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    Pixar Lays Off 14% of Its Staff and Will Stop Making Shows for Disney+

    The animation studio, which has struggled over the past few years, will stop making original shows for Disney+.Pixar will stop making original shows for Disney+ as part of a broader retrenchment, resulting in layoffs that will reduce its work force by 14 percent.Jim Morris, the president of Pixar, announced the layoffs in an internal memo on Tuesday that was viewed by The New York Times. He cited “the return to our focus on feature films.” About 175 employees will be let go.Questions about Pixar’s health have swirled in Hollywood and among investors since June 2022, when the Disney-owned studio released “Lightyear” to disastrous results. How could Pixar, the gold standard of animation studios for nearly three decades, have gotten a movie so wrong — especially one about Buzz Lightyear, a bedrock “Toy Story” character?Pixar’s next film, “Elemental,” an opposites-attract love story, arrived to alarmingly low ticket sales in June 2023, but ultimately generated a solid $500 million at the box office.One problem: Disney had weakened the Pixar brand by using its films to build the Disney+ streaming service. Starting in late 2020, when many multiplexes were still closed because of the coronavirus pandemic, Disney debuted three Pixar films in a row (“Soul,” “Turning Red” and “Luca”) online, bypassing theaters altogether.The layoffs on Tuesday, which were reported earlier by The Hollywood Reporter, acknowledged another reality: Pixar, like other Disney-owned studios, including Marvel, lost its focus when it was pushed to create original programming for Disney+. At the time — around December 2020 — Disney was pouring money into the streaming service in a wild and ultimately unsuccessful effort to attract up to 260 million subscribers worldwide. It had 87 million at the time. It has about 154 million today.Robert A. Iger, the chief executive of Disney, has since reversed course, emphasizing cost containment and quality — less can be more, if the standards are high. He has said repeatedly over the past year that the creative teams at Disney were stretched too thin by the streaming strategy.As part of the retrenchment at Pixar, “Elio,” a movie about an 11-year-old boy who is inadvertently beamed into space, was delayed. It was supposed to arrive this March. Disney pushed it to June 2025. (Pixar’s next film in theaters will be “Inside Out 2.” It is scheduled for release on June 14.)Pixar’s original series for Disney+ included “Cars on the Road,” focused on the “Cars” characters Lightning McQueen and Mater, and “Dug Days,” a series of shorts about the dog from the movie “Up.” The studio’s last original Disney+ series, “Win or Lose,” about a coed middle school softball team, will arrive late this year.Pixar will continue to make the occasional short film for Disney+. More

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    Taylor Swift Heading to Disney+ and ‘Moana’ Sequel to Theaters

    The pop star’s hit “Eras Tour” concert film hits the streaming service next month, part of the company’s attempt to revitalize its entertainment lineup.Disney is deploying Taylor Swift and Moana as part of a campaign to revitalize its entertainment lineup.The company said on Wednesday that it had reached a deal with Ms. Swift to bring her blockbuster “Eras Tour” concert movie to streaming for the first time. “The Eras Tour (Taylor’s Version)” will include five additional performed songs, including the fan favorite “Cardigan,” and exclusively arrive on Disney+ on March 15.The “Eras Tour” movie has sold more than $260 million in tickets at cinemas worldwide. In a statement, Robert A. Iger, Disney’s chief executive, called it “electrifying” and “a true phenomenon.”Separately, Disney said it would release a big-screen sequel to “Moana” in theaters on Nov. 27. The first “Moana” was released in 2016 and took in $687 million against a production budget of roughly $150 million. But streaming is where the characters have really taken off. “Moana” was the No. 1 streaming movie of last year on any service, according to Nielsen, with 11.6 billion viewing minutes. Nielsen said streaming customers have watched almost 80 billion minutes of “Moana” over the last four years.Auli’i Cravalho (the Polynesian princess Moana) and Dwayne Johnson (the tattooed demigod Maui) are expected to reprise their vocal roles in “Moana 2.” The sequel is a musical directed by Dave Derrick Jr., whose credits include “Raya and the Last Dragon” and “Encanto.” The story line for “Moana 2” involves an unexpected call from Moana’s ancestors, which prompts her to travel “to the far seas of Oceania and into dangerous, long-lost waters.”Disney struggled at the box office last year. Its animated “Wish,” the superhero sequel “The Marvels” and the ultraexpensive “Indiana Jones and the Dial of Destiny” were all box office failures, prompting concerns about the vitality of various Disney studios. Pixar’s “Elemental” had a disastrous opening, but was ultimately able to generate a decent $496 million worldwide.The generally poor performance — in stark contrast with prior years, when Disney released one billion-dollar-grossing movie after another — has contributed to attacks on the company by activist investors. Trian Fund Management, for instance, is waging a proxy battle for multiple board seats. Disney is trying to fight off such attempts.“Moana 2,” initially conceived as an animated Disney+ series, joins a theatrical lineup for the year that Walt Disney Studios believes will mark a dramatic turnaround. Other planned releases include “Kingdom of the Planet of the Apes,” “Deadpool 3,” “Inside Out 2” and “Mufasa,” a spinoff from “The Lion King.” More

