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Every so often, I like to write an article on “What I Got Right, What I Got Wrong”, trying my best to hold myself accountable. In trendy online circles, they call it “Updating Your Priors”, but really it just means adjusting your beliefs that an event could/would happen. Or in laymen’s speak, changing your mind, something which is notoriously hard to do, even for me.
If I get something wrong, I want to change my mind, especially if data comes out showing that my analysis wasn’t right or my predictions aren’t coming true. And I’ve got a huge example of that below, a big, big theory of mine that just hasn’t come true and looks increasingly unlikely to come true.
I got some things right too! I don’t like to toot my own horn too loudly, but I should occasionally. After all, there’s a reason you read me.
In this update, I also want to highlight “snark”. In general, I don’t think that I’m a very snarky writer. Yeah, occasionally I like to put in jokes, but compared to many (most?) writers these days, especially on social media, I’m not snarky at all. It seems like everyone is trying to be a modern day H.L. Mencken, throwing rhetorical bombs at their enemies all day, every day. And that’s just not me. Heck, I go out of my way not to call out other reporters and pundits by name if I disagree with them.
So in this issue, I’ve got an apology coming to a favorite actor of mine and to a whole class of workers in Hollywood.
We’ll start with possibly the biggest theory I’ve gotten wrong on streaming, and then a mistake I’ve wanted to clean up since December. That plus how I’d fix Disney’s tech stack issues, a debate over whether Netflix should have cancelled one of their shows, the evidence that music catalogue sales are in decline, more celebrity production company struggles, and more…
Wrong – We’re Still Waiting on “Aggregeddon”
Long time readers might remember my “aggregeddon” theory. In my (decidedly-not-seminal) article from 2019, “Aggregeddon: The Key Terrain Of The Streaming Wars Is Bundling”, I posited that the “bundlers” a.k.a. the companies that bundled multiple streamers (think Amazon, Apple, Roku, smart TV makers) could/would become the key players in the streaming wars, and hence extract the most value/exert the most control. (I also wrote about it more here, here and here.)
Frankly, it just hasn’t happened yet.
The audience remains fragmented (and frustrated, see this great piece by Evan Shapiro) across multiple devices and streamers. (Which, so far, has benefitted Netflix.) Mike Shields has pointed this out too. Despite the push by the Apples, Googles, Rokus and Amazons of the world, they just haven’t grabbed the user experience from the traditional streamers.
So far, we haven’t seen “aggreggedon” really come into its own. The competition in the OS space is as fierce as the competition in the streaming space.
Wrong – Superhero Fatigue is Real
At the beginning of December, I wrote about the ‘Marvel-cession” again. At the time, The Marvels was the big outlier, since Ant-Man 3 and Guardians of the Galaxy Vol. 3 basically grossed what those franchises always gross, minus the Chinese box office returns. As I wrote for the Ankler, I’m not ready to say that superhero movies are “dead”.
That said, not being “dead” does not equal “superhero fatigue is fake”. Customers can both 1. Still want to watch superheroes at the box office but 2. Not want to watch as many superhero films as they used to. Frankly, I thought “superhero fatigue” was overrated as a factor—especially compared to the quality (and sheer volume) of the films—but that doesn’t mean it isn’t a factor.
In other words, you can make the case that superhero fatigue is real. With the failure of Aquaman and the Lost Kingdomand Madame Web (both came out after that article went up), I am ready to say that superhero fatigue is impacting box office returns. Frankly, I should have added this to my blame pie of reasons that the MCU is slumping.
So let’s update the chart:
Looking forward, then, I wouldn’t bet on Sony’s Kraven the Hunter film. But I would bet on the films featuring really popular comic book characters, Venom: Let There Be Carnage and Deadpool & Wolverine. Those films will almost assuredly be top ten films in America, if not top five.
Right – Disney Needs to Improve It’s UX
Recently, Disney CEO Bob Iger made headlines speaking at an investment conference, noting that Disney needed to improve their technology stack to compete with Netflix. While I tend to avoid discussing “UX”—the most visible outcome of a good technology system—I have recommended improvements to Disney’s user experience over the years, since it’s probably the streamer I use the most and, in particular, the one my kids use the most.
