Pandora's Box, page 28
Despite the hefty number, however, its library is not that deep, once we move beyond the handful of titles in lights, and many are encumbered. Its most valuable asset is the James Bond franchise, which Amazon has to share with the rival streamers that have licensed it, and cede creative control to Barbara Broccoli and Michael G. Wilson, with whom Amazon seems to have a cool relationship. Perhaps worst of all, those two were quick to turn Bond’s license to kill into a license to kill the franchise with Fukunaga’s No Time to Die, in which lovesick, sensitive soul Daniel Craig was so out of character with 007 that it made even the wokest of viewers long for the politically incorrect Sean Connery of old.
Amazon inherited MGM top execs Mike De Luca and Pam Abdy, who had revitalized the moribund studio by using a strategy that clashed with Bezos’s goals. Sounding more like Price and Lewis than Bezos, De Luca said, “We thought there was a lane open for the movies Hollywood used to make—bold provocative originals. Not everything has to be a tentpole or a franchise entry.”70 A month after the deal closed, both De Luca and Abdy resigned and were replaced by Salke, whose portfolio was dramatically expanded to include a confusion of subdivisions that all seem to have identical mandates. MGM’s streamer, Epix, was redubbed as—guess what?—MGM+.
Although none of Amazon’s features has taken off, Salke seems determined to make a splash. She has a lot riding on its 2023 holiday season family-friendly action comedy Red One with Dwayne Johnson, aka the Rock, who alone will pocket $50 million. She also has an Eddie Murphy comedy coming up, and a Matt Damon/Ben Affleck–production Unstoppable, starring Jennifer Lopez and Jharrel Jerome, the latter playing a wrestler with one leg, following up on their Air.
On the plus side, Salke has a lot of money to spend, and has been spending it on talent, signing, among others, Donald Glover and Barry Jenkins. She also resurrected Mrs. Maisel from the Palladinos, Amy and Daniel. Soloway and company still have a deal with Amazon, but as one source connected with Transparent puts it, carefully picking a path through a thorny bramble of words, “We still want to push the boundaries of the form, but it’s been a little bit harder for us than it would have been if Joe [Lewis] were still there because he was our artistic cheerleader.”71 Could Transparent find a slot in today’s Amazon’s lineup? Producer Sperling wonders, “I would like to think it would, but it’s hard to know.”72 Adds another former member of the show’s creative team, “Maybe not.”73
Nor has Salke, at least so far, been able to solve the branding problem: Just what kind of service is Amazon Prime Video, and what is its audience? Is it a curated, prestige service as originally intended by Price et al., a “gimme Game of Thrones” service as The Rings of Power and No Time to Die suggest, or some tincture of the two? Given the direction all the streamers are going in, the last option seems most likely.
One thing it has going for it is live sports. Thursday night NFL football, along with Sunday, is the nirvana of streaming. Streamers pay in the megabillions for the rights to air games from the National Football League, Major League Baseball, National Basketball Association, Formula 1, and Major League Soccer. Amazon is in a good position to foot the bill. The fans of these shows are more interested in home runs, goals, baskets, and touchdowns than The Rings of Power’s IP.
In October of 2012, Jeff Bezos surprised everyone by praising Netflix for its hit Squid Game. “Reed Hastings and Ted Sarandos and the team at Netflix get it right so often,” he tweeted. “Their internationalization strategy isn’t easy, and they’re making it work.”74
Some Prime Video tea-leaves readers interpreted that tweet as his passive-aggressive way of indirectly criticizing the job Salke and Co. were doing at Amazon. After rating it a money-losing fourth among the streamers, The Ankler asks: How long will mothership subsidize it? How many of its subscribers really buy more shoes?
At the 2021 Emmys, two of Price’s shows, The Boys and The Underground Railroad, got a slew of nominations. But Amazon came away empty-handed, despite its $8 billion programming budget, whereas Netflix won about ten or so awards for The Crown and The Queen’s Gambit, and HBO Max also scored about ten for Hacks and Mare of Easttown. As one industry veteran sums it up, “Amazon does not have an ethos of ‘Let’s put on something special.’ It’s a one size-fits-all, tube socks ethos.”75
11
Disney’s Empire Strikes Back
Disney digested Marvel, Lucasfilm, Pixar, and Fox, while AT&T gagged on Time Warner and spit it out.
