Bloomberg’s media columnist Lucas Shaw drills down on the dynamics at play in the stand-off between Hollywood’s writers and studios.
On the one hand, studios are losing big money from the huge investments they have made over the past five years to establish new streaming businesses. The go-go-days of building market share at any price have been left behind to be replaced by a drive to profitability, which can be reached most directly through widespread cost-cutting.
Shaw highlights the example of NBC Universal, where profits have crashed over the past three years as the costs required to build out a streaming platform have come due.
Meanwhile, the top executives at these media companies have been rewarded with billions of dollars in compensation over this period, a point which has not gone unnoticed among Hollywood’s rank and file. The timeline for a settlement is uncertain, as both sides appear to be settling in for a lengthy stand-off.