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Wednesday, August 9, 2023

Hello from Los Angeles, where I may be the only one who has not been to the Taylor Swift concert! The writers' strike marks its 100th day, Dave Portnoy ushers in "new regime" at Barstool, the GOP announces another Fox debate, news outlets call for A.I. regulation, and "Suits" proves to be Netflix's surprise hit of the summer. But first, the A1.

THE A1

End of the Stream Dream

CNN Photo Illustration/Gisela Schober/Getty Images

It's the end of an era.

The disruptive streaming model birthed by Netflix that dangled all-you-can-eat menus of films, shows, and endless entertainment without pesky advertisements for extraordinarily low prices came to an official close on Wednesday.

Disney boss Bob Iger announced during the company's quarterly earnings report that the Magic Kingdom will once again hike Disney+ prices for the second time in less than a year, increasing the monthly cost of its ad-free plan $3 to $13.99 in October. Hulu, which Disney owns a majority stake in, will also increase the monthly cost of its ad-free subscription $3 to $17.99.

The more than 20% hike in prices means Disney+ will now cost twice the original price when the service debuted four years ago, and Hulu's ad-free tier is now more expensive than the most popular Netflix plan.

When Iger launched Disney+ in 2019, the chief executive said he had intentionally set the price of the service well below competitors "to reach as many people as possible with it."

But Wednesday's move to significantly bump prices, marked an acknowledgment by Iger of the media giant's intent to squeeze more revenue out of streaming by pushing consumers to the advertising-supported plans, which have proven to be more profitable.

"The advertising marketplace for streaming is picking up," Iger told investors on the quarterly earnings call. "It's more healthy than the advertising marketplace for linear television. We believe in the future of advertising on our streaming platforms, both Disney+ and Hulu."

Disney's moves are part of a larger trend occurring across the industry landscape. Media companies, looking to maximize profits as Wall Street grows impatient with them swimming in seas of endless red, are quickly abandoning pricing structures that pushed bottomless libraries of content to consumers at too-good-to-be-true, one-size-fits-all prices.

Paramount, Warner Bros. Discovery, NBCU and even Netflix have all raised prices this year in a drive toward profitability. And as Iger announced Wednesday for Disney, password-sharing crackdowns are also en route.

The announcement puts to an end much of the initial allure that led to the popularity of streaming. When Netflix first offered its pioneering service for only $8 a month, millions of people signed up, eager to have access to the company's expansive catalog for just a fraction of the cost of the traditional cable bundle. That served as the genesis of the streaming era, with legacy entertainment companies such as Disney racing to launch their own direct-to-consumer products at unsustainably low costs.

Now that is all over.

Those massive libraries of content are growing more expensive (not to mention shrinking) by the year. In fact, consumers who bundle just a few streamers together in 2023 will find that the final cost is effectively the same as basic cable. Couple that reality with the introduction of ads into streaming and the end product eerily resembles on-demand cable.

It's an ironic end to the streaming wars. After pouring billions and billions of dollars into constructing supposedly revolutionary streaming platforms, and decimating the business models that had offered the industry stability for decades, the ultimate product looks awfully similar to what companies and consumers were trying to break free from in the first place.

THE SIDEBAR

Disney's parks, experiences and products division, continues to be a bright spot, which saw a 13% increase in revenue to $8.3 billion in Q3. (CNBC)
On the future of Disney's linear TV networks, including ABC, Iger said the company is considering "a variety of strategic options." (THR)
On ESPN's big sports betting deal, Iger said Penn Entertainment "stepped up in a very aggressive way and made an offer to us that was better than any of the competitive offers by far." (THR)
Iger conceded the performance of Disney's recent box office releases were "disappointing and we don't take that lightly." (NPR)
Addressing the strikes in Hollywood, Iger struck a more conciliatory tone: "It is my fervent hope that we quickly find solutions to the issues that have kept us apart these past few months," he said, adding that he is "personally committed" to resolving the standoff. (Deadline)
Disney's movie studios, he said, would be "not just reducing the number of titles we release, but also the cost per title." (WSJ)
Iger addressed speculation he planned to sell Disney to Apple or another big tech firm, saying it is "not something that we obsess about." (TheWrap)
Missed the earnings call? Here's a full transcript. (Motley Fool)

——— BELOW THE FOLD ———

CNN Photo Illustration/Mike Blake/Reuters

100 Days and Counting : The writers strike has hit a grim milestone. With no end in sight, the work stoppage hit 100 days on Wednesday, putting it on the path to potentially become the longest strike in the history of the WGA West. On the not-so-good milestone, WGA West negotiating committee co-chairs David Goodman and Chris Keyser referred to the marker as one of "shame" for the studios. Deadline's Peter White and Rosy Cordero have more here.

