As the bean counters lock their projections for 2020, Hollywood must cope with this question: How much is too much? Having demonstrated in years past that it can survive on too little, can the industry now thrive on too much?
The major entertainment companies have rolled up some $500 billion in debt on content and deals – a streamers-fed “spending binge” that The Economist, the stolid British publication, likens to the railway boom of generations past.
“Never has so much been spent so chaotically,” observed a top Hollywood agent, who didn’t want his name used because his agency is caught up in the “chaos.”
To a filmmaking veteran like Irwin Winkler, the present spiral reflects a dramatic contrast to the Hollywood of 50 years ago, when the then-impoverished studios unexpectedly turned out a succession of memorable hits. Constrained by limited borrowing power, the majors trimmed budgets, sold off their backlots and turned to untried filmmakers for low-budget films such as The Graduate, Midnight Cowboy and Bonnie and Clyde.
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Winkler, who co-produced The Irishman for Netflix, was shooting Rocky when he, too, realized he had no money to film a key scene on a busy skating rink. The upshot: Sylvester Stallone and Talia Shire were dispatched to stroll across a totally empty arena. “The scene turned out to be stark but much more affecting,” he recalls.
Desperation on this scale seems laughable in an era of The Irishman. Netflix, which burns through $3 billion a year, and its nearly 30 rivals created some 496 new shows last year — an astonishing expansion of content, and one that created a 10% growth in jobs across the industry. Reed Hastings, the Netflix uberboss, is on record as promising a further increase in spending next year.
Analysts guess that Netflix would have to raise prices by 15% to reach break-even, a jump that could prove challenging given the competition. Still, the streaming service confidently projects a continued growth in international markets, irrespective of competitive threat.
One upshot of the Netflix swagger has been to bring rival executives, a publicity-shy crowd, into the public eye. Disney’s Kevin Mayer, WarnerMedia’s John Stankey and Apple’s Jamie Erlicht and Zack Van Amburg all have come forward to unveil important production deals and proclaim the clout of their future slates.
All this pizzazz comes as intriguing news to the Hollywood’s “old guard” feature factories, which have been staring at ambiguous box office results. MGM’s founders classically boasted that its movies embraced “more stars than there are in the heavens.” The new Hollywood mantra: The new “heavens” might create their own stars.
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