So instead of repeating those points I want to provide my recommendations for how Iger could improve his technology operations internally. Here’s how I’d start:
- First, focus on improvements that stem from people (employees or focus groups) of people who actually use the streamer. I can’t emphasize how many of the changes I’d make to Disney+ are seemingly obvious for anyone who uses the streamer multiple days in a row. For example, if you have kids, you know how hard it is to find Mickey Mouse’s shorts. My gut—knowing the average age of many programmers—is that a lot of people fixing/building Disney’s apps don’t actually use those apps, or those small changes would get fixed.
- Get your programming teams off email (and Slack). See this unlocked article on it. Programmers need to spend the most time programming, not talking with each other (hopefully about programming).
- Spend more time fixing, less time planning. Whenever technology teams deliver a project slowly, it’s usually because they spend more time on the technology road map than they do on actually delivering improvements. My gut is Disney (and formerly BAMTech) have that issue. (Really, these first three points could be called “fighting back against corporate bureaucracy/inertia”.)
- When it comes to UX, beware that “optimization” may backfire. I once worked at a company where, when they finally tested the recommendation algorithm, it was actually negatively correlated with retention. Can you imagine that? Indeed, Disney+ often recommends that my family watch a show we’re already to us. That’s mind-boggling. If my kids already have Bluey in their continue watching feed…why recommend it after I finish an unrelated movie? That’s bad algorithm-ing. (Related to 1, if all the programmers used it a lot, they would have fixed this.)
- Related, some of your fixes can’t be automated. I know, AI is taking over. But for example, right now, if you watch a Disney short film, many of the applications count the dubbing subtitles in the run time for the short. That’s a bad experience, since it’s misleading. But the solution isn’t coding a complicated program to figure out where the credits start; just have a program manager go through and find out when the programs actually end. Then manually update it.
- Lastly, do your own thing; don’t copy your competitors. It still amazes me how much strategy at major companies boils down to, “What are our competitors doing? Well, let’s copy them since they must know something.” Whenever I write this, folks insist that’s not what’s happening, but I’ve seen it enough—and see lots of real life examples—to know this is true. Disney+/Hulu’s user experience shouldn’t copy Netflix if it doesn’t make sense for them. They need a UX and tech stack that amplifies Disney’s advantages.
Right: Sports Docu-Series Are Still Shooting Bricks
In one of my favorite articles last year in The Ankler, I wrote about how sports docu-series are really over-rated. Since then, Beckham was a hit on Netflix…
…and nothing else was. (Again, ignore one-off examples of things.)
Here’s what that looks like:
For context, cheap true crime docs make the Nielsen top ten all the time.
Wrong, Plus Too Snarky – Agents and Managers Do a Ton of Work for their Clients
Writing about the “Next 10 Things the WGA Should Fight For” for the Ankler last fall, I pissed off a lot of agents and managers. And frankly, a lot of them should be pissed. I questioned the value that all agents and managers provide to baby/new writers, and I shouldn’t have. What I wrote was way, way too snarky.
There’s tons of incredibly hard-working agents and managers out there (just read the comments below the article for examples) that put their blood, sweat, heart, soul, tears and everything into reading scripts, providing notes, calling their clients, soliciting work, developing pitches, and more. Frankly, in the literary representation world, it’s probably most of them. You represent writers because of the passion to develop writers.
Now, I can’t pretend like this initial impression is totally unfounded; it came from horror stories everyone around town has heard. It came from WGA members complaining during the agent/manager lockout. It came from Twitter during the strike itself. It came from personally dealing with bad/lazy agents and managers. But I conflated the bottom 15-25% of agents and managers with everyone else. And every industry has bad examples.
But to the hard-working, dedicated, passionate literary agents and managers, I do sincerely apologize. Less snark!
