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U.S. film and TV production down 40% from peak TV levels, report says

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U.S. film and TV production down 40% from peak TV levels, report says

The film and TV production drought plaguing the U.S. entertainment industry appears to be “here to stay,” according to a sobering new report by ProdPro.

The tracking company found that production in the United States was down about 40% in the second quarter of 2024 compared to peak-TV levels of filming activity during the same period in 2022. For nearly two years, Hollywood has suffered a stark decline in film and TV shoots that has prolonged mass unemployment and mental health crises among entertainment workers.

Globally, production in the second quarter of the year was down by about 20%, compared to 2022.

Though domestic film and TV shoots were up by 30% in the second quarter compared to 2023, the year-ago numbers are skewed by a production shutdown caused by the Hollywood writers’ strike, which began in May and concluded in September of last year.

Movies have been especially challenged. While the number of TV series in production increased globally by 20% compared to the second quarter of 2023, the number of movie shoots decreased by 18% this year.

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The ProdPro study indicates that the overall sluggish production rebound following the writers’ and actors’ strikes — particularly for feature films — “can be partially attributed to the risk of another” work stoppage in 2024 by crew members.

Industry insiders and experts had speculated earlier this year that studios were playing it safe by not moving forward with as many projects in anticipation of a third strike.

At this point, however, a crew member walkout is looking increasingly unlikely, after the industry’s largest below-the-line union secured a contract agreement with the studios and streamers with minimal drama.

The International Alliance of Theatrical Stage Employees — which represents costume designers, lighting technicians, makeup artists, cinematographers and other craftspeople on film and TV sets — reached a tentative contract deal last month with the top Hollywood studios.

Pending ratification, that agreement includes wage increases, health and pension benefits and artificial intelligence protections for some 50,000 members of the union, which has never gone on strike in its 131-year history.

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Meanwhile, the Hollywood Basic Crafts — a coalition of unions advocating for drivers, electricians, location managers, animal trainers and other below-the-line workers — is still in the midst of contract negotiations with the companies. All the current crew member agreements expire July 31.

Entertainment workers have been hurting as studios continue to cut back on production in an attempt to recoup the financial losses they incurred during the streaming wars.

The so-called peak TV era that enabled 600 scripted series to debut in a single year is over, movie theaters are still chasing pre-pandemic levels of attendance with thin release slates, and countless industry professionals have been unemployed since before the strikes began.

Furthermore, Los Angeles has been losing ground to other production hubs in the United States and abroad that offer more generous tax incentives to companies shooting there. Even so, the City of Angels remains by far the biggest driver of domestic film and TV employment, followed distantly by New York, Atlanta, Chicago, San Francisco and other major players.

ProdPro also tracked studios’ spending habits, noting that they committed in the second quarter of 2024 to investing a total $11.3 billion on film and TV productions — a 39% increase from the same period in 2023, but still lagging 20% behind 2022. According to the report, data show that “returning episodic projects and mid-budget studio films” have attracted the most funding.

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Films and TV series that have launched production in the second quarter of 2024 include Amazon MGM’s “Project Hail Mary,” starring Ryan Gosling and shooting in London; director Ryan Coogler’s “Grilled Cheese,” starring Michael B. Jordan and filming in New Orleans; Amazon MGM’s “Mercy,” starring Chris Pratt at Culver Studios in Los Angeles; HBO’s “Game of Thrones” spin-off “A Knight of the Seven Kingdoms” in Belfast; and Amazon Prime Video’s “Blade Runner 2099,” starring Michelle Yeoh and shooting in Eastern Europe.

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Boeing sent two astronauts into space. Now NASA says it may need SpaceX to go get them

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Boeing sent two astronauts into space. Now NASA says it may need SpaceX to go get them

NASA officials conceded Wednesday that the agency might have to rely on SpaceX to return two American astronauts to Earth from the International Space Station due to problems with Boeing’s Starliner spacecraft.

Astronauts Suni Williams and Butch Wilmore were launched on June 5 to the orbiting lab in the Starliner’s first manned trip to space after years of delays. What was expected to be a roughly one-week mission, however, has turned into an open-ended odyssey with the pair stuck on the station for two months as NASA and Boeing officials investigate malfunctions with Starliner’s propulsion system.

The Starliner may still be able to return the astronauts to Earth, but NASA officials said during a news conference that they are developing alternate plans that would have SpaceX’s Crew Dragon spacecraft bring them down. If SpaceX is needed to transport the astronauts, it is possible the return flight wouldn’t occur until February, meaning Wilmore and Williams would have to remain at the space station for six more months.

“Our prime option is to return Butch and Suni on Starliner. However, we have done the requisite planning to make sure we have other options open and so we have been working with SpaceX to ensure they are ready to respond,” said Steve Stich, program manager for NASA’s Commercial Crew Program.

The announcement by NASA is a blow to the troubled aerospace company, as Boeing grapples with an investigation into the cause of a door plug blowing out during a 737 Max 9 flight this year — as well as the continuing repercussions from the two crashes of its 737 Max 8 jets several years ago.

