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The Business of Hollywood & Streaming


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3 minutes ago, Longhornsnus said:

But then you lose TV sitcoms as training ground and dojos for star making (to your point about stars). You arguably wouldn't have huge Film stars that drive huge revenues without TV. You wouldn't have a George Clooney without an ER or a Jennifer Aniston without a Friends or a Woody Harrelson without Cheers, Will Ferrell without SNL, etc.

But maybe that's the old way of thinking. 

those people will still have a platform.  friends and er could've been 12 episodes and they still would've become big.  pedro pascal has become a huge international star from finally breaking through with narcos and their 10 episode seasons (after a short stint on got - 10 episode seasons).  now he's a part of huge franchises.

nobody is saying to get rid of all broadcast network tv shows, or even to get rid of longer seasons (abbott and ghosts are 18+).  i'm just explaining one of the reasons a high-profile streaming service might prefer shorter seasons.  there are no ads so what difference does it make?  best case, what, you keep someone a subscriber for another 1-2 months?  better off trying to keep your shows compelling and keep releasing new ones when you need to, which is what apple+ does.

one trend that i think will go away because it makes no sense is the netflix "drop all episodes at once" model.  they're already showing cracks with the part 1 and part 2 of certain shows.  it's only a matter of time. 

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1 hour ago, henrygandorf said:

my wife runs a fashion pr agency which means they dress celebrities for events.

it does not look good.  sorry.

wow i didn't even think about this...BCS and (probably) Rhea Seahorn's last chance... that really sucks 😒

 

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I wonder how the success (or failure) of the Summer popcorn movie season will influence studios to budge. 

The jury is out on Barbieheimmer, but it looks like MI was a mild disappointment and Indiana Jones is a huge fail:

Disney’s Indiana Jones 5 took in $300 million at the box office so far—a disaster for CEO Bob Iger and Lucasfilm

Lucasfilm’s fifth Indiana Jones installment is shaping up to be a disaster of epic proportions for parent company Disney and its veteran CEO, Bob Iger.

Released on June 30, Dial of Destiny earned a disappointing $60 million in its opening weekend in the domestic theaters, and interest dropped off sharply ever since. Just one week later, it surrendered the top spot at the box office, despite being one of the most expensive movies ever made, and now it has sunk to a distant fourth in the table.

The new entrycould no longer rely on the goodwill built up by the first three films after the critical disappointment of its predecessor, Kingdom of the Crystal Skull. Poor reviews and dreadful word of mouth look to now sink Lucasfilm’s first theatrical release since 2019.

Its $302 million global take has only matched roughly the reported costs of its production budget, which suffered from expensive reshoots after test screenings indicated audiences were less than thrilled with the initial ending.

Marketing and promotion are expected to have added easily another $100 million to that bill and Disney still has to pay the theaters their share of the receipts.

“It looks certain to fall short of the global total for 2008’s Crystal Skull: $786.6 million,” wrote Box Office Pro on Sunday.

The situation is far more dire, according to The Hollywood Handle. Dial Of Destiny is not expected to even cross the $400 million mark in global box office receipts—half of what the fourth installment made 15 years ago when a dollar went a lot further than today.

This seems a safe bet given the stiff competition it now faces in the form of spy thriller Mission Impossible: Dead Reckoning, Greta Gerwig’s Barbie and Christopher Nolan’s biopic Oppenheimer. In reality, the Indy sequel needed to haul in around $800 million just to break even.

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13 minutes ago, Longhornsnus said:

I wonder how the success (or failure) of the Summer popcorn movie season will influence studios to budge. 

The jury is out on Barbieheimmer, but it looks like MI was a mild disappointment and Indiana Jones is a huge fail:

Disney’s Indiana Jones 5 took in $300 million at the box office so far—a disaster for CEO Bob Iger and Lucasfilm

Lucasfilm’s fifth Indiana Jones installment is shaping up to be a disaster of epic proportions for parent company Disney and its veteran CEO, Bob Iger.

