Hollywood Torrent: Apple’s New Studio, Summer Movie Debacle, The T-Swift Debate

Good afternoon from Los Angeles, wherever you may be. Sorry for the two-week delay in sending these. I tried my best to vacate while on vacation.

Labor Day marked the transition from summer to fall (though the Los Angeles heat would suggest otherwise). Oscar campaigning began with film festivals in Telluride and Venice this past weekend, and accelerates next weekend in Toronto. The NFL kicks off Thursday, and the fall TV season starts a couple weeks later. And then there’s Ms. Taylor Swift, who seems hell-bent on dominating any conversation about the record industry until at least Thanksgiving.

Rather than give thoughts on just one topic, I’m going to highlight a few of the biggest stories we’ll be reading about again and again in the coming months. Starting with …

What does Apple want from Hollywood?

The world’s most valuable company says it has big plans for TV shows. Apple has hired three prominent TV executives, and will spend $1 billion on original programming in the next year. CEO Tim Cook may buy Culver Studios as a playground for his new team, which is already out there bidding on high-profile projects, including a show starring Reese Witherspoon and Jennifer Aniston.

But we’ve seen large technology companies dabble in show business before, and money doesn’t always buy them happiness (cough, Microsoft). Netflix and Amazon are the only tech companies who have sustained their commitment to funding high-end video entertainment over several years. And Amazon is the only real parallel to Apple. TV is Netflix’s business. TV is a means to selling other things for Amazon, as it may be for Apple.

If Apple is to succeed producing TV shows, the company must answer an existential question: Why does Apple want to make TV shows? Apple has the money to buy every studio in town. It can even outspend Amazon. Agents have salivated at the thought of Apple writing checks, but Apple has abstained. What’s changed? Does Apple want to sell its own video service? Prop up iTunes and Apple Music? Keep people tethered to iPhones? Some combination of all those things?

So far Apple has only given vague statements about being integral to culture. Netflix and Amazon know why they make TV shows and have entrusted people to execute a clear programming strategy. Same goes for CBS and Disney. Apple needs to figure out why it wants to make TV for this gambit to work.

For evidence of why strategy is so important, look no further than Spotify. As we scooped last week, Spotify is parting ways with Tom Calderone, the head of its original video and podcasts, after the music-streaming company’s initial round of programs failed to catch on with audiences.

While Spotify has tried for some time to offer more than music, the company has never settled on a strategy for how to do so. Especially not in video.

Spotify has more than 140 million captive users. But it’s never featured video prominently within the app, or trained its users to watch for video. It’s never marketed video heavily, and so no series has found much of an audience. Heck, most users didn’t event know the service had video.

Speaking of Spotify … will Taylor Swift break every streaming record?

Look What You Made Me Do, the first single from Swift’s upcoming record, set the record for most-streamed YouTube video in a 24-hour period last week. It ended the week as the number one song in the country, knocking Despacito out of the top spot after a 16-week run. Derided by critics and mocked by music fans, Look What You Made Me Do is still a massive hit.

The best marketer in the music business has been whetting the public’s appetite for the release of a new album for months. All she had to do was delete a few tweets and the Internet lost its mind.

There is no question as to whether her new album, due out in November, will be a success. The question is how big a hit it will be. Streaming records have been falling left and right over the past year, as millions of new customers sign up for Spotify and Apple Music.

Apple Music didn’t exist in 2014, the last time Swift released an album. As for Spotify … Swift refused to release the album on Spotify, catalyzing a debate about the conflict between streamers and the artistic community.

Since then, most artists have had to accept that they must partake in the streaming revolution. Streaming services now account for more than half of sales in the U.S., the largest music market in the world.

The two exceptions in recent memory are Adele and Beyonce, who, along with Swift, form the holy trinity of the record business in 2017. Will Swift follow their lead and restrict her album to a paid tier (at least for a couple weeks)? Or will she release her album for all to hear? The answer to that question will determine if she breaks a new streaming record.

Bonus question: Will Spotify go public in 2017?

The chances are high, and it’s going to be fun to see them try.

