Hollywood is slowly getting back to work, but the days of top-notch television will not return
Los Angeles — Since the end of the actors’ strike last year, Hollywood workers have been asking themselves one question: When will the entertainment industry’s production economy make its long-awaited comeback?
A full nine months after the end of the crippling “hot work summer” and fall, the picture that is emerging is of an industry in a modest stage of recovery. New data suggests that some companies are commissioning more shows again after a long period of significantly reduced activity, but the comeback is incredibly slow.
Many entertainment executives and employees at various levels have come to terms with the idea that the film and television business has become permanently smaller – and that the high points of business in 2021 and 2022, the so-called Peak TV era, will never return.
“We are in a phase of rebooting,” said Alice Thorpe of Ampere Analysis, a London-based market research firm specializing in media and entertainment.
The streaming sector’s recovery has been led by Netflix and Amazon, which are responsible for a large portion of the programs launched since the end of the writers’ and actors’ strikes. In the first half of 2024, Netflix commissioned 149 programs in North America, the most since the first half of 2022, according to Ampere data.
Commissions for traditional broadcast television, cable television and streaming in the U.S. and Canada by major entertainment companies rose 39% to 1,013 programs in the first half of 2024 compared to the second half of 2023, Ampere said. The data, which takes into account green lights from Warner Bros. Discovery, Netflix, Amazon, Disney, Apple, Paramount and Comcast, did not include theatrical films.
However, according to Ampere data, that number is still down 9.9% compared to the first half of 2023. Even more striking is the decline from the first half of 2022, when these companies greenlit 1,515 programs in the U.S. and Canada.
Back then, the streaming TV universe seemed limitless. Hollywood studios were producing new shows, streamers were paying big bucks for top talent, and there were plenty of special offers for subscribers. The decline of this golden era began in 2022, when streaming leader Netflix reported subscriber losses, and continued as studios cut spending, canceling shows and movies, raising subscription fees, and laying off employees.
While Netflix has been declared the winner of the streaming war by Wall Street and remains one of the few profitable companies in the space, it is unclear when cuts will end at other companies, such as debt-ridden Warner Bros. Discovery and the pending sale of Paramount, which is in the process of cutting 2,000 jobs.
Hollywood insiders had hoped business would rebound after last year’s strikes, but many workers are still struggling to find jobs. “Survive until 25” is now the mantra for many. Others have moved out of town or changed careers.
Some say fears of further strikes have slowed studio activity.
When crew unions negotiated their contracts with studios earlier this year, several shows moved production to London rather than risk disruption from a work stoppage, said Robert Halmi Jr., chief executive of Great Points Studio, whose company operates soundstages in New York, Atlanta and the United Kingdom.
Now that the Hollywood Teamsters and the International Alliance of Theatrical Stage Employees have reached agreements with the studios, Halmi believes a turnaround is imminent.
“For the first time, there are no (US) attacks in sight,” said Halmi. “All obstacles have now been removed.”
His company is opening a new 1 million-square-foot facility in Yonkers, New York, and it’s already fully booked through next year. “Shows are looking for space now,” Halmi said.
Much of the renewed activity takes place outside the United States
Netflix and Amazon are greenlighting programming in North America, but Ampere said around 60 percent of their commissions in the first half of this year came from other continents as they looked to expand their audiences by creating local language content in hubs such as India, Spain and Germany.
The film industry has struggled for years with the exodus of American productions to locations that are cheaper and offer generous government incentives. Also, producing a show abroad for the small screen can be significantly cheaper than producing it in the U.S. A drama series shot in the U.S. can cost between $8 million and $10 million per episode, while the same show can be produced in Europe with tax breaks for as little as $4 million per episode, industry experts estimate.
Netflix, Paramount, Warner Bros. Discovery and Amazon declined to comment on the Ampere report. Apple and the Walt Disney Co. did not respond to a request for comment.
Streamers are looking for safe bets: programs with known talent and existing intellectual property, such as popular books. In January, Amazon greenlit a Bible series called “House of David.” Netflix commissioned a horror show called “Something Very Bad Is Going to Happen” from the producers of “Stranger Things.”
NBCUniversal said the company’s content mix has remained the same across all platforms and will continue to be so. The company declined to comment on the Ampere data.
“The floodgates haven’t opened, but things are slowly but surely getting better,” said Roy Ashton, a partner and agent in the TV literary department of the Gersh talent agency in Beverly Hills. “The bar is simply higher than ever.”
Amazon has greenlit 49 U.S. productions so far this year, about the same number as it plans to do in 2023, according to a person familiar with Amazon’s business who was not authorized to comment publicly. More than 30% of Amazon Originals series will be filmed in the U.S., the person said.
London-based production company Fremantle and its divisions have had several shows approved in various countries by Amazon and Netflix this year. These include some as-yet-unannounced US unscripted shows for Netflix and a second season of the popular German-language romantic drama “Maxton Hall – The World Between Us,” which launched in May and was Amazon Prime Video’s most-watched international original title in its first week.
“There’s movement everywhere,” says Jennifer Mullin, CEO of Fremantle. “The great thing about what we do is that the world needs great content.”
But some industry insiders are concerned about the future of U.S. production as entertainment companies seek to cut costs. Last week, Warner Bros. Discovery and Paramount wrote down the value of their cable networks by a total of $15 billion, an admission of the damage done by the cancellation of cable TV and the shift to streaming.
Analysts fear that streamers will reduce their spending on series and films as they invest more in live sports broadcasts. More and more subscription streamers are offering ad-supported versions of their services and are therefore looking for major sporting events to attract viewers and advertisers.
Talent is under pressure as studios offer less money in contract negotiations with creators, some agents said. During TV’s peak, streamers offered executive producers huge sums of money to help develop content for their libraries.
“It’s the worst market it’s ever been,” said Dan Erlij, a partner at United Talent Agency and co-head of the television writing department. “The correction has been dramatic and profound. … The contracts are being re-signed at a fraction of the deals that were available for these people in the past.”
Even the makers of big hits are struggling to gain traction with new material. Aaron Korsh, whose long-running legal drama Suits became a surprise Netflix sensation last year, said the market is tough. Last month, a pitch he made was rejected.
“It’s been really bad for the last six months,” Korsh said. “I think things are getting a little better now, and everyone is hoping next year will be better.”
Korsh said the pilot for his upcoming NBC show “Suits: LA” — a spinoff of the cable TV original — was mostly filmed in Vancouver, Canada, and he had planned to shoot the season there. But at the last minute, the project received a tax credit to film in Los Angeles, so filming will begin here later this year.
“This was fantastic news for everyone and for the LA economy,” Korsh said.