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    Progress in Hollywood Writers’ Strike Negotiations, but No Deal Yet

    A third straight day of bargaining between the studios and the union ended without an agreement. Talks will continue on Saturday.A third straight day of marathon negotiations between Hollywood studios and striking screenwriters ended on Friday night without a deal. But the sides made substantial progress, according to three people briefed on the talks.The sides plan to reconvene on Saturday.The Friday session started at 11 a.m. Pacific time at the suburban Los Angeles headquarters of the Alliance of Motion Picture and Television Producers, which bargains on behalf of the major entertainment companies. For the third day in a row, several Hollywood moguls directly participated in the negotiations, which ended a little after 8 p.m.Robert A. Iger, Disney’s chief executive; Donna Langley, NBCUniversal’s chief content officer of Universal Pictures; Ted Sarandos, co-chief executive of Netflix; and David Zaslav, the chief executive of Warner Bros. Discovery had previously delegated bargaining with the union to others. Their direct involvement — which many screenwriters and some analysts said was long overdue — contributed to meaningful progress over the past few days, according to the people familiar with the talks, who spoke on condition of anonymity because of the diplomatic nature of the efforts.During the Thursday negotiations, the sides had narrowed their differences, for instance, on the topic of minimum staffing for television show writers’ rooms, a point that studios had been unwilling to engage on before the guild called a strike in early May. The Thursday session took a turn, however, after the sides agreed to take a short break at roughly 5 p.m., according to the people familiar with the talks. The executives and studio labor lawyers had expected guild negotiators to return to discuss points they had been working on earlier. Instead, the guild made additional requests — one being that a return to work by screenwriters be tied to a resolution of the actors’ strike.The actors’ union, known as SAG-AFTRA, joined writers on picket lines on July 14. Its demands exceed those of the Writers Guild. Among other things, the actors want 2 percent of the total revenue generated by streaming shows, something that studios have said is a nonstarter.Several hours after talks ended on Thursday night, the guild emailed its membership to say that the sides would meet on Friday.“Your negotiating committee appreciates all the messages of solidarity and support we have received the last few days, and ask as many of you as possible to come out to the picket lines tomorrow,” the email said.The guild extended picketing hours on Friday to 2 p.m. Pickets have typically ended at noon.In Los Angeles, several hundred writers turned up to picket outside the arching Paramount Pictures gate, far more than in recent weeks. The Writers Guild and SAG-AFTRA have been staging themed pickets to keep members engaged, and the theme on Friday happened to be “puppet day,” meaning that, in addition to picket signs, some marchers held felt hand puppets and marionettes. The mood was optimistic.Outside Netflix’s Hollywood offices on Friday afternoon, picketing writers even began offering goodbye speeches, delivered via bullhorn. At the CBS lot in Studio City, the theme was “silent disco,” with several hundred writers dance-picketing while wearing headphones.The talks were mostly back on track by the time picketing ended on Friday, according to two of the people familiar with the matter. On the sticky issue of minimum staffing for television shows, the sides were discussing a proposal in which at least four writers would be hired regardless of the number of episodes or whether a showrunner felt that the work could be done with fewer. (Earlier in the week, studios were pushing for a sliding number based on the number of episodes.)They were also discussing a plan in which writers would for the first time receive payments from streaming services — in addition to other fees — based on a percentage of active subscribers. The guild had originally asked the entertainment companies to establish a viewership-based royalty payment (known in Hollywood as a residual) to “reward programs with greater viewership.”The writers have been on strike for 144 days. The longest writers’ strike was 153 days in 1988.“Thank you for the wonderful show of support on the picket lines today!” the guild’s negotiating committee said in an email to members late Friday. “It means so much to us as we continue to work toward a deal that writers deserve.”Nicole Sperling More

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    Hollywood Studios Disclose Their Offer on Day 113 of Writers Strike