Right – Music Catalogue Sales Are Still Down…With One Exception
Probably my best set of predictions came two years ago when I called out a series of entertainment industry bubbles in “The Next 5 Bubbles to Burst?” for The Ankler. In hindsight, those calls look pretty good! A few have burst, and some more likely will.) According to Luminate’s 2023 year-end report, which came out four months later, sales of music catalogues by artists has gone down.
Now, a trend doesn’t mean there aren’t any outliers. Katy Perry sold her music catalogue to Litmus Music for a reported $225 million. Still, the market for music rights looked bubbly and that’s held true.
Wrong – The Super Mario Bros. Movie and Barbie on Streaming
As I wrote a few weeks ago, I judged Barbie and The Super Mario Bros. Movie a bit early, thinking they underperformed after their first week’s debut numbers. Both films held on quite well. (Like really well!)
But I want to go a step further. See, looking back to this past summer, I didn’t expect Mario to just do okay on Netflix; I expected it to be the biggest movie of the year, or have a shot at that title. (And so did my readers.)
Turns out, Leave the World Behind took the 2023 streaming crown. And no one saw that coming.
Again, “updating my priors”, after looking at the streaming ratings for Barbie, Mario, Avatar 2, Top Gun: Maverick and other mega-blockbusters, if a film is incredibly popular, that popularity translates into good streaming ratings (and excellent long-term library value), but not necessarily huge/monster streaming numbers. Likely, some of the viewership comes in (higher margin) earlier windows, like theaters or rentals.
Right – Celebrity Production Companies
Speaking of Leave the World Behind, yes, the Obamas finally had a hit! So are celebrity production companies “back”? (I included “celebrity production company valuations” in my list of bubbles I thought could burst.)
Well, what about Love in Fairhope?
Ignore one-off examples and look for trends. If you don’t look at all the misses, you won’t know the hit rate. And in this case, celebrity production companies still haven’t delivered a ton of hits, which I wrote about for The Ankler and my website last fall.
Sure enough, Bloomberg reported that Hello Sunshine’s revenue has missed their targets for Candle Media. The Wall St. Journal reported that LeBron James’ Springhill Co made $200 million, but as I wrote recently, it’s unclear how much of that is pass-through revenue (which means it immediately gets paid out) or payment for LeBron’s endorsement/services, but run through the company. And Semafor had an article on Will and Jada’s company, Westbrook, and its post-slap struggles.
Right – Peacock Should Have Release Season One of Traitors Weekly
Last year, writing about the Peacock show Traitors, I wondered:
“Peacock release The Traitors, a reality show about a real life game of “Mafia” or “Secret Hitler”, so of course they binge released it, so it won’t build buzz. Interestingly, the BBC released it weekly, and some critics credit that show’s slow roll out for its success. (Slate said it’s “taking the world by storm.”)”
Sure enough, this year, Traitors is both coming out weekly and made the Nielsen charts.
Wrong – Did Sex/Life Have Bad Ratings?
In my second renewals and cancellations scorecard, I wrote:
“[Sex/Life] made headlines when the star complained about not being supported during the second season, then Netflix cancelled the show two days later. Was it the ratings or this complaint that got the show cancelled? It was the ratings. (Studios/networks/streamers tend to cancel shows with low ratings. Seems obvious, I know, but that’s the entertainment industry today!)”
But Sex/Life was the 31st ranked show in the first half of the year with 175 million hours. Isn’t that good? Maybe, but its second season only had 17 million hours in the US according to Nielsen, which is much worse, the 48th ranked second season out of 87 season twos in my dataset.
So now I’m more on the side of the reporters who connected Sex/Life getting cancelled to Sarah Shahi’s complaints about the production. I think Sex/Life was in a bit of a grey zone (other shows with similar ratings in America ended their runs) but it seemed to be a good performer globally. (And it doesn’t seem all that expensive compared to other shows.) That said, for some shows, performance in their home territory—in this case the US—could be the determining factor.
