We’ve rarely entered a new year with a greater sense of uncertainty about what the days and months ahead will bring.
On the brink of an unexpected and entirely unpredictable presidency, Hollywood is looking over its shoulder and asking: Should we be worried?
Hollywood has been worried about its future for the better part of the past decade, as technology has stolen its thunder and disrupted a once-flush business model.
The layering-on of reality show huckster Donald Trump as our new president — something that was unimaginable a year ago — creates an entirely new level of complication.
Will Trump be bad for politics but good for stock prices? So far the stock market is decidedly up. But that doesn’t seem to be based on anything concrete. “Stock rises based on feel-good optimism have a history of hitting a factual air pocket, and dropping suddenly and precipitously,” writes Forbes contributor John Tobey.
And what about the news business? The disruption of traditional journalism took a quantum leap forward with a president elect who bypasses normal channels to offer the world his news-bomblettes via Twitter.
Short-term, Trump has been good for CNN, Fox, MSNBC — and CBS, as Les Moonves said earlier in 2016. Viewership and advertising has soared. But Moonves may well live to regret his famous remark: “It may not be good for America, but it’s damn good for CBS” as the new president abandons tradition, avoids press conferences and continually attacks journalists who criticize him. We’ve also started to watch him play favorites with Joe Scarborough and TMZ. This is not good.
From a business perspective, the uncertainty is biggest when it comes to foreign affairs. China is the most important new market for Hollywood movies and television shows. It is the main source of new investment capital and the single most important engine of growth in a mature industry.
China is not an easy partner, and it took years for the industry to work to slightly ease the quotas limiting foreign productions from distribution. A multi-billion-dollar production facility and theme park is set to be built in Guangzhou in the next decade, an important outlet for Hollywood talent.
So Trump’s provocation of China throws a wrench into any media company planning for 2017, that is certain.
The high-priced purchases of content companies of late — Yahoo by Verizon, Time Warner by AT&T, Legendary and Dick Clark Productions by Dalian Wanda — suggest that storytelling remains a desirable business.
But the power center has shifted. It seems that distribution companies now hold the key to where content is headed:
- Verizon now owns AOL, Huffington Post and soon Yahoo, along with an ambitious Go90 program.
- AT&T, the old Ma Bell, is about to be the parent company for the venerable Warners studio, the DC Comics universe and a host of WB television programming.
- Comcast already owns NBC and Universal.
This leaves Fox and Disney as the main freestanding major entertainment companies. Outlier Sony is still owned by a Japanese-based computer hardware company (but for how long?), and Viacom and CBS are the ripest question of the day as Sumner Redstone steps down and daughter Shari steps up. Billions of dollars of shareholder value are on the line as crown jewels MTV and Comedy Central teeter in the void of leadership and creativity. Paramount, another jewel in the Viacom crown, magically manages to produces some important movies this season, even as the studio shrinks year by year.
The tectonic shifts of the past decade driven by technology are now well in place. With the addition of a new president whose core ideology is unclear, whose priorities are still emerging and who has the open contempt of the artistic community, it’s fair to say that 2017 will be a rocky path.
Let’s all buckle up.