    The public disclosure of the Aug. 11 proposal was an unusual step and suggested an attempt to go around union leadership and appeal to rank-and-file members.In an apparent attempt to break a labor stalemate that has helped bring nearly all of Hollywood production to a standstill, the major entertainment studios took the unusual step on Tuesday night of publicly releasing details of their most recent proposal to the union that represents 11,500 striking television and movie writers.The studios are confronting significant decisions about whether to push the release of big-budget films like “Dune: Part Two” into the next year, and whether the network television lineup for the 2023-2024 season can be salvaged or reduced to reality shows and reruns.Shortly before the public release of the proposal, several chief executives at the major Hollywood companies, including David Zaslav, who leads Warner Bros. Discovery, and Robert A. Iger, the Disney kingpin, met with officials at the Writers Guild of America, the writers’ union, to discuss the latest proposal, according to a statement by the union’s negotiating committee. By releasing the proposal, the companies are essentially going around the guild’s negotiating committee and appealing to rank-and-file members — betting that their proposal will look good enough for members to pressure their leaders to make a deal. The writers’ union said that the studios’ offer “failed to sufficiently protect writers from the existential threats that caused us to strike in the first place.” The union described the public release of the companies’ proposal as a “bet that we will turn on each other.” The writers have been on strike for 113 days. The studios and writers resumed negotiations on Aug. 11 for the first time since early May. Since then, there has been optimism within the entertainment industry that the labor disputes might be on a path to resolution.But the public disclosure of the proposal by the Alliance of Motion Picture and Television Producers, which bargains on behalf of the studios, suggests that negotiations may have again reached an impasse. The studios and writers’ union had generally agreed to adhere to a media blackout while at the bargaining table, and the studio alliance has only occasionally released public statements before the guild.“We have come to the table with an offer that meets the priority concerns the writers have expressed,” Carol Lombardini, the lead negotiator for the alliance, said in a statement that accompanied the details of the latest proposal. “We are deeply committed to ending the strike and are hopeful that the Writers Guild of America will work toward the same resolution.”Hollywood has been effectively shut down since tens of thousands of Hollywood actors joined striking screenwriters on picket lines on July 14. Both the writers and actors have called this moment “existential,” arguing that the streaming era has deteriorated their working conditions as well as their compensation levels.The studios said that their latest proposal offered the “highest wage increase” to writers in more than three decades, as well as an increase in residuals (a type of royalty) that has been a major point of contention. The studios also said that they had offered “landmark protections” against artificial intelligence, and that they vowed to offer some degree of streaming viewership data to the guild, information which had previously been held under lock and key.In the statement, the studios said that they were “committed to reaching an equitable agreement to return the industry to what it does best: creating the TV shows and movies that inspire and entertain audiences worldwide.” More

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    For Disney, Streaming Losses and TV’s Decline Are a One-Two Punch