Released on June 30, Dial of Destiny earned a disappointing $60 million in its opening weekend in the domestic theaters, and interest dropped off sharply ever since. Just one week later, it surrendered the top spot at the box office, despite being one of the most expensive movies ever made, and now it has sunk to a distant fourth in the table.

The new entrycould no longer rely on the goodwill built up by the first three films after the critical disappointment of its predecessor, Kingdom of the Crystal Skull. Poor reviews and dreadful word of mouth look to now sink Lucasfilm’s first theatrical release since 2019.

Its $302 million global take has only matched roughly the reported costs of its production budget, which suffered from expensive reshoots after test screenings indicated audiences were less than thrilled with the initial ending.

Marketing and promotion are expected to have added easily another $100 million to that bill and Disney still has to pay the theaters their share of the receipts.

“It looks certain to fall short of the global total for 2008’s Crystal Skull: $786.6 million,” wrote Box Office Pro on Sunday.

The situation is far more dire, according to The Hollywood Handle. Dial Of Destiny is not expected to even cross the $400 million mark in global box office receipts—half of what the fourth installment made 15 years ago when a dollar went a lot further than today.

This seems a safe bet given the stiff competition it now faces in the form of spy thriller Mission Impossible: Dead Reckoning, Greta Gerwig’s Barbie and Christopher Nolan’s biopic Oppenheimer. In reality, the Indy sequel needed to haul in around $800 million just to break even.

I'm not sure what studio exec thought there was a huge audience out there dying to watch an 80 year old Indiana Jones eat soft foods and drink meals through a straw. Harrison Ford should stick to projects like Shrinking at this point in his career.

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19 minutes ago, royiv said:

I'm not sure what studio exec thought there was a huge audience out there dying to watch an 80 year old Indiana Jones eat soft foods and drink meals through a straw. Harrison Ford should stick to projects like Shrinking at this point in his career.

I think it speaks to the @mdmostand others points about Hollywood simply being in the business of pumping out IP, sequels, and derivatives as well as the appetite for nostalgia that GenX/Millennials seem to crave (there was a good post on TLJ thread about that). This fits in a few of those camps and probably looked like a winner on spreadsheets and data models, but reality said "hold my beer".

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22 hours ago, henrygandorf said:

one trend that i think will go away because it makes no sense is the netflix "drop all episodes at once" model.  they're already showing cracks with the part 1 and part 2 of certain shows.  it's only a matter of time. 

I much prefer a week between episodes to ruminate and discuss.

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1 hour ago, Longhornsnus said:

I think it speaks to the @mdmostand others points about Hollywood simply being in the business of pumping out IP, sequels, and derivatives as well as the appetite for nostalgia that GenX/Millennials seem to crave (there was a good post on TLJ thread about that). This fits in a few of those camps and probably looked like a winner on spreadsheets and data models, but reality said "hold my beer".

I'm in that millennial (oregon trail god dammit) generation nostalgia.  I liked it.  But I can see why Gen Z is like, nah.

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1 minute ago, Biff Tannen said:

I'm in that millennial (oregon trail god dammit) generation nostalgia.  I liked it.  But I can see why Gen Z is like, nah.

Lucky. I can't get my family to even watch The Last Crusade with me. They'd rather watch Youtube Shorts and Memes on the 70 inch as a family then watch anything on Disney+

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1 hour ago, Longhornsnus said:

Lucky. I can't get my family to even watch The Last Crusade with me. They'd rather watch Youtube Shorts and Memes on the 70 inch as a family then watch anything on Disney+

Fuck.  That.  I have a friend (Gen Z) that only watches youtube.  Only.  He constantly tries to draw me into it and I'm just like, dude, come on.

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3 minutes ago, Biff Tannen said:

Fuck.  That.  I have a friend (Gen Z) that only watches youtube.  Only.  He constantly tries to draw me into it and I'm just like, dude, come on.

It's real. And it's one of the biggest competitors (phone/social) to traditional entertainment in that we live in an attention based economy now. But yea, I am fighting the good fight against those evil short forms (Shorts/TikTok/Reels), but losing.

