Our team has predicted this almost a year ago in addition to the streaming wars that have occurred with the release of Disney+ and other platforms. If you missed my last article back in May about the history of how this impacted the film industry today, then grab a refresher here: FILM WARS: The Movie Thief and the Lost Monopoly
Vertical Integration (or monopoly) was the ambition of the Big 6 in the early 1920s when the film industry was young and stupid. Now over a century old, the film industry became old and stupid since everyone seemed to forget this particular golden nugget. In a Hollywood Reporter puff piece released on Monday, Disney officially announced its move to restructure their company to focus purely on vertically integrating their content for their streaming platform, Disney+.
[From Hollywood Reporter]
Earlier this month, the activist investor Dan Loeb sent a letter to Chapek and Disney’s board of directors, suggesting that the company really embrace the "transformational opportunity" of streaming by eliminating its $3 billion annual dividend and investing it entirely in content. "[M]eaningfully accelerating DTC content spend will further broaden the divide between Disney and its traditional media peers — AT&T’s WarnerMedia, Discovery, ViacomCBS, Comcast’s NBCUniversal and Fox — none of which have the financial capabilities to execute such a bold plan," Loeb wrote in his letter. In fact, Loeb argued that "with Disney’s superior tentpole franchises and production capabilities, we believe that the company can exceed the subscriber base of the industry leader, Netflix, in just a few years."
Follow the Bread Crumbs
What "content" is Loeb referring to? All Disney-owned content, making it the first major studio to truly re-embrace the vertical integration model in New Media. Most all other streaming platforms license movies and series from other studios, which is exactly how theaters run their businesses as well. Instead, Disney wants to restructure to build AND OWN from the ground up, essentially pushing out indie films and theaters completely.
Does this sound like some sort of conspiracy theory? Take a look at the timeline of only a handful of articles on the subject we've reposted just over the past 2 months:
- After the 'Trolls: World Tour' fiasco, the one that started it all for Disney was 'Mulan'. On Aug 4, Disney CEO, Bob Chapek, states 'Mulan' to release on Disney+ on Sept 4 and in select theaters worldwide (not in the US). The Deadline article further clarifies, "Specifically, Disney will be releasing the film theatrically in certain markets where the studio currently has NO ANNOUNCED LAUNCH PLANS FOR DISNEY+ and where theaters are open (i.e. China)." Their reasoning? Allegedly "piracy" issues, as if piracy doesn't exist in any country where they don't have Disney+. [Article]
- Furthermore, Chapek says, "We're looking at 'Mulan' as a one-off AS OPPOSED TRYING TO SAY THAT THERE'S A NEW BUSINESS WINDOWING MODEL." And yet, here we are as they just announced a new business windowing model bypassing theaters.
- Aug 10: Disney abandons physical media releases, essentially eliminating any 3rd party distributors to take any part of their sales. [Article]
- A spokesperson claims, "There are no plans to discontinue releases in a particular format. We evaluate each release on a case-by-case basis and pursue the best strategy to bring our content into consumer homes across platforms that meet a variety of demands."
- That is the same rationalized logic Amazon tried to use against 'A Child's Voice' even though traffic for the narrative was on the rise (regardless of being able to search pretty much ANY movie on Amazon whether available or not).
