“Employment is going to follow the money. It will disappear in some sectors and reappear in other sectors,” USC’s Gene Del Vecchio says
After an ugly pandemic year, thousands of Hollywood workers affected by COVID-19 layoffs may struggle to find similar jobs when the health crisis fades in 2021 — particularly creative executives in charge of driving content creation in a landscape now dominated by streaming.
“Some folks that were furloughed will be coming back, but many will not or will need to be repurposed to the new world order,” entertainment analyst Jeff Wlodarczak told TheWrap, noting: “Adapt or die.”
Join WrapPRO for Exclusive Content,
Full Video Access, Premium Events, and More!
When it comes to layoffs this year, no company or Hollywood job category seems to have been spared. A recent report from Brookings Metropolitan Policy Program estimated that the film, TV and radio industries lost nearly 200,000 jobs in the early months of the pandemic, from April to July, representing 7% of the employment total.
Last month, Disney announced that it would shed a total of 32,000 jobs by March — an increase of 4,000 from September — though many of the non-parks division cuts were also driven by consolidation in the wake of the company’s $52.4 billion acquisition of Twentieth Century Fox in 2019.
ViacomCBS, NBCUniversal, AT&T-owned WarnerMedia, Sony and Lionsgate have also seen waves of furloughs, pay cuts and layoffs affecting hundreds of employees. Talent agencies UTA, CAA , Paradigm and ICM Partners also downsized, cutting between 50 and 100 employees each, and the pandemic production standstill has affected craftspeople and union workers of all descriptions.
“What we’re seeing is that COVID-19 created a relatively short-term shock to the entertainment system. At some point, things are going to rebalance,” Gene Del Vecchio, adjunct professor of marketing at USC’s Marshall School of Business, said. “But in the long term, it’s not so much a permanent downsizing of the entertainment world. What’s happening is a transition period where employment is going to follow the money. It will disappear in some sectors and reappear in other sectors.”
Several academics from L.A.’s top entertainment business programs said the streaming boom fueled by pandemic safer-at-home protocols will call for a new kind of content leadership, reorganizing around executives with the traditional gut instinct about what the public wants to see blended with enough tech savvy to take advantage of the vast amount of audience data that digital content brings to the table.
“You see this in industries that are in transition, and it’s about skill set,” Del Vecchio said. “You have to have the right skill set.”
Jay Tucker, who heads up the Center for Management Enterprise in Media, Entertainment and Sports for UCLA’s Anderson School of Management, said a new market dominated by streaming will call for new blood, or a pivot on the part of traditional content creation leadership. “We went through the ’90s and had senior executives who were considered taste makers, who knew what the next cool thing was,” Tucker said. “But now we can give that person with a great gut… all this information from the data coming off streaming services and social media and so forth. We understand the consumer so much better than we have in the past.”
Attorney Darrell Miller, a partner at Fox Rothschild and founding chair of the firm’s entertainment and sports law department, sees a power shift away from the traditional players who set the creative agenda at studios and networks. “What I do think will be downsized is the one-dimensional thinking,” he said. “The limited-thinking executive, post-pandemic, is going to be a lonely person.”
David Offenberg, an associate professor of finance at Loyola Marymount University with an expertise in the entertainment industry, said it’s going to be an “amazing time” for content creators and the executives who oversee the pipeline for entertainment companies. “The tricky thing is that there have been so many people out of work for so long that they will invariably choose to leave the industry,” Offenberg said. “Will there be enough (creatives) to produce the shows in the quantity needed when the industry comes back to life?”
Pandemic layoffs over an extended period of months may remind longtime entertainment industry watchers of job losses during the writer’s strike of 2007-2008, which lasted 100 days — from Nov. 5, 2007 to Feb. 12, 2008. According to a report from the Milken Institute, the strike resulted in a predicted loss of 37,700 jobs and tipped the state into a recession in early 2008. However, when writers and other workers affected by production shutdowns came back to work, they were returning to a landscape similar to the one they had left, rather than shifting to an industry suddenly disrupted by an enormous streaming surge.
In 2021, despite the new opportunities in streaming content, experts agree that post-pandemic re-hiring will look vastly different for the various employment sectors in the entertainment industry. Del Vecchio said the mega-numbers of layoffs at theme parks owned by Disney, NBCUniversal and other companies constitute a separate category of employees whose jobs will likely return once the parks reopen. (Most of the 100,000-plus furloughs Disney announced last March were employees at the company’s theme parks and cruise ships.)
While those jobs may return once vaccination efforts expand, parks reopen and tourism kicks in again, many entertainment giants will see permanent downsizing from the continued consolidation of administrative jobs — particularly at companies like Disney, ViacomCBS and AT&T/WarnerMedia that recently underwent mergers.
That disruption will lead many whose careers were placed on hold to either retire or leave the business. “Any time there’s a slowdown in business, those who may have been toward the end of wanting to do it anymore …may be taking their buyouts or whatever,” Offenberg said.
However, the door should remain wide open post-COVID for creative leaders who are willing to adapt to new rules of the game. The most desirable new creative executive’s skill set may include learning to tap into the value of content libraries and franchises rather than greenlighting original projects.
“As a creative executive, you’re not just thinking what’s the greatest idea for a new movie,” Offenberg said. “Disney is digging into all these franchises — your creativity might be about, ‘How do we make this great toy?’ That won’t be some other department anymore; it’s all going to be kind of mushed together into this one executive who looks at (content) as a marketing entity, rather than how to market a movie.”
And how will traditional creative executives acquire these skills? Offenberg said today’s business students headed for industry jobs are learning data analysis skills and financial modeling “in every course,” but those already working must learn those skills on the job, possibly by becoming voracious consumers of streamed content to observe what combinations of content and marketing click with viewers and future viewers as indicated by available data.
And if they don’t, Offenberg admitted, “People who were working in older parts of the industry are going to have a very hard time getting back into the industry with the same sort of power and influence that they had before.”
WrapPRO Roundtable: Some of the thought leaders in this piece debated the future of Hollywood employment with senior entertainment reporter Diane Haithman, watch it below.