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Boeing and SpaceX were given multibillion-dollar contracts in 2014 to develop spacecraft to transport crew and cargo to and from the orbiting space station after the ending of the Space Shuttle program, which forced NASA to rely on Russia’s Soyuz spacecraft to send American astronauts to the station.

Since then, Elon Musk’s Hawthorne company has ferried more than half a dozen crews to the station, whereas the current Starliner mission was its first crewed test flight.

Marco Caceres, an aerospace analyst at Teal Group, said the mission has become a debacle for Boeing as it grapples with Starliner’s myriad problems.

“They are three, four, five years behind SpaceX with this program. The only reason NASA really has been giving Boeing chance after chance after chance is because it really does want to have backup capability so that it never has to rely on the Russians,” he said.

Just last week, Boeing wrote off an additional $125 million in expenses related to the program after previously booking some $1.5 billion in cost overruns.

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The June mission had been delayed for weeks after a helium leak in Starliner’s propulsion system was detected on the launch pad, but NASA gave approval for the launch after determining it did not pose a risk to the astronauts and would not prevent the capsule from reaching the space station.

On the ascent to the station, however, the helium leak worsened, and during docking the thrusters that propel the craft in space malfunctioned. NASA said last month that testing at its White Sands Test Facility in New Mexico found that Teflon seals that control the flow of fuel in a valve were one cause of the malfunction.

On Wednesday, officials provided additional detail, saying the seals had swelled during the ground testing, although a test of Starliner’s engines in space on July 11 indicated they were performing to specifications, indicating the Teflon had returned to its original form.

NASA officials have said that Starliner has 10 times more helium than it needs to return Starliner to Earth. The gas is used to pressurize the craft’s propulsion system. But Stich said Wednesday that engineers were analyzing the possibility that on a return flight there would be a simultaneous leak of the helium and a malfunctioning of the thrusters.

“The worst case would be some integrated failure,” Stich said.

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He acknowledged there was disagreement over the safety of returning the astronauts on the Starliner.
Last week, Boeing issued a statement that cited all the testing that had been conducted and concluded, “Boeing remains confident in the Starliner spacecraft and its ability to return safely with crew.”

Boeing officials did not attend the news conference, unlike previous NASA updates on the Starliner mission. A decision on whether to return the astronauts on Starliner is expected to be made in the next few weeks, he said, with NASA Administrator Bill Nelson ultimately responsible for the call.

If the agency decides that it is too risky to return the astronauts aboard Starliner, it would bring them down on the next flight of SpaceX’s Crew Dragon capsule. That mission had been scheduled to blast off this month but has been delayed until no earlier than Sept. 24 to give the agency time to make its decision, he said.

Under that scenario, the Crew Dragon would blast off with two crew members and come back with Williams and Wilmore and two other astronauts when it returns sometime in February 2025. The Starliner, meanwhile, would remotely undock and return to Earth without a crew.

The first two test flights of the Starliner in 2019 and 2022 were conducted without a crew. Stich said that returning Starliner this time would only require that the control software be set for an uncrewed mission

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Disney's streaming business is profitable for the first time, but its parks unit lags

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Disney's streaming business is profitable for the first time, but its parks unit lags

After years of losses totaling billions of dollars, Walt Disney Co.’s overall streaming business has reached profitability for the first time. Third-quarter results, however, were tempered by weakening demand at the company’s key parks unit.

The Burbank media and entertainment giant reported Wednesday that its streaming business — which includes Disney+, Hulu and ESPN+ — took in about $6.4 billion in revenue for its fiscal third quarter, up 15% compared with a year earlier.

The streaming business notched $47 million in operating income, compared with a loss of $512 million a year earlier. During the most recent quarter, ESPN+ helped boost Disney’s streaming business over the profitability hump, at a time when Disney+ and Hulu saw an operating loss of $19 million.

The milestone comes one fiscal quarter earlier than Disney executives had anticipated.

“What we’ve been seeing with streaming is significant success largely driven by the success of our creativity,” chief executive Bob Iger said during a Wednesday morning call with analysts. “We’re bullish about the future of this business.”

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Achieving profitability in Disney’s streaming business has been a top priority for Iger, who earlier this year held off activist investor Nelson Peltz in a proxy fight. Among other things, Peltz demanded that Disney show a realistic plan for achieving large margins of profitability in its streaming business. To reach that goal, Iger undertook a wide-ranging cost-cutting effort across the company, which slashed thousands of jobs.

Company executives said product and technology improvements in its streaming services would pay dividends going forward. They mentioned that bundling packages, such as the recent deal Disney reached with Warner Bros. Discovery to offer Disney+, Hulu and Max for one price, has helped reduce subscriber churn, while the company’s early efforts to crack down on password sharing have not faced significant backlash.

Overall, the company generated revenue of $23.1 billion during the fiscal third quarter, up 4% year over year. Earnings, excluding certain items, were $1.39 per share, up from $1.03 a year earlier and higher than analysts’ estimates.

