On July 25th, I wrote an article titled “Hollywood Headed for Hard Times Based on Box Office“. My how things have progressed since that time in a way that even surprised me!
We need to preface this article with some basic information that seems to be lacking in today’s educational systems. Since 1890, the United States has been the top dog in Gross Domestic Product, without fail, and at times dwarfing the rest of the world in its total economic progress. You could teach several university classes on the reasons for this, but one of the biggest has been America’s civil society across the North American continent for more than a century. Was it perfect? Of course not. Anything that involves humans is going to be less than perfection. But something has been driving the country towards unparalleled, unprecedented fortune. That something has been a civil society that awards merit. Not perfectly, mind you, but enough so that someone who becomes great at a given task can become profitable, sometimes at great scale.
Things are changing, though. And with a communist China nipping at the heels of the United States’ place in dominance, the various entertainment companies of the USA have all seemingly bowed to Beijing. They’re not the only industry, of course, but they’re significantly more dangerous in bowing to a communist oligarchy because they effectively generate the culture of the western world.
It is with this backdrop that we are now seeing a great swath of American entertainment companies beginning to experience major problems. The issues are severe enough that we could see huge changes in the landscape of various entertainment industries. Remember how Atari was a behemoth of video games in the 1980s, but then collapsed due to corruption and incompetence? Nintendo would fill the void later, but not before the fledgling video game industry was nearly destroyed. Today, rather than it being just one company, we’re seeing across a plethora of mega corporations. While it’s no guarantee that we will see Atari-like situations in the future, it is time to start talking about the possibility.
Let’s start with Netflix. At a time when streaming numbers should be bonkers, the company recently lost half a million subscribers in North America. Half a million subscribers. With people still stuck at home, a pandemic still out there to some degree, and more opportunities than ever to sit and watch TV, half a million consumers said “no”. What in the world is going on? Well, perhaps it has something to do with having unforced errors like insanely controversial shows promoting inappropriate topics? Perhaps it also has to do with doubling down to defend that sort of thing? It would almost seem like a company that did this sort of thing had forgotten that corruption and incompetence have consequences.
Then there’s the sports industry. Again, at a time when viewers should be available more than ever before, sports ratings in nearly every way have dropped to decades (and often more) lows. Current estimates are that up to 40% of fans are leaving. The amount of money these professional leagues are losing versus where they could be is remarkable. Amazingly, it doesn’t seem to be slowing down whatsoever. For some reason, huge parts of America are tuning out of sports — and sports for decades have been a place for people of all beliefs, all political viewpoints, and all backgrounds to gather around. Sports were the watering hole of culture where alligators, caribou, and lions all take a break from attacking one another because water is more important. You get the metaphor. Sports have bottomed out so much that Nielson put out a new ratings statistic called Out of Home (OoH), which it used at a time when nobody basically could be out of home, to pad the Super Bowl ratings statistics.
In video games, Activision Blizzard was once one of the greatest gaming companies in the world. Blizzard, for example, produced legendary, industry-defining titles one after the other for about two decades. Today, the company is a laughing stock. Customers were asking why they couldn’t balance Overwatch, or why they would fire an entire E-Sport ecosystem without warning before Christmas. People wondered how in the world they could devastate a player that just spoke out in favor of Hong Kong human rights. Now that we know they were hosting a “Cosby Suite” for inappropriate behavior, kicking women out of lactation rooms, and more, it’s very easy to see how the company fell. It was being run by fully incompetent and corrupt imbeciles who should be fired today. But rather than being fired, they still have jobs, still put out pathetic PR statements, and will probably still make hypocritical social statements that reflect a total opposite of what was really happening behind closed doors. The whole company is one giant, cynical tool for making money through whatever statements and virtues they need to espouse anywhere they need to espouse them. Only Lucasfilm compares in the level of hatred any studio holds for their consumers.
Speaking of Lucasfilm, Disney apparently thinks they’re far too big to fail as well. The company that thanks genocidal, concentration camp governments in their film credits is all too happy to chastise Scarlett Johansson for daring to ask for her fair share during a pandemic. Why, it’s indecent what she’s doing! Yet it was Disney that decided they would play fast and loose with the box office for Black Widow. For weeks I declared that Black Widow was on track to be low performing using my own analytical system developed over the past year. Yet when the movie released, Disney said it was a $200 million, amazing success for the opening weekend. What they didn’t say was that they used streaming numbers to reach that total, that they would not release future streaming numbers since that could make them look poorly, and that the actual box office numbers were average (at best). Soon the critics were eating crow and saying how wrong they were about Black Widow. I did not.
Now Black Widow is a movie in a more than hundred million hole, with the lead actress suing the company for cheating her out of profit sharing. Other actresses are looking at the same option. The movie is as big a dud as John Carter, a film that shook Disney to its core. But nobody’s talking about that right now. Well, except Lebron James, who is bragging because his $31 million opening for Space Jam: A New Legacy was able to topple a Black Widow film that collapsed in the second weekend. I hate to break it to Lebron James, but his Space Jam movie is actually on track to lose about $200 million dollars. The film has made $100 million total, of which Warner Bros is like to currently make between $60 – $70 million. The total cost for the film? It’s between $250 – $300 million. That makes Space Jam: A New Legacy on track to be the biggest box office bomb in the history of cinema.
Wonder why you can only read that here?
Ultimately, this is unsustainable. Hollywood and other entertainment industries cannot continue to lose hundreds of millions of dollars on movies. Other than Ghostbusters Afterlife, there is really no movie on the horizon to save the situation. Either the entertainment industry is going to figure out why North American customers are abandoning them like crazy, or else we’re about to head into an industry failure like we haven’t seen in decades. And all the press about “record post-pandemic numbers” or “people are busy going outside instead” is not going to change the hurt that will come.
The entertainment industries need to get their act together, and get them together now. Incompetence and corruption have costs… maybe they didn’t feel them when the economy was booming. That’s no longer the case, and it is emergency time when it comes to going back to films, games, and sports that draw everyone in. The current trajectory is flat-out unsustainable.