- Another Hollywood Reporter article on Aug 18 speaks of WarnerMedia and NBCUniversal refocusing on streaming content. The article also mentions Disney but doesn't go into detail at all; just mentions them in passing like its no big deal. [Article]
- Aug 20, Cineplex attempts to be the first theater chain to reopen for all Hollywood movies. [Article]
- Sept 6, Indie Wire outlines how Disney tacks on a buy-in fee to watch 'Mulan' on top of their subscription fee on their platform alone, further testing their vertical integration strategies. [Article]
- In an article by Anthony D'Alessandro posted by Deadline on Sept 16, he urges the union of exhibition and distribution over division to solve the financial crisis. [Article]
- On Sept 23, some filmmakers speak out to tell audiences to NOT go see their films in theaters. [Article]
- On Sept 30, the National Association of Theatre Owners (NATO), the Director's Guild of America, the Motion Picture Association, and other notable filmmakers warn Congress that theaters will "go extinct" without additional aide. [Article]
- On Oct 5, major theater chain Cineworld announces its closure due to a "lack of studio product". [Article]
- Just last week on Oct 8, Pixar (Disney-owned) announced their release of their latest animated feature, 'Soul', on Disney+ making sure it was clear the film would be available "at no extra charge" (except for the subscription charge for Disney+, of course). [Article]
- Oct 12: Disney officially announces its move to restructure the Disney Company to prioritize its creation and distribution of streaming content in a puff piece by Hollywood Reporter.
These monopolizing moves have been in the works ever since the Streaming Wars began. With Netflix leading the charge in the early 2010s (as an independent, at first), other big studios watched carefully as they launched their own proprietary content with huge success - and no legal repercussions (because lack of New Media laws) bringing in the New Media Age of streaming content (NOTE: regardless, Netflix still buys and exhibits licensed material, not just content they create and own like Disney+).
What Does This Mean For Indie Filmmakers & Theaters?
If you're an indie filmmaker or theater owner, and this doesn't piss you off, then you're missing how vertical integration (monopoly) further tightens its grip on all of us creators. In a talk given by the former CEO of AVID Technology, he revealed storytellers and creators continuously got lower and lower pay for their creations. Greedy studios pay pennies to the dollar on original work (scripts and films alike). The whole WGA mess against the agencies last year was due to writers getting the shaft on pay by their agents, who took a sizeable percentage throughout the duration of the film process rather than on the sale, which is typical practice in other industries ("finder's fee" so-to-speak, but nobody likes calling it that anymore).
With larger companies exploiting your naivety of business and reaping all the benefits for themselves, many streaming networks have opted for flat fees rather than basing your pay on the number of views. Why is that? So they don't have to report on their earnings per view and further show creators how little they actually earned compared to how much they do.
The biggest surprise came from the lack of fight by theater chains. Though the boycott on Universal films by AMC happened earlier this year, AMC opted to change their long-standing position on tentpole movies, which required a 90-day theatrical release before moving to a streaming platform. Unfortunately, AMC caved and made the deal with Universal to only require a 17-day release window. The idea of a longer, exclusive release to make ticket sales (pre-sold or otherwise) is what gave the box office such power against the Hollywood machine in terms of fighting against their moves for monopolization.
This makes it seem like the theater chain owners have alternative stakes in streaming services they were meant to fight against. Remember the US vs. Paramount Antitrust Case (Archive) began in the 1920s by Indie Filmmakers AND Theaters. They banned together and embarked on an almost 20-year venture to finally uproot the stranglehold of the Big 6 studios of the film industry.
Where Do We Go From Here?
My team and I have always pushed to educate indie filmmakers about distribution and marketing to raise awareness and build our own community to match, and eventually overturn, the Hollywood system. With the entire US placed on hold, Hollywood continues to make power play moves to further tighten their grip on independent filmmaking in order to build the hegemonic belief that we can't make it unless we go through them - it's simply untrue.
We're on the rise! Multiple indie filmmakers have come together to brainstorm on how to fight against the menace of Vertical Integration / Monopoly of the film industry to stop them from ruling it all. Disney, Hollywood, etc, want to own you, not help build you up. We need to take power into our own hands and fight back to bring audiences to us again! It's time for all independent filmmakers to ban together and build!
We have plans on executing exactly that... but that is for another time in the near future. If you'd like more information on what we've been working on to build a workhorse for indie filmmakers and wish to help with this venture, shoot us an email on our website: Hyde Hooligan Films, LLC to let us know.
Written by: J Hooligan
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