HOLLYWOOD HELL

Jennifer Lie writes about the "side hustles" writers have been turning to as the work on "making ends meet 100 days into the strike." (CNBC)
"Out on the picket lines this week, resolve mixed with anger," Dawn Chmielewski and Danielle Broadway report. (Reuters)
Someone was always bound to assemble a list like this: The Deadline team has a list of the "best and worst places" to picket. (Deadline)
WGA negotiating committee co-chair Chris Keyser speaks to Lesley Goldberg about negotiating with the AMPTP: "Everything is very professional; coldly professional, probably." (THR)
"There does not appear to be much pressure on negotiators on either side to make the kind of major concession that might end the stalemate," Gene Maddaus writes. (Variety)
Waivers granted to independent projects have caused "confusion and consternation around Hollywood," Nicole Sperling reports. (NYT)

THE INDUSTRY

CNN Photo Illustration/Jasen Vinlove/USA Today Sports

Backslide at Barstool : Dave Portnoy, who purchased Barstool Sports back from Penn Entertainment for a mere $1, started the reign of his "new regime" Wednesday by berating his employees as "f**king dumb" for not showing up to the office before 10am. "I've been here since 8 am because I'm old and don't sleep anymore and was reading all the news articles sucking my c**k for buying Barstool back," Portnoy wrote. "Anyway back to the point. Nobody is here. ... None of them thought to show up maybe early on day one of the new regime. I mean seriously how f**king dumb are these people? ... I got the dumbest group of morons who ever lived." Portnoy also recorded a video, mocking cards encouraging staff to anonymously report "illegal or unethical" activity. "You want to publicly narc on someone, you do it on f**king camera," Portnoy said. "No more b**ches. No more f**king this, that. 'Make a difference?' Shut the f**k up. You got a problem, you turn the cameras on, you settle it for content."

► The crude approach to management, Portnoy's trademark, runs counter to how Barstool chief executive Erika Nardini has sought to operate the company in recent years. Nardini has attempted to mature the company beyond the early days defined by Portnoy's childish antics. Now Portnoy is signaling he will reverse policies put into place under her. A spokesperson for Nardini did not provide a comment when I asked on Wednesday whether she approved of Portnoy's managerial tactics.

THE MARKET

"Now that S&S is coming off the books, and with BET likely next, what might a market look like for a deal-fit, debt-trimmed Paramount Global?" William Cohen asks. (Puck)
Shares in Lionsgate are up nearly 3% in after-hours trading following a strong earnings report. (Variety)
Lionsgate will delay its separation with Starz until next year. (THR)
Sony Pictures Entertainment "posted $115 million in operating income for the three months ending June 30, down 71% on a dollar basis from last year's comparable first quarter despite a stronger theatrical slate," Nancy Tartaglione reports. (Deadline)

THE FOURTH ESTATE

Is Amy Robach about to head to NewsNation? Hazel Jones and Martin Gould report she is "set to sign a million dollar deal" with the network. (Daily Mail)
CNN's "Little Richard: I Am Everything" will premiere on Sept. 4. (Deadline)

MEDIA MOVES

NBC News announced that Laura Jarrett will co-anchor the network's "Saturday Today" program starting on Sept. 9. (LAT)
The WaPo named Ashlyn Still deputy director of elections and Susan Levine the America team's deputy editor. (WaPo/WaPo)
The NYT promoted Libby Peterson to senior staff editor for its News Print Hub. (NYT)

THE INFO WARS

CNN Photo Illustration/Scott Olson/Getty Images

Favoring Fox: The Republican Party is staying in its safe space. The GOP said Wednesday that its second debate will be hosted by the right-wing channel Fox Business on September 27 at the Reagan Presidential Library. Univision and Rumble, the video sharing website that one might most accurately describe as a right-wing fever swamp, will also partner on the debate. CNN has more here.

🔎 Zooming in: While not surprising, it is notable that the GOP is choosing to host its debates on Fox, which of course just earlier this year paid out a historic $787 million settlement to Dominion Voting Systems for airing lies about the 2020 election. The Fox brand might be toxic to many Americans, given the incendiary and misleading rhetoric it pumps into the public discourse on a daily basis. But it's the home to the GOP.

📺 Will Donald Trump participate in the debates? "I have decided," he told Newsmax's Eric Bolling on Wednesday. Trump said he will announce his decision next week.

