The classic studio era of Hollywood may have ended in the late 1960s, but it wasn’t until recently that the many studios still at the top of the movie industry seemed to truly be losing some of their power.
Streaming services — bolstered by the COVID-19 pandemic and the spike in at-home viewing — have taken over an enormous corner of the market, and, although studios like Warner Brothers, Universal, Paramount and Disney remain premier global suppliers of film, the era of the studio bosses is coming to an abrupt end. We have reached a point, perhaps for the first time in movie history, where “major movie studio” has begun to sound more like an anachronism than anything else.
Don’t believe it? Think the studios still drive the market? Well consider just some of the things that have happened since the last CinemaCon in 2019 (CinemaCon is the largest gathering of movie studios and theater owners in the world; all major studios have agreed to attend the upcoming 2021 event in the face of serious concern for the industry).
Firstly, in just the last 18 months, the streaming service landscape has exploded with options. While viewers’ choices used to primarily be between Hulu, Amazon Prime and Netflix, a number of in-house streaming platforms have been released in the last year or so that are dramatically changing the market and making it look more and more like its many-channelled network cable counterparts.
Streaming services released in the last 2 years include HBO Max, Discovery+, Disney+, Apple TV+, Peacock, Paramount+ and more. These platforms, all with their own curated and original content, have not only added to the dozens of streaming options out there, but, with every popular release, they take more and more power away from the major studios.
Make no mistake — this isn’t just happening in California and the United States either. Studio power around the world is changing, and one need only to look at the recent release of Filmio in Hungary to see that. Filmio, a service that has been dubbed the “Netflix of Hungary,” was launched late last year by the National Film Institute of Hungary, and features hundreds of Hungarian films and series. This service, among other launching worldwide, are just more blows to major studio power in the industry at large.
A rise in streaming viewership has caused another issue for the studios, one that might spell out their demise more than anything else: the 90-day theatrical window, once thought to be an untouchable, unchangeable part of the industry to which movie exhibitors swore allegiance to, is dramatically shrinking. Already, 45 days is more-or-less understood as the new release window, and, with studios like Disney releasing their movies to streaming services the same day as in theaters (albeit with a premium payment fee), even that seems to be flexible at best.
Disney, in fact, in a business move last year, created an entirely new division called the Media and Entertainment Distribution group. This centralized department makes all distribution decisions for the studio with an eye toward satisfying Disney+ and Hulu audiences first. This move is telling in itself, yes, but even more telling is what the Media and Entertainment Distribution group says regarding traditional theater distribution.
The department labels theatrical releases in the cinema as a “legacy platform” and nothing more. For Disney, it seems, a theater release is now on the same level as a DVD.
Disney is far from the only studio scrambling to keep up, adapt and maintain their power in this new world of film though. Warner Brothers, in a massive, controversial deal with HBO Max, has also started making its films available on the same day the films are released in theaters, with no fee needed beyond the base HBO Max subscription. This decision, which drew the ire of a number of distributors and exhibitors but has ultimately proved both popular and profitable, is just another example of the tectonic shifts happening in the film industry right now.
Before the pandemic, these decisions and others like them may have seemed impossible or at least years away, but now, it appears as if the shutdowns last year were exactly what the industry needed to shake things up and move even more power away from the traditional studio structure.
As has been noted though, the studios are doing all they can to retain their position in the industry, and, for the most part, they’re succeeding. Though distribution and exhibition looks quite a bit different than it may have ten or twenty years ago, it is still, for the most part, the same few companies at the top, albeit with a different look and an incredibly different business model.
Some of these companies are combining, growing or acquiring others in an effort to weather the storm and solidify their power. Disney, in the last few months, completed its acquisition of 20th Century Fox and has started to add all of the studio’s intellectual property to its streaming platforms.
AT&T recently announced that Warner Media, the company’s media division, would be merged with Discovery under a new joint banner. And Amazon just announced an $8 billion deal to acquire MGM, a studio from a bygone era that is no stranger to surviving changing times in the industry.
However, the studios aren’t the only ones spending money. Netflix, bolstered by their major uptick in viewership, has started to buy flagship theaters in New York City and Los Angeles in an effort to physically release their films in theaters. This irony — of major movie studios abandoning theaters as streaming services embrace them — is almost comical, but it, if nothing else, it’s a perfect reflection of the major changes that are sure to still come.
Lastly, the #MeToo movement, a major social campaign that called out sexism and misogyny in the entertainment industry and beyond, had shaken the power structure of the studios internally as well, and this too has led to a distrust and a decentralization of the traditional studio power.
Universal studio chief Ron Meyer was removed from his position in August 2020 after a sex scandal, and Warner Brother’s studio head Kevin Tsujihara made a similar exit in March 2019. These men are just two of the dozens who have been held accountable for their actions within the industry over the last number of years, and, as these studios continue to lose ground on the outside and crumble apart on the inside, it’s really only a matter of time before their power grows even smaller.
Corporate power in the film industry isn’t going anywhere — the consolidations and acquisitions mentioned above should be proof of that — but it’s certainly changing. New giants like Netflix are emerging as industry leaders, and old-guard studios like MGM are getting swept up in the ride. It’s an exciting and scary time to be in the movie business, because no one quite knows where the business will be next.
The last two years of the film industry have been some of the most chaotic and tumultuous in recent decades, but, if there is a silver lining in any of it, it’s likely the fact that new studios, actors, methods and more now have more of an a opportunity to climb the ladder and get noticed. The studio bosses are no longer the only ones calling the shots, and that’s good for filmmakers and film lovers alike.