6 Reasons Hollywood’s in Real Trouble This Time

Experts have been predicting the demise of Hollywood for as long as Hollywood’s been around. Not me.

 

People love stories. They love movies and TV, and that will never change. But the entertainment industry is in serious trouble today, primarily because it has painted itself into several corners. There will always be a Hollywood, but what the industry looks like in five or ten years could be very different from what we see today.

 

Here’s why Hollywood’s in real trouble…

 

1. The Death of Cable/Satellite/Linear TV

 

“Cable/Satellite/Linear TV” is non-streaming TV, where you pay for a package of channels every month—ESPN, CNN, Turner Classic Movies, Fox News, etc.

 

For the sake of simplicity, I’ll use the term “pay TV.”

 

Although I’ve been writing about the imminent death of pay TV for more than a decade, no one else really has. There’s a reason why this consequential story has been deliberately underplayed: pay TV is the one-legged stool propping up the entertainment industry.

 

 The importance of pay TV is rarely discussed in the media because the entertainment industry wholly owns the entertainment media. If the media covered this issue with the seriousness it deserves, stock prices would fall. Entertainment companies are judged solely by their stock prices, and the entertainment media will never risk damaging their patrons.

 

 

 

 Entertainment companies made billions from pay TV for decades, year in and year out. But those dollars were not earned on merit. If you’re wondering why you pay $175 a month for a bunch of channels you never watch that still serve up 20 minutes of ads per hour, here’s why: a major chunk of your $175 goes to entertainment companies. So let me repeat my main point: none of that money is based on merit.

 

Merit means Hollywood makes money based on what people actually watch. Pay TV successfully circumvented merit with a rigged system where you pay for dozens of channels you never watch.

 

Want proof? Look here… That is last week’s list of 118 pay TV channels. The “P2+” column reveals the average number of total viewers in thousands. As you can see, out of 118 channels, only two(!) average more than a million viewers. Only 13 average more than 500,000. Only 33 average more than 250,000. Question: how many of these 118 networks could survive on merit—advertising revenue based on ratings? Maybe five? Nevertheless, Hollywood still makes a ton of money from over a hundred channels that fewer than a million people watch because pay TV customers pay for those channels.

 

How sweet is that?

 

But.

 

Thanks to streaming, those days are coming to an end. Already, the number of people who have canceled their pay TV subscriptions (cord-cutters) has been enough to hurt Hollywood’s bottom line.

 

Americans now want to stream, and the problem with streaming is that, unlike pay TV…

 

2. Streaming Services Are Merit-Based

 

Pay TV will always be around. The problem is that within the next ten years or so, there will not be enough pay TV subscribers to sustain all those channels no one watches. So…

 

Every entertainment corporation has launched a streaming service hoping the streaming boom will automatically replace those pay TV billions. Oops. Other than Netflix, those streaming services are losing billions. Disney alone has lost upwards of $10 billion on Disney+.

 

 

Read More Here:  Breitbart