We recently looked at a juicy new set of tax incentives on the table for shows filmed in the New York area. However, the New York State legislature this week called on the AMPTP to return swiftly to the bargaining table with the WGA with a veiled threat that the strike’s outcome could affect future funding of the tax incentive program. Blake & Wang P.A entertainment lawyer, Brandon Blake, has all the news.

Expanded Program

New York expanded their film incentives program from $400M to $700M as part of the state budget approved in April 2023. The recent threat is backed by 20 state senators and 34 members of the state Assembly, and encourages the AMPTP to return to the bargaining table as soon as possible, echoing many of the same talking points we’ve seen the WGA themselves raise since the strike began.

‘Essential to Well-Being’

The communication is surprisingly strongly worded, too, including the following statement:

“It is unacceptable for writers to have their earnings decline, in some instances as much as 23%, inflation-adjusted, in the last ten years while studio, network, and streaming companies’ profits soar.”

In the statement, they circle back to the number of tax dollars spent on AMPTP projects in the state, and lampoon the association for utilizing these credits but seeming unwilling to enter into ‘fair collective bargaining agreements.’ They also cite the number of WGA members living and working in the NYC area, and the importance of these careers to the state, and state:

“We find it distasteful that companies insist on hiring writers on a day-to-day basis in a race to the bottom to make employment in this area akin to the gig industry rather than treating members of the Writers Guild of America as the professionals they are.”

The message ends with a call to return to the bargaining table with a fair mindset on all sides. It’s perhaps the most powerful independent statement on the state of the striking industry we’ve seen to date. Will it have an impact? Dangling the future of their tax incentive program as bait may well get some attention, but so far, there seems to be little progress in ending the stalemate. We’ll keep you updated as things change.

2022 was not Netflix’s year. Despite the setbacks, however, it seems their decision to add an ad-supported tier to their subscription packages could be paying off in spades. With over 5M active monthly users for the new tier, it was a critical focus of their first TV Upfront presentation- and seems to have won Wall Street approval, too. Brandon Blake, entertainment lawyer Los Angeles with Blake & Wang P.A, has all the news.

Stock Price Jump

After their Upfronts presentation, despite a change to a virtual event at the last minute, Netflix stock jumped a rather mighty 9%. It closed at $371.29 on the back of supportive subscriber numbers and major growth for the new tier. Of course, it’s worth noting that those numbers are 5M active monthly accounts, not actual subscriber numbers- but then, Netflix has never been comfortable discussing its subscriber base in too much data-driven detail. And no doubt advertisers looking for a solid partner will be taking note regardless.

Other Positive Metrics

The news that over 25% of new Netflix subscriptions, with a median age of 34-prime targets for ad marketing-  are going to the cheaper ad-supported tier will be cheering news for Wall Street, too. Especially now the era of constantly booming subscription numbers is well and truly bust. That’s a lot of traction to gain in only half a year of availability, especially with a notoriously rocky start.

On the ad member side, we’ve heard that it has ‘more than doubled’ this year alone. Interestingly, Netflix has managed this off the back of a programming lineup with zero live marquee sports programming, too- something that has become a key hope for subscription increases on other streaming platforms.

While there’s still a long way to go before Netflix recovers the peak of its share price, let alone public goodwill, it seems they launched their ad-supported tier at the perfect time for the market. And in a year riddled with advertising and subscription downturns both, that- and Netflix’s notoriety as one of the few streamers operating in the black- is news worth celebrating.

With Wall Street turning away from subscriber numbers to focus on profits and sustainable balance sheets, Peacock was known to be in an unenviable position. While all of the streaming platforms bar Netflix itself are still finding their way into the black, Peacock’s deepening losses and slow growth have been working against it for a while. With the news of another steep and painful loss for Q1, and no real sign of it turning around any time soon, does this mean Peacock could find itself on the chopping block as we inevitably see shrinkage in the streaming market? Blake & Wang P.A entertainment lawyer, Brandon Blake, unpacks the news.