I mean, I mentioned it earlier. YouTubers like Mr. Beast has triple the subscribers of Hulu, mainly from the youth (and the future). That's a lot of impressions.

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1 hour ago, Longhornsnus said:

I think it speaks to the @mdmostand others points about Hollywood simply being in the business of pumping out IP, sequels, and derivatives as well as the appetite for nostalgia that GenX/Millennials seem to crave (there was a good post on TLJ thread about that). This fits in a few of those camps and probably looked like a winner on spreadsheets and data models, but reality said "hold my beer".

 

 

But why Harrison Ford? Fury Road was great and didn't have Mel Gibson as Mad Max, no one cared. Bond has been 5 different actors, no one cares. They could have made an Indy movie that didn't have Ford and likely could have been cast around WW2 again.

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8 minutes ago, Captain Ron said:

 

 

But why Harrison Ford? Fury Road was great and didn't have Mel Gibson as Mad Max, no one cared. Bond has been 5 different actors, no one cares. They could have made an Indy movie that didn't have Ford and likely could have been cast around WW2 again.

Harrison Ford is Indiana Jones just like he's Han Solo. Trying to put someone else in that role will never work. Solo didn't do well for a number of reasons but one was definitely that no one can replicate what Harrison Ford did with that character. I went to see Fury Road because it was a spectacle. I didn't care one bit about Mad Max. If you make an Indiana Jones movie without Harrison Ford, no one shows up for it. 

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43 minutes ago, mdmost said:

Harrison Ford is Indiana Jones just like he's Han Solo. Trying to put someone else in that role will never work. Solo didn't do well for a number of reasons but one was definitely that no one can replicate what Harrison Ford did with that character. I went to see Fury Road because it was a spectacle. I didn't care one bit about Mad Max. If you make an Indiana Jones movie without Harrison Ford, no one shows up for it. 

I mean…I probably would. 
 

 

yes, I definitely would. But I could be a freak. 

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it needed a prequel, reboot, or just leave it alone.  i don't need an 80 year old ford out there running around (i haven't seen it, so maybe he just has office hours).  to me, that's depressing, because we've all seen the original 3.  if they're going for a new audience, then find a new star.

it's hard enough watching him stumble around on shrinking.  people get old, that's ok.  i don't really want to see larry bird and michael jordan play 1-on-1 in their 60's either.

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5 minutes ago, royiv said:

In this case they made an Indiana Jones movie with Harrison Ford and no one showed up for it.

Sure. Not as much as Lucasfilm thought might and not enough for a film with a ridiculous 300 million dollar budget. But it was a film that never needed to be made. Again, I enjoyed it and it was fun watching HF do it again with the aid of de-aging. I think Lucasfilm and Disney thought it worked before, it should work again. 

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1 hour ago, mdmost said:

Harrison Ford is Indiana Jones just like he's Han Solo. Trying to put someone else in that role will never work. Solo didn't do well for a number of reasons but one was definitely that no one can replicate what Harrison Ford did with that character. I went to see Fury Road because it was a spectacle. I didn't care one bit about Mad Max. If you make an Indiana Jones movie without Harrison Ford, no one shows up for it. 

 

Solo was a crap movie. Ehrenreich was given an impossible task with that script.

You can make an Indy film without Ford, you just need to make a good movie.

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3 hours ago, mdmost said:

Harrison Ford is Indiana Jones just like he's Han Solo. Trying to put someone else in that role will never work. Solo didn't do well for a number of reasons but one was definitely that no one can replicate what Harrison Ford did with that character. I went to see Fury Road because it was a spectacle. I didn't care one bit about Mad Max. If you make an Indiana Jones movie without Harrison Ford, no one shows up for it. 

It would work if you picked the right actor. Chris Pratt would've killed in that role IMO. 

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4 hours ago, mdmost said:

Well, at least we'll have some A24 films to look forward to.

 

SAG-AFTRA should tell the studios to fuck off and make their own SAG-AFTRA streaming service with in house production companies like A24. All the union members get a percentage of subscription revenue in addition to fair residual pay.

