While we know the end goal of newly minted Warner Bros Discovery is to combine their two current streaming platforms- HBO Max and Discovery+- into one entity, details are still frustratingly sparse, including a solid timeline for the coming merger. We now know one thing, however- whenever it happens, expect subscription costs to rise, too. Entertainment attorney with Blake & Wang P.A, Brandon Blake, gives us the full story.

3 Years Without Increases

In absolute fairness, HBO Max has now gone three years with no changes to either its subscription pricing or its advertising experience on ad-supported offerings. It set its monthly premium tier subscription at $15 in 2020, and there it has remained since. In June last year, a $10 ad-supported tier was added. However, news that the ad load may well double by the combined entities launch likely won’t be accepted all that well across the board. Currently, HBO, HBO Max, and Discovery+ have a combined 94.9M subscribers.

An Early Spring 2023 Launch?

As Warner Bros Discovery makes huge changes to their upcoming content and even their operating models, news about the merger of their streaming platforms has been slow to arrive. Currently, they’re eyeing a spring 2023 rollout for the new entity, in whatever form it takes. HBO Max was, at launch, the most expensive streaming offering in the US market, so the three-year price freeze has simply brought it into line with other streaming services- Netflix, for example, has its premium tier set at $15.45 currently.

And let’s be brutal- the new company has some serious financial hurdles to clear. With the merger, theoretically at least, creating a stronger product offering, a price hike is not that unreasonable. Nor have they seen much of a ‘trade down’ to the ad-supported tier from existing subscribers, suggesting their offerings are still seen as worthwhile. 

For now, the predicted increase seems to be only for the ad-supported tier. Will expecting watchers to front a higher ad load for that increased cost sit well with them, however? The company clearly sees it as a revenue-boosting opportunity. Whether subscribers agree will, for now at least, have to remain to be seen.

As a smaller player in the streaming pond, Peacock has also struck out for a more holistic model than many of the key players. Instead, parent company NBCUniversal has made much of its intent to leverage the streaming service as part of their overall business, selling advertising and managing it as one with their other arms. It puts the service in a strange place overall- and now it seems they’re not all that interested in market feedback, either. An interesting statement, indeed! Blake & Wang P.A entertainment lawyer Los Angeles, Brandon Blake, looks at the matter in detail.

Comcast Shares Rise

As a flurry of Q3 results are released, Comcast has managed to do pretty solidly, and the news saw their share price inch up by 6% overall despite their $8.6M write-downs regarding Sky. Their movie (and, notably, parks) divisions were top performers for them this quarter. Peacock is also now sitting at around 30 M monthly active users, divided across their premium and free tiers. However, its operating losses widened for the quarter, too, despite attempts to put a very positive spin on the matter. We’ve also seen their year-spanning efforts to integrate Xfinity TV with streaming finally pay off.

Yet we still have to wonder how well a public announcement that they are “somewhat indifferent to what the consumer prefers” will be taken overall. Their goals for the streamer have been stated as to maximize their returns on their content, and a more straightforward return on investment, with NBCU now also “fairly indifferent” to whether their content airs on Peacock or via their linear TV service.

While Peacock’s different approach to streaming has paid off for it over the last year, one does have to wonder if such indifference across the board is really called for. An integrated content strategy is one thing. Being so openly dismissive of wider market trends, however, seems entirely different. Will such boldness pay off for them? For now, that remains to be seen- but they will need to patch that operating loss up fast to achieve it.

When it comes to occupying news headlines, we’ve seen a lot from Netflix recently- and not all of it positive. Despite the strong interest in its soon-to-launch advertising tier, its inability to up its subscriber numbers in 2022 has remained a sticking point for its stock and investors alike. Finally, we see some positive upward movement. Our entertainment lawyer and industry expert, Brandon Blake from Blake & Wang P.A, unpacks the figures. 

A Major Turnaround

The third quarter sees Netflix add 2.4M subscribers to their pool, the first upward tick of the year. This brings its total to a little over 223 M subscribers. Additionally, they are projecting further upward growth of 4.5M for the fourth quarter.

