(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.)
Before we get going today, I’d like to defend my anonymity.
Now, I’m not sure that I really need to, but every now and then, people ask about it. Other people complain about it. And some people get way too conspiratorial about it, accusing me of being a coward or something of that ilk.
I think the anonymity makes this newsletter better. First off, it benefits you, my readers, since being anonymous allows me to speak more freely. But it also benefits me, mainly preserving future opportunities for myself and the people I work with. (I sometimes consult on creative projects, and I don’t want what I write here to influence those outcomes.)
But here’s the thing: it doesn’t matter.
Even though I’m anonymous, I strive to put forward a kind persona. Yeah, occasionally I make jokes, but I like to think that I’m far less cruel, mean-spirited and insulting than almost every other anonymous persona out there, especially on social media. I also think I’m less insulting than some other pundits who write under their names (especially on social media). By the way, if you believe something I’ve written doesn’t pass that test, then drop me a line and let me know!
More importantly, at this point, I’ve written hundreds of articles and hundreds of thousands of words. Do you want to know if you can trust me? Then read me!
After all, unlike most pundits, I actively fact check myself.
That’s right. It’s time for another edition of “What I Got Right, What I Got Wrong”, where I update my predictions and arguments. (How many pundits put themselves through this brutal exercise?) Today, we’re going over my take on Sinners and what it says about Zaslav and IP, AI and energy usage, the indie TV model, my big miss on Warner Bros. Discovery’s strategy, the rush for YouTube stars, South Korean TV shows, and more
Believe me, I’ve gotten a ton of stuff wrong, so let’s dive right in, starting with Hollywood’s juiciest topic.
Right: Warner Bros. Discovery’s Original Film Strategy and IP
Recently, the talk of the town has been Ryan Coogler’s Sinners, which somehow managed to touch on so many important topics: the future of film/theaters, race, IP, media discourse, and the rights of creators. Let me touch on a few things.
First off, here’s what I wrote in the Ankler last fall in my article, “David Zaslav: A Cautious Defense”:
“If one looks at Warner Bros.’ 2025 slate, at least six movies are original IP, the type of films most critics and observers desperately want Hollywood to make more of. If you’re going to complain about the endless parade of sequels and reboots, then you have to give Zaslav credit for giving more than half a billion dollars to Bong Joon-Ho, Ryan Coogler, Barry Levinson, David Robert Mitchell and Paul Thomas Anderson collectively to pursue their visions.
No, seriously, I checked: Warner Bros. is laying out $500 million-plus in estimated budgets to a half-dozen really talented filmmakers to make novel projects. What a monster!
Between keeping Bloys in his role and hiring Pamela Abdy and Mike De Luca to run the movie studio, Zaslav appears to have made the right hiring decisions for the content side of his business.”
So yeah, Pam and Mike–using first names feels a bit too casual to me, but I’m going with how everyone refers to them in articles and on podcasts–have done a fine job, so far. (Earlier this year, I listened to podcasts where pundits mocked WBD’s film slate, and those same podcasters have since recorded podcasts pretending like they didn’t.) But it’s still too early to make the call whether this film slate is a success. We won’t know until the end of the year since the movie business is a portfolio play, and Pam and Mike need Sinners to pay for its budget and the flop that was Mickey 17. Then again, they also had Minecraft, which will easily pay for both. Again, it’s a portfolio play!
Next up, let’s talk IP. Often, when it comes to IP, people confuse three things:
- Derivative IP like sequels and reboots.
- New IP (like The Super Mario Bros. Movie, Minecraft and Wicked, three franchises I thought would succeed.)
- Original films, like Sinners.
The pundit class hates the first two, but Hollywood needs an even balance of all three, which I’ve argued before. Sinners is a terrific story, but Minecraft is an order of magnitude bigger than it, and it’s new IP. Obviously, Hollywood needs more original films. They need more new IP even more.
(Speaking of original films, I was going to check in on A24, but they have an original comedy and an original romcom coming out in the next two months—which I love! Hollywood needs to start putting these genres back in theaters—and I want to see how they do first. I’m also curious to see how Angel Studios’ bull-riding film does.)
