2023 was the year when Hollywood finally managed to eat its tail.
Costly blockbusters turning into mere tax write-offs, the biggest writers strike in history halting production for most of the year, streaming companies trying every trick to finally become profitable, and studios merging into one almighty singularity.
It’s not been a great year for Hollywood, with the major studios constantly circling the drain of consumer culture in place of fresh ideas that organically capture the public’s imagination.
One would think the reaction to these events would be a studio system willing to pare back and rethink. Yet, those inside the machine struggle to see it from the outside. When Hollywood flails, everything is examined… except its habits of excess.
Failing is costly
A surefire way to ensure profits is to give the audience more of what they want. Or at least, that was the conventional wisdom of modern Hollywood up until this year. 2023 saw obvious blockbusters become liabilities, shaking the overall trust of studio expectations.
Indiana Jones and the Dial of Destiny, hoping to bring in younger spectators along with the older nostalgia-bitten crowd, completely overshot the mark when it came to audience interest.
On a $300 million budget, it only managed to return $384 million. A profit of $84 million? Get the tiny violins ready. Yet this number only covers production costs, with marketing and distribution tending to double a major film’s budget. It’s clear from these margins that Indiana Jones’ last-ever foray was far from profitable, an outcome that surprised a studio so confident in its formula.
Read more:
Hollywood and the year of excess from Avatar to the Will Smith slap
But no worries, major studios will always have superhero movies on the conveyor belt, right? Superhero movies have nestled themselves quite comfortably in the top-grossing films of all time, yet the appetite for such caped fare has seen a dramatic shift. DC’s The Flash struggled, with another $300 million budget failing to turn a profit. Faring even worse was The Marvels, which didn’t even reach its $275 million production budget at the box office.
Studio executives expected writers to lose their homes
In times of industrial dispute, those with power simply know they can wait longer than those fighting for better conditions. The writers' strike was the main story in Tinseltown this year, with the main disagreement being an outdated royalty scheme that still served traditional television syndication over the much more relevant streaming giants.
“The endgame is to allow things to drag on until union members start losing their apartments and losing their houses,” a studio executive told industry website Deadline. “A cruel but necessary evil”, another insider described the strategy.
Other issues in the dispute came to the forefront, including the use of AI likeness. Instead of actors only being booked for their time on set like traditional contracts of labour, they are also encouraged to sign away their image for AI purposes.
This is already being integrated into studio production, with Disney’s Prom Pact coming under scrutiny for using AI actors to fill out crowd shots. This move was described as “better serving the consumer” by Disney, yet its real intention is to reduce labour costs, which in turn reduces the pool of acting work to a chosen lucky few.
Netflix buys cheap from South Korea and keeps all the money
What’s the best way to continue pumping out content during a strike? Buy cheap from other countries that are culturally in vogue.
Squid Game, the South Korean import that took the streaming world by storm, raised Netflix’s internal value by $900 million. Following this and other Korean-imported hits, Netflix has pledged to spend $2.5 billion on shows and films from the country.
But are these Korean productions enjoying the spoils of their massive successes? According to the Korea Broadcasting Actors Union, absolutely not. As the union fights for fairer actor residuals given the extent of their screen industry successes, Netflix refuses to pick up the phone.
In South Korea, the attitude towards Netflix is that it pays in exposure. Netflix’s value sits at over $200 billion yet expects to pay dirt low prices for major international hits. Meanwhile, a country whose output has dramatically increased in value still suffers from low rates set from before their moment in the cultural zeitgeist.
Major studios continue to combine into a singularity
In 2019, Disney finally acquired 21st Century Fox in a landmark deal that cost $71 billion. This brought the major studios from six down to five.
As media properties increase in value over time and studios continue to reduce the diversity of their output, a monopoly is sure to form. Recent news reveals that two major players, Warner Bros Pictures and Paramount Pictures, are in talks for a merger. This would reduce the majors down to a Big Four, consolidate studio power even further and place many more titles and franchises under one roof.
Read more:
Jean-Luc Godard: the 20th century giant that changed film forever
What’s the end goal of this trend of consolidation? Ultimately, the perfect scenario for Hollywood would be one major studio controlling all production and output. An endlessly beneficial and preservational relationship for a chosen few, but for everyone else – workers, actors, writers, the public – it will simply be more circling the drain in the vast space where ideas and creativity once stood.
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