Tuesday, November 22, 2022

The news never stops! The AP is reviewing its anonymous sourcing policy, Elon Musk is upset at brands for pausing advertising, Alex Jones has lost another legal battle, and Chip and Joanna Gaines are on the cover of Variety. But first, the A1.

THE A1

The $2 Billion Bet

CNN Photo Illustration/20th Century Studios

"Avatar: The Way of Water" has an imposing task on its hands.

When the much-anticipated James Cameron sci-fi epic is released on December 16, it will need to make more than $2 billion at the global box office, just to break even. That's according to Cameron himself, who told GQ for a story published this week that the movie is "very f--king" expensive and possibly represented "the worst business case in movie history."

"You have to be the third or fourth highest-grossing film in history. That's your threshold. That's your break even," Cameron explained to the magazine.

The sequel's release also comes at a momentous time for Disney with Bob Iger retaking the throne of the Magic Kingdom. The movie will be the first major release for Disney since he returned as CEO. And, it is worth noting, while the film was ordered before Disney acquired 20th Century Fox, for some of the movie's development, Iger was chief executive at Disney. Which is to say, "Avatar's" performance will reflect on him to a degree.

But a not-so-insignificant part of whether the lofty $2 billion+ box office goal can be archived depends on whether audiences will rush to open their wallets and pay extra for what is being touted as an immersive 3D film experience. When the first "Avatar" debuted nearly 13 years ago, moviegoers filled theaters in droves with the explicit desire of seeing a dazzling 3D movie, glasses and all.

It was the peak of the 3D craze. Back then, you'll remember, 3D was considered the future of cinema and "Avatar" was the movie that would usher in a magical new era of storytelling on the big screen. Approximately 80% of the movie's gross was from 3D showings. "Avatar" became the highest-grossing film of all-time, making nearly $3 billion. It was a smash hit, Cameron was celebrated yet again, and expensive sequels were green lit.

But the era of the 3D film, in which it was groundbreaking to go all-in on the format, has long passed as the concept has lost its allure. Box office sales of 3D movies are on life support and have been for some time. The number of films released in 3D has been in decline since the format exploded in popularity around the time the first "Avatar" came out.

Which is to say, the fact that "Avatar: The Way of the Water" depends so much on the format represents somewhat of a risk for Cameron and Disney. "It is a big bet," Shawn Robbins, chief analyst at Boxoffice Pro, told me. The sequel, he said, "is one of the hardest movies in quite a while," to predict in terms of success, "in large part because of that 3D element."

While the format was a draw for audiences in the past, 3D movies also allowed studios to earn extra dollars from the higher-priced tickets.

The first "Avatar" benefited from a cocktail that included both the magnetism of a 3D spectacle and the inflated ticket prices. And it's already clear that Cameron and Disney are hoping to benefit from them again. "Experience it in 3D," urged a new trailer for the movie that debuted this week during "Monday Night Football." The movie's official site also recommends audiences see the movie "in 3D."

"It's mostly going to be 3D, and that's a big bet," Robbins said, noting that most of the showings will present the movie in that format. "But James Cameron has won big bets before. So I have learned not to doubt him."

Cameron himself has made it clear that he hasn't given up on the format. Ahead of the sequel's release, he insisted that the style of moviemaking is "really not over," though he appeared to acknowledge the buzz around seeing movies presented in the format has dissipated.

"It's just now a part of your choices when you go to the theater to see a big blockbuster movie ... I liken it to color," Cameron reportedly said at a roundtable in September. "When color films first came out, it was a big deal. People would go to see movies because they were in color. I think around the time of 'Avatar,' people used to go to see movies because they were in 3D ... I think it had an impact on how films were presented that's now just sort of accepted and part of the zeitgeist and how it's done."

The question, of course, is whether 3D is in fact "part of the zeitgeist." Box office figures — and the dwindling number of films released in 3D — would suggest otherwise.

——— BELOW THE FOLD ———

CNN Photo Illistration/Hannah McKay/Reuters

The First 48: Two days after the stunning announcement that Bob Iger would return to lead Disney, news organizations are still trying to report out precisely what sequence of events led to the explosive C-suite shakeup. The WSJ's Erich Schwartzel, Emily Glazer, Robbie Whelan, and Jessica Toonkel on Tuesday evening published a deep-dive chronicling the tense relationship the "two Bobs" had over the last couple years. "He's killing the soul of the company," they reported Iger privately complained of Bob Chapek. More from the four-person team here.

OFF THE WIRE

Brooks Barnes notes that Iger faces quite a few "long-term challenges" at Disney. (NYT)
Dealbook raises the question of what Iger will now do with assets such as Hulu and ESPN. (NYT)
Analyst Rich Greenfield to Alex Sherman: "Iger should sit down this weekend and make a list of the assets he wants Disney to keep and the ones he wants to get rid of." (CNBC)
David Sims asks: "Will Bob Iger stop the streaming death spiral?" (The Atlantic)
Brent Lang and Rebecca Rubin write about the "risks and rewards" Iger faces having returned as Disney CEO. (Variety)

THE BUSINESS

Mess At The Associated Press: The AP is reviewing its sourcing standards following the publication of a now-retracted story that cited a single U.S. official alleging stray Russian missiles had slammed into Poland, the AP's David Bauder reported Tuesday. As we reported in the prior edition of this newsletter, the AP reporter, James LaPorta, has been fired. But questions were raised on Tuesday about whether LaPorta's editors who published the reporting were also to blame.