Wrong: Warner Bros. Discovery Got Out of Video Games
Naturally, I didn’t get everything right in that article on Zaslav and WBD. I predicted that WBD’s flexibility to diversify into theme parks and video games could become a strength for the company. Alas, they’re now scaling back their video game division, including closing the Monolith Productions unit.
This feels like a mistake to me. Corporations need to embrace people/divisions who are good at what they do, and Monolith Productions does great work, for example. Their excellent “nemesis system”—an innovative and patented video game technology, showcased in the amazing Shadows of Mordor and Shadows of War video games—is a perfect system to use with DC heroes. Overall, I think video games could have provided a good revenue stream to bolster WBD, but clearly their leadership team disagreed.
Right: The Indie TV Model Isn’t There Yet
Last fall, I gave a “Miss of the Week” win to Penelope, Mark Duplass’ new independently-produced TV show. Last month, the indie TV model, represented by Penelope, was one of my misses of the half year.
But I realized that both of those sections were behind the paywall, so most of my readers have probably only seen or read articles hyping up this new indie TV model—PR reps are clearly good at what they do—without reading the anti-hype, if you will. Many (most?) articles just assumed that this new model worked. One data point doesn’t determine anything, but Penelope isn’t a great test case since the show flopped. Also, I haven’t seen any news on this show either selling its rights globally or producing a second season. If you see an update, send it my way.
Finally, this show was made for, allegedly, very, very little money. And it’s worth pausing on that point because, for a lot of labor and talent in Hollywood, that’s a pretty bad thing. If more shows become “non-union” shoots, the talent won’t get paid as much. If more shows are independently financed, that means talent may have to front the upfront costs and risk ruin in failure. In short, there’s a version where the future of TV production (less unionized, more upfront risk) hurts labor and talent.
Wrong: There is a “Rush” to Grab YouTube Stars/Shows
Almost as soon as I wrote “This is probably why you haven’t seen an avalanche of headlines about YouTubers signing deals with streamers,” in my article “Beast Games Is…Mid”…
Cue said avalanche of headlines:
I’d still argue that these articles are more in the vein of “three things makes a trend” rather than a sea change. Sure, Ms. Rachel and Pop the Balloon Live are on Netflix, the Paul Brothers have a documentary series on Max, and Prime Video just bought Helluva Boss, but I’m not quite sure I’d call it a gold rush just yet. Indeed, much of the coverage stemmed from, to be frank, fairly aggressive PR campaigns by Dude Perfect—PR reps are clearly good at what they do—and others.
Hopefully, this summer, I’ll be writing more on social video and how Hollywood should actually embrace social video.
Wrong: AI Energy Use
One of my biggest concerns about AI is that its energy expenditure will make it too expensive for its current value.
Then DeepSeek came out and claimed to use a fraction of the energy that other AI companies need to train and use their models, based off of a new technique of siloing LLMs’ internal “experts”. Then again, some of these claims might be a bit disingenuous, especially if DeepSeek used ChatGPT to help partially train its model.
That said, don’t forget Jevons’ Paradox: even if resources get cheaper, usage keeps going up. So even if LLMs become more efficient, their energy usage might increase anyway. Still, I’ll mark this take as wrong for now.
Wrong: The NBA’s Cut of Media Rights Isn’t as Drastic As I Thought
Here’s an incorrect fact I don’t know quite what to do with. Last summer, I wrote two long articles about the NBA’s media rights and ratings, splashing more cold water on it than most of the media. I made a big deal over a specific number that came from NBA Knicks owner James Dolan, where he claimed the NBA is massively increasing their share of national media rights.
According to Dolan’s math, the league kept around $15 million of the previous rights deal, and was going to increase their share to $348 million going forward. I then used those numbers to estimate the potential media rights values for the league’s previous and current media rights deals.
