News
Hollywood faces the great contraction as economic realities bite
As Hollywood celebrities graced the red carpet in early January, a pressing concern loomed over the glitz and glamour: Hollywood is undergoing a significant contraction.
Seventeen industry insiders, including entertainment executives, agents, and bankers, have shared their perspectives with Reuters, collectively painting a picture of a shifting landscape in the television and film industries.
From a reduced number of original series and movies to increased scrutiny of budgets and mounting pressure on cinema profits, decision-makers acknowledge that the entertainment sector is adapting to challenging economic conditions.
Notable reduction
“The great contraction is upon us,” commented one anonymous veteran television executive. “I anticipate a notable reduction in both the quantity of content and the expenditure on content.”
The ongoing contraction will be a focal point as companies like Walt Disney (DIS.N), Warner Bros Discovery (WBD.O), and Fox release their quarterly results this month.
It also sets the stage for discussions regarding potential media mergers, including recent talks of a sale between the owner of Paramount Global (PARA.O) and Skydance Media CEO David Ellison, whose studio co-produced “Top Gun: Maverick.”
Analyst TD Cowen predicted a 7% decline in broadcast and cable television advertising by the end of 2023 compared to the previous year, with Disney experiencing an 11.7% drop in total advertising, as per LSEG.
Warner Bros Discovery reported a 13% reduction in advertising during the first nine months of 2023.
Digital advertising
Traditional TV, alongside print and radio, has faced challenges due to the rise of digital advertising.
The outlook for 2024 remains unfavorable, with TD Cowen projecting another 7% decline in broadcast and cable TV ad revenue. Despite media companies expanding their digital advertising ventures, traditional TV advertising still constitutes 80% of their total advertising revenue.
Streaming services, once hailed as the future of the industry, are grappling with profitability concerns after years of extravagant spending.
As the industry enters the “third act of the streaming wars,” production spending is expected to dip below 2022 levels, signaling a shift from the previously “unsustainable” investment, according to MoffettNathanson.
Subscription fees
Most streaming platforms have increased subscription fees while offering fewer new content, raising doubts about their long-term strategies, as noted by TD Cowen.
The number of scripted series is expected to witness a significant reduction from the peak of 633 shows in 2022.
A combination of Hollywood strikes and budget constraints led to a decrease in production, resulting in only 481 U.S. series released in 2023, as reported by market research firm Ampere Analysis.
Even industry leader Netflix (NFLX.O) reduced its scripted series output by more than one-third from 2022 to 2023, according to Ampere.
News
OpenAI prepares first consumer device amid revenue boom
OpenAI plans to launch a screenless smart speaker by late 2026, shifting focus to hardware amid significant revenue growth.
OpenAI plans to launch a screenless smart speaker by late 2026, shifting focus to hardware amid significant revenue growth.
OpenAI is gearing up to launch its first-ever consumer hardware device in late 2026. The product is expected to be a screenless smart speaker, signalling the tech giant’s move beyond software and into the world of physical devices.
The device comes after OpenAI acquired a promising hardware startup to accelerate development.
The company is also pushing a strategy to strengthen domestic manufacturing, working closely with U.S. manufacturers to secure efficient production of essential components.
Despite the progress, technical hurdles remain, especially around the device’s listening capabilities, which could delay the rollout.
This development comes on the heels of OpenAI reporting an annualised revenue of over $20 billion in 2025, representing a staggering 233% increase from the previous year. The combination of massive revenue growth and expansion into hardware marks a new era for the AI pioneer.
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Putin invited to Trump’s Gaza Peace Board
Putin invited to U.S.-led ‘Board of Peace’ for Gaza amid ceasefire efforts and reconstruction debates.
Putin invited to U.S.-led ‘Board of Peace’ for Gaza amid ceasefire efforts and reconstruction debates.
Russian President Vladimir Putin has reportedly received an invitation to join the U.S.-led ‘Board of Peace’ for Gaza, according to the Kremlin. The council, created by President Donald Trump, is designed to maintain a ceasefire between Israel and Hamas while overseeing the region’s reconstruction.
Kremlin spokesman Dmitry Peskov said Moscow will review the details of the invitation before responding. The board has already extended invitations to several world leaders, with some nations confirming their participation.
The proposal has sparked debate because the Trump administration reportedly requires participating nations to pay $1 billion to secure a permanent seat. Putin’s potential involvement also raises concerns, given his ongoing conflict with Ukraine.
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Trump escalates Greenland standoff as Europe weighs retaliation
Denmark boosts Greenland troops as Trump pushes U.S. control, prompting European leaders to seek diplomatic solutions amidst rising tensions.
Denmark boosts Greenland troops as Trump pushes U.S. control, prompting European leaders to seek diplomatic solutions amidst rising tensions.
Denmark has deployed additional troops to Greenland after President Donald Trump renewed his push for U.S. control of the island, linking the issue to what he claims cost him a Nobel Peace Prize.
The move has raised alarm across Europe, with leaders scrambling to prevent a fresh transatlantic crisis.
Trump has warned of tariffs against countries opposing American control of Greenland, calling the territory vital to U.S. security interests. Norway’s Prime Minister Jonas Gahr Støre has privately raised concerns with Trump, while EU officials assess potential coordinated countermeasures.
Despite the rhetoric, European leaders remain cautious. With U.S. influence deeply embedded in Europe’s defence and security framework, the bloc is keen to avoid further escalation as diplomatic negotiations continue behind the scenes.
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