Will NFL ratings bounce back?
Forget Netflix, Facebook, YouTube, Apple and Amazon for a second. The NFL is the most popular televised event in the world’s largest media market.

Media companies enter this season with a bit of trepidation. Viewership of the NFL dropped last year, and some advertisers believe viewership will drop again this year.

Media companies came up with all sorts of explanations for the league’s struggles last year. They blamed the election, bad games, and even Colin Kaepernick.

There are no excuses this year. If ratings drop for a second year in a row, the NFL (and several large media companies) will have a big problem.

CBS. NBC, Fox and ESPN have leaned on the NFL while viewership for all their other programming withered. While the rights to NFL games have become so expensive that networks often lose money on the deal in isolation, those networks use NFL games to promote all their other programming.

Bonus question: How many people will watch Amazon’s stream of the games?

Tech companies are starting to get serious about their live sports. Facebook just bid $600 million for the rights to cricket (but lost to Star India).

Twitter considered its live stream of Thursday night games last season a success, but the audiences were still paltry relative to the live TV broadcasts. Will Amazon convince more people to switch over to the web? Unfortunately, we probably won’t know.

Will Netflix finally crack Hollywood?

For all Netflix’s success with consumers, it has yet to win any major awards. Amazon beat it to the punch at the Emmys and the Oscars.

That could change this year. The Emmy race for best drama is wide open because Game of Thrones isn’t eligible. Netflix released two of the three shows that are most likely to win (Stranger Things and The Crown), per Gold Derby.

As for the Oscars, nobody confuses Netflix’s Mudbound for a Best Picture frontrunner. But it would be notable if Netflix even got nominations in the major categories.

Netflix will also release Bright, its most expensive movie yet, in the heart of Oscar season. It’s not an awards contender, but it is Netflix’s first real attempt at a blockbuster.

Netflix PR people will say these awards don’t mean much. But they are spending record sums of money to win awards. The company also has an awards case in its lobby, which has room for more.

How will the movie business respond to a bad summer?

Summer movie ticket sales fell below $4 billion for the first time since 2006. Studios created no major new franchises, while many older franchises showed their age (see Transformers, Pirates of the Caribbean).

The year’s biggest surprises are all original hits (Dunkirk, Get Out, Girl’s Trip, etc), but none of those made enough money to change the equation for media chieftains. $250 million for a horror movie is a great success, but there will be no Get Out amusement park ride.

So… will the movie business bounce back this fall with Thor and Star Wars, or will studios do some soul searching? A few companies have been pushing to release movies at home shortly after they appear in theaters, as chronicled by my colleague Anousha Sakoui.

But the studios have been talking about this for years without much to show for it.

Bonus question: What will a phone company do with Time Warner (and Warner Bros.)? And will the approval of that merger lead to more deal making?

AT&T’s deal for Time Warner should close before the end of the year. Top executives at the phone company have said all the right things about letting the creative people stay creative, but that doesn’t mean incoming media boss John Stankey will refrain from questioning why HBO spends so much money on its shows (and parties).

Meanwhile, AT&T’s competitors at Sprint, Verizon, Charter and Comcast are all considering their next steps.

The Week That Was

1. The streaming music boom is upon us. Vivendi reported stellar earnings thanks to Universal Music Group, the world’s largest record label. UMG accounted for half of Vivendi’s sales, and about 80 percent of its profit. Tencent plans to sell shares in its music business to strategic partners (aka record labels). Record sales from China have more than doubled in the last four years.

2. Goldman Sachs is projecting streaming music will account for $34 billion in sales by 2030, and that 847 million people will be paying for a music subscription. These numbers are quite optimistic, and most label sources are worried that expectations are growing faster than actual sales.

Still, the music industry has to be happy that we’ve moved on from discussing its demise.

3. Labor Day box office sales were the lowest in 20 years. And for the first time since 1992, there was no new movie opening in wide release. A re-release of Close Encounters is the closest we’ve got, unless you count Tulip Fever, a period piece scorned by critics. The dismal weekend caps a dismal season, as covered above.

