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Disney Prioritizes Streaming as Theater Industry Falls Further Behind

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  • Disney announced major restructuring plans Monday aimed at prioritizing streaming, a major move to come from one of the most powerful studios in the entertainment industry.
  • Under its new structure, Disney will form a whole new arm called Media and Entertainment Distribution Organization, which will be responsible for distribution and ad sales as well as overseeing the company’s streaming services.
  • CEO Bob Chapek says this is in line with how consumers want to take in content. While many see it as a knee-jerk reaction to the coronavirus pandemic, he said the decision was actually more of an effort to move towards the future of content viewing.
  • Regardless of the reasons behind it, Disney’s move towards streaming is a blow to theaters, which are already suffering during the pandemic. Early Tuesday, AMC predicted it could be out of money by the year’s end as studios continually choose to push back their movie release dates, or release them through VOD or streaming platforms.

Disney Prioritizes Streaming

Disney announced major restructuring plans Monday aimed at prioritizing distribution and content creation for its streaming platforms. 

The company is forming a new Media and Entertainment Distribution Organization, which will be responsible for distribution and ad sales as well as overseeing the company’s streaming services. On the content creation side, responsibilities for funneling programming to distribution will fall on three divisions at Disney.

Studios will focus on branded theatrical and episodic content based on franchises for theatrical exhibition and streaming services like Disney+; general entertainment will work on episodic and original long-form content for streaming, cable, and broadcast; and sports will focus on live sports and other related content.

The Media and Entertainment Distribution Organization will be headed up by Kareem Daniel, who has been working at the mouse house. Disney CEO Bob Chapek said this new strategy will support its plans to accelerate its direct-to-consumer business. 

“Managing content creation distinct from distribution will allow us to be more effective and nimble in making the content consumers want most, delivered in the way they prefer to consume it,” he said in a press release. 

This is a huge announcement to come from one of the leading box office giants. Putting streaming ahead of movie theaters is a grave sign for theaters, which are already severely struggling during the coronavirus pandemic. However, while speaking to CNBC, Chapek claimed that COVID-19 complications were not the driving force in this decision, consumer preferences were. 

“Right now, [consumers] are voting with their pocketbooks and they’re voting very heavily towards Disney+. What we want to do is make sure we’re going to go the way that consumers want us to go,” Chapek explained.

“As you mentioned, COVID-19 impacted all of our traditional distribution businesses, but this is even more than reactionary, this is really progressive, this is looking out with a vision towards where we see the world going and to where we see consumers interacting with Disney+, ESPN+ and Hulu and where it’s going to go in the future.” 

Chapek believes this strategy allows Disney to make more objective decisions when it comes to distribution, as opposed to seeing content as predetermined to either land in theaters, on a network, or elsewhere. 

Streaming Becomes Dominant

Disney is also not the first major studio to recently shift to prioritizing streaming. Back in August, WarnerMedia announced a huge management shakeup as well as the departure of top executives all in an effort to put their streaming service, HBOMax, first. 

Movie theaters are not exactly pleased with moves like this since they are banking on studios for new content so they can stay alive through the pandemic. But studios have constantly been either delaying films far down their release calendars, or opting to release them through VOD or streaming, something that those in the theater industry have been vocally against.

Disney recently faced backlash from The International Union of Cinemas after announcing that one of its biggest ticket pictures, the new Pixar film “Soul” would be going directly to Disney+. 

“The decision on Soul is doubly frustrating for operators who were counting on the release after the film was previewed at a number of key European film festivals,” the union wrote in a statement. 

“Decisions to postpone titles, to bypass cinemas and the value they create are extremely disappointing – and concerning – and will only delay the day that the whole industry is able to put this crisis behind it,” the union continued.

“It is not only cinemas and audiences who are missing out – this situation must surely also be deeply frustrating for the creators and talents who want to see their films on the Big Screen.”

Issues for Movie Theaters

The fight theaters are being forced to confront cannot be understated. The pandemic is making it nearly impossible for the industry to rebound from its financial losses. On Tuesday morning, AMC said in a public filings report that it could run out of money by the year’s end. 

“Given the reduced movie slate for the fourth quarter, in the absence of significant increases in attendance from current levels or incremental sources of liquidity, at the existing cash burn rate, the Company anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021,” the top movie chain wrote. 