The Walt Disney Company has become the most successful studio in Hollywood, while boasting of extensive holdings in TV, parks, cruises, and a vigorous merchandising business. CEO Bob Iger cultivates the image of a good guy in an industry that values the ruthless and the brash. He is a casual dresser—Mr. Rogers style—of whom it was said, he “occupies a sofa well.”1 Commented the sage of Berkshire Hathaway, Warren Buffett, “When he calls I don’t spend time thinking, How do I tell this guy no? It’s, How do I tell this guy yes?”2 He was a Democrat who considered running against Trump but ended up backing Hillary Clinton.
Iger always believed that content is king. Speaking of Apple and Amazon, he says, “We view them . . . as competitors, but we never worried that they were going to put us out of business or own Hollywood, [since] they can’t make a Star Wars movie. They can’t make a Thor movie.”3
Yet, when Iger sat down at the desk of his predecessor, Michael Eisner, on November 1, 2005, he faced daunting challenges. Content is a fickle mistress, given to dancing with any suitor flashing a fat wallet who walks through the door. And it wasn’t the only factor he had to consider. Iger had to rejuvenate a weakened animation division that had been eclipsed by John Lasseter’s Pixar with films like Toy Story 1 and 2. Lasseter had recently stalked out of talks intended to shore up the foundering twelve-year partnership between the two companies. Adding injury to insult, Disney’s share of the theatrical exhibition market was shrinking, and would fall to a mere 10 percent by 2008.
That wasn’t all. The chatter Iger was hearing about cord cutting had become a deafening roar. In 2018, Bloomberg blared, “Netflix-Loving Kids Are Killing Cable TV.”4 According to Cord Cutters News, the audience for Disney Channel dropped dramatically from 2 million viewers in 2014 to 534,000 viewers in 2019.5 Its enormously profitable sports cable network, ESPN, had lost 7 million subscribers in two years. He was, in his words, hearing “an alarm bell.”6
As far back as 2015, he decided, as he puts it, “You don’t really have a choice if you want to stay in the business or grow the business, except to go in the streaming direction.”7
At the time, Disney was licensing Marvel movies to Netflix. “I woke up one day and thought, we’re basically selling nuclear weapons technology to a Third World country, and now they’re using it against us,” he says. “So we decided at the time that we would stop licensing to Netflix and do it ourselves.”8
What Iger needed, in other words, was his own bright and shiny Disney-branded direct-to-consumer streaming service, aside from Hulu, of which Disney was only part owner. Before that, however, he had to make sure that he had enough content to push through this new streamer when it was ready. He needed to ramp up production dramatically if Disney were to compete with Netflix, given its mile-long head start. There was a one-word answer to Iger’s problems: “Buy!” He went on a spending spree that transformed Disney from a cartoon factory into a goliath among the studios. No longer would Disney’s offerings be confined to talking mice, quacking ducks, and slumbering princesses, the diet consumed by decades of tweens and teens and animation nerds. Instead of trying to negotiate with Pixar, he bought the company in a stock deal worth about $7.4 billion. (Eventually, Lasseter, under a cloud for unwanted hugging, left Pixar entirely.)
Barely digesting Pixar, in December 2009, Iger set out to charm the irascible Ike Perlmutter, CEO of Marvel. Initially Perlmutter refused to meet with him. An Israeli army veteran, he disliked Hollywood and had a reputation for being pugnacious and litigious.
Inside Disney, executives scratched their heads. Acquiring Pixar made sense, but Marvel? Nevertheless, as one Disney source puts it, “The Pixar deal gave Iger the ability to say, ‘This is what we should do.’ What Bob wanted, Bob got.”9 Iger bought Marvel for $4.24 billion, and with it corralled a royal flush of superheroes—Iron Man, Captain America, Thor, the Avengers, and so on—that he hoped would secure Disney’s holdover boys, long a weak spot in its demographic. (Elon Musk, by the way, was an inspiration for Iron Man, and had a cameo in Iron Man 2.) Better yet, the movies would function as commercials for Marvel merchandise that, as of 2020, funneled about $41 billion into the company, more than the earnings of all its superhero pictures combined.