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Well I'll be:

Netflix flexed its muscle in the second quarter, reporting nearly 6 million new paid subscribers and further cementing it as the pacesetter in streaming video. The addition of 5.9 million paid users beat Wall Street estimates and shows that Netflix's password-sharing crackdown didn't sour new users on signing up. It reported $8.2 billion in Q2 revenue and a better-than-expected $1.8 billion in operating income. The strong showing comes hours after Netflix cut its "Basic" $9.99 subscription for new or returning members, nudging them to a cheaper $6.99 ad-supported tier or ad-free options priced at $15.49 for "Standard" and $19.99 for "Premium."

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It would work if you picked the right actor. Chris Pratt would've killed in that role IMO. 

He’s lost some ability. Not the same actor, nor as interesting in roles. Peaked with Moneyball and GOG about 10 years ago. He’s cashing checks.

A high-budget, Indiana Jones tv series would kill it. Start off with Dr Jones worrying about tenure, fighting off co-eds in the 20’s, then send him to Morocco by way of Vienna. No need for fan service or pandering when you got a badass PhD with a bull whip runnin around.
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48 minutes ago, Eskimohorn said:


He’s lost some ability. Not the same actor, nor as interesting in roles. Peaked with Moneyball and GOG about 10 years ago. He’s cashing checks.

A high-budget, Indiana Jones tv series would kill it. Start off with Dr Jones worrying about tenure, fighting off co-eds in the 20’s, then send him to Morocco by way of Vienna. No need for fan service or pandering when you got a badass PhD with a bull whip runnin around.

Pratt is the same character now in every movie and couldn't match what Harrison Ford brought to it. It would be Star Lord as Indiana Jones or guy who hold his hand up to stop dinosaurs as Indiana Jones.

There was talk of an Indiana Jones Disney+ show but I'd imagine Dial of Destiny's poor returns and Iger wanting to cut back means that's gone. I'd imagine Disney's troubles means a lot of stuff is gone from Disney+'s future now. For the MCU, that's probably a good thing. 

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He’s lost some ability. Not the same actor, nor as interesting in roles. Peaked with Moneyball and GOG about 10 years ago. He’s cashing checks.

A high-budget, Indiana Jones tv series would kill it. Start off with Dr Jones worrying about tenure, fighting off co-eds in the 20’s, then send him to Morocco by way of Vienna. No need for fan service or pandering when you got a badass PhD with a bull whip runnin around.

The latest movie alluded to a time when Indy was more concerned with money and glory instead of protecting history. Let’s see that era and what made him change. Maybe he had partnered up with Belloq in the early days and that partnership went sour.
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SAG-AFTRA telling non-union social media influencers that if they take on any new work to promote tv or films, perhaps even just as a fan, they won’t be eligible for union membership later on.  While I understand the concept of a digital picket line and scab workers, this seems to be petty to me and it’s never a good look threatening low power people.

If they’re telling people to not create content about tv/film or face consequences, then why aren’t they also requesting fans not to go see the content? Shouldn’t Margot Robbie or Cillian Murphy tell their fans to avoid their new movies? Isn’t paying to see a movie also crossing picket line? Shouldn’t Christopher Nolan, presumably a directors’ union member, be warned to stop giving promotional interviews for his film or SAG members will not work for him again?

if you’re going to play hard ball with some TikTok users, why not go after your own industry a bit harder? Or are they afraid to ruin a few big movies or piss off a big director?

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9 hours ago, mdmost said:

Pratt is the same character now in every movie and couldn't match what Harrison Ford brought to it. It would be Star Lord as Indiana Jones or guy who hold his hand up to stop dinosaurs as Indiana Jones.

Let's not overlook that holding up a hand could be very much an homage to the actor he'd be replacing....

10 Famous Actors Who Have Extremely Weird Tics In Every Movie – Page 4

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Fran Dresher was on a podcast doing an interview today, lays out much of what is said. Just about nailed @henrygandorf's points from a few posts back.

