After years of review, lobbying, and more lobbying, the Film, Documentary and TV sector had welcome news from Canberra late December 1st as legislation was passed lifting the TV producer rebate from 20% to 30%. For months that increase was tied to making certain productions made at lower budget thresholds ineligible, which would have disproportionately hit the documentary sector. But at the last minute, those changes were scrapped. Particularly of note, the “Gallipoli Clause,” that allowed offset claims against footage that could only be obtained in foreign destinations was retained. As one commentator put it, those shots of India from LION probably would have been shot in Western Sydney but for the Gallipoli Clause. There was tremendous behind the scenes work done to get this legislation over the line. It is a particular victory for the Screen Producers Association (‘SPA’) which managed to secure a terrific legislative outcome for both its corporate and individual membership. SPA is calling it a “historic win,” and in this case it’s not hyperbole.
Perhaps it was not a coincidence that shortly thereafter Australian Netflix Subscribers were notified their billing was being updated to Netflix Australia Pty Ltd. What this means is rather than using their Netherlands based subsidiary, from January 1st subscription revenue generated in Australia will be taxed in Australia. It is estimated that Netflix has six million Australian subscribers, resulting in between $790-$1.4bn in revenue according to AFR’s Miranda Ward. That should result in more money flowing to Canberra and earns Netflix some good will and good press.
Across media, change is the only constant. Since our last Newsletter, Hugh Marks has departed Nine Entertainment and Mike Sneesby now has the reigns. So far Mr. Sneesby has made only minimal changes to his front bench, promoting James Chessell to Managing Director of Publishing and Alex Parsons to step in to look after Nine’s digital business. Across funding agencies, New Zealander David Strong was appointed CEO of the New Zealand Film Commission, stepping into a role vacated by Australian Annabelle Sheehan. It was a short honeymoon for David with Amazon announcing they were moving their second season of The Lord of the Rings to the UK as COVID-19 restrictions and uncertainties made it easier to base in the UK. Meanwhile amalgamation continues in Australia with HT&E buying Grant Broadcasters and Seven West Media buying Prime Media.
Across the pond, Hollywood is unlikely to experience a mass exodus of the young who battle low wages and long hours to have the privilege to work in the dream factory amongst the forecasted Great Resignation but the last few months in Hollywood could be billed the Great Retirement. The most profitable studio going, DISNEY, is farewelling one of the most famous CEOs in the world as Bob Iger fully exits the building, followed by his Chief Creative Officer Alan Horn and a number of other veterans from the theatrical team. It puts a coda on one of the most spectacular theatrical track records of the last decade, with Disney’s various divisions (MARVEL, LUCAS, PIXAR, DISNEY ANIMATION & LIVE ACTION) bringing in billions and billions from the big screen until COVID-19 hit. Today’s Hollywood Power Structures are now unrecognisable from just two years ago as theatrical moguls are supplanted by streaming titans. Meanwhile all Hollywood is watching David Zaslav as the President and CEO of Discovery takes onboard the Warner Media Portfolio. As Mr. Zaslav has been catapulted to one of the most powerful positions in Hollywood, Joe Pompeo’s excellent Oct 13, Vanity Fair article is well worth the read.
Perhaps not a household name, but an executive whose work had an outsize influence in Australia, Bruce Berman, after 24 years as Chairman and CEO of Village Roadshow Pictures also announced his departure last month. With 101 movies co-produced with Warner Bros. including giant tentpole films such as THE MATRIX and MAD MAX FURY ROAD, Bruce had an enormous influence on many giant Studio productions that shot in Australia working closely with Australia’s Village Roadshow Limited Group. Bruce Berman brought me into “the business,” after a chance encounter at LA’s Palm Restaurant in 2003. We at Blenheim wish Bruce all success for his next ventures. Bruce was not the only legend to leave a powerful role last month. Paramount’s Chairman and CEO since 2017 and prior long time 20th Century Fox Impresario Jim Gianopulos who famously oversaw James Cameron’s multi-oscar winning Titanic and Avatar films has announced his departure. What is clear is Hollywood power structures are being reshaped by the continuing disruption of the streaming business. Expect further leadership changes with further amalgamation as big gets bigger, as happened when Creative Artist Agency (CAA) acquired ICM Partners. Considered the biggest deal in the agency space since WMA and Endeavor merged. CAA whose Century City HQ is referred to as the “Death Star,” will benefit from ICM’s publishing and global sports business.
In Media, we are consumed by daily, weekly, and monthly numbers. Box office, ratings, subscription numbers, reach, demographic; we live and die by the professional maxim “You have to measure it to manage it.” But behind the numbers are a cadre of men, and increasingly, women at the top, (Disney’s new Chairman of the Board, Susan E. Arnold) engaged in very high stakes decision making with crystal balls that are at best cloudy as the future always is. Even as the last round of earnings reports were buoyant, (save magazines whose decline, according to the recent reports, will continue and cinemas, who have been disproportionally impacted by lockdowns, lack of product and streaming) real concerns abound about where and how to engage increasingly fragmented audiences.
One trend through all our conversations and underpinning a number of our searches, is that technology and what it will bring is at the forefront of media leaders’ minds regardless of sector. Barry Lerner, a Partner in our Technology Practice, and futurist, sat down recently to share his thoughts on where technology and media are now, and where technology is taking media over the next few years. It’s worth a watch. In the meantime, we at Blenheim wish you a festive holiday and look forward to an exciting year.