IN THE BATTLEFIELD

"I decided I had to do something": Former Fox executive Preston Padden talks to David Folkenflik about why he's taking on Rupert Murdoch —someone he once fiercely respected — and challenging the license for his Philadelphia station. (NPR)
Padden also spoke to Paul Farhi, telling him that Murdoch has "undermined our democracy and has radicalized a segment of our population by presenting knowingly false narratives about the legitimacy of the 2020 election." (WaPo)
"A new Media Matters analysis finds that Fox News' prime-time ratings have cratered since Tucker Carlson's firing, with ratings down in both the key 25-54-year-old demographic (over 45%) and total audience (roughly 30%)," Courtney Hagle and Kayla Gogarty write. (MMFA)
Salem Media host Charlie Kirk says the quiet part aloud, imploring the GOP to "embrace political prosecutorial power." (MMFA)

THE VALLEY

CNN Photo Illustration/John Walton/Press Association/AP

Rage Against the Machine: Some of the top news organizations in the world on Wednesday signed an open letter warning of the risks posed by A.I. and calling for greater regulation of the rapidly developing technology. "Democracy is underpinned by trust in a free, reliable, independent, and strong media ecosystem," the news organizations wrote. "We believe artificial intelligence and generative models hold the potential to provide significant benefits to humanity; however, left unchecked, we also believe these technologies can threaten the sustainability of the media ecosystem as a whole by significantly eroding the public's trust in the independence and quality of content and threatening the financial viability of its creators." The letter was signed by Gannett, the Associated Press, Agence France-Presse, and the News Media Alliance, which represents hundreds of media organizations. Reuters' Yuvraj Malik has more.

TOO MANY TABS

Most Americans across the aisle are concerned about the risks posed by A.I. and support federal regulation of the platform, Ryan Heath reports, citing research from the Artificial Intelligence Policy Institute. (Axios)
The Supreme Court will allow Apple to retain its current App Store payment rules for now after the court rejected Epic Games' request asking that developers be allowed to direct iPhone users to additional platforms. (Bloomberg)
Elon Musk's X was fined $350,000 after it delayed cooperating with a search warrant the special counsel secured for information from Donald Trump's account. (CNN)
"Want to pay less for your X ads? Just place them next to spam," writes Amanda Silberling. (TechCrunch)
Australia's ABC is discontinuing most of its major X accounts, citing "toxic interactions that unfortunately are becoming more prevalent." (ABC)
Threads is continuing to roll out new features, with the ability to share posts via Instagram DM added Wednesday, among other things. Still no desktop functionality or search, though. (The Verge)
A major Oxford study found no evidence that Facebook is linked to psychological harm. (BBC)
Ofcom found that most Twitch and Snapchat users would likely have trouble reading and understanding the websites' respective terms and conditions. (BBC)
"TikTok appears to be working on a new way for creators to disclose if their posts contain AI-generated content," Umar Shakir reports. (The Verge)

CURTAIN CALL

CNN Photo Illustration/Netflix

'Suits' Success: Has Netflix recommended "Suits" to you in recent weeks? Well, you're definitely not the alone. Since the streamer obtained the rights to the decade-old legal drama, the Netflix algorithm has been putting the show front and center for untold numbers of users — and it's breathing new life into the show. Puck's Julia Alexander, citing data from Nielsen, noted the Meghan Markle-starred drama has "set a record for a licensed show, with more than three billion minutes streamed." As Alexander wrote, it has become the "surprise hit" of the summer for the streamer, posting better numbers than shows like "Manifest" and "The Witcher." Read Alexander's full piece.

OFF STAGE

"Barbarians at the Hollywood gates": Claire Atkinson writes about private equity in Hollywood. (Ankler)
Netflix will reopen its New York-based Paris Theater after giving the cinema some major technological upgrades. (THR)
Sky ended its 20-year partnership with the Oscars as the award show's U.K. broadcaster. (THR)
Standing Stones: Statues of Mick Jagger and Keith Richards were unveiled in the rock stars' respective hometowns. (Pitchfork)
Sam Mendes' and Armando Iannucci's comedy series "The Franchise" was picked up by HBO. (The Wrap)
"MasterChef" was renewed for a fourteenth season on Fox. (Deadline)
The trailer for "The Continental: From the World of John Wick" has dropped. (YouTube)

Thank you for reading! This newsletter was edited by Jon Passantino and produced with the assistance of Liam Reilly. Have feedback? Send us an email here. We will see you back in your inbox tomorrow.