 

It really makes you realize that late stage capitalism is designed to break everything. When you make stock price link to something other than true company performance (subscribers), it is very easy to "lose money" yet still become rich.

 

 

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12 hours ago, Longhornsnus said:

Well I'll be:

Netflix flexed its muscle in the second quarter, reporting nearly 6 million new paid subscribers and further cementing it as the pacesetter in streaming video. The addition of 5.9 million paid users beat Wall Street estimates and shows that Netflix's password-sharing crackdown didn't sour new users on signing up. It reported $8.2 billion in Q2 revenue and a better-than-expected $1.8 billion in operating income. The strong showing comes hours after Netflix cut its "Basic" $9.99 subscription for new or returning members, nudging them to a cheaper $6.99 ad-supported tier or ad-free options priced at $15.49 for "Standard" and $19.99 for "Premium."

and wall street really took notice. 

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It’s simple. We need new IP.


Almost every sequel has underperformed this summer, some very badly. Indiana Jones likely could have been rebooted when they made the fourth one, but at this point they likely boxed themselves in sticking with Harrison Ford as long as they did. I can’t imagine them successfully recasting and rebooting now.
 

(Which isn’t to say they won’t try.)

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https://www.nytimes.com/2023/07/20/business/economy/writers-strike-hollywood-gig-work.html#:~:text=As in manufacturing%2C the job,to separate writing from production.

Obviously a lot of despair reading this, not that these aren't sentiments I hear basically every time I hang out with fellow writer friends.

The good news is, this isn't for lack demand, or some notion that the scripted television business is dying. It's instead short-sided business practices as the studios chase the Netflix model. They want to wring as much out of as few of us as possible, but we're saying "nah, sorry dawg." 

Took today off to get some writing done, but now I'm itching to get back to the lines. THIS is why we strike.

 

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Barbenheimer off to a good start.  Anecdotal evidence, I know, but driving home last night, I drove past a theater and there were a ton of Gen Z types all wearing pink.  Same theater showing sold out all weekend.  Maybe it'll do well.

https://www.cnbc.com/2023/07/21/barbenheimer-box-office-thursday-ticket-sales.html

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6 minutes ago, Aqua Buddha said:

Barbenheimer off to a good start.  Anecdotal evidence, I know, but driving home last night, I drove past a theater and there were a ton of Gen Z types all wearing pink.  Same theater showing sold out all weekend.  Maybe it'll do well.

https://www.cnbc.com/2023/07/21/barbenheimer-box-office-thursday-ticket-sales.html

That’s terrific news for my investment in a Noah Baumbach helmed “Hot Wheels” movie listed on the Hollywood Stock Exchange.  

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listened to this driving home https://www.npr.org/podcasts/478859728/think

JULY 20, 2023
Hollywood's shut down. Now what?
TV and movie actors have joined Hollywood writers for the biggest strike in four decades. Dominic Patten, senior editor for Deadline, joins host Krys Boyd to discuss the move, which has effectively shut down the industry as negotiations with the Alliance of Motion Picture and Television Producers broke down. Plus, we'll hear how streaming and A.I. have brought new complications into discussions of fair wages, royalties and studio profits.

No idea who Dominic Patten is or if he's a good source, but some interesting talk on a lot of topics.   

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19 hours ago, MrBig said:

https://ew.com/movies/anne-hathaway-matthew-mcconaughey-get-sag-aftra-strike-waivers/
 

Are these independent productions allowed to sell their content to studios/streamers? That would defeat the purpose of the strike even if the production companies comply with SAG-AFTRA demands.

 

6 hours ago, Queen Bitch said:

Lotta folks asking that question and I can't really find a clear answer. It's annoying and deflating, but I'm trying to reserve judgment.

If A24 complies with all SAG-AFTRA demands, how does SAG-AFTRA enforce the rules for residuals and new media revenue sharing once the project is sold to a streamer? It’s not like the streamer is going to give the production company the number of streams once the project is sold.

