Is the film industry dying?
The film industry contraction has many people worried for their jobs. What’s happening, what to expect and what can you do?
“I think I first heard that the film industry was dying about 35 years ago, and I’ve been hearing it ever since. The industry has been in a constant state of flux from its very inception and will continue to be so.
If you get used to how the industry is for a brief moment when you’re comfortable in it, then the flux will quickly feel like it’s dying. But if you accept the constant change that’s the nature of this business, you’ll be able to better meet the challenges.” La_Nuit_Americaine
Why is the film industry slow?
The entertainment industry is going through a “contraction” felt across all entertainment sectors, including film, TV, animation, and gaming.
We all know the 2023 strike was the reason for the abrupt film production shutdowns, but the slow bounce-back is causing worry. Many thought once productions set schedules, ordered scripts, and booked studio space, cameras would be rolling sometime in January. But in fact, studios are cutting projects. This pilot season has three pilots scheduled to date, whereas, in past years, as many as a hundred pilots might have been normal. As of 2024, production levels are uncomfortably low.
“History offers no point of comparison to the present. The pandemic year aside, we have to look very far back – farther back than permit records allow – to find a time when production levels stayed so low, for so long.” Paul Audley, President FilmLA
There is not one sweeping answer for the slowdown; one circumstance or issue seems to lead to another. And, each film community is dealing with specific issues for their area. However, the entertainment industry will eventually bounce back. Let’s look at some of the reports coming out and dispel rumors and fears.
In this issue:
Why is the film industry slow?
More strike action in 2024?
Is AI taking over the film Industry?
When are the jobs coming?
What to do in the meantime.
Why is the film industry slow?
Streaming Wars
Big spending resulted in streaming wars, where legacy networks fought to get into the steaming business while new companies like Amazon and Apple entered with expensive content.
Netflix claims the strikes didn’t have a huge impact on its slate, but it did release about 25 percent fewer series in the second half of 2023. Nonetheless, big streaming companies are making financial cuts, including layoffs and reduced spending. They are pausing to assess their financial positions before moving forward with new projects.
Streaming platforms are changing their business model to include two subscription tiers, one with advertisements and a pricier one with no ads. The new model is intended to offset the costs of hiring A-List actors and producing spectacular shows like “The Lord of the Rings: The Rings of Power,” the most expensive series ever made.
The current TV budget cutbacks follow a decade of escalating prices fueled by the streaming wars as attracting big talent and big shows was considered paramount in the pursuit of subscribed growth….With the focus now shifting to profitability, the market is undergoing what many describe as a correction. The question is how long it will last….some predict the current contraction to last a couple of years. - Deadline
The Cost of Business
There are other reasons for reduced spending and fewer green-lit shows. First, studios are facing a 10% increase from inflation, making it more expensive to finance productions. Individually we are all feeling the rise in food and gas prices. It’s not a surprise productions are too. “The price of everything from labor to transportation to securing materials for sets have all climbed to dizzying levels, making it harder for movies to stay on budget.” - Variety
Lumber prices are very high, leading to the cost of sets “being at least 15 percent more expensive to build than they were just last year” - Hollywood Reporter
“It feels like the whole business has pressed the reset button at the moment. That’s both streamers and studios. We’ve gone through a period of horrible uncertainty.” -Screen Daily
Secondly, productions are recovering from increased spending on COVID protocols and lost revenue due to the strike, which “cost the entertainment industry roughly $5 billion nationwide.” Michigan Journal of Economics
COVID protocols had a financial effect on the film and television industry. Production companies spent up to 10% of their budgets on PPE. In 2022, I worked on a Netflix movie that spent three million extra to keep the crew safe during the pandemic, and it nearly sank them. They intended to make a series of seven movies, but they pulled the plug after three. This financial burden was felt across the industry with COVID protocols, “adding hundreds of millions of dollars to the cost of making movies and TV shows throughout the pandemic.” - Deadline
Acquisitions, Consolidation and Hollywood Deals
Big business is happening at the top level of film studios where giants like Disney bought Hulu, Amazon bought MGM, and Lionsgate bought Entertainment One. This disruption also plays a part in the slowdown in series renewals and new green-lit productions.
These groundbreaking deals… [are setting] the stage for transformative trends that are reshaping the media and entertainment industry. - Forbes
More Strike Action in 2024?