AMC said that theatergoing at its sites is down 85% compared to this time last year. On top of social distancing requirements meaning that theaters can only be partially filled, the desire to go to theaters is also lacking. A poll from Variety showed that as of October, just over 20% of adults in the U.S. feel very or somewhat comfortable going to the movies. While this is an increase from how many felt comfortable earlier in the pandemic, it is still not enough to fill seats.

See what others are saying: (IndieWire) (CNBC) (Variety)

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Joe Rogan Says Grimes Did Not Give Dave Chappelle COVID-19

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  • Comedian Dave Chappelle is under quarantine after testing positive for COVID-19. He is asymptomatic and his remaining shows in Austin, Texas have been canceled.
  • The news comes just days after Chappelle was photographed with Joe Rogan, Elon Musk, Grimes, and several others backstage at one of his Austin performances.
  • “Because people are asking, I was not exposed to the person who had covid and I have tested negative every day this week,” Rogan wrote on Instagram Friday. “Also, the person that gave covid to Dave was NOT Elon’s partner @grimes.”

Chappelle Tests Positive

Comedian Dave Chappelle has tested positive for coronavirus and is currently under quarantine, according to one of his representatives.

In a statement to The Hollywood Reporter, that rep also confirmed that he is currently asymptomatic and has canceled all of his remaining shows at Stubbs Waller Creek Amphitheater in Austin, Texas.

“Chappelle has safely conducted socially-distanced shows in Ohio since June 2020 and he moved those shows to Austin during the winter,” the statement read.

“Chappelle implemented COVID-19 protocols which included rapid testing for the audience and daily testing for himself and his team. His diligent testing enabled him to immediately respond by quarantining, thus mitigating the spread of the virus,” it continued.

Joe Rogan Speaks Out After He Was Photographed With Chappelle

Two of the remaining Austin shows were supposed to include fellow comedian Joe Rogan. Rogan took to Instagram Friday morning to announce that they will be rescheduled as soon as possible.

Still, many fans had questions about Rogan’s current state of health. The news of Chappelle’s positive test comes just days after he was photographed maskless with Rogan, Tesla CEO Elon Musk, musician Grimes, and several others backstage at one of his Austin performances.

Since Grimes, who is also in a relationship with Musk, recently had COVID, many were concerned that she may have exposed the group. Others wondered if Chappelle may have spread it.

Rogan eventually updates his Instagram caption to dismiss the ideas.

“Because people are asking, I was not exposed to the person who had covid and I have tested negative every day this week,” he wrote.“Also, the person that gave covid to Dave was NOT Elon’s partner @grimes.”

See what others are saying: (The Hollywood Reporter) (CNN) (AP News)

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Netflix Passes 200M Subscribers as Other Streamers Struggle With Retention

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  • In a letter to shareholders, Netflix said it has hit over 200 million subscribers following a successful year of growth.
  • The pandemic gave Netflix a significant subscriber boost in March and April. The company continued to perform well even in its final quarter, gaining 8.5 million subscribers when it was only projected to add 6 million.
  • The data also highlights how relatively unaffected Netflix has been by new streaming services entering the market. While companies like Disney+, HBO Max, and Peacock continue to grow, they also struggle to retain the subscribers that sign up.

Netflix Passes 200 Million Subscribers

Netflix has topped 200 million subscribers following a year of strong growth in 2020.

In its Tuesday letter to shareholders, Netflix announced that it added 8.5 million subscribers in its fourth quarter. This exceeds projections, which estimated the streaming giant would only add around 6 million. In total, Netflix gained 37 million new memberships throughout 2020, bringing the company to 203.6 million subscribers.

Pandemic lockdowns gave Netflix a substantial boost in March in April. In the company’s first two quarters, it added a combined 25.7 million subscribers. According to data from the letter, Netflix had added over 10 million more subscribers by May of 2020 than it had by May of 2019.

When it comes to the success of their fourth quarter, Netflix pointed to shows like “Bridgerton” and “The Crown.” The fourth season of “The Crown” hit the platform in November, prompting many to return to older seasons of the show. Netflix claims the series has been viewed by 100 million households since it first aired in 2016.