    The company experienced a sharp decline in its traditional TV business for the second straight quarter and will raise subscription prices for its streaming services.Robert A. Iger’s urgent need to overhaul Disney — to turn its streaming division into a profitable enterprise and pull back on its troubled traditional television business — came into sharp relief on Wednesday.Disney’s streaming operation lost $512 million in the most-recent quarter, the company said, bringing total streaming losses since 2019, when Disney+ was introduced, to more than $11 billion. Disney+ lost roughly 11.7 million subscribers worldwide in the three months that ended July 1, for a new total of 146.1 million.All the decline came from a low-priced version of Disney+ in India. Last year, Disney lost a bid to renew the expensive rights to Indian Premier League cricket matches. Excluding India, Disney+ gained 800,000 subscribers, primarily overseas.To make streaming profitable, Mr. Iger, Disney’s chief executive, has shifted the focus at Disney+ away from brisk subscriber growth, which requires expensive marketing campaigns. Instead, Disney has been trying to make more money from the Disney+ subscribers it already has. The monthly price for access to an ad-free version of Disney+ rose to $11 in December, from $8.Another hefty price increase is on the way. Starting on Oct. 12, the ad-free version will cost $14, Disney said. Hulu, which is also controlled by Disney, will begin charging $18 for ad-free access, up from $15. As an incentive, Disney will begin selling a new streaming package — ad-free access to both Disney+ and Hulu — for $20 a month starting on Sept. 6.The ad-supported options for both Disney+ and Hulu will remain the same, at $8. “We’re obviously trying with our pricing strategy to migrate more subs to the advertiser-supported tier,” Mr. Iger told analysts on a conference call. The pricing news, along with a vow by Mr. Iger to follow Netflix by cracking down on password sharing, sent Disney shares up roughly 2 percent in after-hours trading.Disney still relies on old-line channels like ESPN and ABC for roughly a third of its operating profits — and those outlets are being maimed by cord cutting, sports programming costs and advertiser pullback. Disney’s traditional channels had $1.9 billion in quarterly operating income, down 23 percent from a year earlier. Disney cited lower ad sales at ABC, partly because of viewership declines, and lower payments from ESPN subscribers, along with higher sports programming costs. (On a positive note, ESPN ad sales increased 10 percent.)It was the second consecutive quarter in which Disney’s traditional TV business recorded a sharp decline in operating income.Disney is exploring a once-unthinkable sale of a stake in ESPN. Bob Levey/Getty ImagesDisney is now exploring a once-unthinkable sale of a stake in ESPN. Not all of it, Mr. Iger has made clear. But he wants “strategic partners that could either help us with distribution or content,” he said during an interview with CNBC last month. Disney has held talks with the National Football League, the National Basketball Association and Major League Baseball about taking a minority stake.Earlier this summer, Mr. Iger brought in two former senior Disney executives, Kevin Mayer and Thomas O. Staggs, to consult on ESPN strategy with James Pitaro, the channel’s president, and help put together any deal. Mr. Mayer and Mr. Staggs were both viewed as possible successors to Mr. Iger when they were at Disney, ultimately leaving when they were passed over to start their own media company, Candle Media, with the private equity firm Blackstone as the backer.Their return has sent the Hollywood and Wall Street gossip mills into overdrive. Are Mr. Mayer and Mr. Staggs now back in the running for Disney’s top job? Is Blackstone a potential investor in ESPN? Maybe the whole company is being prepped for a sale — with Apple as the buyer?The first two questions did not come up on Disney’s conference call, and Mr. Iger batted away the third. “I just am not going to speculate about the potential for Disney to be acquired by any company, whether it’s a technology company or not,” he said. “Obviously, anyone who wants to speculate about these things would have to immediately consider the global regulatory environment. I’ll say no more than that.”ESPN on Tuesday announced a 10-year deal with a casino company to create an online sports betting brand and push more aggressively into the lucrative world of online gambling. Notably, the $2 billion deal allows ESPN to rake in gambling money without — in keeping with Disney’s family-friendly brand — becoming a sports book itself.Mr. Iger is also contending with dual strikes in Hollywood. Unionized screenwriters have now been on strike for 100 days and actors for 27. They want higher pay from streaming services and guardrails around the use of artificial intelligence by studios.On the conference call, Mr. Iger addressed the strikes for the first time since mid-July, when he told CNBC — from an elite gathering of chief executives in Idaho — that union leaders were not being “realistic,” prompting an eruption of vitriol on picket lines. On Thursday, reading from a script, Mr. Iger said it was his “fervent hope that we quickly find solutions to the issues that have kept us apart these past few months.”“I am personally committed to working to achieve this result,” he added, saying that he had “deep respect and appreciation” for actors and writers.Disney’s quarter included some encouraging signs. The $512 million streaming loss was 32 percent less than analysts had predicted, for instance. In the fall, quarterly streaming losses reached $1.5 billion. In other words, Mr. Iger’s effort to drastically reduce losses is working. “In spite of a challenging environment in the near term, I’m overwhelmingly bullish about Disney’s future,” Mr. Iger said, noting that the company was on track to exceed a goal, announced in February, to cut $5.5 billion in costs.An 11 percent increase in profitability at Disney’s theme park division — despite weakness at Walt Disney World in Florida — allowed the company to salvage the quarter, to a degree. Companywide revenue totaled $22.3 billion, a 4 percent increase from a year earlier; analysts had expected slightly more. About $2.7 billion in one-time restructuring charges resulted in net loss of $460 million, compared with $1.4 billion in profit a year earlier.Excluding the charges, which were related to the removal of more than 30 underperforming shows and movies from Disney+ and Hulu, Disney reported earnings per share of $1.03. Analysts had expected 95 cents.Growth at Disney’s theme park division came largely from overseas. A year ago, the Shanghai Disney Resort was closed because of the Chinese government’s Covid-19 restrictions. The Shanghai property was open for all of the most-recent quarter. Hong Kong Disneyland also reported improved results. Disney’s five-ship cruise line has also been running at near capacity.Economists have long watched Disney’s domestic theme parks as informal barometers of consumer confidence. Historically, when budgets get tight, families cut back on expensive trips to Disney World. Whether for that reason or another, attendance at the Florida mega-resort declined. Attendance rose at Disneyland, in California.Other theme park operators in Florida have seen similar attendance declines. Some analysts have blamed ticket price increases. Others have said that tourist demand has shifted away from locations that reopened earlier in the pandemic — like Florida — and toward destinations that remained closed for a longer period. More

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    Searching for Someone to Deliver a Hollywood Ending

