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Late Edition: New Projects - Netflix Q2 Report Impact - Summer Pilot Season - Production Trends - Theatre News

By Abigail Hardin, July 26, 2022

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Happy Tuesday, UTD!

Wow, there is a lot to unpack this week! I'm going to keep the intro brief and jump straight into the bulk of this late edition of our Weekly Insight email. With spring upfronts all but a distant memory, both linear and streaming studios are shifting gears into focusing on earnings season ahead of the Fall boom. Chiefly among the virtual competitors still looms Netflix, which seems to re-route its competitive trajectory every few weeks to combat its stalled growth and sporadic layoffs.

It's not just Netflix, the news cycle is spinning this week between Summer Pilot Season, Streaming vs Linear TV, Production stats, Theatre News and so much more!

So curl up with this briefing tonight or save it for your morning coffee tomorrow! ☕️

Lastly, our last Free workshop of the Summer is tomorrow 7/27. Don't miss this great opportunity to ask your UTDA and career questions! Make sure to register tonight. Annie and I hope to see you there.

Create a great week! ✌️

Netflix: Lemons or Lemonade? 🍋

Netflix beat expectations for the second quarter, reporting a decline of about 970,000 subscribers to end the period with a global total of 220.67 million. The streamer was expecting to lose an even 1M so this decline is in essence good news. The markets responded by surging Netflix stock by 6% with shares gaining more than 7% in after-hours trading. Other streamers including Disney, Paramount, etc. also saw stock gains.

However, the positive decline (if there is such a thing) did not save hundreds of Netflix employees their jobs. The streamer's second-quarter earnings letter to shareholders revealed the streamer paid out $70 million in severance costs. Hit by subscriber losses for the first time as well as plunging stock prices, Netflix has laid off about 475 staffers in the past three months.

Looking forward, Netflix continues to be financially conservative by capping content spending through 2023 at it's 2021 total of $17 billion. "We spent the way we spent to get to where we are today," said co-CEO Ted Sarandos, agreeing that "in general, we are kind of in the right ZIP code" for the next few years.

To further dampen the implications of a spending cap, the streamer also stressed in their shareholder letter that Netflix hit an all-time high of 7.7% total U.S. TV viewing in June 2022, up from 6.6% in June 2021. "While we always have room to improve, we're very pleased with how far we've come in providing so much satisfaction and enjoyment to our members," it said. "In the U.S., which is one of the most competitive markets in the world, we drew more TV viewing time than any other outlet during the 2021-22 TV season." The letter included a chart showing Netflix at 1.334 trillion minutes of streaming, dwarfing second-place CBS, which had 753 billion minutes of viewing.

New Ad-Tier Coming

More details have been announced on Netflix's proposed advertising subscription tier. There is still no mention of exact pricing but it is confirmed the new ad-tier will be released in early 2023 and will be cheaper than their current options. The streamer is looking to monetize the 100 million-plus households that currently use the service for free by illegal password sharing. This new model is currently being tested in Latin America and Netflix is "encouraged by our early learnings and ability to convert consumers to paid sharing."

End of Linear TV? STRANGER THINGS have happened.

With all of Netflix's touting that things aren't so bad, the central entity they have to thank is none other than STRANGER THINGS. Founder Reed Hastings singled out the recent release of the first part of season four as the "single thing" that pushed the streamer in the black with 1.3 billion hours viewed since it was released late May.

He doubled down on his statement "lots of titles, lots of viewing" and took it one step further, "streaming is working everywhere, everyone's pouring in." "It's definitely the end of linear TV over the next five to 10 years, so very bullish on streaming." A prediction that Hastings in 2014 said would occur by 2030. A prediction that Netflix looked to assert with data included in their letter to shareholders after the market closed today – read more for specifics and data in the article.

Lastly on STRANGER THINGS, apparently, the season length was cut short due to surging COVID production costs. So, we have fewer episodes than what could have been. Blast you, COVID!

TV Talk
Streaming On the Rise 📈

Reed Hastings assertions of the death of Linear TV might not be far off. According to Nielsen's latest monthly snapshot, The Gauge, streaming made up more than one-third of total TV viewing in June. Accounting for almost 34% of overall viewership, streaming upped its share by six percentage points over the same month in 2021. Cable TV, meanwhile, slumped by five percentage points year-over-year. Even though summer months traditionally see lighter viewing of broadcast and cable television, Nielsen noted that broadcast's slice of the pie (22.4%) and cable's (35.1%) represented the smallest shares they have ever recorded.

Who knew, over the past 18 months Amazon has been working on a new user interface 🤷🏻‍♀️The move comes as the streamer looks to keep up with the Joneses and the plethora of new streaming options. The new interface, which will be rolled out to select devices this week, prioritizes simplification. Various buttons and menu items have been removed to make it easier to navigate, and new carousels are designed to make the experience more “cinematic.” The new interface also devotes more real estate to live television, which will be increasingly important as streaming services continue to bid against each other for live sports and news broadcasts. The upcoming football season will be significant for Amazon, as it begins to expand its live coverage of NFL games.

Summer Pilot Season 🤔

As we have talked about at length, the traditional "Pilot Season" of January - April has gone by the wayside. The season was already being slowly phased out before COVID dealt the timeframe a deathly blow. Sure enough, this pilot "off-season" is strong. ABC and NBC have five and six off-cycle pilots this year, respectively, while CBS has a decision to make on a project with a pilot production commitment, and Fox is eyeing more script-to-series orders.

