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 interruption to face – the VCR explosion of the 1980s, for example – or even overlapping ones (streaming, the pandemic), the film and television business is struck on a dizzying number of fronts. And no one seems to have any solutions.

On Friday, about 160,000 unionized actors went on strike for the first time in 43 years, saying they were fed up with excessive pay for entertainment moguls and worried about not getting 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 have not gone on strike at the same time since 1960.

“The industry that we once knew — when I did ‘The Nanny’ — everyone was part of the gravy train,” said Fran Drescher, the former sitcom star and the president of the actors’ union, in announcing the walkout. “Now it’s an in-wall vacuum.”

At the same time, Hollywood’s two traditional businesses, the box office and television channels, are both badly broken.

This was the year that moviegoing was finally supposed to bounce back from the pandemic that closed many theaters for months. Finally, cinemas would reclaim a position of cultural urgency.

But ticket sales in the U.S. 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. Hopes, including strong sales for “Spider-Man: Across the Spider-Verse”, were dashed by disappointing results for expensive films such as “Indiana Jones and the Dial of Fate”, “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 worldwide may reach 7.2 billion in 2027, according to a recent report by accounting firm PwC. Participation totaled 7.9 billion in 2019.

It’s a slowly dying business, but it’s at least better than rapidly dying. Fewer than 50 million homes will pay for cable or satellite TV 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 changed forever for the worse,” Michael Nathanson, an analyst at SVB MoffettNathanson, wrote in a note to clients Thursday.

Disney, NBCUniversal, Paramount Global and WarnerBros. Discovery has relied for decades on television channels for fat profit growth. The end of that era resulted in a stock-price malaise. Disney shares fell 55 percent from their peak in March 2021. Paramount Global, which owns channels such as MTV and CBS, experienced an 83 percent decline during the same period.

On Thursday, Robert A. Iger, head of Disney, put the sale of the company’s “non-core” channels, including ABC and FX, on the table. He called the decline of traditional television “a reality we have to deal with.”

In other words, it’s over.

And then there’s streaming. For a while, Wall Street was mesmerized by the subscription-sipping potential of services like Disney+, Max, Hulu, Paramount+ and Peacock, so the big Hollywood companies poured money into building online viewing platforms. Netflix has conquered the world. Amazon arrived in Hollywood determined to make an inroad, as did the ultra-deep-pocketed Apple. If the older entertainment companies wanted to stay competitive – not to mention relevant – there was only one direction to run.

“You now have, really in control, technology companies that don’t have a care or a 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 main 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 loss of subscribers for the first time in a decade, and Wall Street’s interest turned. Forget subscribers. Now we worry about profits — at least when it comes to the old 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 cut billions of dollars in costs and eliminated more than 10,000 jobs. Studio executives also slowed down ordering new TV series last year to curb costs.

WarnerBros. Discovery said its streaming business, anchored by Max, will be profitable in 2023. Disney has promised a profit by September 2024, while Paramount has not predicted a date, except to say that peak losses will occur this year, according to Rich Greenfield, founder. from the research firm LightShed Partners.

Giving in to union demands that would threaten trickle-down profits is not something the companies will do without a fight.

“In the short term, there will be pain,” said Tara Kole, founding partner of JSSK, an entertainment law firm that counts Emma Stone, Adam McKay and Halle Berry as clients. “A lot of pain.”

All indications point to a long and destructive confrontation. Agents who have worked in show business for 40 years said the anger growing across Hollywood was beyond anything they had ever seen.

“Straight out of ‘Les Miz'” was how one longtime executive described the high-drama, us-versus-them mood in a text to a reporter. Photos circulating online from last week’s Allen & Company Sun Valley media conference, the annual “billionaire summer camp” attended by Hollywood’s have-it-alls, inflamed the situation.

On Friday on a Paramount Pictures picket line, Ms. Drescher attacked Mr. Iger, something few people in Hollywood would dare do without the cloak of anonymity. She criticized his 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 compared him and other Hollywood moguls to “land barons from medieval times.” “

“It’s so obvious that he has no idea what’s really going on on the ground,” she added. Mr. Iger told CNBC on Thursday that the two unions’ demands were “just not realistic.”

In the coming weeks, studios are likely to cancel lucrative long-term deals with writers (and some actor-producers) because of the force majeure clause in their contracts, which kicks in on the 60th or 90th day of a strike, depending on how. the agreements are structured. The force majeure clause states that when unforeseen circumstances prevent someone from fulfilling a contract, the studios can cancel the agreement without paying a penalty.

Next, 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 contributed reporting.

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