Of these gains, we see 100,000 from the domestic market, 310,000 from Latin America, and more impressive gains from the EMEA region (570,000) and Asia-Pacific (1.4M). No doubt much of the Q4 growth is anticipated on the back of their ad-supported tier launch later this year.

To add to the subscriber numbers, we have Q3 revenue of $7.92B, a slight reduction on Q2, but still a solid 5.9% year-on-year rise.

The Need for More Momentum

Despite this swing back to positivity, even Netflix co-CEO Reed Hastings has admitted that the company needs to boost its momentum for future growth. The company’s lost subscriber base in Q1 and Q2 led to a spate of layoffs, a pullback in content spending, and a dismal stock price. For now, most growth hopes appear to be pinned on the Q4 launch of their ad-supported tier, which will launch at $6.99. This November launch will pip Disney’s entry into the same market by a month. They also will continue with their disputed crack down on account sharing, although recent developments will allow people to transfer their profiles to new accounts to ease some of the sour feelings around this decision.

2022 has definitely been an interesting year for the intrusion of private equity and capital investment firms into the wider entertainment landscape. With Hackman Capital Partners now investing in the global studio space in a big way, it’s an interesting landscape indeed. Blake & Wang P.A entertainment lawyer, Brandon Blake, takes a look at this boom.

$1.6B in Investment

Already a recognized name behind many of the iconic studio properties domestically, this week we saw them announce that their initial target of $1B in the HCP Studio Fund had been surpassed. The fund itself closed at $1.4B, with a further $200M in co-investment capital commitments factored into the wider space. Investing entities vary from private equity and global sovereign wealth funds to foundations, family offices, insurance companies, and even some corporate and public pensions. These are, of course, institutions well known for looking for solid niche asset classes to help grow wealth.

The Soundstage Spree

The demand for quality production space is certainly at a premium currently, with demand faroutstripping supply. Even as we’ve seen some streamers ratchet back production volume this year, there’s still significant need for ‘homes’ in key production hubs. Coupled with longer leases becoming the norm, it’s an interesting rise in demand.

As of Q2 this year, the fund is said to be about 50% allocated to investment, across 7 key projects. This still leaves it plenty of space for further investment potential. This also brings Hackman’s portfolio up to 18 studio properties, with 90 sound stages in development and 120 actively working. Most of these are in North America, Ireland, and the UK.

With the demand for solid and reliable shooting venues and soundstages still growing, it’s an interesting example of the widening globalization of the entertainment market, as well as the steep increase in demand for continuous content development in the entertainment industry.

Of all things to topple Thor: Love and Thunder from its No 1 spot on Nielsen’s streaming charts, few were likely to be betting on Cobra Kai. However, of broader interest to the entertainment landscape will doubtless be the surge past the 1B minutes of viewing marker for 4 separate services revealed by Nielsen’s early-September data. Blake & Wang P.A entertainment lawyer, Brandon Blake, shares the data.

Karate Kid Takes the Lead

Now in its fifth season, the Netflix reboot of the nostalgia-laced Karate Kid franchise managed to pull in 1.7B viewing minutes across the 50 episodes available to stream. The franchise, which started on YouTube Originals before its shift to Netflix, is still drawing the bulk (35%) of its viewers from the nostalgia-hungry Gen X audience who enjoyed the original films, but has also made strides in the 18-34 demographic, now comprising 20% of viewers.

Cracking 1B

Nor was this the only title on the list to make it over the 1B minutes threshold. Thor: Love and Thunder, now on offer as a no-charge title on Disney+, earned itself 1.5B. This should add nicely to the $760M worldwide gross it brought to the table despite fierce competition from Jurassic World: Dominion and Thor: Love and Thunder. Disney’s Pinocchio, released as bait for their Disney Plus Day promotions, missed the 1B mark, but only just- pulling in 930M minutes and taking the 6th spot on Nielsen’s list.

Amazon Prime’s The Lord of the Rings: The Rings of Power took the 4th spot and 1.2B viewing minutes. Keeping the fantasy flag flying high, HBO Max’s House of the Dragon settles into 5th with just over 1B minutes. The Game of Thrones prequel series has seen huge traction for HBO, as well as boosting the older series a juicy 30% in viewership, creating an ironic situation where the prequel and original are directly competing with each other as top performers for the platform.

