Hollywood’s major movie studios are remaking their executive structures to adapt to the steaming age, which means reducing theatrical marketing infrastructure. This week, Sony Pictures combined theatrical, home video (includes DVD) and TV executive structures, and reduced headcount.
“Moving forward, we will be combining our theatrical, home entertainment and television distribution marketing teams in the U.S. and adopting a regional model for both businesses internationally,” Sony co-president Josh Greenstein wrote in a memo sent to staff. “This will allow for better coordination and enable us to apply the collective expertise of our teams across all platforms throughout each title’s life-cycle, and to respond cohesively to new and emerging release patterns.” Greenstein’s purview as president is across all major-studio functions after being promoted from the marketing side.
Expect some variant of that consolidation to sweep across the industry as major studios and independents orient to the video streaming window, pioneered by Netflix, as their primary focus. Staff reductions are also possible, especially in marketing/distribution as physical media disappears that requires manpower to manage.
On being less manpower intensive, movies are now delivered to cinemas via compact digital hard drives, which replaced bulky celluloid film reels. Also, DVD discs are in decline, as consumers migrate to Netflix and other seamless online platforms.
Walt Disney unveiled its streaming-motivated organizational restructuring in mid-October creating the Media and Entertainment Distribution group, which pools oversight and content creation. Media/Entertainment executives will then decide where to best place new content. Interestingly, Disney is the biggest supporter of cinema because its tentpole—glossy blockbuster movies—accumulate huge box office globally. Marketing was not a big focus in the recent Disney revamp.
“Under the new structure, Disney’s world-class creative engines will focus on developing and producing original content for the Company’s streaming services, as well as for legacy platforms, while distribution and commercialization activities will be centralized into a single, global Media and Entertainment Distribution organization,” says a Disney press release.
In essence, the reorganizations knock down silos—a TV series group producing for basic cable TV networks with an associated dedicated marketing organization, for example—replacing various vertical structures for a centralizing operation.
It sounds good at first glance but observers argue this muddles has authority internally for each individual movie/TV series. Also, responsibility for profit-and-loss on each title is less clear as executives are decoupled from control of specific content, because decision-making and oversight gets pooled.
In earlier executive flow-chart reorganizations, NBCUniversal and WarnerMedia also centralized some functions, though marketing wasn’t central.
A “Hollywood Reporter” article by Natalie Jarvey noted: “Though the changes are meant to encourage collaboration across divisions and create a clearer path to project completion, some who do business with Disney are skeptical. WarnerMedia and NBCUniversal, which both have centralized creative decision making as they prioritize new streaming services, have faced similar criticism.”
Elevating streaming and orienting to an all-options-are-on-the-table may seem obvious but Hollywood content still rakes in more from non-steaming windows. However, the balance is shifting toward video streaming.
And placing a movie or TV show on a streamer can be more lucrative if the content company owns the hosting streamer. Examples are Disney+ and ViacomCBS’s CBS All Access (soon to be renamed Paramount Plus early next year-adopting the name of the major studio that is a corporate sibling).
Simply put: the best content of major studios in the future will go to company-owned streamers, because a successful streaming platform creates huge value for the studio’s parent company. An example is Disney placing “Star Wars” universe spinoff “The Mandalorian” TV series on its new Disney+ streamer, not one of its traditional linear TV channels or licensing to a third party..
An exception might be a brief cinema release that creates consumer awareness and excitement for a movie that then could land exclusively on a corporate sibling’s streaming platform. That would dip into two revenue pools and let the halo from an initial cinema run shine on the same movie’s play on a streamer.
It’s early days and expect new release patterns to be tried and some will eventually become industry standards that are re-used.
Hollywood has come full circle from initially dismissing video streamers. Back in 2010, the boss of Warner Bros. studio’s parent poo-pooed Netflix saying “is the Albanian army going to take over the world? I don’t think so.”
Well, now it has.
Related content:
- Sony Combining Theatrical, Home Entertainment & TV Distribution Marketing Ops Under Josh Greenstein & Keith Le Goy, Resulting In 35 Layoffs; Andre Caraco To Exit
- Layoffs Hit Sony Pictures Marketing, Distribution Operations
- The Walt Disney Company Announces Strategic Reorganization Of Its Media And Entertainment Businesses
- Hollywood Marketing Execs Grapple With Accelerating Change
- Disney’s Streaming Pivot: How Will New Structure Work in Practice?
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