Hollywood Torrent: Music Giants Do Battle in Austin, Netflix’s Film Strategy, Public Broadcasting’s Future
Good afternoon from Los Angeles, wherever you may be. I just returned from Austin, where technology executives and bespectacled media nerds have ceded the city to leather jacket-clad singer-songwriters and fraternity brothers.
Headed into a week at South by Southwest, I wrote about the brewing battle royalebetween some of the world’s largest tech companies. The prize? The affection of musicians and their fans.
While music revenue is climbing for the first time in nearly two decades thanks to paid streaming services, artists still feel slighted. Songwriters are trying to extract extra money from tech companies with help from Washington, and record labels are haggling over two companies’ efforts to reduce what they pay.
Gone are the days when Apple ruled the industry with iTunes. A free-for-all has broken out among at least five parties: Amazon, Apple, Google, Pandora and Spotify. Inspired by Apple’s success with iPods and iTunes, these companies use music to sell new subscriptions services (Apple Music) and devices (Amazon Echo).
With competition intensifying, all five waged a charm offensive in Austin to curry favor with artists to prove they aren’t soulless, greedy conglomerates. Here’s what we found.
Apple wants to be a tastemaker. The company picked one artist to headline each night, beginning with Vince Staples, a rising star in the rap community, and followed with the Chainsmokers, the unavoidable American DJ duo. Apple’s selective scheduling is unsurprising coming from the masters of minimalist design, but it stands in stark contrast to other parties at the festival, where hosts cram anywhere from 4 to 25 artists onto the bill.
Apple Music boss Jimmy Iovine and Apple services boss Eddy Cue repeat one word ad nauseum: culture. The world’s most valuable company has pursued exclusive deals with the best artists and best TV producers to make its music service relevant and cool — just like its phones. Their concert venue sat adjacent to a posh bungalow outfitted with comfortable, desert-themed couches and chairs, and some of the best drinks at the festival. The problem with being a tastemaker? Elitism. That bungalow was only available to those on the VIP list.
Amazon is a bundler. Amazon hosted a concert to promote Resistance Radio, a pirate radio station from its show The Man in The High Castle. Amazon makes TV shows to convince more people to pay for Prime because Prime customers spend more on Amazon. Amazon is pushing its music service for the same reason — and to sell Echo devices. So what does Amazon do in Austin? It uses a concert to promote a TV show that, in turn, could make you buy more diapers. Reminder: Jeff Bezos is worth $74 billion.
Pandora is killing the game (from 2008). The online radio service hosted a rollicking party the same week it introduced a new on-demand service (more on that below.) T.I. was the highlight. He inspired everyone in the party to dance, and I’ve never seen more security guards at a concert whip out their phones to take photos and post live video on Facebook. The downside? Crappy beer (from a sponsor).
Spotify is a cocky, cost-conscious market leader. Spotify ditched its strategy from years’ past, when it hosted huge parties out on east 6th Street, in favor of a subtler approach. The company hosted intimate listening parties for devoted fans of a few emerging artists. These parties accomplish several goals at once. They prove Spotify has the data on artists and their fans to bring them together. Spotify gives young artists the ego boost of performing in front of fans who know every word to their mixtape, and fans the delight of seeing their favorite act up close.
Oh, and Spotify can film the event for music and video — programming for which they keep all the proceeds (rather than splitting it with a label). And there lies the other benefit to Spotify in ditching a party. The company can spend less money, a major priority for a company that needs to prove to potential investors that profit isn’t a dirty word in the streaming music business.
I didn’t make it to YouTube, but we can all agree YouTube’s role in the music community is the best known. Whether Google can convince anyone to pay for YouTube is still unclear, but I did meet a Google Play subscriber for the first time this weekend.
Are these insightful or the random ravings of a sleep-deprived hip-hop head? You decide. Just listen to Jacob Banks. He didn’t play any of those events.
Hulu, Comcast Near a Deal
Hulu has added Comcast cable networks E! and Bravo to a new live online TV service customers are testing. Hulu still doesn’t have a deal with NBC for the service, but the tests suggest a deal is imminent. NBC is the lone holdout of the major broadcast networks — and the only one owned by a cable provider.
Elsewhere in Hulu-land, the streaming service is close to hiring e a senior programming executive to produce and acquire hit shows (and new customers). Existing content chief Craig Erwich will stay with the company and focus on developing and producing original shows. This new person will oversee those efforts, as well as licensing programs from other companies. Hulu has released a couple of critically acclaimed original shows, but has yet to score a buzzy hit a la ``House of Cards’’ or ``Transparent.’’