$700M Loss

Unveiled as part of the wider Comcast earnings update, Peacock managed a staggering $700M loss in Q1 despite an upward turn in subscriber numbers. Now at 22M, a 60% increase on the same period last year, it wasn’t enough to match operating costs. Peacock’s revenue total was $685M, significantly behind the EBITDA loss of $704M.

2023 was predicted to be the peak of Peacock’s losses, and it seems they weren’t exaggerating! It’s currently estimated they could turn in an overall loss of $3B this year.

Overall Declines

While the overall Comcast balance sheet looked a little better, it still hasn’t brought anything to the table to get excited about. Overall we see their content and experiences division drop by 9.5%, with adjusted earnings ending flat. The studio division did see a 13% upturn, but the advertising division turned in a dull 21% drop on the back of a tighter advertising environment. With an unanticipated high-level departure in their ranks, too, it seems Peacock has a lot of ground to regain if it wants to make a case for itself as a true streaming competitor.

While execs were keen to write these dull returns off as just an expected part of the business, it’s hard to see a compelling argument for that competitiveness at present. Unless 2024 brings considerably better things for the platform, Peacock may yet find itself on the streaming chopping block.

Netflix have finally come to the table with more details about the much-debated password sharing crackdown. A move that resulted in a lot of poor press for them, converting to paid sharing at a time when they’ve already been buffeted by poor publicity sounds pig-headed at best- but luckily we have Brandon Blake from Blake & Wang P.A to give the entertainment attorney’s perspective on the matter.

Quarter 2 Rollout

The rollout will begin for the US market as of the second quarter. However, we have also seen them trial the password crackdown in Latin America from January this year, with considerable momentum through February as the replacement paid sharing option became available. At the moment, this plan is available in New Zealand, Spain, Canada, and Portugal. It allows for 2 active users outside the primary user’s home for a price between 3.99-5.99 Euros, or $7.99 CAD or NZD. What will the domestic price be? We’ve yet to find out- and you’d think they might have wanted better clarity on that matter with the rollout coming fast. All we know is that pricing, “will be higher in more affluent countries.” Fair? Possibly. Good publicity? We aren’t so sure! While the crackdown is, at the heart, merely an attempt to squeeze more profitability out of the same few subscribers, stating it so openly does leave a bit of a bad taste.

Pleased With Results

While the removal of a ‘service’ they once actively encouraged was always going to be problematic publicity-wise, especially with the oddly combative and blame-heavy spin they’ve put on it to the public, hey seem content with the results of the Q1 rollout to date. Acquisitions and revenue have gone up with the ‘extra member’ accounts (naturally) for the Latin American area, now growing faster than the US.

Is that really ‘growth’, however? Debatable, but Wall Street seems to like it, and also believe the paid sharing option will work in tandem with their new ad-supported tier to boost numbers. For now, we can simply wait and see what happens as more territories make the change.

Super Mario Bros has definitely been the unexpected hit of the 2023 box office so far. As an unpredicted side effect of this exceptional launch for the Nintendo franchise, we have now seen share prices for a range of top theatrical chains pop too. Entertainment lawyer from Blake & Wang P.A, Brandon Blake, takes a closer look at the news.

AMC Receives a Welcome Boost

Despite it’s now infamous ‘memestock’ boom, the AMC share price has been languishing as the box office recovery stalled at the end of 2022. Off the back of the surprisingly solid performance from Super Mario Bros, however, it saw a 7%, or 35c, boost to its share price. Cinemark achieved a similar benchmark. IMAX, which is one of the few theatrical chains to have seen very little disruption from the pandemic shutdowns, also saw a 5% ($1.05) jump. For Imax in particular, Super Mario Bros has also brought it the top opening of all time in the animation category, earning about $375.6M of the global takings for the film.

