Hollywood Torrent: Spotify braces for a fight, Netflix invades Toronto, Moonves negotiates an exit
Good afternoon from Los Angeles, wherever you may be. Hollywood titan Les Moonves may be on his way out, the Toronto Film Festival is underway and Silicon Valley is on trial. But first…some news.
Spotify and the world’s largest music company are fighting over music videos, which appear at the top of more and more Spotify playlists. Spotify says the videos are promotional, but Universal Music’s publishing group says its songwriters are owed a higher rate for the videos than for songs.
The dispute has been simmering for months, and threatens to blow up if the two sides can’t resolve it in the next few weeks. (Universal’s Marc Cimino is hoping for the best.)
The music video fight is the latest in a series of disagreements over the past few months that have ratcheted up tensions between Spotify and its biggest suppliers: Universal Music Group, Sony and Warner Music Group. (You can read more on those disputes here.) It also fits a pattern. Spotify introduces or tests new features without much warning or agreement on compensation, and industry executives complain. In response, they’ve hindered Spotify’s expansion into new territories and cozied up to Apple, Amazon and Alphabet (who’d have guessed?).
All this tension seems odd. After 15 years of decline, global music sales have been growing since 2015, thanks to paid on-demand streaming. Spotify’s market value has eclipsed $30 billion.
Yet the relationship has seldom been rockier, according to interviews with more than a dozen executives (some on record, some not). Music executives call Spotify a bad partner — arrogant, unreliable, dismissive of their work — and are quick to point out that such services are only popular because of the music. Spotify says the labels are backward-looking and stifle its attempts to innovate. Note: both of these can be true, and both sides are posturing ahead of high-pressure talks.
Spotify is about to commence negotiations with Universal’s record label, which will set the market for the whole music business. Industry executives expect these talks to be drawn out and acrimonious. In its last deal, Spotify gave the labels more equity in the company and free access to listener data on artists in exchange for lower royalty rates. Spotify needed to get a deal done before going public. Now, the stock is soaring and CEO Daniel Ek is less willing to compromise. He has spoken openly about cutting labels out of the process and floated the idea of charging the companies for data.
The record industry, meanwhile, is reluctant to give Spotify another rate cut. They hope other players in streaming will reduce their dependence on Spotify — and increase their bargaining power. Apple Music has passed Spotify in several key territories, including the U.S., while Google’s YouTube and Amazon have launched new paid services.
The simplest explanation may come from Hartwig Masuch, the chief executive officer of BMG: ``The music industry hates that Spotify, YouTube and Apple Music reduce the relevance of the traditional music business.’’ It’s a ``classic ego fight.’’ — Lucas Shaw
And the Oscar goes to… Netflix?
The streaming service is the big winner so far at the fall festivals, which begin the six-month sprint to the Oscars. Alfonso Cuaron’s ``Roma’’ has received rapturous reviews. The black-and-white neorealist drama set in 1970s Mexico is a ``heart-rending triumph.’’
``Roma’’ is one of several high-profile films that has premiered in the past week. So have Bradley Cooper’s directorial debut, ``A Star is Born,’’ Paul Greengrass’ ``22 July’’ (also a Netflix film) and Damien Chazelle’s ``First Man,’’ starring Ryan Gosling as space explorer Neil Armstrong.
Yet ``Roma’’ will be the biggest test of whether Academy voters can overlook Netflix’s aversion to movie theaters and nominate one of its film for Best Picture. Cuaron’s last film, ``Gravity,’’ received a nomination in that category while Cuaron won best director. A black-and-white film is a hard sell commercially, but that didn’t stop ``The Artist.’’
The back story: The film industry objects to Netflix’s insistence on releasing movies on its streaming service at the same time they appear in theaters. Cannes all but banned Netflix’s films from competition at the festival, while independent filmmakers in Europe have called for a boycott.
Netflix will release ``Roma’’ and ``22 July’’ in theaters, but it has historically given potential Oscar movies what’s called a qualifying run. The movie appears in a handful of theaters for a short period of time, but there is no big marketing campaign behind to push people to buy a ticket. Netflix would just as well have people watch the film on Netflix.
Now I hear Netflix’s Scott Stuber has campaigned for the company to release certain movies in theaters before they appear on the service in order to placate certain filmmakers. It will be easier for Stuber to win projects if he can guarantee a theatrical window. His bosses have thus far resisted because Netflix is most concerned with people watching its movies on Netflix. Executives believe filmmakers will assent so long as Netflix shows it can win an Oscar. There’s only one way to find out…
Horror prevails again
``The Nun’’ will top the box office this weekend, grossing upwards of $35 million this weekend. That marks the fifth weekend in a row that Warner Bros. will lead the box office thanks to ``The Meg’’ and ``Crazy Rich Asians.’’