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On 7/21/2023 at 10:51 AM, Aqua Buddha said:

Barbenheimer off to a good start.  Anecdotal evidence, I know, but driving home last night, I drove past a theater and there were a ton of Gen Z types all wearing pink.  Same theater showing sold out all weekend.  Maybe it'll do well.

https://www.cnbc.com/2023/07/21/barbenheimer-box-office-thursday-ticket-sales.html

Barbienheimer seems to be doing really well as some weird organic mashup that’s turned into the vibe. I read a tweet today saying last week and this weekend felt like the closest thing adults had to spirit week in terms of fun and excitement. Now studios will try to manufacture mash up weekends like this and it will be cringe and bad, but for now enjoy it.

That said and a question more for Queen who is a writer— does the energy and success and fun of this take away from the movement? I feel like at a minimum it’s distracting and surely you don’t wish for failure, and while these successes aren’t possible without actors and writers, nobody is thinking about what could be lost in the future wearing pink tutus and drinking manhattans. But lagging indicators and all…. 

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Nah man, we're genuinely thrilled. We *love* this business, and we want it to succeed. Pretty much everyone I know went to see one or both this weekend. Hell, the Fox line had a Barbie-themed picket weeks ago. 

Furthermore, success means the studios can't claim poverty. It's partially why any kind of campaign to boycott the movies or cancel streaming services isn't something we'd push for. Financially, we'd never actually be able to make a sizable dent in a studio's bottom line from a grassroots-cancellation campaign, which would make us look weak and foolish as a guild. And creatively -- and this is far more important from where I'm sitting -- if these movies had underperformed, the studios would continue to trot out dinosaur franchises until the end of time, and creative risks would become even more rare.

The audiences just very loudly told the studios what gets them to buy tickets in unprecedented droves. Now it's up to the executives to interpret the correct lessons from the weekend. Will they? Probably not -- and *that's* the only (potential) disappointment coming out of such an iconic weekend. 

 

 

 

 

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1 hour ago, Longhornsnus said:

Barbienheimer seems to be doing really well as some weird organic mashup that’s turned into the vibe. I read a tweet today saying last week and this weekend felt like the closest thing adults had to spirit week in terms of fun and excitement. Now studios will try to manufacture mash up weekends like this and it will be cringe and bad, but for now enjoy it.

lol no.

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Yeah I doubt too many studios will want their movie to be the one that loses to the higher grossing movie just for a "mash up weekend". 

Going back to something I don't get. Why is Disney releasing a movie like Haunted Mansion at the end of July on the same crowded calendar as Barbie, Oppenheimer, and before the animated TMNT movie? Wouldn't that movie make more sense in oh...I don't know...October since it's about a HAUNTED MANSION? And yeah, it's not a horror movie but it is going to get so overshadowed and fail horribly because its placement both makes no sense and will be something people will just wait for to be on Disney+ in the proper time frame that you would watch a movie like that...October. 

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really interesting article by the NYT

 

basically SAG has come out and said that any influencer (roll eyes) who isnt part of SAG, and ever wants to be part of SAG, has to join the strike.

The article basically says SAG only allowed influencers to join in 2021. it doesnt give a number, but its implied that its a tiny number of folks who are 100% social media stars also being part of SAG. And thus any entertainment related sponsorship is now banned by SAG for these folks

So the fact that SAG is effectively trying to block the current (non-competing) employment of someone who might, someday, have that tiny .000005% chance to join SAG, are basically told either join the picket line, or take the money now and never get a SAG gig in the future.

Which seems pretty fucked up to me.

I realize scabs are universally hated by every union out there, but these folks were already working their job without the benefit of SAG, the good ones (the ones that have grown their viewship base -however they did it- beit showing tits, intelligence, comedy or hard work) did that on their own. 

They aren't paying SAG dues, and thus not getting any benefits from being a SAG member, yet they are basically being told to turn down thousands of endorsement dollars now, for that minuscule chance to get "thousands" of SAG generated dollars in the future.

 

This honestly bothers me,  These influencers are currently doing their thing without the help of SAG (other than a tiny few).