While the boost won’t manage to offset the pandemic disruptions entirely, the rise in stock prices will doubtless help the chains struggling with heavy debt after the pandemic closures. It isn’t a full return to pre-COVID numbers, but it is certainly a welcome breather.

The Video Game Surprise

And unlike the successes of films like Top Gun:Maverick and Avater:The Way of Water, this boom is rather unexpected. Historically, video game franchises like Super Mario Bros have not played well to audiences, and this may well be the first truly successful video game IP we’ve seen in a long time.

While a slump in product could still seriously impair the wider box office recovery, and with a slate that’s still smaller than is needed set for 2023, it’s another welcome sign that fans are keen to return to the theatrical experience. And that’s good news for the whole industry.

We’ve seen more and more locations enter the market in attempts to lure location shoots and film/TV projects to their locales over the last few years. Now it’s time to add Singapore to the pile, too. With the announcement of a $7.5M TV and Film Fund to court international productions that highlight the country as a travel destination, there’s even more scope for those looking for appealing shoot destinations. Blake & Wang P.A entertainment lawyer, Brandon Blake, has the details.

The Fund

Established as a joint venture between the Infocomm Media Development Authority (IMDA) and the Singapore Tourism Board (STB), the fund is accessible to all international entertainment/media companies making global content that will highlight Singapore’s appeal. Potential projects will be evaluated for market reach, distribution agreements, concept and ‘creative merit’, as well as how much focus on the area is shown on screen and how much local talent is used in credited roles. Successful projects will have up to 30% of qualifying costs (again with the ‘related to featuring Singapore’ caveat) returned, including marketing and production costs. To qualify, the project needs to launch by Q1 in 2027.

The Destination Boom

In fairness, unlike some of the tax incentives we’ve seen leveraged to attract location shoots both within US borders and internationally, the new fund has a limited budget and clear focus. But the Singapore On-Screen Fund, as it is being named, shares a common feature with other such incentives we’ve seen launched- the urge to get themselves a slice of the ever-more lucrative destination shoot boom. With an acceleration in ‘content creation’ across streaming platforms, it was inevitable we’d see the demand for shoot space increase, both for soundstages and location shoots. We expect to see even more incentives like this arise globally as the demand accelerates.

As we’ve seen with the meteoric appeal of The Last of Us to UK audiences via Comcast/HBO’s content carriage deal with Sky, a great content carriage deal can be a critical part of both growth and audience traction, especially for smaller platforms without the budgets to invest heavily in developing their own original content. With studios becoming more focused on retaining content for their own platforms, however, these deals have been harder to come by, but this week we see Mubi strike a fantastic deal with Sony Pictures for library content. Blake & Wang P.A entertainment attorney, Brandon Blake, has more focus.

The Unique Sony Position

With more and more of the so-called ‘legacy’ studios launching their own streaming platforms, Sony has chosen to take a different position. One that involves licensing its compelling library of content to the highest bidder (or, rather, several). The company is on-record as seeing this as a unique selling proposition for their coveted titles, allowing them to remain agile (and in the black) in an era where many of the newer streaming platforms are struggling to reach profitability. So far, it is working well for them indeed.

The Mubi Deal

Mubi, which also acts as a distributor and has even ventured into the production arena of late, also offers a unique theatrical deal with its premium Mubi Go service, allowing for a free movie ticket each week for a selected film in key locations through the US. This has made it something of a darling with Indie distributors, who have seen an uptick in audiences from the offer. It currently offers its base plan to US markets for $12.99 a month, or $17.99 with the Mubi Go option. While we have no clear subscription numbers for them, they do suggest a ‘community’ figure of around 12M members.

The new deal will see them add to the 900+ titles already on their US service with 50 new additions from the Sony library, mostly studio and arthouse fare. They add one new movie to the platform daily. Each Sony title will receive its own window, with some going to immediate accessibility and others cycling onto the platform through the end of 2024. No doubt this new haul from Sony, which includes cult classics like Close Encounters of the Third Kind, will be a fantastic drawcard for the service.