Last year, Hollywood braved the summer of strikes. This year, a cruel mirror image has appeared: a brutal season of layoffs.
The entertainment industry is reeling from cuts at Paramount Global, which last week began a deep cost-cutting effort that is expected to eliminate 2,000 jobs, or 15% of staff, by year’s end ahead of a long-in-the-works ownership change.
As part of that effort, the struggling media giant closed down Paramount Television Studios, the unit responsible for streaming shows such as “Reacher” and “The Offer.” Up to 30 people employed by the Nicole Clemens-led division lost their jobs as the group’s shows moved under George Cheeks’ CBS Studios.
The workforce reduction is just another example of the full-on reset the film and TV business is enduring in the aftermath of the streaming wars. Debt-saddled Warner Bros. Discovery recently targeted nearly 1,000 cuts in its latest round of downsizing. Walt Disney Co.’s TV division last month shed 140 workers, the latest in a round of layoffs at the Burbank company.
Studios used the writers’ and actors’ strikes as cover to reduce their spending after losing billions of dollars trying to catch up with Netflix. All the while, the cable TV business continued to disintegrate, like a slowly melting glacier that suddenly broke into pieces.
Paramount‘s and Warner Bros. Discovery’s decisions to write down the value of their cable networks felt like an admission that the TV business had reached a point of no return, and that once formidable brands including TNT, HGTV, MTV and Comedy Central had lost relevance.
Between Paramount and Warner Bros. Discovery, $15 billion in value were wiped out in a matter of days. In another major change, Warner Bros. Discovery said Friday that it would shift oversight of its networks to television studio chief Channing Dungey.
It all seemed like the logical result of what Walt Disney Co. Chief Executive Bob Iger foresaw in 2015, when he sent the stocks of media companies, including Disney, plunging with comments about the challenges ahead for cable channels such as ESPN. More ominously, between his first and second terms as Disney’s CEO, he remarked that traditional TV was “marching to a distinct precipice,” and would be “pushed off.”
Those predictions are coming true in dramatic fashion, especially for Iger’s rivals. David Ellison’s Skydance Media and his partners at RedBird Capital are poised to take over Paramount in the first half of next year. Meanwhile, speculation abounds over when activist investors might set their sights on Warner and its chief executive, David Zaslav.
For the workers in the entertainment industry who’ve been struggling to find jobs since the “hot labor summer” and fall concluded, there’s been little relief so far. Only recently have glimmers of hope started to emerge, and optimism has been blunted by the sense that the business is smaller than it was a few years ago, when companies simply couldn’t get enough content.
The green light committees at the studios have started to come out of their hidey holes, but the long-awaited recovery has been painfully slow, as my colleagues Wendy Lee, Stephen Battaglio and Thomas Suh Lauder wrote last week, digging through data from London-based market research firm Ampere Analysis.
The Times’ review of the numbers found that major entertainment companies’ commissions for traditional broadcast television, cable and streaming shows in the U.S. and Canada increased 39% to 1,013 programs in the first half of 2024, compared to the second half of 2023. The data factored in green lights from Warner Bros. Discovery, Netflix, Amazon, Disney, Apple, Paramount and Comcast (not including theatrical movies).
But green light activity was still down 9.9% compared with the first half of 2023, according to Ampere data. Even more dire are comparisons with the first half of “peak TV” year 2022, when the companies commissioned 1,515 programs in the U.S. and Canada. Taking a more global view, the data also show that a large portion of the newly commissioned shows and streaming movies are being produced abroad and for less money.
The reasons for sluggishness are varied, with some observers resigning themselves to a more-or-less permanent market correction compared with boom times of two or three years ago. Others say studios held back in the first half of the year or moved productions abroad, fearing yet another work stoppage, this time by IATSE or the Teamsters.
When will the U.S. entertainment production economy start its comeback for real? The feared crew member strikes, which were never likely, didn’t come to pass, so perhaps things will now start to pick up again.
There’s a reason “Survive till ’25” has for months been the mantra of below-the-line workers, writers, actors and others looking to get on with the business of making shows and movies. The phrase echoes the refrain fans of beleaguered sports teams and people waiting for an $11-billion annual box office: “We’ll get ’em next year.”
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