Pandora’s Last Stand
Pandora unveiled its $9.99/month on-demand music service this week, the success of which could determine the company’s future given recent user attrition and rumors of a potential sale. Growth in advertising sales has slowed, so the company is looking to new businesses like ticket sales and paid music for help.
Pandora will have to prove it’s not just a me-too product. While on-demand streaming is new for Pandora, a large online radio service, it isn’t to the public. Spotify, Apple, Google and Amazon already offer millions of songs on-demand for a monthly fee. Pandora says it will tuser existing data on customer preferences will help the company serve the best music and playlists.
Beauty Will Slay Kong
Kong: Skull Island opened at number one last weekend, grossing $61 million in the U.S., and has now surpassed $150 million worldwide. That makes for good headlines, but the movie will need to put up big numbers overseas to offset its $185 million production cost.
The giant ape’s reign will be short-lived. Disney’s Beauty and the Beast opens this weekend, and is expected to be the year’s highest-grossing movie to-date. The movie will gross more than $140 million its opening weekend, and could cross $1 billion before all is said and done.
You know what that means? More remakes, per Anousha Sakoui and Nicole Piper! Dumbo! Lion King!
Public Broadcasting Imperiled
Public radio and TV broadcasters are preparing for the federal government to slash their funding. Donald Trump has proposed a budget that would eliminate $445 million in funding for the Corporation for Public Broadcasting.
This will hurt stations in rural areas more than those in major cities — affecting the residents of countries who voted for Trump more than those who despise him.
Netflix Has Movies On Its Mind
Will Smith’s next movie — part cop flick, part sci-fi — has all the makings of a Hollywood blockbuster except one. When “Bright” is released later this year it’ll be playing on Netflix’s streaming service, not thousands of theater screens.
Once an industry outsider, Netflix has emerged as one of the TV industry’s most powerful forces with shows including “House of Cards’’ and “Stranger Things,’’ earning awards and attracting millions of viewers. Though the Los Gatos, California-based company has released dozens of films in recent years, it hasn’t had the same impact in movies.
Now, the world’s largest paid video service is devoting more attention to motion pictures, looking to shake up that business just as it has TV. “Bright,” with a $90 million budget, is one of about 30 original films Netflix will release this year, from micro-budget pictures made by independent producers to lavish Hollywood productions. That’s a bigger slate than most major studios.
To succeed, Netflix needs to create pictures that generate the kind of buzz associated with a big-screen hit or an awards contender. That won’t be easy. Major theaters shun Netflix because the company insists that its films be available for streaming from day one. Hollywood studios, while eager to get movies in the home sooner, still vouch for the cinema experience, as do most filmmakers.
For Netflix, which will spend more than $6 billion on TV shows and movies this year, the answer is money, talent and volume, as well as almost 100 million paying subscribers. The company’s future slate includes “War Machine,” a comedy featuring Brad Pitt and Oscar winner Tilda Swinton that’s due out in May, and a new film from director Martin Scorsese.
Netflix said Tuesday it hired Scott Stuber, producer of “Ted’’ and “The Break-Up,’’ to shepherd its film ambitions. A former vice chairman of worldwide production at Universal Pictures, he’ll lead the development, production and acquisition of the company’s slate of original movies, and work to persuade filmmakers to shed their attachment to the cineplex.
The Week That Was
1. Spotify is inching closer to reaching long-term deals with the major record labels. The streaming service is searching for deals where it can pay out lower fees (but give labels something in return).
2. This is Us ended its first season as NBC’s most-watched scripted show in almost a decade. NBC will air four episodes of the Weekend Update segment from Saturday Night Live in prime time, a sign of SNL’s strength in the Trump era.
3. Fox is hawking a new app that combines TV shows from many of its networks (including FX and NatGeo) in one place. (You still have to pay for cable.) The company has also been approached about thwarting a potential merger of broadcast station owners.
4. Vice will produce original series for Snapchat, including an eight-episode dating series.
5. Warner Bros. wants to remake The Matrix. The news was jeered for what it is: a terrible idea.
6. Fox News and Megyn Kelly are fighting over whether she is still under contract. Meanwhile, Donald Trump fired the New York attorney investigating Fox News, and may replace him with the lawyer for former Fox News chief Roger Ailes.
7. The CEO of cable giant Charter was given a $98.5 million pay package last year.
8. Paramount is working to salvage co-financing deals with the Chinese.
9 . Netflix is going to help some producers finance the completion of an unfinished Orson Welles movie.