The Hollywood Reporter - 06.11.2019

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THE HOLLYWOOD REPORTER 24 NOVEMBER 6, 2019


CLAPPERBOARD: ADOBE STOCK. BARRIOS: BRYAN STEFFY/GETTY IMAGES.

A


s Disney+, HBO Max,
Peacock and Apple TV+
launch billion-dollar
programming budgets in search
of scale, will that leave small
streaming services struggling? In
this group, streamers from AMC
Networks and WWE to nonfiction
programmer CuriosityStream
and indie purveyor Sundance
Now are finding that there is
no room for error as the field

crowds. As MoffettNathanson
analyst Michael Nathanson put
it in a Nov. 1 research note, the
question AMC faces is “whether it
can make this strategic transfor-
mation, or build a ‘lifeboat,’ fast
enough to offset the declines in
the traditional business.”
Clearly, these companies
think the market is big enough
to support their ambitions,
especially with such smaller

among the companies that make
their services available through
these intermediaries. “This sce-
nario is exactly why we are seeing
increasing interest in aggregation
services like Amazon Channels,
Roku Channel, even Apple chan-
nels now,” says Brett Sappington,
senior research director for
Parks Associates.
The goal? Hold on to favorable
margins. Sappington says con-
sumers are willing to pay more
for a service that fits specific
needs. “By and large, consumers
will pay for the content that they
want,” he says. “When you are
talking $1, $2 or $5, that may not
be enough to dissuade consumers
from getting that content.”

A


s of the end of October, nearly 152 million
Americans were working, the Bureau of
Labor Statistics disclosed Nov. 1. But the enter-
tainment and media sectors are not sharing the
good times, as mergers and acquisitions and the
layoffs they typically cause appear to be taking a
toll. Hit hardest: sound recording and film, where
jobs are off 4 percent year-over-year, while overall

U.S. employment rose more than 1 percent.
For years, Disney had been in hiring mode,
closing fiscal 2018 with 201,000 employees,
up from 199,000 the prior year, according to
filings, though it has slashed at least 400 jobs
since closing its $71 billion deal for most of 21st
Century Fox in March, and observers predict
3,000 layoffs will eventually be attributed to the
partial merger. Analyst Richard Greenfield of
LightShed Partners has speculated the number
could swell to 10,000 as the conglomerate seeks
its goal of $2 billion in synergies by fiscal 2021.
Over at AT&T, the carnage reportedly is more
muted given there was less overlap in job func-
tions when the telecom giant scooped up Time
Warner in June 2018 for $85 billion: 13 months
later, 20 ad sales jobs were slashed and there
were about 50 layoffs in a variety of positions at
HBO, Turner and Warner Bros. in October.

Viacom had 10,400 full-time employees as
of Sept. 30, while CBS employed 12,770 full-
timers at the end of 2018, according to filings. If
Greenfield’s initial estimate is correct, 9 percent
of those jobs are at stake. And some insiders
believe ViacomCBS could scoop up smaller
companies — Lionsgate and/or its Starz asset, for
example — which would lead to more synergies,
and layoffs.
One bit of good news for entertainment work-
ers in the BLS numbers? Average hourly wage is
north of $37 an hour, about $9 more than all other
non-farm, non-government jobs in America.

WWE, AMC’s Acorn TV and others are betting that
‘there’s not the same pressure on retail price’ compared to
what Netflix competitors are facing BY ALEX WEPRIN

Where Do Niche


Streamers Fit in a


Sea of Services?


content spends. AMC Networks
CEO Josh Sapan told analysts
Oct. 31 that the addressable
market for its offerings, which
include Anglophile-focused
Acorn TV ($5.99 per month) and
horror-centric Shudder ($5.99 per
month), is “in excess of 10 million
subs for each.”
But 10 million subscribers is
modest compared to the stated
targets from HBO Max and
Disney+, both of which expect to
have more than 60 million sub-
scribers by 2025. Sapan argued
that while the big streamers fight
a price battle to the bottom, niche
services are “superior” because
“there’s not the same pressure on
retail price,” noting that Acorn TV
raised its prices without impact-
ing growth. It was a comment
echoed by WWE co-president
George Barrios, who told ana-
lysts that WWE Network ($9.99
per month, 1.5 million subs) has
“a fundamentally
different value
proposition” than the
general entertain-
ment services.
Niche services also
are using the targeting capabili-
ties of tech giants like Amazon,
Roku and Apple to drive new
subscriptions (in exchange for a
cut of revenue). AMC Networks is

M&A Job Losses Widen in Hollywood
As other sectors see year-over-year growth, the media and entertainment
economy faces significant contractions in workers BY PAUL BOND

Not Keeping Pace
While U.S. job market is growing, entertainment lags

Small Streamers’
Price Points

Service
WWE
Network
Britbox

Acorn TV

Price Subscribers

$9.99 1.5M


$6.99 500K or less


$5.99 1M or less


Platforms with modest subs hope to
grow niche customers

Source: Company disclosures

Source: U.S. Bureau of Labor Statistics. Employment numbers are seasonally adjusted and overall data does not include jobs in the farming industry.

Barrios

U.S. Total
Employees

Motion Picture and Sound Recording (except internet)Broadcasting

150M
in 2018

152M
in 2019

441K
270K

423K
268K

↑1.4%


↓4.1%
↓0.4%

2018 2019
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