The company’s studios business also contributed to the quarterly results, led by the success of Pixar’s “Inside Out 2.”

Disney’s entertainment division reported revenue of about $10.6 billion, up 4% year over year. Operating income for the segment totaled $1.2 billion, up from $408 million in the previous year. (The interest in “Inside Out 2” also drove viewers to Disney+, as the company said viewers’ desire to watch 2015’s “Inside Out” helped lead to more than 1.3 million sign-ups for the streaming service. Iger said the company is seeing similar trends with the previous “Deadpool” and “Planet of the Apes” movies.)

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Revenue for Disney’s sports business, which includes ESPN, increased 5% to about $4.5 billion, though the segment saw operating income of $802 million, down 6%. Domestic ESPN ad revenue rose 17% year over year, but it wasn’t enough to offset the $314-million operating loss from Disney’s Star India business, which saw higher programming and production costs due to the timing of the ICC T20 cricket World Cup.

It was a more muted quarter for the company’s experiences division, which includes its amusement parks and cruise line, as well as merchandise.

The division dominated the company’s financial results in recent fiscal quarters, aided in part by pent-up demand for travel since the pandemic. But for the most recent quarter, the division reported operating income of $2.2 billion, down 3% from last year.

Disney said the decrease in operating income was due to softening consumer demand. Results from the company’s U.S.-based parks decreased “modestly,” though year-over-year attendance was comparable and per-capita spending was “slightly up,” the company said.

The group brought in about $8.4 billion in revenue in the fiscal third quarter, up 2% year over year.

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The company expects to see “flat-ish” revenue for its experiences division in the fourth quarter and for several quarters after that, Hugh Johnston, chief financial officer, said on the Wednesday call. Disney cited the Olympics’ effect on attendance at Disneyland Paris, as well as “cyclical softening” in China as factors for fourth-quarter results.

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Google loses major antitrust case over search, declared a monopoly by judge

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Google loses major antitrust case over search, declared a monopoly by judge

In a major blow to Google, a federal judge on Monday ruled that the tech giant violated antitrust laws by illegally maintaining a monopoly on web searches.

The much-anticipated decision marks a significant victory for federal regulators trying to rein in the power of Big Tech and could send shock waves through the tech world. Other firms, including Apple, Meta and Amazon, also face federal antitrust lawsuits.

“After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly,” U.S. District Judge Amit Mehta wrote in his opinion.

The ruling did not include a remedy for Google’s conduct.

Kent Walker, president of Google Global Affairs, said in a statement that the company plans to appeal.

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“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available,” he said. “As this process continues, we will remain focused on making products that people find helpful and easy to use.”

Regulators alleged that Google maintained a monopoly on web searches by reaching agreements with browser developers, phone manufacturers and wireless carriers to pre-load their products with the Google search engine as the default.

By agreeing to partner with Google, the companies receive a portion of the advertising revenue Google generates through the search process, the ruling said.

In 2021, Google paid out a total of $26.3 billion in revenue share under its contracts with browser developers Apple and Mozilla, major manufacturers of Android devices such as Samsung and Motorola, and U.S. wireless carriers including AT&T and Verizon, according to the ruling.

That amount was Google’s greatest expense that year, the ruling said. That same year, Google earned more than $146 billion in advertising revenue, according to the ruling.

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“These distribution deals have forced Google’s rivals to find other ways to reach users,” the ruling said.

The Mountain View-based subsidiary of Alphabet Inc. has increasingly cornered the market for web searching. In 2009, 80% of U.S. web searches went through Google. By 2020, that figure was nearly 90%, according to the ruling. Almost 95% of mobile searches used Google.

Google’s next closest competitor — Microsoft’s Bing — took up just 6% of web searches, the ruling said.

This dominance of the search market caught the attention of antitrust regulators, and by 2020, the U.S. Department of Justice and multiple state attorneys general had filed two separate lawsuits against the tech giant.

During the course of legal proceedings, dozens of witnesses were deposed, including high-ranking tech executives. The bench trial started in September 2023 and lasted for nine weeks. Closing arguments occurred in May.

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It’s not yet clear what the ruling will mean for Google, particularly since the company plans to appeal and there will be further proceedings about potential remedies.

“We’re still in the middle of the game, as opposed to the end of the game,” said Colin Kass, a partner in the litigation department at Proskauer and co-head of the firm’s antitrust group.

But if the ruling stands, it could force Google to revisit how it does deals with outside companies for the opportunity to be the default search engine, said Jef Pearlman, clinical professor of law and director of the intellectual property and technology law clinic at the USC Gould School of Law.

“If it stands, this will limit their current approach,” he said.

The ruling is less likely to have an effect on the other pending tech federal antitrust cases, mostly because the Google case focuses so narrowly on the market for web searches, which is not relevant to the other lawsuits, legal experts said.

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But it could serve as a warning for artificial intelligence companies, which are starting to make deals with outside companies to use their technology and could run into similar issues as Google did with its default search engine agreements.

Though the AI market is still nascent, “they will be thinking of this as they pen those deals,” Pearlman said.

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