I have since heard that the league’s expenses in the 2024 to 2025 season were $113 million. So they are indeed seeing a huge leap (nearly a quarter of a billion increase!), but that’s a reflection on the size of the media rights deal increase. In other words, Dolan got his number wrong, so this doesn’t reflect on the size of the media rights deal.
Unfortunately, I don’t know how to reconcile the difference between Dolan’s math and what I’ve heard, short of the NBA actually providing me a breakdown of their revenue. On the one hand, this comes from a good source. On the other hand, how did Dolan get it sooooooo wrong? And why didn’t ESPN point this out in their article about his letter? I doubt his team would let him publish a clearly wrong number, but maybe they did.
My main solution to square this circle is that we’re talking two different things, and we don’t know all the numbers. For example, the league’s operating costs likely were the $113 million cited to me. But where does that come from? My gut is that it includes a lot of international revenue, and the league is increasing its cut of national media revenue, which is what Dolan cited.
Either way, the simple solution is that the NBA could just give all of us their national media rights deal broken down by year, not the average. Then we’d all have the numbers and could make much better calls. (Short of that, you know, someone with access to the actual numbers could leak it…)
Right: Too Many South Korean TV Shows!
Whenever I write about foreign language content at The Ankler, I inevitably get pushback from some corners of the pundit-sphere. I think too many people copied Netflix by trying to make TV shows in South Korea (especially Disney) since that region is experiencing a production bubble right now, driving up costs. Others disagree.
So I checked in on Disney, finding this headline right away:
Competing in every country around the world is very hard. Disney is finding that out right now in South Korea, not gaining much ground (10.1% streaming usage) and losing tons of money. This strategic bet isn’t paying off.
Instead of copying other companies, chart your own path and find other regions that you can turn into the next South Korea.
Also, I loved this chart from Ampere Analysis on foreign content. English-speaking countries make up 3 of the top five regions on Netflix, and arguably, Japan means anime…which I bet the dubbed versions get the most viewership. Per my suggestion, I’d love to know what percentage of that 14% is Spanish language, and if it could go higher.
Quick Hits and Corrections
- Right: Citadel. The next season of Citadel is on hold, and the spinoffs—Prime Video’s “winner” for flops in H2—have been cancelled.
- Right: The Oscars Are Already Off the Hulu/Disney+ Bundle. I just complained that streamers shouldn’t pull live specials off of their platforms, and sure enough, the Oscars have already been pulled off the Hulu/the Disney bundle already.
- Right/Wrong: Oscars. On the one hand, my model is undefeated. On the other, I really thought that this year’s telecast would do better on Hulu.
- Wrong: Prime Video is allegedly committing to theaters. Again. Honestly, I’m not sure how this was wrong. Amazon and theaters is the “Will they/won’t they?” of the entertainment industry.
- Right: The Kardashians. This show has still never made the ratings charts!
- Right: I’ve long been bearish on sports on Apple TV+ and now, allegedly, an MLS exec wants to get out of Apple deal.
- Right: Hello Sunshine. According to Reuters, Hello Sunshine “is exploring options” about merging with another company. I’ve long been skeptical on celebrity production companies.
- Correction: I misspelled Caitlin Clark’s name in one of the images in last week’s article on the WNBA and Formula 1.
- Correction. Roy Price greenlit Reacher and Jack Ryan. I’m trying to podcast more, but one thing holding me back is that I can’t fact check things, live, while I’m speaking extemporaneously. When I brought up Amazon’s hits on The Town, I tried to clarify that I didn’t know when Reacher or Jack Ryan were greenlit, emphasizing that I was mostly giving Salke credit for shepherding those shows along through multiple seasons. Roy Price wrote a great follow-up article, clarifying that, yes, both shows were greenlit during his tenure at Prime Video.
- Correction: In this article, I originally wrote “Critics Choice Awards” instead of the Spirit Awards, like I did in the rest of the article.
- Correction: Searchlight developed NightBitch; they didn’t purchase it at TIFF. (The original article has been corrected.)
- Correction: I initially put the wrong JustWatch chart in my film winners recap. That article has been corrected.