Nielsen, of course, only records views through TV screens in the US, so viewing minutes globally and via other services will have been much higher for all of the Top 5. Overall, it’s an exciting milestone to see on the reinvigorated Nielsen rankings, and speaks to good things for the wider entertainment world.

The future of the much-debated Starz name becomes at least a little clearer this week, as we hear news that Lionsgate will be renaming its StarzPlay international streaming platform in 35 non-US markets to Lionsgate+. Blake & Wang P.A entertainment lawyer, Brandon Blake, has more.

Starz and Studio to Separate

This comes as part of a larger move to separate Starz from the studio side of the Lionsgate business model. There’s already been plenty of talk about it being spun off entirely. For now, however, it will operate as a separate, but aligned, entity with the larger Lionsgate Company. The shift to Lionsgate+ will happen as of the first week in October.

A Mismatched Puzzle Piece

Starz seems to be a thorny problem for Lionsgate, who don’t seem quite decided on what to do with the small, but respectable, streaming platform. There’s also some wider debate on their overall separation of their streaming and Pay-TV business. We can assume that this new move, which will create clear and separate entities, will also help them evaluate the studio and Starz assets more clearly for investors. While there’s nothing official, some also believe the tech giants moving into the Hollywood landscape may be eying the wider Lionsgate catalog as a valuable indie studio acquisition.

It’s certainly a unique one, with 17,000 titles which would be particularly difficult to replicate. So it’s understandable that it may look like a ‘just add water’ solution to any entity looking to add an indie studio to their assets simply. We are, after all, still deep in the wider mergers and acquisitions cycle the entertainment world has been going through overall. It could offer them better strategic benefits than trying to remarket Starz, but that will have to wait on more solid evidence.

Currently, the Starz brand will be retained for the US and Canada. StarzPlay and Lionsgate Play will remain as is.

Immersive theater technology has been an exciting idea (and little more) for several years- and now it could be becoming a reality. Cinemark, in partnership with CJ 4DPLex are looking to outfit select auditoriums with their ‘ScreenX’ immersive exhibition format. By the end of the year, it is hoped that the tech will be live in at least 6 cinemas. Blake & Wang P.A entertainment lawyer, Brandon Blake, walks us through these developments.

California and Texas Cinemas

While additional locations should receive the tech in time, the initial rollout will focus on 6 sites across California and Texas. The ScreenX technology gives a 270-degree field of view for some film sequences. CJ 4DPlex has its own visual effects studio in Korea, where it will partner with studios and filmmakers to introduce exclusive imagery to the screenings with the aim of increasing viewer engagement. The company is part of the CJ group, operating one of the largest circuits in Korea, and also responsible for bringing us Parasite, the little Oscar Best Picture that could.

Building on Existing Rollouts

This ScreenX technology is also live now in 38 countries, across 380 global locations. It has already been leveraged in some locations for releases of Thor: Love and Thunder, Doctor Strange in the Multiverse of Madness, Bullet Train, Elvis, and, of course, Top Gun: Maverick. 

Here its premium experience seeks to further differentiate theatrical viewings from what people can get in-home through streaming. Hopefully it will help continue the notable theatrical recovery we’ve seen from 2022. 

It’s an exciting new expansion in the wider theatrical concept, so while the rollout will be understandably limited for now, and a Cinemark exclusive domestically, it’s still exciting to see this kind of next-gen theater experience start its introduction to the wider cinematic world.

As the House of Mouse continues its aggressive campaign of digitizing and expanding its brand footprint, it seems they may want a clear resolution to the looming issue of Hulu’s split ownership earlier than the intended 2024 buy-out date. Brandon Blake, entertainment laywer with Blake & Wang P.A, reports on what we know.

Hulu’s Thorny Split

Despite something of a greater focus on building the reach of their Disney+ brand, Hulu has become something of a dark horse as well as a success story. Proving to have solid market traction, it’s a surprising little success story- and that success makes the awkward ⅓ stake owned by Comcast a problem Disney are going to have to focus on.