IATSE is planning on a potential strike authorization vote if deals on two major labor contracts are not reached around the time they expire on July 31. - Hollywood Reporter
We’ve barely started to recover from the strikes of 2023, and now there are more union negotiations. IATSE is first with The Basic Agreement covering 13 West Coast locals in the union, while the Area Standards Agreement covers 23 locals across the rest of the United States. The Actors’ Equity Guild in the United Kingdom is also heading to the negotiating table.
I’m not sure how film production jurisdictions outside these union districts will be affected if strike action occurs. It could mean uninterrupted production work, or other union districts may walk out in solidarity. The action taken in these areas will be determined by the local union rules.
Is AI coming for our jobs?
Not today, but maybe sometime in the future.
“Even if Hollywood wanted to use generative AI today, content created by AI cannot be copyrighted. …Studios will have to be very careful not to integrate generative AI into their process. They’re basically producing public-domain works, so there’s a real risk of incorporating generative AI into the workflow. - Edward Klaris, Attorney, Klaris Law
When do we push the panic button?
The day an AI show or movie is broadcast that the audience doesn’t hate will be the breaking point for the current studio model. Industry folks predict we have 5-10 years.
But remember audiences are very critical (to put it kindly). There will be no mercy for anything less than a spectacular cinematic experience. Think back to the de-aged faces in Martin Scorsese’s “The Irishman” that were mocked online. This uncanny valley experiment cost Netflix $160 million. No was left begging for more - in fact I think it traumatized a few people.
Then there are those trending Sora OpenAI videos causing panic. These videos are impressive only because a computer created them. The footage isn’t engaging, the imagery is janky and the actors can’t talk. Sora can only generate 10-15 seconds at a time. More importantly, the prompts are merely suggestions that Sora (like Midjourney) can interpret however they wish.
I think most of us are just impressed it can do anything, which is a low bar. When a Production Designer doesn’t get the vision of a film set right, they’re fired. Open AI can’t sell a product that sucks at taking direction, so the film industry is safe from the AI invasion, for now.
When are the jobs coming?
It will be a slow pickup over 2024, with a noticeable jump in April, mainly due to the start of the tax year. No one thinks the IATSE union negotiations will end in strike action. Most negotiating points were on the bargaining table for the writer's and actors' union contracts, which should make talks go faster. Also, studios need to get back to producing content to make money.
Most importantly, the studios and streamers have no intention of producing large numbers of shows again. There was an all-time high number of productions between 2017 and 2019. Unfortunately, viewers aren't watching everything created. Also, there's a drop in theatrical releases because audiences are not lining up like they once did because of the convenience of streaming services. It's a catch-22. Time will tell how things balance out in the future.
In the meantime…
If you’re at home wondering about the lack of work, know you’re not alone. Roughly 60% of film crew around the world are not working. The industry will bounce back, just much slower through 2024 and 2025. In the meantime, here are some survival tips:
If you’re financially struggling, give yourself permission to get any job. I know a few art department people who have landed unfilm-related jobs; from working in an architecture firm to driving an Uber. A temporary job is a great way to feel empowered and get yourself a paycheck. When the industry bounces back either quit or enjoy your new job security.
Arrange a meetup with people from the art department.
If you are working, reach out to art department friends and make them feel in the loop.
Review, refresh, or rebuild your portfolio. This one’s on my to-do list. I'm not super excited to do it, but I will eventually.
Show off your work on Instagram. Get to know the friendly prolific art department community online.
Learn some AI skills. This could be as simple as becoming more aware of what is possible. You know the old adage knowledge is power.
Try new software plug-ins and integrations. I recently discovered Adobe Exchange, which has interesting plug-ins to improve your design and productivity.
Dive into video tutorials. I watched Annie Atkins's online class and caught up on the 2024 Adobe updates on YouTube.
Learn a brand new design skill. I’m signed up for a sewing class.
Be kind to yourself. Soon everyone will be working again and complaining about having no free time.
research links
2024 is going to be a rough year for TV, Wired
Game industry layoffs in 2024, Kotaku
Google, Alphabet and Amazon Layoffs, APNews
Hollywood Merger Mania, Filmtrack
Deals the Shook up the Entertainment Space in 2023, Forbes
Hollywoods Deal Consolidation, Hollywood Reporter
Inflation Impact on Movie Business, Variety