What I Got Right and Wrong in 2023 So Far

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(Welcome to the Entertainment Strategy Guy, a newsletter on the entertainment industry and business strategy. I write a weekly Streaming Ratings Report and a bi-weekly strategy column, along with occasional deep dives into other topics, like today’s article. Please subscribe.)
Today’s article is free for all to read. If you’d like to cross-post it to your newsletter, feel free! Also, if you ever spot something I got wrong or right—from a fact to a prediction—please, please, please let me know.)

Recently, Planet Money had a fascinating episode/update on “nudge” theory. In short, some fairly-famous social science researchers, who study honesty, were caught…using fabricated data. But my favorite part was that Planet Money called themselves out, sharing a clip from a 2014 episode quoting one of those very same researchers! 

(Unfortunately, that episode’s page doesn’t have a correction on it, yet, or a link to the new episode debunking that incorrect idea. To be fair, I don’t retroactively edit my old posts if they’re wrong, but maybe I should?)

I love, love, love when people call themselves out on what they get right and what they get wrong! The media ecosystem doesn’t really work if you don’t do this.

I’ve been planning on writing up a “What I Got Right, What I Got Wrong” update for a few months or so now, especially since I’ve gotten more feedback/responses to my articles this summer than ever before, so without further ado, let’s get right into it!

Wrong: SAG-AFTRA Went On Strike

Well, in July, I was too optimistic that the AMPTP could avoid a strike with SAG-AFTRA. I expected that the AMPTP and SAG-AFTRA would reach a deal. They extended the deadline, called in a federal mediator, and the SAG-AFTRA president even flew to Italy during the negotiations, so it seemed unlikely, to me, that the two sides were that far apart on a deal. 

Well, I was wrong.

Right – The South Korean TV Show Bubble

People keep touting Netflix’s foreign strategy, specifically citing South Korea as the go-to example. You can look at recent headlines like

“How Netflix Plans Total Global Domination, One Korean Drama at a Time: Popular content produced in Asia and around the world has taken on greater significance with most of Hollywood now on strike.”

“Netflix to invest $2.5 billion in South Korea as K-content continues to dominate”

Some skepticism might be warranted. How’s the K-drama market as a whole doing? Not great! 

However, Korea’s hot streak has begun to wind down, driving the K-drama industry into crisis. Many streaming services and networks are starting to tighten their belts and hit the pause button concerning the overflow in series production, leaving many series in stasis or shelved after production. 

According to Korea Creative Content Agency, about 160 series were made in 2022, which was the highest number in the last three years. However, this year, only about 100 series were confirmed to proceed to the production stage.”

Add to this that Netflix’s growth has fluctuated in South Korea. According to government reports last year, “the number of Netflix users in South Korea was 1.17 million as of the fourth quarter of 2022, a drop of 30.5% from the same period in the previous year.”

As with all things, it’s complicated. Netflix’s two biggest rivals in South Korea, TVING and Wavve, had huge losses last year. So maybe, during a drop in K-Drama productions, now is the time to make an investment like this. And as Media Partners Asia notes, in Netflix’s fast-growing region, Asia, it is South Korean content that hooks subscribers, not American content.

But $2.5 billion is a big, big bet in a region that lacks the same ARPU as the US. Ever since the massive success of Squid Game, I’ve repeated, again and again (and here, here, here, here or here) that foreign hits in the US/globally are really, really rare. (Most viewers, across the globe, prefer content from their region or in their native language.) When Bela Bajaria tells people that, “We truly believe that great storytelling can come from anywhere and be loved everywhere.” (I think this profile actually balances skepticism and optimism pretty well.) just know that the data doesn’t really support that thesis yet. 

Wrong – Will YouTube Live TV Lose Money on NFL Sunday Ticket?

When YouTube Live TV won the rights to NFL Sunday Ticket—the subscription to watch all out-of-market games for the NFL—I called it a big win for Google at the time. And strategically I hold to that, since NFL Sunday Ticket really can drive subscriptions, as DirecTV learned.

But will it make money? I didn’t run my own numbers, but both The Ankler’s Sean McNulty and Twitterzen Masa Capital did, and they think it will lose money. They both make good enough points that I’d agree that this deal will will lose money, in which case Google is just subsidizing losses to gain market share.

Speaking of which…

Wrong – DirecTV Was Available Without a Subscription…in Some Cases

Writing about YouTube announcing the prices for NFL Sunday Ticket, I wrote that “Of course, DirecTV required a DirecTV subscription, which was the real goal. But that’s also the goal of YouTube, to get people in the Google/Chromecast/YouTube “ecosystem” too.” Reader Stu Selonik responded:

I’ve seen this point repeated in the trades ad nauseum, but it’s simply not true. DirecTV offered a standalone streaming option for Sunday ticket for years, and I bought it every year. YouTube offering a standalone streaming Sunday ticket package is not a groundbreaking innovation- it’s normal.

Fair enough! That’s a good correction. (I love nuance!) Though it doesn’t seem like Sunday Ticket was open for everyone… 

Lest I have to offer a correction to my correction later, per one article from 2020, “If your address is eligible for DIRECTV, you must have DIRECTV to order NFL SUNDAY TICKET.” Here’s a USA Today article from 2014 that offers the same general sentiment. 

But — just to be clear — you still either need to be a DirecTV subscriber or live in a location where you cannot get the service or cannot install a satellite dish. The company has been offering a Sunday Ticket streaming service for those unable to get DirecTV installed since 2010 and last year partnered with Amazon and EA Sports on a special version of the Madden 25 video game that included a code to allow non-DirecTV customers to stream the Sunday Ticket service.