Being an influencer and endorsing a new season of something already in the can for SAG-paid actors, isnt a case of getting a random untrained person to take your job at the Ford plant hitting the "make the mold" button for hours. 

Its also not like a football player taking the striking NFL players job (and when they did, the "good" scab players got offered jobs- Kelvin Edwards and Luis Z come to mind). 

and before someone says it, I too hate the idea of the 10,000 subscriber insta "model" calling themselves an influencer. 

But once you get above 200k in subs, the content creators actually start making serious money, anywhere from $100-300k in annual actual ad rev, plus additional endorsement money amounts that are literally paid out according to the number of subscribers they have. 

 

If SAG wants all these influencers to not take the money, then they need to give them a fucking membership, and then they can enforce the ban

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Hey look! Captain Ron with another podcast talking about <insert thread topic here>.

Swisher is hosting a panel discussion with Matthew Belloni (entertainment reporter), Franklin Leonard (producer) and Brooke Hammerling (communications expert) talking about the strike. I recommend the whole thing as it's really good. But I think there is a really good part at 29:45 the question leads into what the real fight is about where Leonard just nails the answer and that is outside of "more money" what are each side "selling?" And the writers/actors are selling a future with a healthy industry where new talent can develop because they can survive on their early income and you continue to make new talented actors, directors and writers. And the studios aren't selling shit - in fact their model just sucks for the industry.

 

 

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Joseph Gordon-Levitt with an op-ed.

https://www.washingtonpost.com/opinions/2023/07/26/joseph-gordon-levitt-artificial-intelligence-residuals/

Quote

Joseph Gordon-Levitt is an actor, writer and director and the founder of HitRecord.

Actors love residuals. Don’t worry, this is not some annoying Hollywood thing like quinoa or crystal healing. I actually do like quinoa — sorry. Anyway, what are residuals?

Residuals are an important part of how actors get paid. They’re checks you get long after you’re done shooting, because audiences are still watching the movie, perhaps on a new channel or in a new country. Some residual checks can be for pennies, some for thousands of dollars or more.

At the moment, Hollywood’s labor unions for writers and actors, the WGA and SAG-AFTRA, are on strike, and streaming residuals are one of the main deal points being negotiated. I’m a proud member of both of these unions, and I strongly support their demands. But zooming out, so to speak, I think there’s a larger conversation to be had about residuals that goes well beyond Hollywood.

 

Actors, writers and the rest of us film and television professionals might be some of the first (but not the last) to have our jobs threatened by so-called artificial intelligence — technology that ingests enormous amounts of “training data,” crunches the numbers and spits out new combinations of the data, following the patterns it was trained on. Tech giants, entertainment giants and every other profit-hungry giant will soon claim that AI can do human-level work at an astonishingly small fraction of the cost.

 

However, this claim will be hiding something, like the Wizard of Oz bellowing, “Pay no attention to that man behind the curtain!” What’s behind the curtain of AI? The cost of the human labor it took to produce the training data. “Generative AI” cannot generate anything at all without first being trained on massive troves of data it then recombines. Who produces that training data? People do.

And those people deserve residuals.

For example, let’s say a new AI program could generate a complete feature film at the click of a button. (Some industry insiders think this could actually happen pretty soon.) Building that AI will require a bazillion past movies to be used as training data. Therefore, anytime this AI yields revenue, the people who made those past movies will deserve a substantial piece. And I’m not just talking about actors and writers. I also mean people who don’t get residuals today: the camera operators, the costume designers, the sound mixers, everyone whose work the AI will be ingesting, mashing up and mimicking.

This principle holds true whether we’re talking about entertainers, doctors, engineers or pretty much anyone whose work involves a computer. AI can’t do our jobs yet, but it might be able to soon. And people whose jobs are threatened by AI will be the same people who produced the data used to train it. A new kind of residuals for these human data producers could potentially provide some much-needed economic relief.