Right – Podcasts Are Struggling
About a year ago, I wrote about podcasts for The Ankler, and though I’m a die hard podcast junkie, I was really skeptical about a podcast bubble. (I was more skeptical about the valuations and growth predictions, not podcasting itself.) And after writing that, the podcast boom did indeed burst.
Since my last “What I Got Right/Wrong”, we’ve had a few more news stories showing the general decline in the podcast market:
- “Emily Ratajkowski Show Gets Cut, Along With Sony Podcast Jobs”
- “Has the Podcast Bubble Finally Burst?”
- “Podcasts are in the middle of a numbers and people crisis / After a year of layoffs and canceled podcasts, 2024 may be the podcast industry’s big reckoning.”
What’s particularly interesting to me is where the bubble specifically popped: with high-end, expensive, elite “prestige” podcasting.
Quick Hits:
- Wrong – Netflix’s Growth Continues. As I wrote for my question of the year, I didn’t think Netflix would continue to grow the way it has, both in terms of subs (password-sharing crackdown) or free cash flow. But it has! Netflix will be the streaming elephant I continue to write about all year. (I’m going to revisit that topic after I compile data on all the streamers and “rank the streamers”.)
- Right – I called it on Physical 100. In my big 2023 Streaming Viewership Recap, I mentioned that Physical 100was the only foreign TV show to make the top 25 for new shows. I just want to say that I called this last year, predicting the week it came out that it had a chance to be the next genuinely big foreign show in a long time.
- Wrong – Hijack is coming back for a second season. I’m not quite sure how a second season is going to work for this concept—24 had similar issues back in the day—but we’ll see if another plane or vehicle of some sort—gets hijacked again.
Mistakes
Time for a quick rundown of some smaller factual mistakes from the past few months, which I’m just sharing for total accountability:
- In my charts tracking Nielsen’s “The Gauge”, I have switched how I’ve categorized The Roku Channel. I’ve put as both a FAST and an AVOD service, since it really has elements of both. Going forward, I plan to leave it as an FAST channel. I would add, Nielsen lumps Amazon’s FAST channel Amazon Freevee in with Prime Video viewing, meaning FAST growth could be even higher than I previously showed.
- Apple has 1 billion total paid subs across all of their subscriptions, which I should have mentioned in my last US subscribers update. Again, we don’t know how many customers actually subscribe to the video product, but that’s super useful context!
- I had The Secrets of Hillsong marked as a Hulu Original, but it aired on FX first, and thus wasn’t eligible for the Nielsen streaming charts.
- In my year end article for The Ankler, looking at growth and decline in various parts of the entertainment value chain, I should have adjusted the charts to inflation. You should always adjust to inflation. I’ll be better about that in the future.
- In my fourth renewals and cancellations article, I should have clarified that Warwick Davis was upset that Disney removed his show, not just cancelled it. (Also, this is a great example of snark that’s just unneeded. And I’m a huge Warwick Davis fan. Wicket is on my Mt. Rushmore of Star Wars characters and I’ve actually watched Ewoks: Caravan of Courage in the last year.)
- On Twitter/X, Seeds of Stolen Pods pointed out that Peter Pan and Wendy’s budget was in Canadian dollars, so it’s actually $50 million lower. (If this is the total budget, including talent costs.) But $120 million is still huge! I stand by the originally point that this was a huge bomb for Disney that should have gone to theaters.
- Recently, I wrote “Tyler Sheridan” instead of “Taylor Sheridan”, and I regret the error, especially since he’s still about the most successful showrunner out there. Fine, it wasn’t just recently, it’s like all the time. Again, I’m really sorry on this one.
- I accidentally gave Nimona a second win for flop of the year, when it already got nominated for the first half of the year (when it came out).
- In my article on Microsoft acquiring Activision, I accidentally wrote “Amazon” and yes, that would have been a huge acquisition.
- In December, I mentioned that YouGov had a new monthly poll. Turns out, this service/poll been around for a while, and it might not update regularly. (Their website is really, really hard to use, and a bi-weekly streaming ratings tracker isn’t super useful.)
