Experts have been predicting the demise of Hollywood for as long as Hollywood’s been around. Not me.
People love stories. They love movies and TV, and that will never change. But the entertainment industry is in serious trouble today, primarily because it has painted itself into several corners. There will always be a Hollywood, but what the industry looks like in five or ten years could be very different from what we see today.
Here’s why Hollywood’s in real trouble…
1. The Death of Cable/Satellite/Linear TV
“Cable/Satellite/Linear TV” is non-streaming TV, where you pay for a package of channels every month—ESPN, CNN, Turner Classic Movies, Fox News, etc.
For the sake of simplicity, I’ll use the term “pay TV.”
Although I’ve been writing about the imminent death of pay TV for more than a decade, no one else really has. There’s a reason why this consequential story has been deliberately underplayed: pay TV is the one-legged stool propping up the entertainment industry.
The importance of pay TV is rarely discussed in the media because the entertainment industry wholly owns the entertainment media. If the media covered this issue with the seriousness it deserves, stock prices would fall. Entertainment companies are judged solely by their stock prices, and the entertainment media will never risk damaging their patrons.
(iStock/Getty Images)
Entertainment companies made billions from pay TV for decades, year in and year out. But those dollars were not earned on merit. If you’re wondering why you pay $175 a month for a bunch of channels you never watch that still serve up 20 minutes of ads per hour, here’s why: a major chunk of your $175 goes to entertainment companies. So let me repeat my main point: none of that money is based on merit.
Merit means Hollywood makes money based on what people actually watch. Pay TV successfully circumvented merit with a rigged system where you pay for dozens of channels you never watch.
Want proof? Look here… That is last week’s list of 118 pay TV channels. The “P2+” column reveals the average number of total viewers in thousands. As you can see, out of 118 channels, only two(!) average more than a million viewers. Only 13 average more than 500,000. Only 33 average more than 250,000. Question: how many of these 118 networks could survive on merit—advertising revenue based on ratings? Maybe five? Nevertheless, Hollywood still makes a ton of money from over a hundred channels that fewer than a million people watch because pay TV customers pay for those channels.
How sweet is that?
But.
Thanks to streaming, those days are coming to an end. Already, the number of people who have canceled their pay TV subscriptions (cord-cutters) has been enough to hurt Hollywood’s bottom line.
Americans now want to stream, and the problem with streaming is that, unlike pay TV…
2. Streaming Services Are Merit-Based
Pay TV will always be around. The problem is that within the next ten years or so, there will not be enough pay TV subscribers to sustain all those channels no one watches. So…
Every entertainment corporation has launched a streaming service hoping the streaming boom will automatically replace those pay TV billions. Oops. Other than Netflix, those streaming services are losing billions. Disney alone has lost upwards of $10 billion on Disney+.
(AP Photo)
The result is this [emphasis original]:
Two years ago … [Disney’s] stock price was a buoyant $176. On Friday, the stock closed at $87.
Over the same period, Shari Redstone’s Paramount Global has plummeted from $40 on July 21, 2021 to $15.50, and shares in Jim Dolan’s AMC Networks have slid from $52 to $13. Indeed, even factoring in the Netflix correction of last year, entertainment stocks are still down an additional 30-50 percent.
Without the financial affirmative action that is pay TV, these companies must survive on merit (e.g., people pay directly for the product), and these companies cannot survive—at least not at the same level—on merit because…
3. Pay TV Made Hollywood Lazy and Mean
When merit had nothing to do with Hollywood’s massive profits, three things happened to the industry: 1) it got lazy, 2) cocky, and 3) politically divisive.
Why put effort into creating great content if you make the same amount of money for no effort?
One of the primary reasons Hollywood content is so awful and repetitive (Fast & Furious 10, Indiana Jones 5, and all those Law & Order, CSI, and NCIS franchises that never die) is because “awful and repetitive” is good enough when 120 million households pay for all that “awful and repetitive” content (they do not watch) through their pay-TV bill.