Success Amid Growth of Competition

The year 2020 could have been a difficult one for Netflix as new streaming services entered the market. Disney+, Apple TV+, HBO Max, Peacock and more have all made waves with their original programming or by taking some of their brand’s content from Netflix to host on their own site. User-based content on YouTube and TikTok also became increasingly popular throughout the pandemic, further posing as a threat to Netflix. 

Still, it reached a massive milestone. 

“Our strategy is simple: if we can continue to improve Netflix every day to better delight our members, we can be their first choice for streaming entertainment,” Netflix said in the letter. “This past year is a testament to this approach.”

Netflix potentially sees Disney+ as the biggest competitor among new platforms. In its letter, the company noted that the streamer added 87 million subscribers in its first year. In a Q&A, Netflix CEO Reed Hastings seemed enthusiastic about this competition.

“It’s super impressive what Disney’s done,” he said. “It’s going to be great for the world that Disney and Netflix are competing show-by-show, movie-by-movie. We’re very fired up about catching them in family animation, maybe eventually passing them, we’ll see. It’s a long way to go just to catch them, and maintaining our lead in general entertainment that’s so stimulating like ‘Bridgerton,’ which I don’t think you’re going to see on Disney anytime soon.”

Streamers Struggle with Retaining Subscribers

Even as new streamers have had impressive years, there is one hurdle that many are still struggling to jump over: retaining the subscribers who sign up. The Los Angeles Times named Disney+, HBO Max, Peacock, and Apple TV+ in particular, writing that people create accounts with these services, watch the TV shows or movies they are interested in, and cancel once they are done.

An October survey from Deloitte said that 46% of respondents canceled at least one streaming service in the last 6 months, which is up 20% from January of last year. Most who had canceled said they did so because they had finished watching whatever programming it was that brought them to that service. 

Places like Disney+ and HBO Max are really vulnerable to this because they have banked on drawing people in with exclusive marquis titles like “Hamilton” or “Wonder Woman 1984.” However, since they are newer, they are still building their original programming catalog, meaning that people can quickly burn through highlight titles. 

See what others are saying: (Los Angeles Times) (Wall Street Journal) (The Hollywood Reporter)

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Paramount+ To Launch March 4

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  • ViacomCBS is launching Paramount+ in the United States and Latin America on March 4 before rolling out to other markets internationally later this year. 
  • The streaming service will be a relaunch and expansion of CBS All Access. It will include content from Nickelodeon, MTV, and more on top of the CBS-focused selection. 

Paramount+ Gets Launch Date

ViacomCBS will be launching its streaming service Paramount+ in the U.S. and Latin America on March 4 before rolling out in more countries throughout the year. 

It will be an expansion and rebrand of CBS All Access, the service the company currently offers that is used by nearly 8 million subscribers. Paramount+ will go beyond the CBS-centric content promoted there, including works from brands like Nickelodeon, MTV, BET, Comedy Central, and the Smithsonian Channel.

More details about their streaming strategy will be released during an investor event on February 24. Right now, ViacomCBS is boasting that the service will have over 30,000 episodes and movies in their catalog, which will also include live sports and breaking news. 

“The Paramount brand is known and loved all around the world, and is synonymous with great entertainment. It’s always brought people together, which makes it a perfect fit for a streaming service that’s uniquely positioned to do the same,” Josh Line the chief brand officer of ViacomCBS said during a brand announcement in September. “The Paramount+ streaming service will elevate ViacomCBS’ iconic family of brands.”

State of the Streaming Wars

Paramount+ has already announced a slew of original projects including a revival of “iCarly” and a series about the making of “The Godfather” titled “The Offer.”

The service is entering an already crowded battlefield as the streaming wars wages on. It will have plenty of uphill battles to fight since brand recognition for Paramount is not nearly as strong as it is for studios like Disney or NBCUniversal. It will also have to compete with Netflix, which leads the pack in subscribers and unveils new content regularly; HBO Max, which will be home to Warner Media’s new theatrical releases; and Hulu, which hosts original content as well as shows currently airing on cable and network television. 

ViacomCBS has not released information on pricing, but that will likely come during or before the February investor event.

See what others are saying: (Variety) (Deadline) (CNBC)

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