So yes: many people could be non-DirecTV subscribers and get NFL Sunday ticket, but my ultimate point—NFL Sunday ticket was used to drive DirecTV signups—stands, since if you were eligible for DirectTV, you had to be a subscriber to sign up. 

Maybe Wrong? – Does the WGA’s Annual Report Include Dollar Amounts Over Minimums? 

In response to my article “Exclusive: WGA Screenwriter Earnings Likely Broke Records in 2022…”, one person on Twitter responded that I was accusing WGA writers of committing fraud when I wrote…

And writers don’t report more than the minimums to minimize their payments to the guild.

The factual question is fascinating: does the WGA writer require all writers to report all of their earnings? Or just the minimums? What about producer fees?

On the first issue, I genuinely don’t know anymore! My initial source, a WGA writer with decades of experience, was crystal clear on this issue that they only report WGA minimums. After publishing that article, I got an email from an actor that actors definitely don’t report all their earnings.

So those are my “receipts” if you will. That said, looking at the WGA rules, it seems pretty clear that writers must/should declare all income!

You need to declare gross compensation, before taxes and commissions, that you received from writing (weekly salary, script fees, options/sales, settlements, profit participations, royalties and program fees) during the previous quarter. This includes the quarter in which you become a member. You don’t need to report residuals; the Guild will fill those in when it calculates your  a sports analogyubill.

It appears that screenwriters do have to report everything. (But if I’m wrong on this point, please email me!)

So problem solved right? Well, no. Just because you’re supposed to report your earnings doesn’t mean that every writer does report their earnings. 

It’s like taxes. Everyone is supposed to pay their taxes, but not everyone does. Often, especially for rich people, accountants build elaborate tax structures so their (mostly very rich) clients can avoid paying taxes (or pay a lot less in taxes than they should, and a lot less than poorer Americans). And most of this is legal! (Though I don’t think it should be.)

Here’s the question: do all writers report all income? Almost certainly not. But does the WGA have a “gross income reporting” problem? If so, how big is it? Frankly, I don’t know. Indeed, as other reporting on this issue has noted, the WGA itself acknowledges that its total is likely a floor, not a ceiling, due to under-reported income, because there’s a very legal way to avoid paying your dues to the WGA (and thus not fully pay into the pension and health programs): 

Producer fees. 

Essentially, a writer can take a minimum “writer” payment, then take a producer fee over the top, and then they don’t pay the 1.5% fee to the WGA. If this sounds dirty and unfair, I agree!

And it’s not just me! The WGA also thinks that this is a huge problem, hence why they fought so hard to get this total income data from the agencies, the people who really do know exactly how much their writer clients earn. Again, the WGA won this concession when they went to war against the agencies (and won), and now he agencies report producer fees to the WGA. They just started collecting this data last year. However, I wouldn’t predict the WGA will report producer fees in future reports.  

Quick Hits

  • Right: Moana is getting a live-action remake. Reviewing Nielsen’s 2022 year-end charts, I wrote, “Also looking at the data, I’d bet a Moana sequel is inevitable, and an Encanto sequel is also very likely.” Well, Moana isn’t getting a sequel (yet) but it is getting a live action remake starring the Rock! (I might write about Disney’s franchise problems later this year; I’m not sure that this is the solution.)
  • Wrong – Primetime channels launched for YouTube last fall. In the very minor corrections piece, in an article on YouTube I mentioned that they were planning to launch a “Channels” business a la Amazon and Apple TV+, but they launched YouTube Primetime Channels last fall. In my defense, I searched for “YouTube Channels” and couldn’t find it, even on YouTube, so maybe their SEO needs to improve.
  • Right: Netflix says that the algorithm is a lie. In June, Bela Bejaria, at a conference, said, “Algorithms don’t decide what we make…There’s not an algorithm that would probably say, you know what’s a great idea? A period show about a woman playing chess” Based on what I wrote in “The Algorithm is a Lie” and its sequel, I’ll say that I called this!
  • Wrong: Adult animation chugs right along. Or at least old shows that came from Fox? Both King of the Hill and Futurama are part of the animation “revival” trend, including the latter, which just debuted on Hulu.
  • Right – Esports don’t make money. In November, the New York Times ran an article with the title, “The Excitement Around E-Sports Is Growing. But Where Are the Profits?: Traditional sports owners who invested in competitive gaming say the money isn’t flowing in as quickly as they had expected.” Based on what I’ve written before, let’s just say that I’m not surprised.
  • Right: Piracy is a problem! Piracy is a problem!!! Sorry to say it twice, but it must be said that piracy impacts entertainment industry bottom lines as much as any other force buffeting the industry. This article from The Verge is a pinch old, but you could write it nearly any given week for many films and shows.
  • Right: TikTok can manipulate it’s numbers. As Forbes writes, they can manipulate their algorithm to make “anyone go viral”, backing up some of my previous skepticism.
  • Wrong: Penske media is only a partial investor in Luminate.  As I mentioned just last week, in my update to my article, “Biggest TV Flops, Bombs and Misses of for the First Half of 2023”, I said that data company Luminate was owned by Penske media. Instead, Penske is a partial investor in Luminate, for an undisclosed sum.
The Entertainment Strategy Guy

The Entertainment Strategy Guy

Former strategy and business development guy at a major streaming company. But I like writing more than sending email, so I launched this website to share what I know.


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