4. European media stocks have suffered a couple weeks in a row due to pessimistic forecasts from WPP, the largest advertising company in the world, and Prosieben, the German owner of several TV channels and radio stations.

5. The head of entertainment at Fox (the TV network) left, and is reportedly headed to AMC Networks. It’s unclear whether Madden knew he was going to get fired and lined up another job, or got fired while lining up another job. Fox was the lowest-rated network last year, and is in dire need of a new hit.

Speaking of Fox, the company’s sports team is experimenting with six-second advertisementsduring NFL games. The first six-second ads will show up during NFL coverage Sept. 10, and will also appear during the World Series.

Fox also outbid Sony for the cricket premiere league rights ($2.55 billion goes a long way).

6. Warner Bros. is remaking Lord of the Flies with an all-female cast. Two men are writing the project (naturally), an adaptation of William Golding’s novel about ``a group of young boarding school students that end up stranded on an island and devolve into pre-pubescent savages.’’

7. Amazon will pay gamers, artists and chefs to hawk products while live streaming on Twitch. From Spencer Soper: ``Think of it as video-game broadcasters hosting virtual Tupperware parties. Except they’re more likely to hawk headsets and consoles than salad spinners.’’

8. The Floyd Mayweather-Conor McGregor fight is on track to set a pay-per-view record. Showtime says it has counted more than 4.5 million, and the final number could end up closer to 5 million. The record is 4.6 million.

9. Disney may fire 300 people from its TV group, the latest sign of trouble at the entertainment giant. Disney/ABC TV covers ABC, Freeform, Disney Channel, ABC News, ABC’s TV studio and local TV stations. Most of the TV networks are struggling. Other media companies are concerned those job cuts could inspire comparable firings at other companies. Disney often sets the market.

10. Roku filed for an IPO. The company makes those boxes you use to stream Netflix, and, increasingly, is selling advertisements.

Out Now

Bodak Yellow. The fastest-rising track on the Billboard Hot 100 during the month of August now sits at #3. That’s a first for B Cardi, an exotic dancer turned reality TV star turned hit singer.

Disjointed. Chuck Lorre, creator of The Big Bang Theory and Two and a Half Men, made a show for Netflix starring Kathy Bates as a pot evangelist. It’s a buzzkill.

LCD Soundsystem. James Murphy’s electro-pop troupe has another album out. More ink has been spilled on that group’s retirement, un-retirement and impact than I care to read. I read a few stories, and then they just started to blur together. But in case you want to read more, start here.

New Yawk. St. Vincent released a video for her song New York, which I can’t get out of my head. It features city landmarks like the FAO Schwartz keyboard, but you may not recognize it in this pastel dreamscape.

Patti Cake$. The story of a young white woman who dreams of being a rap superstar is the most enjoyable movie I’ve seen since The Big Sick. Bonus points to the marketing and music team for putting all her raps on Spotify.

Narcos. The new season of Netflix’s drug drama is the best yet if you believe most critics.

New Tay Tay. Taylor Swift relased Ready For It, the second song we’ve heard off of her forthcoming album.

On deck. We’ve got a big week of TV premieres coming up: new American Horror Story, You’re the Worst and BoJack Horseman, along with football and the reboot of MTV Unplugged.

Oh, and the new season of Insecure is coming to an end. Last night’s pentultimateepisode was bonkers. Business Insider spoke with the music supervisor for the show with the best music on TV.

NIGHT TIME READING

All the Young Sadboys: XXXTentacion, Lil Peep, and the Future of Emo [Lindsay Zoladz, The Ringer]

What Lena Waithe Wants From Hollywood [Adrienne Green, The Atlantic]

A Fall TV Preview [Alan Sepinwall, Uproxx]

How YouTube Perfected the Feed [Casey Newton, The Verge]

Here’s How Google’s Money Really Influences Research [Robert Levine, Fast Company]

Taylor Swift’s ‘Look What You Made Me Do’ Is the First Pure Piece of Trump-Era Pop Art[Mark Harris, Vulture]

Reid Hoffman Takes on Donald Trump [Tony Romm, Recode]

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