    Thanks to a changing culture and differing business models, the entertainment industry lacks power brokers with the stature to bring on labor peace.The 1954 Hollywood classic “On the Waterfront” ends with unionized longshoremen on a dock. They’re fed up and standing idle, staring at a bloodied Marlon Brando. All of a sudden, an authoritative man in a fancy suit and a natty hat arrives. “We gotta get this ship going,” he barks. “It’s costing us money!”Over the last week, as TV and movie actors went on strike for the first time in 43 years, joining already striking screenwriters on picket lines, Hollywood started looking around for its version of that figure — someone, anyone, to find a solution to the standoff and get America’s motion picture factories running again.But the more the entertainment industry looked, the more it became clear that such a person may no longer exist.“Back in the day, it was Lew Wasserman who would enter the talks and move them along,” said Jason E. Squire, professor emeritus at the University of Southern California’s School of Cinematic Arts, referring to the superagent turned studio mogul. “Today, it is different. Traditional studios and the technology companies that have moved into Hollywood have different cultures and business models. There is no studio elder, respected by both sides, to help broker a deal.”At the moment, no talks between union leaders and the involved companies are happening and none have been scheduled, with each side insisting the other has to make the first move.Two federal mediators have been studying the issues that led to the breakdown in negotiations. Agents and lawyers are engaged in a flurry of back-channel phone conversations, encouraging union leaders and studio executives to soften their unmovable positions; Bryan Lourd, the Creative Artists Agency heavyweight, asked the Biden administration and Gov. Gavin Newsom of California to get involved, according to three people briefed on the matter, who spoke on condition of anonymity because of the sensitivity of the labor situation. A spokesman for Mr. Lourd declined to comment.Emotions must cool before talks restart, said one entertainment lawyer who has been working in the background to bring the sides together again. When does that happen? He said it could be next week or it could be-mid August.Starting in 1960, the last time both actors and writers were on strike, and continuing into the 1990s, the person who could break an impasse was the feared Wasserman. He commanded the respect of both labor and management and could push beyond the colorful personalities in each camp.It was an era when the entertainment business, for the most part, was much less complicated. Studios had not become buried inside conglomerates and beholden to lucrative toy divisions, not to mention having to deliver quarterly growth.Bob Daly, who ran Warner Bros. in the 1980s and ’90s, said he thought it was troubling that the labor strife had gotten personal.Valerie Macon/WireImage, via Getty ImagesBob Daly, who ran Warner Bros. in the 1980s and ’90s, picked up the mantle from Wasserman, who died in 2002. Mr. Daly, who went on to run the Los Angeles Dodgers, said by phone that he was no longer involved in Hollywood’s labor strife. But he had some advice.“One thing that has troubled me is that it has become personal, which I think is a mistake,” Mr. Daly said. “The only way this is going to get solved is for both sides to get in a room and talk, talk, talk until they find compromises. Neither side is going to get everything it wants. You can yell and scream inside that room — I did myself many times — but don’t come out until you have a deal.”The last Hollywood strike took place in 2007 and 2008. The Writers Guild of America walked out over a variety of issues, with compensation for shows distributed online a major sticking point. It was resolved after 100 days (the current writers’ strike was 81 days old on Thursday) when Peter Chernin, then president of News Corporation, and Robert A. Iger, Disney’s relatively new chief executive at the time, took a hands-on role in solving the stalemate. Barry M. Meyer, who was chairman of Warner Bros., and Jeffrey Katzenberg, then the chief executive of DreamWorks Animation, also played roles.All those men, with the possible exception of Mr. Chernin, are now busy with other matters or viewed as villains by actors.Mr. Iger, who returned to run Disney in November after a brief retirement, became a picket line piñata last week after telling CNBC that, while he respected “their right and their desire to get as much as they possibly can,” union leaders were not being “realistic.” The backdrop of his interview, a meeting of elite media and technology executives in Sun Valley, Idaho, poured