Bob Greenblatt, the chairman of WarnerMedia Entertainment, was among those ousted this month as Warner Media emptied the executive suite at the once-great studio that built Hollywood. Photo / AP
The streaming services are in charge, and bringing a ruthless new culture with them.
For decades, the best thing about being a Hollywood executive, really, was how you got fired. Studio executives would be gradually, gently, even lovingly, nudged aside, given months to shape their own narratives and find new work, or even promoted. When Amy Pascal was pushed out of Sony Pictures in 2015, she got an exit package and production deal worth a reported US$40 million ($60 million).
That, of course, was before streaming services arrived, upending everything with a ruthless logic and coldhearted efficiency.
That was never more clear than on August 7, when WarnerMedia abruptly eliminated the jobs of hundreds of employees, emptying the executive suite at the once-great studio that built Hollywood, and is now the subsidiary of AT&T. In a series of brisk video calls, executives who imagined they were studio eminences were reminded that they work — or used to work — at the video division of a phone company. The chairman of WarnerMedia Entertainment, Bob Greenblatt, learned that he'd been fired the morning of the day the news broke, two people he spoke to told me. Jeffrey Schlesinger, a 37-year company veteran who ran the lucrative international licensing business, complained to friends that he had less than an hour's notice, two other people told me.
"We're in the brutal final scenes of Hollywood as people here knew it, as streaming investment and infrastructure take precedence," said Janice Min, the former Hollywood Reporter co-president who did a brief stretch as an executive at streaming platform Quibi. "Politesse and production deal kiss-offs for those at the top, and, more importantly, the financial firehose to float a bureaucracy, seem to be disappearing. It's like a club, already shut down by the pandemic, running out of dues to feed all its members."
The drama at Warner marked a turning point, in part because of its huge size and the high profile of the iconic companies under its umbrella: Warner Bros., HBO and CNN among them. And it comes as Hollywood power is conspicuously absent from the national conversation. Washington is consumed by TikTok, the Chinese-owned video-sharing app that's the most successful new content platform in the world. TikTok has succeeded as Quibi — Hollywood's premium alternative to user-generated content — struggles to find an audience. The California politician just nominated for the vice presidency comes from San Francisco, and doesn't particularly advertise her Hollywood ties (though she was all over Hollywood insiders' Instagram last week).
The corporate shifts at WarnerMedia and NBCUniversal in recent days signal that the technological shift you've been reading about for years is finally taking concrete form, accelerated by the pandemic. The new leaders of the industry want to talk about digital products and subscription marketing. The most interesting profiles of entertainment executives are, literally, obituaries, notably the catalogue of victories and vices that marked the career of Viacom's founder, Sumner Redstone.
(Like much of his industry, Redstone, who died last week at age 97, held on far longer than anyone expected. Former Viacom employees recalled that it had been more than six years since, the then- chief executive, Philippe Dauman, asked his aides to draft a stirring eulogy for Redstone, who was 90 at the time, and to create a website in his memory. But Dauman was fired four years ago, there are no plans for him to deliver a eulogy and the website remains on some forgotten digital shelf.)
Much of what's happening now in Hollywood, too, has that feeling of a death so long anticipated that you half assumed you'd just missed the funeral. At WarnerMedia, the executives' firings came after the company badly botched the introduction of a streaming service whose name — HBO Go, HBO Now, or HBO Max — nobody could figure out. The service has primarily distinguished itself so far by its energetic and unsuccessful attempts to spin about 4 million people who have actually used the service into a number north of 30 million.
"It's the great reckoning," another top executive who was abruptly forced out, Kevin Reilly, told The Hollywood Reporter.
That reckoning is mostly driven by the unglamorous economics of streaming, although it also overlaps with this year's better-known reckoning, over race and gender. Studio executives have been mortified by the "About Us" pages with profiles of their leaders — pages that are full of white faces as the push for representation adds new pressure for change.
But the underlying rationale is economic, and obvious. "The golden rivers of money from cable TV are drying up. With the only growth business for most of the companies coming from streaming, which isn't a profit maker yet, the companies have no alternative than to cut costs," The Information wrote. (News of Warner's planned layoffs leaked to that Silicon Valley-based business publication, not the usual Hollywood trades, adding insult to injury.)