There’s no reason to offer anything new or good when three million viewers are enough to describe your TV show (no one watches) as a hit.
Look at these viewership numbers from earlier this month.
Now look at these numbers.
Pay TV killed merit.
When all that unearned money flowed in, Hollywood also got cocky and arrogant. This is why Hollywood had no problem insulting, demeaning, and alienating half the country. When merit has nothing to do with profits, it is perfectly safe to make your content left-wing, gay, anti-Christian, and culturally bigoted. Why not? We rubes are so addicted to Fox News and live sports we’ll still pay for networks like CNN that propagandize for our destruction.
But now that streaming means profits can only be made through merit, Hollywood has painted itself into one corner where it has lost half the country as a potential customer base. The second corner is an industry without the talent to create quality content.
Look at this… Somewhere around 350 TV shows debuted just last year, and it’s almost all garbage no one watches—quantity over quality to fill the schedules of cable networks no one watches and streaming services that lose billions. Without pay TV’s affirmative action billions, that is not sustainable.
4. The Woke Prison
With billions and billions of unearned dollars pouring in from the old pay-TV model, Hollywood stopped worrying about quality, stopped worrying about serving Middle America, and felt secure turning their companies over to the Woke Nazis. Disney is so politicized it has openly embraced grooming and sexualized its children’s content.
Jerod Harris; Alberto E. Rodriguez/Getty Images/Lucas Film/Disney, BNN Edit
Here’s the problem…
Now that these companies will have to make money based on merit, merit will not be allowed.
Once the Woke Parasites infest something, they never let go or compromise. For example, suppose Disney decided to save itself the only way it could: by returning to its roots of quality and wholesome programming. In that case, the Woke Nazis will destroy the company from within (CNN is in the same fix if it ever decides to be an honest, objective news outlet).
The Woke Nazis demand everything be openly, stridently, and belligerently political, which destroys any chance of quality content that might attract a mass audience—which in turn means your streaming service will continue to lose billions.
The woke tail is wagging the dog, and there’s no escape.
5. Free TV Is Making a Comeback
TV used to be free. No one paid for TV until cable TV came along. People are rediscovering this. If you live near a metro area, a $25 antenna will deliver all kinds of free channels, including the broadcast networks. If you already pay for the Internet, streaming services like FreeVee, Tubi, Redbox, and Pluto offer a countless number of free channels that deliver a countless number of movies, TV shows, sports, news, reality, DIY, and true crime programming. Why anyone would pay for TV today is beyond me.
6. The Writer and Actor Strikes Expose a Paper Tiger
The strikers want a higher percentage of profits that don’t exist.
Actors on strike carry signs outside Amazon Studios in Culver City, California, on July 17, 2023. (AP Photo/Chris Pizzello)
Writer Ilana Pena holds her sign on the picket line on the fourth day of the strike by the Writers Guild of America in front of Netflix in Hollywood, California, on May 5, 2023. (FREDERIC J. BROWN/AFP via Getty Images)
Streaming services are losing billions, pay TV is dying, movies are not making a comeback, and entertainment stocks are sinking.
Where exactly are the profits?
Here’s what terrifies the industry more than anything… The strikers want residuals on streaming content. For that to happen, streaming services must release viewership data on streaming shows, something they have adamantly refused to do. You see, the streamers don’t want Wall Street to see this data. Once Wall Street discovers no one is watching 340 of those 350 shows linked above, the stock will take an even deeper dive.
I would summarize things this way: the death of pay TV and the loss of those unearned billions is crippling an out-of-touch industry that alienated half the country and no longer knows how to create quality content. Worse still, the takeover of these companies by rabid leftists ensures these companies will not even try to win back the masses.
I don’t know how this will shake out over the next decade or so, but we’re only in the first act of this long overdue reckoning, and I’m sure enjoying the show so far.
Follow John Nolte on Twitter @NolteNC. Follow his Facebook Page here.