gasoline on the moment.Mr. Katzenberg largely left the entertainment business in 2020 after the collapse of Quibi, his streaming start-up. In April, Mr. Katzenberg was named a co-chair of President Biden’s re-election campaign.Mr. Meyer retired from Hollywood in 2013 after a celebrated 42 years and went on to sit on the board of the Federal Reserve Bank of San Francisco. “I’ve had nothing to do with the negotiations this year,” he said in an email. “That being said, it doesn’t stop me from feeling sad about the way things are stuck right now.”Peter Chernin was instrumental in ending the last writers’ strike when he was president of News Corporation. He left Hollywood’s corporate ranks in 2009.Annie Tritt for The New York TimesThat leaves Mr. Chernin. He left Hollywood’s corporate ranks in 2009 and founded an independent company that includes a film and television production arm — he has a deal with Netflix — and a sprawling investment portfolio focused on new technology and media companies. In recent days, Mr. Chernin told one senior associate that he had not been approached for help in the strikes, but that he would be hard-pressed to say no if asked.A spokeswoman for Mr. Chernin declined to comment.The studios that now must figure out how to appease actors and writers are wildly different in size and have diverging priorities. They all say they want to resolve the strikes. But some are more willing than others to compromise and immediately restart talks. The willing camp includes WarnerBros. Discovery, while Disney, which owns Disney+ and Hulu, has taken a harder line, according to two people involved in the negotiations. WarnerBros. Discovery and Disney declined to comment.Some people in Hollywood have been looking to elected officials to help smooth a path, but so far direct involvement, if any, has been unclear. The mayor of Los Angeles, Karen Bass, last week called the actors’ strike “an urgent issue that must be resolved, and I will be working to make that happen.” A spokesman did not respond to queries about what she was specifically doing.Mr. Newsom said in May that he would intervene in the writers’ strike “when called in by both sides.” He has not commented on the actors’ walkout, and a spokesman did not respond to queries.With two unions on strike, it could be months before new contracts can be negotiated and ratified. The Alliance of Motion Picture and Television Producers, which negotiates on behalf of the biggest studios, has decided to first focus on resolving differences with SAG-AFTRA, as the actors’ union is known, according to the two people involved in the negotiations.Cameras may not begin rolling again until January, given the time it takes to reassemble casts and crews, with the end-of-year holidays as a complication, executives at WarnerBros. Discovery and other companies told staff members this week.SAG-AFTRA and the Writers Guild of America are striking largely because, they say, entertainment companies — led by Netflix — have adopted unfair compensation formulas for streaming. This was the biggest sticking point at the negotiating table, much more so than union demands for guardrails around artificial intelligence, according to three people briefed on the matter. (The companies defended their proposed improvements to the contract as “historic.”)Under the now-expired contracts, streaming services pay residuals (a form of royalty) to actors and writers based on subscriber totals in the United States and Canada. The actors’ union, in particular, has made it clear that a new contract must go back to a version of the old way — with streaming services using pay formulas that are based on the popularity of shows and movies, the way traditional television channels have done for decades, with Nielsen as an independent measuring stick.Streaming companies refuse to divulge granular viewership data; secrecy is part of Big Tech’s culture. Independent measuring companies, including Nielsen, have tried to fill the gap, but they have provided only vague information — what is generating a lot of views, what is not. Nobody except the companies knows if a streaming show like “Stranger Things” is watched by 100 million people worldwide or 50 million.Netflix signaled on Wednesday that it saw the data it discloses as sufficient. The company posts weekly top-10 lists on its site; the rankings are based on “engagement,” which Netflix defines as total hours viewed divided by run time.“We believe sharing this engagement data on a regular basis helps talent and the broader industry understand what success looks like on Netflix — and we hope that other streamers become more transparent about engagement on their services over time,” Netflix said in its quarterly letter to shareholders.John Koblin More

