Incentives
California Shake-Up: Newsom Proposes Refundable Credits
Many states in the U.S. are creating lucrative tax incentive programs to steal away Californian productions, but Govenor Gavin Newsom is fighting back by making the state’s tax credits refundable. In this new proposal, the program will be extended for an additional five years and a total of $330 million will be set aside for tax incentives, starting in 2025. Currently, California’s credits are non-refundable and non-transferable, but under this new proposal, applicants will be entitled to a refund. According to Colleen Bell, Executive Director of the California Film Commission, this new plan “will give industry decision makers more options and the certainty they need to make long-term investments here in the Golden State. This will translate into more production-related jobs, spending and opportunity.” The refundable credit will benefit a wider range of productions, and people who apply for credits with “insufficient tax liability” will be able to earn a refund at a discounted rate. Other states currently offering refundable credits include Arizona, Maryland, Nevada, and New York. The film industry plays a vital role in California's economy, and Charles Rivkin, CEO of the Motion Picture Association, believes that the new proposal properly acknowledges the vital role that the industry plays in the state. Working with unions and other industry partners, the new tax program with boost creativity and empower filmmakers.
Streaming
Fast Times for Streamers: The Slowdown After a Year of Change
Last year, Warner Bros. Discovery merged in a $43 billion transaction, only to see a sudden subscriber slowdown following the merger. Netflix, who has set the pace for streaming since its inception, declared that they were losing subscribers as well. After a year of cost-saving techniques and schedule trimming, studios are hoping to start fresh in 2023 with a focus on strategy. One big realization facing the industry is that new platforms and content have been unable to deliver results that match pace with rising content spend. Some of the success of linear cable can be attributed to local bundling, meaning that channels receive contractual monthly revenue rather than relying on subscribers. Now that streaming model profits are not what they used to be, companies are reassessing their strategies. Many industry experts believe that bundles will arise out of necessity, and more users will turn to alternatives like ad-supported platforms (which also saw a boost in popularity last year). While some streamers never anticipated entering the world of advertising, other experts believe this was always in the cards. Most ad-supported streaming channels are viewed through smart TVs, and now, manufacturers like LG and Samsung are interested in creating their own proprietary platforms. Roku, another disruptive force in digital streaming, revealed plans to create their own streaming channels and smart TVs. Although pay TV reached a big milestone in the third quarter of 2022, streamers are off to a rocky start this year, which is shown in some double-digit stock declines. But Hollywood is getting creative as streamers eye new and interesting ways to bundle their products in order to reduce churn.
Sports
End of Season Stats: Pro Football Delivers Record Viewership
The 18-week NFL season has ended, and it delivered record viewership across Fox, NBC, and CBS. The 10 Sunday games on CBS had an average of 23.5 million viewers during the 4:25 p.m. spot. According to the network, a total of 105.2 billion minutes were watched by viewers last season, including audiences on CBS Sports. The last Bills-Patriots game on the channel brought in 22.7 million viewers—a 35% increase from last year's final game. On Fox, games averaged 19.4 million viewers—a 4% increase from last year's 18.6 million. The Fox network has a special football broadcast offering—America’s Game of the Week—which averaged 24.1 million viewers and is projected to be the most watched TV program for the fourteenth year in a row. This was also the best season of America’s Game of the Week since 2019. Lastly, NBC’s Sunday Night Football also achieved its best viewership since 2019 with an average of 19.9 million viewers and a total of 72 billion minutes watched. The last NBC game, which was Lions vs. Packers, averaged 23.6 million viewers and became the largest end-of-season game on the network in the last six years. A total of nine games on the network had more than 20 million viewers, which is an increase from the five games from last season that cleared that bar. While these broadcast numbers are large, viewership is likely larger, thanks to the increase of streaming. ESPN, ABC, and other sports streamers have yet to release their viewer data or share exact numbers.
Measurement
Hollywood’s Tech Future: CES Highlights Studio Engineering Trends for 2023
Recently, Fox, NBCUniversal, Paramount, TelevisaUnivision, and Warner Bros. Discovery launched a joint committee, coming together to fight for better audiences. Together with Open AP, the networks will work together to test and vet the newest measurement tools and technologies that are hitting the market. The five companies released a joint statement saying that by creating this committee the companies can “can collaborate and accelerate the efforts to implement a new multi-currency future that fosters more competition, inclusivity and innovation and will ultimately better serve advertisers, agencies and consumers.” These companies often compete for audiences but have now decided to put down their gloves and work together. John Halley, President of Paramount Global U.S. Advertising Sales, believes that this will give the company time to act and make better content. As companies come to rely less on measurement giant Nielsen, advertising companies like iSpot, VideoAmp, ComScore, and Samba are introducing newer and more experimental offerings that better capture audience metrics. But Nielsen is still in competition with the upcoming release of NielsenOne, which promises to more accurately calculate TV and streaming audiences (though the company has yet to regain accreditation from the Media Rating Council). These five networks hope to create and certify uniform ratings benchmarks by 2024 in advance of industry upfronts. The committee will also create a set of streaming data (typically proprietary data) that companies do not release to the public and verify all this information with third party auditors. While the committee launched with five members, there is an open invitation available to those seeking to join their mission.
Technology
AI Screenplays: Industry Writers Are Skeptical About New Tech
In November of 2022, an AI-powered chatbot called ChatGPT entered the scene with a free prototype that can create sophisticated poems, essays, and short scripts. The introduction raises the question of if and when automation is coming to film and TV writing. While experts remain skeptical of the technology in its current state, future advancements could mean massive changes for the industry. Experienced screenwriter John August (Big Fish, Aladdin) does not believe that the chat bot will be able to replicate the amazing work that writers do, but now that this tool does exist, it is imperative to start thinking of ways that AI can contribute to the creative landscape rather than limit artists. Wishing to remain anonymous, another showrunner spoke to The Hollywood Reporter about their belief that the bot will not replace professional writers, since it can’t create a script without substantial input. Some writers believe this automation tool can help by taking on time-consuming or mundane work, like formatting scripts or generating scene locations. Non-native English speakers might also be interested in using this tool to create more fluid writing in their scripts. While helpful, industry experts remain wary about modern technology, fearing it could eventually replace talent. In addition, there is a large question mark around copyright issues and how work created by AI will be protected by copyright law. ChatGPT, which was released by AI research company OpenAI, can produce material in seconds.
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