Dear Gossips,
As we float through the liminal space of the last week of the year, there is something to keep in mind about 2022—it’s the year the Paramount consent decrees dies in the US. At 12:01 AM on January 1, 2022, movie distributors will be able to buy movie theaters, recreating the brick-and-mortar vertical integration of the early Hollywood era. The best case scenario is that studios don’t bother, that between massive investments in streaming, and the digital vertical integration it offers, and COVID-induced losses, no one wastes resources acquiring movie theaters. The worst case scenario is that the biggest studios buy up theater chains and create walled gardens for cinema, which could put even more pressure on mom-and-pop local operations and create movie deserts for areas limited to only one theater. For instance, if the only theater in your area is a Regal cinema, and Disney buys Regal, you are now at the mercy of whatever Disney feels like showing in your area, with no other options.
I am not terribly optimistic about the future of the theatrical business right now, despite Spider-Man: No Way Home cracking a billion dollars for the first time during the pandemic, because a shift for primary viewing to be in the home was always coming, the pandemic just hastened it. Films like Spider-Man will always have a place in theaters, but smaller movies, particularly those by up-and-coming filmmakers without name recognition with audiences, and even films from Big Name Filmmakers that skew toward adult audiences, such as Steven Spielberg’s West Side Story, will find themselves banished to streaming debuts. Maybe day-and-date releases if the filmmaker has enough clout to demand it, but streaming at home will be the primary mode of viewing movies. Theaters will be the land of tent poles, as long as tent poles keep propping up the industry, and then whatever money-making blockbuster thing comes after comic book movies. (My absolute worst projection is that Disney buys a theater chain and Disneyfies your multiplex into a mini-theme park experience, complete with costumed characters and privileged ticket access.)
It’s not the end of the world to watch movies at home. Factoring in things like cost and accessibility issues, streaming at home can be a better proposition for many. But you also look at how the Hollywood model is built on theatrical revenues, and you wonder what’s going to happen when that market bottoms out. In the 2000s, the bottom fell out of home video and stars lost a chunk of downstream revenue and suddenly every actress had a lifestyle brand, and every actor had an alcohol label. In the 2010s, we saw the mass celebrity expansion into makeup, skin care, hair care, and fashion, particularly lingerie, as the ancillary revenues from home video completely cratered. And now, with the squeeze on theatrical revenue, we’ve already seen Scarlett Johansson sue Disney over those back-end bonuses, which will likely be a thing of the past very soon.
There are two things to think about as we stand on the brink of a new era in Hollywood. One is what happens to movie theaters, and the other is how stars replace those bonuses. Some will have the power to demand massive up-front deals, like Rian Johnson and Daniel Craig earning $100 million apiece for Knives Out 2 and 3 from Netflix, but even among the A-list, deals like that are uncommon. Most movie stars are going to be fighting over increasingly smaller pieces of the pie, particularly as some of these streaming platforms start going bust, which they will. What new moneymaking scheme will Hollywood latch onto as theatrical bonuses go away? NFTs and cryptocurrency seem like a good bet, at least until those bubbles burst. But what comes after? What lifestyle product or incomprehensible digital deal will celebrities endorse next? I shudder to contemplate it.
On another note, I would like to thank everyone for the kind words as I stepped into my new role as deputy editor, and also for gossiping with us through the most ridiculous year on record. Here’s hoping 2022 is slightly less ludicrous than 2021.
Live long and gossip,
Sarah