``The Nun’’ grossed more than $5 million last night, surpassing the previous opening night numbers for other films in ``The Conjuring’’ franchise.
Les Moonves is negotiating his final act
The most-watched corporate drama in Hollywood is inching toward a finale. CBS’s board is negotiating an exit package for Chairman and Chief Executive Officer Leslie Moonves, an industry titan accused of sexual harassment. The board is also in separate talks to end a legal fight with controlling shareholder National Amusements on terms that would end any uncertainty over who calls the shots at CBS.
There is no deal for either negotiation, and these talks could fall apart. But we’re talking about this now because the talks have progressed, and there’s greater likelihood than ever before that they could have a deal.
The negotiations are proceeding on parallel tracks. Moonves is talking to the subcommittee of the board overseeing the harassment probe. Under terms being discussed, he would be succeeded by Chief Operating Officer Joseph Ianniello. The board would then begin a search for a full-time replacement.
Under the second deal, CBS, owner of the highest-rated broadcast network and the Showtime cable channels, would end efforts to dilute the Redstone family’s 80 percent voting stake, which is held through National Amusements. The accord would also result in the dismissal of board members who staged an attempted coup.
National Amusements and the Redstones would emerge from a couple years of fighting with the same control over CBS and Viacom — and new leaders in place at both.
The NFL is still in decline
Viewership for Thursday night’s season opener fell 8 percent from a year ago, the third year in a row ratings have started on a downward trajectory. The ratings will allow President Trump to blame the controversy surrounding a Nike commercial featuring Colin Kaepernick, the player who first knelt during the national anthem.
As Gerry Smith notes, Thursday’s game still saw the best viewership for any sporting event since the Winter Olympics earlier this year. Regular season football is more popular than the NBA finals.
Weekly playlist
- ``Feels Like Summer,’’ Childish Gambino
- ``All Mine,’’ Ivy Sole
- ``Bubblin,’’ Anderson .Paak
- ``Nunca Es Suficiente,’’ Los Angeles Azules
- ``The Ringer,’’ Eminem
The week that was
1. U.S. telecom companies are slowing Internet traffic to and from video services like YouTube and Netflix, according to new research. Verizon and AT&T, the two largest telecom companies, were the most common culprits.
Carriers say they are slowing traffic to ensure higher-quality video, but the slower speeds also raise questions as to whether the companies are punishing video services. Tech companies have supported net neutrality because it would prevent this sort of behavior.
2. NBC News is locked in public spat with Ronan Farrow, the Pulitzer Prize-winning journalist who used to contribute to NBC News. Farrow left NBC in the middle of reporting on sexual harassment claims against Harvey Weinstein.
Farrow’s old producer told John Koblin that NBC suppressed the story, while NBC has said the story simply wasn’t ready. Whatever the truth, NBC doesn’t look good.
3. Speaking of kerfuffles over news coverage… New Yorker editor David Remnick stepped in it this week. Remnick announced he would interview Trump’s former campaign chief Steve Bannon at the magazine’s annual festival. Other speakers dropped out in protest, and Reminck caved, dropping Bannon from the schedule.
Remnick is one of the most-respected journalists in the country. Wouldn’t you want him pushing Bannon? Shouldn’t Judd Apatow and John Mulaney, two comedians who dropped out, welcome the opportunity to ask questions and make jokes?
4. Gwyneth Paltrow’s lifestyle company Goop agreed to pay $145,000 to settle allegations it made unscientific claims about the benefits of three products. Goop said its vaginal eggs could balance hormones and regulate menstrual cycles. Others disagreed.
“Goop provides a forum for practitioners to present their views and experiences with various products like the Jade Egg,” Erica Moore, the company’s chief financial officer, said in an emailed statement. “The law, though, sometimes views statement like this as advertising claims, which are subject to various legal requirements.”
5.Mattel created a film division to turn its toys into film properties, and hired Robbie Brenner to run it. Brenner’s first priority will be sorting out what to do about forthcoming ``Barbie’’ and ``Masters of the Universe’’ projects.
6. Korean boy band BTS has the #1 album in the U.S. It will soon cede that throne to Eminem, whose new album claims 4 of the top 10 spots on Spotify charts.
7. Netflix hired a head of consumer products, the next step in the company’s quest to be more like Disney. Disney makes billions turning its popular characters into toys and games.
8. The Oscars scrapped a new category honoring popular films after resistance from Hollywood. The category could still be used in future shows, but Steven Spielberg opposed it.
9. Fox pulled a scene from an upcoming movie after it found out one of the actors was a registered sex offender. Olivia Munn, who stars in the film, voiced concerns to Fox.
10. How did a rap recorded in 20 minutes become a smash hit? Watch the New York Times’ latest ``Diary of a Song.’’
One final thought… if you haven’t watched Nike’s commercial featuring Colin Kaepernick, you should do that now. Let me know your thoughts.
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