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    In Hollywood, the Strikes Are Just Part of the Problem

    The entertainment industry is trying to figure out the economics of streaming. It’s also facing angst over a tech-powered future and fighting to stay culturally dominant.Existential hand-wringing has always been part of Hollywood’s personality. But the crisis in which the entertainment capital now finds itself is different.Instead of one unwelcome disruption to face — the VCR boom of the 1980s, for instance — or even overlapping ones (streaming, the pandemic), the movie and television business is being buffeted on a dizzying number of fronts. And no one seems to have any solutions.On Friday, roughly 160,000 unionized actors went on strike for the first time in 43 years, saying they were fed up with exorbitant pay for entertainment moguls and worried about not receiving a fair share of the spoils of a streaming-dominated future. They joined 11,500 already striking screenwriters, who walked out in May over similar concerns, including the threat of artificial intelligence. Actors and writers had not been on strike at the same time since 1960.“The industry that we once knew — when I did ‘The Nanny’ — everybody was part of the gravy train,” Fran Drescher, the former sitcom star and the president of the actors’ union, said while announcing the walkout. “Now it’s a walled-in vacuum.”At the same time, Hollywood’s two traditional businesses, the box office and television channels, are both badly broken.This was the year when moviegoing was finally supposed to bounce back from the pandemic, which closed many theaters for months on end. At last, cinemas would reclaim a position of cultural urgency.But ticket sales in the United States and Canada for the year to date (about $4.9 billion) are down 21 percent from the same period in 2019, according to Comscore, which compiles box office data. Blips of hope, including strong sales for “Spider-Man: Across the Spider-Verse,” have been blotted out by disappointing results for expensive films like “Indiana Jones and the Dial of Destiny,” “Elemental,” “The Flash,” “Shazam! Fury of the Gods” and, to a lesser extent, “The Little Mermaid” and “Fast X.”The number of movie tickets sold globally may reach 7.2 billion in 2027, according to a recent report from the accounting firm PwC. Attendance totaled 7.9 billion in 2019.It’s a slowly dying business, but it’s at least better than a quickly dying one. Fewer than 50 million homes will pay for cable or satellite television by 2027, down from 64 million today and 100 million seven years ago, according to PwC. When it comes to traditional television, “the world has forever changed for the worse,” Michael Nathanson, an analyst at SVB MoffettNathanson, wrote in a note to clients on Thursday.Disney, NBCUniversal, Paramount Global and WarnerBros. Discovery have relied for decades on television channels for fat profit growth. The end of that era has resulted in stock-price malaise. Disney shares have fallen 55 percent from their peak in March 2021. Paramount Global, which owns channels like MTV and CBS, has experienced an 83 percent decline over the same period.On Thursday, Robert A. Iger, Disney’s chief executive, put the sale of the company’s “noncore” channels, including ABC and FX, on the table. He called the decline in traditional television “a reality we have to come to grips with.”In other words, it’s over.The latest installment of “Mission: Impossible” is opening this week and could be a rare bright spot at the box office.Mark Abramson for The New York TimesAnd then there is streaming. For a time, Wall Street was mesmerized by the subscriber-siphoning potential of services like Disney+, Max, Hulu, Paramount+ and Peacock, so the big Hollywood companies poured money into building online viewing platforms. Netflix was conquering the world. Amazon had arrived in Hollywood determined to make inroads, as had the ultra-deep-pocketed Apple. If the older entertainment companies wanted to remain competitive — not to mention relevant — there was only one direction to run.“You now have, really in control, tech companies who haven’t a care or clue, so to speak, about the entertainment business — it’s not a pejorative, it’s just the reality,” Barry Diller, the media veteran, said by phone this past week, referring to Amazon and Apple.“For each of these companies,” he added, “their minor business, not their major business, is entertainment. And yet, because of their size and influence, their minor interests are paramount in making any decisions about the future.”A little over a year ago, Netflix reported a subscriber loss for the first time in a decade, and Wall Street’s interest swiveled. Forget subscribers. Now we care about profits — at least when it comes to the old-line companies, because their traditional businesses (box office and channels) are in trouble.To make services like Disney+, Paramount+ and Max (formerly HBO Max) profitable, their parent companies have slashed billions of dollars in costs and eliminated more than 10,000 jobs. Studio executives also put the brakes on ordering new television series last year to rein in costs.WarnerBros. Discovery has said its streaming business, anchored by Max, will be profitable in 2023. Disney has promised profitability by September 2024, while Paramount had not forecast a date, except to say peak losses will occur this year, according to Rich Greenfield, a founder of the LightShed Partners research firm.Giving in to union demands, which would threaten streaming profitability anew, is not something the companies will do without a fight.“In the short term, there will be pain,” said Tara Kole, a founding partner of JSSK, an entertainment law firm that counts Emma Stone, Adam McKay and Halle Berry as clients. “A lot of pain.”Every indication points to a long and destructive standoff. Agents who have worked in show business for 40 years said the anger surging through Hollywood exceeded anything they had ever seen.“Straight out of ‘Les Miz’” was how one longtime executive described the high-drama, us-against-them mood in a text to a reporter. Photos circulating online from this past week’s Allen & Company Sun Valley media conference, the annual “billionaires’ summer camp” attended by Hollywood’s haves, inflamed the situation.On a Paramount Pictures picket line on Friday, Ms. Drescher attacked Mr. Iger, something few people in Hollywood would dare to do without the cloak of anonymity. She criticized his pay package (his performance-based contract allows for up to $27 million annually, including stock awards, which is middle of the road for entertainment chief executives) and likened him and other Hollywood moguls to “land barons of a medieval time.”“It’s so obvious that he has no clue as to what is really happening on the ground,” she added. Mr. Iger had told CNBC on Thursday that the demands by the two unions were “just not realistic.”In the coming weeks, studios will probably cancel lucrative long-term deals with writers (and some actor-producers) by virtue of the force majeure clause in their contracts, which kick in on the 60th or 90th day of a strike, depending on how the agreements are structured. The force majeure clause states that when unforeseeable circumstances prevent someone from fulfilling a contract, the studios can cancel the deal without paying a penalty.Eventually, contracts with the Writers Guild of America and SAG-AFTRA, as the actors’ union is known, will be hammered out.The deeper business challenges will remain.Nicole Sperling More