They are already, of course, bound to offer Comcast a buy out by the initial 2024 deadline. As CEO Bob Chapek points out, that’s not particularly far away, especially in entertainment industry terms. However, in real terms, Hulu is a Disney operated service. And, given its rising profile, they very likely want to see that happen officially.

The Fair Market Value Conundrum

The issue lies, however, in the terms of the original deal. Comcast must be offered ‘fair market value’ for the service, with a minimum total equity valuation of $27.5 billion. With Hulu proving to be both profitable and a key part of Disney’s wider services, they cannot easily fold it into their current bundling model without jettisoning Comcast’s stake.

Despite its profitability, it’s also not really a key focus for the company. Or Comcast, which favors Peacock. And when Disney takes the helm completely, how will the adult-leaning Comcast demographics fit into the wider vision for Disney+. Is there a benefit to them keeping two successful streaming services under one banner?

With these questions unresolved and no clear path forward, Hulu seems set to remain a juicy, but thorny, issue for both companies. There can be little surprise that Disney would be interested in resolving the matter quickly- but for now, we can only wait and see.

Paramount Films have announced their intent to head for 12-15 theatrical releases in 2024, as the group remains bullish on the wider theatrical recovery. With Top Gun: Maverick continuing to farm money for the studio, now the biggest film in Paramount Picutre’s history, it’s good news overall. Entertainment lawyer Brandon Blake, of Blake & Wang P.A, takes a closer look.

Announcement Made

The announcement was made at the Bank of America Securities 2022 Media, Communications & Entertainment Conference last week by CEO Brian Robbins. Surprisingly, despite their vast stable of platforms- including a streaming service, linear channels, free TV, and the movie studio- he still maintains that theatrical releases have the biggest impact on the success of their titles. Especially with the 45-day release period that’s now become an industry standard post-pandemic.

This does, of course, align with wider findings from the tight pandemic and post-pandemic period, where films with a solid theatrical release continue to outshine those that have been released on day-and-date models concurrent with streaming platforms.

Not Just One Genre

While Top Gun: Maverick has been a runaway success for the studio, still in theaters 15 weeks after its release, it’s not the be-all and end-all of Paramount’s massive rebound. Sonicthe Hedgehog 2, The Lost City, and Jackass Forever all delivering compelling performances for the studio this year. It’s also a very diverse slate of demographics to be represented, too. 

Paramount currently plans on 8 theatrical releases for 2022, and 10-12 for the 2023 period, rising to the projected 12-15 for 2024. Of course, there’s still some challenges in those lofty ideals- available talent, smooth shooting, and the absence of any further setbacks- but Robbins also suggests that talent are showing increasing interest in theatrical release projects over purely streaming, with the broader marketing campaigns available to theatrical releases keeping interest high.

Even this early in the month, we can say one thing for the September Box Office. It has to be better than August! It was a lackluster month for sure, but coming off the heels of a very hot summer, also to be expected. Blake & Wang P.A entertainment lawyer, Brandon Blake, digs into the September slate and what we can expect.

Lack of Product

It’s important to point out (again) that it’s not a lack of willing attendees causing the slump. It’s the lack of product to offer them. Historically, September has the lowest box-office gross of any month, too, which makes for glum reading. Sadly, we only have four titles from big name studios, and a handful of others- none of which are really seen as potential blockbusters. The relocation of two key pictures (Are You There God? It’s Me, Margaret and Distant) to new release dates has not helped, either. It’s a little better than the dull August lineup, but that’s about all you can say for it, and it will sadly pull down some of the overall Box Office recovery we’ve seen this year. 

Back to the… Past?

Disney is bringing a new title to the table in Barbarian, and the horror film has built some anticipation with positive word of mouth. We also have Sony’s The Woman King which may help, but that will have to wait for its Toronto International Film Festival debut to know for certain. 

However, there is a return to the theater planned for the runaway hit, Spider-Man: No Way Home, despite it now being available on streaming. There’s also the remastered release of Avatar hitting the screens. Strange to think of old titles as new sources of hype, but anything will help this month. 

At least there was the $3 discounted ticket festival over the Labor Day weekend to help this month limp along until the festive season slate hits. Hopefully we’ll see some new blockbusters to pep the system up again at that point.