The new leaders in the industry do not come out of old Hollywood, which has seen its clubbiness and values fall into disrepute. The new WarnerMedia chief executive, Jason Kilar, spent the formative years of his career as the senior vice president of worldwide application software at Amazon, known for its grim corporate culture. He ran Hulu, then left it after clashing with its legacy media owners. At WarnerMedia he promoted an executive who hadn't made her career inside the Hollywood club, Ann Sarnoff, to head his content division.
Many of the new leaders are admirers of the culture at Netflix, which is hardheaded and unsentimental: Executives eat in the cafeteria and have a corporate philosophy that holds, in an admired slide presentation, that employees are like athletes. Managers should always be looking to trade up, and fire even high performers if a better player comes along. (The well-regarded human resources executive who developed the presentation with the company's chief executive, Reed Hastings, was, herself, eventually fired.)
WarnerMedia's Kilar told me in an email that his cuts and reorganisations were aimed at pushing company "from a wholesaling mind set to a retailing mindset" — that is, from the old studio hitmakers' handshake deals with distributors to a techie's focus on user-friendly streaming interfaces and subscriber retention.
That's an unromantic vision that still rankles many in the industry.
"This is the difference between people who got into the movie business and people who are in the content business," said Terry Press, the former president of CBS Films, whose division was eliminated in a merger with Viacom earlier this year.
The industry's cultural shift is also wiping out fiefdoms. A day before the WarnerMedia firings, NBCUniversal forced out the embattled chairman of its entertainment division — a storied role held in the past by, among others, Greenblatt — and announced it wouldn't replace him. Instead it's shearing off executive roles and merging most of what were once separate operations across channels as varied as Syfy and NBC. Similarly, WarnerMedia combined its crown jewel, HBO, and the workaday cable channels TBS and TNT and the struggling new streaming service.
The companies deny that the organisational changes will affect what you see. ("The brands will maintain their distinctiveness, and there won't be visible differences to the viewer," an NBC official said.) But that's not how it usually plays out in declining industries. The moves echo those taken by long-declining publishing industry institutions like the magazine company Condé Nast, which has gradually combined the roles of executives at magazines like Vogue and Vanity Fair, all the while insisting that they weren't diminishing the inevitably diminished brands.
And at WarnerMedia, the challenge is particularly existential. We won't know for a couple of years whether this month's layoffs signalled a successful shift, as Kilar and AT&T's chief executive, John Stankey, intend, or whether they were simply a clumsy attempt to mask the company's remarkable failure in the streaming world. HBO Max has barely been able to compete with Netflix and Disney, despite having a service full of beloved shows and movies, from the best of Alfred Hitchcock to HBO's long hot streak that includes, this summer, the releases of Lovecraft Country and I May Destroy You.
With the purge of top creative executives completed, the responsibility for what's inside HBO Max and the cable TV channels will fall largely on Casey Bloys, an HBO veteran who is now overseeing all of WarnerMedia's entertainment content. He has, he said in a telephone interview, told his new team that he wants programming on the streaming service that will complement the buzzy, complex adult shows like Watchmen and Succession that HBO is best known for. He is pointed to straightforwardly fun titles that appeal to younger audiences like Green Lantern and Gossip Girl as models for broadening out the service. His success will depend, in part, on the company's ability to clearly market its streaming service and perhaps more on whether AT&T is really willing to keep spending on TV like Netflix and Disney.
Bloys is a great programmer, not a power player or politician of the old model. Indeed, the studio bosses seem to have lost their central place in the American power structure and become simply the well-compensated employees of ordinary companies, with ordinary attention to the bottom line. There is one exception, Disney, which also proves the rule: Bob Iger's Disney+ started just in time to catch the streaming wave and provide a business that met the coronavirus moment.
"Disney will remain relevant into the future," said Barry Diller, who once headed Paramount and Fox and is now chief executive of the digital media company IAC. "All of the rest of them are caddies on a golf course they'll never play."
Written by: Ben Smith
© 2020 THE NEW YORK TIMES
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