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    Disney’s Iger Returns to Familiar Stage, but With Different Challenges

    The company reports quarterly earnings on Wednesday, and Wall Street is expecting it to lay out a new streaming strategy and operating structure.When it comes to reporting quarterly earnings, Robert A. Iger is an old pro. He has done it 58 times as Disney’s chief executive. But the next one, scheduled for Wednesday, will require him to give a performance for the corporate ages.“It has to be an impactful, meaningful, tone-setting, agenda-changing day,” said Michael Nathanson, an analyst at SVB MoffettNathanson who has followed Disney for 18 years.Another veteran Disney analyst, Jessica Reif Ehrlich of BofA Securities, agreed. “I don’t know that we’re going to see answers to everything, but Iger’s overall messaging is going to be critical,” she said.So, no pressure.On Wednesday, Mr. Iger will publicly face Wall Street and Hollywood for the first time since he came out of retirement to retake the reins of a deeply troubled Disney. In late November, the Disney board fired Bob Chapek as chief executive and rehired Mr. Iger, 71, who ran the company from late 2005 to early 2020. He is also contending with Nelson Peltz, the corporate raider turned activist investor. Mr. Peltz, 80, whose Trian Partners has amassed roughly $1 billion in Disney stock and is fighting for a board seat for himself or his son, wants the world’s largest entertainment company to revamp its streaming business, refocus on profit growth, cut costs, reinstate its dividend and do a much better job at succession planning.Most of those things were in motion at Disney before Mr. Peltz started his proxy battle, and analysts expect Mr. Iger to provide updates on at least some fronts on Wednesday.More on the Walt Disney CompanyLabor Tensions: Unions that represent about 32,000 full-time workers at Disney World said that members had voted overwhelmingly to reject the company’s offer for a new five-year contract.Splash Mountain’s Closure: As Disney takes steps to erase the racist back story of the Walt Disney World ride, some are claiming to be selling water from the attraction online.Return to Office: Starting on March 1, the Walt Disney Company will require employees to report to the office four days a week, a relatively strict policy among large companies.Pricing Policies: After complaints by visitors about the costs at its domestic theme parks, Disney revised policies related to ticketing, hotel parking, ride photos and annual passes.How are the content pipelines to Disney’s streaming services (Disney+, Hulu and Disney+) going to be managed? At 6:30 a.m. on his first day back, Mr. Iger ousted Disney’s top streaming executive and ordered a restructuring of a restructuring that Mr. Chapek had put into place.For months, Disney has been talking about cost cutting and layoffs. Where are they? “This can’t drag on,” Ms. Ehrlich said. “It’s not good for company morale.” (Speaking of morale, some Disney employees have been circulating a petition to protest Mr. Iger’s decision last month to require everyone to report to the office four days a week.)Shareholders are increasingly worried about the decline of Disney’s traditional television business, which includes ABC and 15 cable networks, led by ESPN, Disney Channel, FX, Freeform and National Geographic. Disney’s cable portfolio has held up better than those owned by some rival companies (notably NBCUniversal), but Americans have been cutting the cable cord at an alarming pace — total hookups declined by a record 6.2 percent from October to December.“We need an honest and appropriate view of the future of Disney’s television business,” Mr. Nathanson said. “Is there an asset change? Does spending change? Under Chapek, the messaging was never very clear.”Even in decline, traditional television remains Disney’s largest business, delivering $8.5 billion in operating income in the fiscal year that ended in October.Disney and other old-line media companies are facing a simple equation that has proved astoundingly difficult to solve: Profit from traditional television is declining at a faster rate than streaming losses are moderating. In Disney’s case, traditional television earnings are expected to decline by $1.6 billion in 2023, while losses from streaming will abate by only about $900 million, according to Mr. Nathanson.In November, Disney said that losses from its streaming portfolio totaled $1.5 billion from July through September, compared with $630 million a year earlier.But Mr. Chapek, who led the company’s November earnings call, reiterated a promise that Disney+ would turn a profit by next October. Wall Street has been skeptical of that assertion, and Mr. Iger may revise it on Wednesday, along with guidance that Disney+ would have 215 million to 245 million global subscriptions by 2024. Disney+ currently has about 164 million worldwide.Companies always try to put the rosiest spin possible on numbers when talking to analysts, shareholders and the news media on quarterly earnings conference calls. But the upbeat tone struck by Mr. Chapek in the November session did not sit well given the numbers that Disney was reporting. Along with widening losses in streaming, Disney had disappointing profit margins at its theme park business and missed Wall Street’s overall expectations for both revenue and net income, a rarity for the company. (When one senior Disney executive privately told Mr. Chapek before the call that his planned remarks were too positive, he called her Eeyore, the gloomy donkey from “Winnie the Pooh.”)Mr. Iger will undoubtedly highlight some of Disney’s recent achievements. “Avatar: The Way of Water,” released by Walt Disney Studios, has generated $2.2 billion worldwide since it arrived in theaters on Dec. 16. Disney received more Oscar nominations last month (23) than any other company. Over the end-of-year holidays, Disney’s theme parks were gridlocked, easing fears about consumer belt-tightening.“Despite the macro headwinds, the parks still feel incredibly strong,” Ms. Ehrlich said.But Mr. Iger will also need to contend with a lackluster set of overall numbers, at least if analysts’ forecasts are correct. Analysts are expecting per-share earnings of about 79 cents from Disney, down from $1.06 for the same period a year ago, and revenue of $23.4 billion, up from $21.8 billion a year ago.Analysts polled by FactSet estimate that Disney+ will have 163 million subscribers, a slight erosion from the previous quarter.Mr. Iger will probably not directly address Mr. Peltz’s proxy battle, unless an analyst prods him about it. Disney has already made its position clear, saying in a Jan. 17 securities filing that Mr. Peltz had “no strategy, no operating initiatives, no new ideas and no plan.” In a fresh eruption late last week, Trian said there was an “urgent need” for Disney shareholders to drop Michael B.G. Froman from the company’s board and give the seat to Mr. Peltz or his son. In response, Disney aggressively defended Mr. Froman, a senior Mastercard executive and former U.S. trade representative who has been a Disney director since 2018.Some prominent analysts have taken Disney’s side.“He hasn’t made a good enough case for why he needs a seat on the board,” Mr. Nathanson said, referring to Mr. Peltz.Richard Greenfield, a founder of the LightShed Partners research firm, was one of Mr. Iger’s most ardent critics during his previous tenure at Disney — so much so that Mr. Iger blocked him on Twitter and refused to take questions from him on earnings calls. Mr. Greenfield, however, recently published an aggressive defense of Disney titled “Disney Would Be Wise to Keep Peltz Off the Jedi Council.”Perhaps Mr. Iger will take a question from Mr. Greenfield on Wednesday. More