Semafor's Max Tani published Slack messages revealing the chaotic behind the scenes process. One issue: LaPorta, who told Tani he had been "ordered by AP not to comment," said in Slack at the time his source had been vetted by AP executive Ron Nixon. "But Nixon has said he had no knowledge that the source was being used for this particular story and development," Bauder wrote in his piece. Bauder also reported that "there has been other disciplinary action taken" at the AP. More from Bauder here.

A Charlotte Station Grieves: A Tuesday helicopter accident killed WBTV meteorologist Jason Myers and the station's pilot Chip Tayag, the outlet said. "The WBTV family is grieving a terrible loss," WBTV said in a statement. "Our news helicopter Sky3 crashed mid-day Tuesday with two of our colleagues on board. ... We are working to comfort their families in this difficult time. We appreciate the outpouring of support for our staff and your continued prayers for their families."

IN THE INDUSTRY

Layoffs are expected at NBCUniversal in January, affecting ad sales, marketing, and back-end functions, Claire Atkinson reports. (Insider)
The big picture from Sara Fischer: "The media industry is getting hit by sizable rounds of layoffs and cost-cutting measures as the ad market continues to show signs of a serious slowdown." (Axios)
The Athletic is planning on doubling its coverage of women's sports, Fischer also reports. (Axios)
Erik Wemple takes news organizations to task over midterms coverage: "Major media outlets promoted an inaccurate depiction of the national political mood heading into Election Day, and they have no stated regrets about it." (WaPo)
Over in the UK: Sky News host Peter Gleeson has been accused of plagiarizing for the third time this month. (Guardian)

THE VALLEY

CNN Photo Illustration/Michael Gonzalez/Getty Images

Musk's Biggest Problem: More than a third of Twitter's top 100 advertisers have abandoned the platform in the last two weeks as Elon Musk has stirred mayhem, WaPo's Naomi Nix and Jeremy B. Merrill reported Tuesday. The lack of ad revenue is one of the most consequential threats to Twitter's livelihood, accounting for roughly 90% of its income last year.

🔎 Zooming in: The pausing of ad campaigns is clearly getting under Musk's skin. The new Twitter owner lashed out at brands again Tuesday for "starving" the company of revenue. Musk also strongly suggested he never actually formed a "content moderation council" because advertisers "broke the deal" they supposedly had with him when they started fleeing the platform after he "agreed to this condition."

TOO MANY TABS

"To successfully overhaul Twitter into a thriving subscription business would be to buck the trend of many other media properties that have struggled with the model," Clare Duffy writes. (CNN)
Mike Isaac and Ryan Mac report that as Musk cuts costs at Twitter, "some bills are going unpaid." (NYT)
Cat Zakrzewski, Faiz Siddiqui, and Joseph Menn look at how Musk has effectively torpedoed Twitter's Trust & Safety team. (WaPo)
France's digital regulator Arcom warns Twitter of its legal duty to moderate misinformation and hate, setting a Nov. 24 deadline. (WaPo)
In other tech news: House Republicans are pressing TikTok in a letter for answers on Chinese data sharing. (Reuters)
Sen. Mark Warner and Rep. Elissa Slotkin have sent a letter to Google, urging it to combat misleading abortion ads. (Bloomberg)
Oops! Major tax prep sites sent user financial data to Facebook, Simon Fondrie-Teitler, Angie Waller, and Colin Lecher report. (The Verge)

THE INFO WARS

CNN Photo Illustration/Joe Buglewicz/Getty Images

Jones Loses Appeal: Right-wing conspiracy theorist Alex Jones on Tuesday lost an appeal to water down the nearly $50 million Texas verdict for Sandy Hook parents on the basis that the state limits non-economic punitive judgments. Jones' attorney said the Infowars founder will appeal the decision. Of course, Jones also owes a staggering $1.4 billion in the separate Connecticut case brought by eight families of Sandy Hook victims and a first responder. The Associated Press has more here.

IN THE BATTLEFIELD

Jonathan O'Connell reported on Monday that after Sandy Hook families sued Jones, records show that he "transferred millions from his media company to firms that he or his family members controlled." (WaPo)
During his final White House briefing, Dr. Anthony Fauci addressed how misinformation can be combatted in future pandemics: "People who base what they say on evidence and data need to speak out more." (CNN)
Kara Swisher blasted "propaganda from the right that smeared" LGBTQ community as "groomers" after the Colorado mass shooting. (Mediaite)
The NYT's Emma Dibdin has put together a list of six podcasts digging into how dangerous misinformation spreads. (NYT)

CURTAIN CALL

CNN Photo Illistration/Variety

Magnolia Magic: Home improvement stars Chip and Joanna Gaines are on the cover of this week's Variety, talking about their Magnolia empire and how they created their linear network with Warner Bros. Discovery boss David Zaslav. Zaslav explained to Jennifer Maas that he wanted to work with the duo because they "have a huge fan base" and "everything they touch turns to gold." (Regular disclosure: WBD is CNN's parent company.)

OFF STAGE

UTA boss Jeremy Zimmer writes, "As streaming giants evolve their business, it's time to rethink talent deals." (THR)
After its massive box office run, "Top Gun: Maverick" will fly onto Paramount+ December 22. (Variety)
Disney is set to rule the Thanksgiving box office with "Black Panther" and "Strange World." (Variety)
The series finale of "The Walking Dead" drew 2.27 million viewers on Sunday; meanwhile, the third episode of "Yellowstone" brought in 8.83 million viewers. (THR)
"The Crown" still occupies the throne on Netflix's charts. (Deadline)
"I turned down $9 million": Ice Cube says he exited comedy "Oh Hell No" with Jack Black, over a Covid vaccination requirement. (Deadline)

Thank you for reading! This newsletter was edited by Jon Passantino. Have feedback? Send us an email here. We will be back in your inbox tomorrow for the holiday week's final edition.