And by the way, I’m not the only one advocating this kind of thing. Renowned technologists and economists, including Jaron Lanier and E. Glen Weyl, have long argued that Big Tech should not be allowed to monetize people’s data without compensating them. This concept of “data dignity” was largely responding to the surveillance advertising business models of companies such as Google and Facebook, but Lanier and Weyl also pointed out, quite presciently, that the principle would only grow more vital as AI rose to prominence.

 

Technologically speaking, the type of residuals program I have in mind would be a tall order. An AI system would have to track every piece of its training data, and then be able to determine which of those pieces influenced any given output generated and to what degree. On top of that, each of those pieces of data would have to be attributed to a verified human or set of humans, and there would need to be a channel of payment for those humans to receive their residuals. We did something a little bit like this at my company, HitRecord, producing pieces of art and entertainment with sometimes thousands of online collaborators and paying each contributing artist. Residuals from AI, in comparison, would require an astronomically huge scale, keeping track of zillions of bits and bytes, as well as billions of people, dollars, cents and microcents. (Disclosure: My wife serves on the board of directors of the OpenAI Nonprofit.)

So, now that I’ve said how hard the tech will be, let’s talk about the really hard part.

Tech companies won’t be incentivized all by themselves to build the necessary software. The law will have to make them do it. The U.S. Copyright Office recently issued an official statement that completely AI-generated works are not eligible for registration, saying, “These technologies ‘train’ on vast quantities of preexisting human-authored works and use inferences from that training to generate new content.” I imagine the copyright question will force tech companies to come up with a solution to attribute some sort of human authorship to an AI’s outputs. But here’s the question: Who owns the copyright to the training data? Who will therefore reap the benefits?

The answer to that key question, in the case of the film and television industry, is not the writers, actors, camera operators, costume designers, sound mixers or any of the other people who made the creations. The copyright is owned by the big studios. See the problem?

 

When I do a movie, and I sign my contract with a movie studio, I agree that the studio will own the copyright to the movie. Which feels fair and non-threatening. The studio paid to make the movie, so it should get to monetize the movie however it wants. But if I had known that by signing this contract and allowing the studio to be the movie’s sole copyright holder, I would then be allowing the studio to use that intellectual property as training data for an AI that would put me out of a job forever, I would never have signed that contract.

And again, this doesn’t apply just to the film and television industry but to many, many others as well. Take the medical industry. A doctor’s work produces lots of intellectual property in the form of medical records — and many doctors sign contracts allowing hospitals (or whoever) to take sole ownership of those medical records. But if the doctors had known this intellectual property would be used as training data for an AI that would put them out of a job forever, they, too, would never have signed those contracts.

So, if residuals from AI training data are based on existing copyright, then the aforementioned profit-hungry giants might indeed get to stop paying humans for their labor. How do we deal with this? Both of the Hollywood unions on strike today have expressed grave concern over AI, but their demands regarding AI will not address the pitfall I’m describing here. Nor do I think the problem can be solved by the courts. A number of independent visual artists have sued the AI companies Midjourney and Stability AI, claiming their work was used as training data without consent or compensation. Similar lawsuits are cropping up more and more. I hope these artists win these lawsuits. But I’m not sure they will without new intellectual-property law on their side.

I’m well aware that implementing this kind of residuals program would take a ton of work. It would require technology that doesn’t exist yet. It would also require new public policy, and most governments don’t exactly have a stellar track record when it comes to regulating new tech. Still, there are encouraging signs out there that the White House and Congress are moving toward regulating AI. So here’s my request: Residuals from AI training data should be made mandatory and intellectual-property law amended to make sure those residuals go to the people who deserve them. The seemingly miraculous outputs of generative AI should not be allowed to fill the coffers of tech giants or any other giants without paying the people whose data made those outputs possible.

AI is going to change things faster and harder than our intuition can predict. Will those changes be for the better or worse? I believe we still have a real shot at a world in which our careers are both more productive and more meaningful, and in which our compensation is both more honorable and more equitable than any we’ve ever known. But that kind of bright future won’t arrive automatically. As always, it’ll be us doing the work.

 

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