Sunday, March 06, 2016

Struggle and Contraction

Some entertainment analyst think there is hard slogging ahead.

The film industry faces an “increasingly dire” outlook as audiences continue to shrink in the U.S., with too many studios producing too many tentpole films, which end up cannibalizing each other’s audiences, analyst Doug Creutz reported Friday. ...

Creutz offers a welter of stats to back up his contraction argument: “Last year, over 25% of total box office came from just five films, well above the average of roughly 16% from 2001-14 and the prior peak of 19% in 2012.” He called this a “consistent phenomenon.” ...

Creutz predicts tough sledding for most of the studios in 2016, though he adds: “We expect that one or two of the companies will likely outperform our generally negative view; however, we also think picking the winners at this point is a high-risk proposition.” ...

Consolidation goes on in maturing industries all the time. Where 110 years ago, there were 20 or 30 American car companies. A century-plus on, there are 2 1/2, and one of those is owned by the French.

But in this corporatist age, Hollywood consolidates for survival. Viacom has hit an economic rough patch, and even Disney has problems with the incredible shrinking ESPN and feature films that don't perform. In the animated sphere, Hanna-Barbera was once a prolific independent that churned out animated TV hits. But that was in an era when conglomerates there were limits on corporate power and vertical integration was a no-no.

Today, our fine entertainment conglomerates are free to own content, content makers, and distribution networks. It's all one big vertically integrated money machine and Disney, Comcast-Universal-NBC, 20th Century Fox-News Corporation are taking advantage of the brave new world. Smaller film companies find it increasingly hard to finance and create big, competitive films, so they partner with ... or get gobbled up by ... one of the handful of monster conglomerates.

DreamWorks' live-action division has been partnered with larger companies for years. And DreamWorks Animation has been trying to become the subsidiary of a conglomerate for almost as long. As costs rise higher and advertising budgets sy-rocket, consolidation becomes the name of the game.


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