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Hollywood faces the great contraction as economic realities bite

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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.

Ahron Young is an award winning journalist who has covered major news events around the world. Ahron is the Managing Editor and Founder of TICKER NEWS.

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Without drastic change, global IT outage will hit again

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Elements of Friday’s global IT outage have occurred before and until more contingencies are built into networks, and organisations put better back-up plans in place, it will happen again.

A widespread Microsoft outage is affecting Australia’s supermarkets, banks, telecommunications companies.

There are also reports of outages in Japan and the United States.

The ongoing widespread outage is reportedly related to US-based cybersecurity provider CrowdStrike. Its ‘Falcon sensor’ is installed on many business computers to gather security data.

In a statement to Ticker News, StickmanCyber said:

“Multiple StickmanCyber security engineering and our 24×7/365 security operations teams across the country support reports that this outage is related to a CrowdStrike update. 
 
“It is our understanding that any business running versions 7.15 and 7.16 are affected by the outage, but 7.17 seems to be ok. We are waiting on official advisory from CrowdStrike on these findings but doing our best to help affected customers. It’s a lesson to always update your software, but obviously this is an extreme example. IT security tools are all designed to ensure that companies can continue to operate in the worst-case scenario of a data breach, so to be the root cause of a global IT outage is an unmitigated disaster.
 
“Crowdstrike support is offering a workaround to customers. It claims users may be able to fix the issue by booting windows in safe mode or in the Windows Recovery Environment and deleting a file named “C-00000291*.sys”.   

“CrowdStrike is aware of reports of crashes on Windows hosts related to the Falcon sensor,” the company said in a statement on its website.

“Symptoms include hosts experiencing a bugcheck\blue screen error related to the Falcon sensor. Our engineering teams are actively working to resolve this issue and there is no need to open a support ticket.

“Status updates will be posted below [on the Microsoft websit€0 as we have more information to share, including when the issue is resolved.”

Laptops down

Thousands of users across the world reported problems with Microsoft services to Downdector.com, a website that tracks service disruptions.

Microsoft laptops suddenly restarted across Australia on Friday afternoon.

Outage website Downdetector shows issues across companies including NAB, Bendigo Bank, Telstra, CBA, Google.

Microsoft response

As users take to social media to complain, Microsoft reported a service outage for its Microsoft 365 apps and services, affecting businesses and users across the world.

“We’re investigating an issue impacting users ability to access various Microsoft 365 apps and services,” Microsoft 365 Status said on X early Friday.

Microsoft didn’t respond immediately to a request for comment.

Frontier airlines

 

The outage forced low-cost airline Frontier to cancel some flights. “Our systems are currently impacted by a Microsoft outage, which is also affecting other companies,” Frontier said in a statement. “We appreciate your patience.” The carrier said it would offer refunds to affected passengers.

The Federal Aviation Administration said Frontier asked it to pause the airline’s departures across the U.S. Thursday night. The ground stop was later lifted. 

 

 

 

 

 

 

It said it is “observing a positive trend in service availability” as it continues to mitigate the problem.

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