Iger, however, was just getting started. He talked Steven Spielberg into releasing DreamWorks pictures through Touchstone, a Disney division. In December 2012, he added Lucasfilm to his collection for $4.05 billion. That brought him the Star Wars franchise, which had been squandered by Rupert Murdoch’s 20th Century Fox.
Not satisfied with acquiring content engines like these, Iger turned his attention to Fox itself, beating out Comcast in a bidding war with an offer of more than $71.3 billion, thereby hitting the delete key for one of Hollywood’s storied studios while fattening Disney’s library and supercharging its production. Save for Fox News, Disney hoovered up all its parts, including Fox Searchlight, its well-regarded indie division.
Disney also acquired Fox’s movie studio that not only boasted Avatar, the biggest-grossing movie of all time, and its four sequels still in production, but errant Marvel series like X-Men, the Fantastic Four, Daredevil, and the new hit, Deadpool. (Disney also secured joint custody of the Spider-Man franchise fumbled by Sony Pictures.) All in all, that gave Disney nearly sole possession of the Marvel Cinematic Universe (MCU), a complex group of interconnected stories boasting scores of characters. And last but not least, it picked up the Fox television studio, which was then producing thirty-six shows, including This Is Us, Modern Family, Homeland, and The Simpsons, the longest-running scripted series in the history of American TV.
Among the treats that Disney collected from the Fox feature library were classics like The Sound of Music, the Home Alone franchise, and the Aliens series. And wait! There’s more. Disney also acquired control of Hulu, the streaming service that it had shared with Fox and NBCUniversal. Iger could have just as easily deep-sixed FX, Fox’s linear cable service, but he recognized that it could be Disney’s HBO, and under the Disney umbrella it would continue to build hits like FX-on-Hulu’s The Bear and Reservation Dogs, as well as Donald Glover’s Atlanta, Under the Banner of Heaven, The Old Man, and Fleishman Is in Trouble. Says Landgraf, whose stand-alone cabler otherwise faced death, “Thank God that Disney bought us.”10
Iger’s purchases were so strategic that they amounted to winning the lottery, and he came to be regarded as a latter-day Walt. As someone or other told The New York Times’ Maureen Dowd, “Nobody expected Bob Iger to be Bob Iger.”11 And finally, with as much originality as he could muster, Iger would call his new streaming service Disney+.
Again, given that the pandemic made the numbers for 2020 and most of 2021 meaningless, we have to go back to the prepandemic year of 2019 to get a snapshot of the entire Disney operation. Its studio division, fattened by Fox, effectively controlled nearly 35 percent of domestic box office, tripling its market share in just nine years, leaving its nearest competitor, Warner Bros., with scraps, a mere 13.8 percent. Of the ten top grossing theatrical features that year, Disney released eight, including five $1 billion box office movies.
Disney’s Dumbo-size chunk of the theatrical exhibition revenue, however, accounts for only 13 percent of its annual revenues of $70 billion. It’s no more than an accelerant for its real business, led by broadcast and cable networks, as well as its twelve parks nesting within six resorts. California governor Gavin Newsom called it a “nation state.”12
In contrast to Iger’s great adventure stands AT&T’s great misadventure—its acquisition of Time Warner, renamed WarnerMedia in 2018. AT&T’s COO, John Stankey, had watched the frenzy of mergers and acquisitions that defined the era, as Comcast gobbled up NBCUniversal, CBS and Viacom merged into Paramount Global while its streamer, Paramount+ (formerly CBS All Access), was poised to swallow Showtime, and Disney gobbled up everything else in sight. To him, Time Warner seemed like a perfect fit, its product with his pipeline, described by that magic word “synergy,” the marriage of hardware and software.
Could New York–based HBO with its Democrat-affiliated CEO Richard Plepler find happiness in bed with Dallas-based Stankey? Randall Stephenson, Stankey’s boss, was hand in glove with Trump, who hated Time Warner’s CNN for baiting Fox News, and was pressing Stephenson to get rid of its head, Jeff Zucker. (Stephenson claims he protected the integrity of CNN.) AT&T employees referred to Stephenson, the head of their top-down company, as “Mr. Chairman,” while Time Warner employees referred to Bewkes as simply “Jeff.”13 Bewkes, however, would hear no evil, saying the two companies “fit together very well culturally.”14 What was he smoking?