Don't miss an opportunity! Add the projects in the article above to your Up-To-Date Actor targets list and let us do the work of keeping you informed. When you add a project to your targets list you will receive notification of any change to production status, casting information, important news articles, etc. Be in the know, be Up-To-Date! 😉

Awards 🏆
Emmy Season

With the recent announcement of the 2022 Primetime Emmy Nominations, analysts and industry professionals are beginning to do some deeper dives into who may emerge as frontrunners, what shows could pull out some surprises, and how studios' approach to advertising may be shifting in an increasingly virtual world. Variety, in particular, broke down each category and gives insight into what we can expect.

Craving more? Check out this TV Talk Podcast: Emmy Nominations, Did Those FYC Campaigns Really Help? 🎙

Looking to the future 🎞

Production: California Dip & Relocation

On-location filming in Los Angeles fell 5.8% in the second quarter of 2022 compared to the same period last year – the first decline following three consecutive record-breaking quarters. Even so, local production has surpassed pre-pandemic levels, finishing 6.8% ahead of 2019's second quarter and 2.7% ahead of 2Q 2018, according to FilmLA, the city and county film office. "We expected we would see production return to pre-pandemic levels sometime within the year, and now here we are," said FilmLA President Paul Audley in the group's Q2. "Resilient in the face of the Covid-19 pandemic, and with industry leaders taking steps to protect both worker and community safety, we have confidence in the film industry's ability to sustain local production at or above its historic levels."

It's no secret that Film & TV production is absolutely essential to California's economy. All the more reason why the gainful tax incentive is in place. The new Disney+ Star Wars series SKELETON CREW was one of seven shows who were awarded lucrative California tax incentives. To be specific SKELETON CREW received a near record breaking $20.9 million in incentives.

California has been trying for many years to gain projects from other markets such as the burgeoning Atlanta market and its east coast sister New York. As part of this wave of incentives, both RAP SH!T and KILLING IT seasons two will be relocating from Miami and New Orleans respectively.

Global Edition 🌍

The UK's Pinewood studios, home to Disney, Marvel, and many more, has submitted an application for an £800M ($955M) scheme that would expand the studio by 1.4 million sq ft if accepted. The Pinewood South Studios scheme will deliver 20 purpose-built sound stages as part of an expanded Screen Hub, according to the planning application submitted this week for the studio in Buckinghamshire, South England, which it said would create more than 8000 jobs and add around £640m ($760M) per year to the economy.

Unions

SAG-AFTRA's national board has approved a resolution to create a path to membership for intimacy coordinators, who serve as advocates and liaisons between performers and productions when nudity and intimate scenes are being filmed. "The role of intimacy coordinators greatly improves safety and well-being on sets and in productions requiring intimate scenes," said Fran Drescher, the union's president. "Their value is immeasurable and the National Board is committed to bringing intimacy coordinators into the SAG-AFTRA family and ensuring they have the kind of benefits and protections other members already enjoy."

Upcoming contract negotiations between the Writers Guild of America (WGA) and Hollywood's major producers are about to ramp back up. After the WGA's recent success to eliminate packaging fees, the guild is looking to leverage that success for 2023 contract gains, AKA mo' money.

If the last WGA fight is any evidence, expect for this to play out over months if not years. Here is a great in-depth look at the current climate of Hollywood's creative community and why this is a complicated matter.

Theatre: Treading the Boards

😷 COVID Update! Face masks will continue to be optional for audience members attending Broadway shows through August and until further notice, according to The Broadway League. Consistent with New York City and State recommendations, audience members are encouraged to wear masks in theatres. The announcement does not affect non-Broadway theatres, leaving Off-Broadway companies and other theatres to set their own policies. Theatregoers should consult the official show website or point of purchase for up-to-date information about COVID protocols for the show (or shows) they will be attending.

Tony Award-winning Playwright Christopher Durang has been diagnosed with logopenic primary progressive aphasia (PPA). According to the Weill Institute For Neurosciences, persons with logopenic variant primary progressive aphasia "have increasing trouble thinking of the words they want to say. As time goes on, people with lvPPA have more trouble getting the words out, and they eventually begin to speak slower and slower." The first signs of the illness surfaced in Durang in 2012, and he was officially diagnosed in 2016. His husband, John Augustine, shared that Durang's long-term memory is intact but he has difficulty producing and comprehending speech, and struggles to follow long sentences. Otherwise, he is physically unaffected, and still has his motor skills and executive functioning.

Regional Theatre: At the Office 💼

There were also some big announcements in theatrical leadership positions at some of the country's biggest regional houses:

More Unsettling PARADICE SQUARE Producer Claims

More details have emerged about the active PARADISE SQUARE lawsuit, including a story about a non-binary crew member who permanently severed their pinky finger in an accident during a rehearsal for the show's pre-Broadway run. The new Broadway musical, which closed July 17, is currently facing legal action filed by Equity and United Scenic Artists Local USA 829 seeking to collect nearly $350,000 in benefit contributions, wages, and payments owed to both unions and their members cumulatively.

Additionally, Actors' Equity added the show's producer Garth Drabinsky to its "Do Not Work" list at the request of the production's actors and stage managers, rendering Drabinsky unable to hire members of Actors' Equity, effectively ending his ability to produce on Broadway and at many major theatrical venues across the country, many of which operate under contracts requiring the use of Equity performers. Now, Canadian Actors' Equity Association will join American Equity and bar its members from working with the Toronto-based producer.

Bad Business: In other news of scammy, low-life, producers, Fake Producer Gets More Than 21 Years In Florida Prison For $60M Scam

Diversity, Equity & Inclusion
Actors on Acting

Another round of insider tips and tricks from A-listers around the industry this week! Several actors spoke about their complex relationships with fame, and how they've handled their failures and successes throughout their careers:

While others shared their excitement for what may be ahead in their next projects:

New Works, New Faces
Quick Bites