could influence that

511
00:28:55,600 --> 00:29:00,680
Speaker 3: as well. One of the notable buys that did sort

512
00:29:00,720 --> 00:29:02,120
Speaker 3: of come out right out of the gate was Neon

513
00:29:02,200 --> 00:29:05,120
Speaker 3: scooping up yet another horror film. They bought this film

514
00:29:05,160 --> 00:29:07,680
Speaker 3: called Together. That made a little bit of a splash there,

515
00:29:08,280 --> 00:29:11,720
Speaker 3: and like going back to what I was saying about

516
00:29:12,120 --> 00:29:14,920
Speaker 3: horror and like Sony taking a chance on a horror franchise,

517
00:29:15,160 --> 00:29:18,440
Speaker 3: that genre alone is still such a big draw at

518
00:29:18,480 --> 00:29:20,680
Speaker 3: the box office that I expect you're going to see

519
00:29:21,080 --> 00:29:24,120
Speaker 3: a lot more acquisitions on the horror side at you know,

520
00:29:24,920 --> 00:29:28,520
Speaker 3: the festivals throughout the year, because you know, Neon already

521
00:29:28,560 --> 00:29:31,360
Speaker 3: had I think at least six films scheduled on their

522
00:29:31,360 --> 00:29:33,680
Speaker 3: slate with actual dates or twenty to twenty five that

523
00:29:33,760 --> 00:29:37,240
Speaker 3: you know, can definitely be considered horror movies. So if

524
00:29:37,280 --> 00:29:39,400
Speaker 3: they hit the festival and almost immediately come back with

525
00:29:39,400 --> 00:29:42,520
Speaker 3: another film, that's showing a lot about their thinking, because

526
00:29:42,560 --> 00:29:45,080
Speaker 3: Neon isn't just you know, they don't just put out

527
00:29:45,240 --> 00:29:47,160
Speaker 3: neat horror films. They also put out quite a lot

528
00:29:47,160 --> 00:29:50,400
Speaker 3: of foreign language films. They have a knack for films

529
00:29:50,440 --> 00:29:53,959
Speaker 3: than when the Palm dor can uh Anora for instance,

530
00:29:54,000 --> 00:29:55,400
Speaker 3: which is you know, one of their front runners for

531
00:29:55,440 --> 00:29:57,960
Speaker 3: this Oscar season, that's a Neon film and that also

532
00:29:58,000 --> 00:30:00,880
Speaker 3: took on Palm d'Or So. The fact that studio is

533
00:30:00,920 --> 00:30:04,760
Speaker 3: bridging such an interesting gap between stuff that plays very

534
00:30:04,840 --> 00:30:08,560
Speaker 3: very well with film audiences and you know, the other

535
00:30:08,840 --> 00:30:12,560
Speaker 3: Christige fair they're known for, I think it's a good

536
00:30:12,560 --> 00:30:15,560
Speaker 3: indication that festivals could get a lot more genre centric.

537
00:30:16,600 --> 00:30:19,240
Speaker 1: You mentioned the Oscars, You mentioned in Nora anything else

538
00:30:20,000 --> 00:30:22,320
Speaker 1: as the Oscars approach that you're going to be looking

539
00:30:22,360 --> 00:30:26,520
Speaker 1: at as the award show season is in high gear.

540
00:30:27,880 --> 00:30:31,520
Speaker 3: A twenty four is the Brutalist that's pretty front of mind,

541
00:30:31,800 --> 00:30:33,800
Speaker 3: not just because it's a front runner for awards, but

542
00:30:33,840 --> 00:30:36,920
Speaker 3: it's actually been doing pretty decently at the box office.

543
00:30:37,160 --> 00:30:40,160
Speaker 3: Initially that had a very small release, you know, over

544
00:30:40,200 --> 00:30:42,680
Speaker 3: the holiday season, was playing in just a few theaters

545
00:30:42,680 --> 00:30:46,040
Speaker 3: on seventy millimeter. I checked that out on Christmas and

546
00:30:46,200 --> 00:30:49,560
Speaker 3: that is a very very long movie. It's over three hours,

547
00:30:50,280 --> 00:30:53,840
Speaker 3: and it's from a director who is you know, becoming

548
00:30:53,840 --> 00:30:57,760
Speaker 3: increasingly lauded, but isn't Martin Scorsese, who I think can

549
00:30:57,800 --> 00:31:00,239
Speaker 3: get away a bit easier with putting films out his

550
00:31:00,320 --> 00:31:05,800
Speaker 3: name again, Uh, pretty Corbett right, Yeah, So that expanded

551
00:31:05,920 --> 00:31:09,520
Speaker 3: in January now has about twelve million domestically, which you know,

552
00:31:09,760 --> 00:31:13,080
Speaker 3: not a ton compared to what most of the studio

553
00:31:13,120 --> 00:31:16,840
Speaker 3: pictures draw in, but is still I think evidence of

554
00:31:17,080 --> 00:31:19,719
Speaker 3: you know, half the strength of A twenty four's brand,

555
00:31:20,280 --> 00:31:23,320
Speaker 3: but also that there is still a willingness to see

556
00:31:23,400 --> 00:31:25,320
Speaker 3: movies with a lot of praise behind them, you know,

557
00:31:25,480 --> 00:31:28,400
Speaker 3: no matter their length, if people feel they'll get a

558
00:31:28,400 --> 00:31:30,040
Speaker 3: decent theatrical experience out of it.

559
00:31:31,320 --> 00:31:36,520
Speaker 1: Well, barely a month into the calendar, but plenty, plenty

560
00:31:36,560 --> 00:31:40,440
Speaker 1: of trends to be watching across the entertainment industry, and

561
00:31:40,680 --> 00:31:44,080
Speaker 1: you could do worse. And check out the Variety Intelligence

562
00:31:44,120 --> 00:31:49,800
Speaker 1: platform latest report on production pipelines, film and TV in Flux.

563
00:31:50,400 --> 00:31:55,800
Speaker 1: My fellow Variety Intelligence platform analysts Tyler Aquillina and Corey

564
00:31:55,840 --> 00:31:58,800
Speaker 1: Ericksson did some great work that you got to check out,

565
00:31:59,160 --> 00:32:00,720
Speaker 1: and I thank them both for being here.

566
00:32:00,800 --> 00:32:05,680
Speaker 3: Thank you, Thanks for listening.

567
00:32:06,080 --> 00:32:09,000
Speaker 2: Be sure to leave us a review at Apple Podcasts

568
00:32:09,200 --> 00:32:12,160
Speaker 2: or Amazon Music. We love to hear from listeners.

569
00:32:12,360 --> 00:32:14,960
Speaker 3: Please go to Variety dot com and sign up for

570
00:32:15,080 --> 00:32:19,240
Speaker 3: the free weekly Strictly Business newsletter, and don't forget to

571
00:32:19,320 --> 00:32:23,160
Speaker 3: tune in next week for another episode of Strictly Business