When Plepler met with Stephenson at his favorite haunt, the Lambs Club, he too left reassured that AT&T would be hands-off, confident that Stephenson understood the necessity of “a Chinese wall between the creative process and everything else.”15 But China had outgrown its wall, and HBO would find that it had more in common with Taiwan.
Bewkes had finally awakened to the streaming threat, only to discover that he had overslept, and it was too late. As he testified in 2018 when the Justice Department tried to block the merger, “We don’t have the tech platform, don’t have the engineers, don’t have the infrastructure” to compete with the likes of Netflix and Amazon.16 Trump’s “antitrust” division allowed the deal to go through. AT&T bought Time Warner, including its cash cow, HBO, for $85.4 billion.
When Stankey first planted his foot in Time Warner, he was like Gulliver among the Lilliputians. He seemed to have no idea of, or else didn’t care about, the damage he might do. On a steamy day in July of that same year, 150 or so HBO executives and staffers gathered in the theater atop its Bryant Park headquarters to hear what Stankey had in store for them. Plepler, with his perennial tan and casual, open-collared shirt looking like he’d just breezed in from St. Bart’s, kicked off the now infamous town hall on a cordial note, introducing Stankey as “a superlative businessman,” and “a gentleman [who] will be a tremendous boost to where we’re going with this company.”17 He went on to recall having dinner with Stankey months earlier in Dallas when, as he launched into HBO 101, Stankey interrupted him, saying, “Richard, you do not need to waste one more minute telling me about the superior quality of the HBO brand.” Plepler thought, “This is one smart fucking guy!”
Plepler opened with a brief video featuring HBO stars like Emilia Clarke, Bill Hader, Sarah Jessica Parker, and Jeffrey Wright, which concluded with “Welcome to the HBO family” plastered across the screen in large type. It was so laudatory that Stankey asked for a copy to take home to his family. John Oliver refused to take part in the video, saying no good would come from the AT&T takeover. Oliver proved to be right. The audience applauded appreciatively as the six-foot-five Stankey lumbered onstage, but he opened his remarks with, “It’s going to be a tough year.”18 They had no idea just how tough it was going to be.
Instead of stroking his new, nervous employees, and providing answers to the bread-and-butter questions they wanted to hear, like, “Are our jobs secure?” Stankey aggressively reminded them that there was a new sheriff in town, warning that HBO was going to have to “alter and change direction.”19 By that he meant it needed more “engagement” with its viewers. “It’s not hours a week, and it’s not hours a month,” he went on. “We need hours a day. You are competing with devices that sit in people’s hands that capture their attention every 15 minutes.” Stankey continued, “Why are more hours of engagement important? Because you get more data and information about a customer that then allows you to do things like monetize through alternate models of advertising as well as subscriptions.”
AT&T had promised to be hands-off its new bauble, but this didn’t sound like it. Stankey had used his first appearance before staffers to lecture them about their business, about which he seemed to know next to nothing, since he apparently didn’t watch much TV. When asked about his favorite shows, he was flummoxed. Tired of questions from HBO-ers, he yelled, “I’m sick of hearing this! I know more about television than any of you! Stop questioning me.”20 He also gave the impression that Time Warner, which he renamed WarnerMedia, was no more than a perk for AT&T’s new customers, like Amazon Prime Video was for Amazon’s customers.
Predictably, this didn’t go down well, especially when he thought it necessary to remind them, “We’ve got to make money at the end of the day, right?” But HBO had been making money, netting its no-longer-parent company, Time Warner, $6 billion a year. When Plepler broke in to say, “We do that,” Stankey retorted, “Yes you do. Just not enough.”21
Even more discomfiting than Stankey’s remarks was one by Randall Stephenson, his boss, suggesting that hour episodes don’t play well on “direct-to-consumer platforms” like cell phones; Game of Thrones, then HBO’s flagship show, might do better in a “mobile environment” if reduced to twenty-minute segments.22 Stories had become product, then content, then, as one AT&T executive referred to HBO’s programming, “bits in pipes.”23 Although Stankey denied it, it sounded very much like AT&T wanted to remake HBO in the image of Netflix.
Plepler, by that time a twenty-eight-year veteran of the company, tried to paste a smiley face on Stankey’s presentation, saying, “AT&T understands that we have no interest in being Netflix,” and more, it gave HBO the opportunity to become “a turbocharged version of ourselves.”24 He couldn’t have been more wrong.
