Hollywood Week: Paramount Credit Rating, Oscar Countdown, Tyler Perry Studio, Talent Coalition buys Theater
- Details
- Category: Entertainment News
- Published on Saturday, 24 February 2024 09:36
- Written by Janet Walker
As the fallout of the pandemic continues to direct studio business, the industry is confronting a new threat, Sora, an AI technology so advanced that it will cause an industry wide revolution, costing thousands of jobs.
Paramount Credit Rating Placed on Watch
Paramount Global, led by Bob Baskin, has been placed on watch this week as the credit agency Standard & Poor's who lowered the studios credit rating, from a triple B to a triple B-, one year ago, explaining that the cash flow of the in-flux studio is in question.
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"The margin and cash flows generated by DTC [direct to consumer] streaming businesses, which are replacing the linear TV segment, will be lower in comparison due to greater required content spending, higher technology investments, and higher marketing and subscriber acquisition costs," S&P ratings director Jawad Hussain said in a statement Friday," reported The Hollywood Reporter.
Paramount Global financial issues are complicated by the possibility that Shari Redstone, the daughter of the studio's founder, Sumner Redstone, who controls the studio and its vast entities, may either be selling in its entirety or selling off in pieces, and these rumors have been swirling for the last three months.
The business model shift to DTC and SVOD (Subscription based Video on Demand), with accelerated due to the Covid-19 pandemic has been a cataclysmic adjustment for every studio's theatrical business model, and while the box office has continued to show improvement, the billion dollar global box office mark is no longer a given for many films that pre-Covid would have easily reached that threshold in the first two weeks of release.
With that, every studio, not only Paramount Global, has been forced to readjust across the board, with theatrical projections as well and more so with streaming options. The studio and the public are now in a relationship where the studios are not controlling the entertainment market, public consumption controls the studios, and the public prefers streaming.
Paramount is not on life support, as the company has many possible suitors, and two most notable Bryon Allen has offered 14.3 billion for the studio, and David Ellison, who has not made a public bid offer.
Standard & Poor's also explained should a deal come to pass, it will have the markings of a fire sale, where the entire studio and all its entities will be divested and sold.
As technology companies are the new oil companies, the unlimited cash reserves of Apple, Facebook, Amazon, Microsoft, and Google create a new dynamic in the entertainment business. The billion-dollar price tag for Paramount is an investment but for the tech companies, while a significant amount, compared to the stratospheric value of the tech companies, it becomes an opportunity an extension of the growing tributary of control over public consumption.
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OSCAR Countdown
With the Academy Awards two weeks away, and final voting ending February 27, 2024, all members of the Academy are encouraged to submit their votes. As many know, the accounting firm of PrivewaterhouseCoopers oversee tabulating the ballots and the only individuals who know the results before the envelope reaches the presenters hands. They arrive Oscar night with a silver cache, much like is seen in espionage thrillers, carrying the precious contents. Only once in recent history has the accounting firm erred.
"Infamously, in 2017, a PwC accountant handed Warren Beaty and Faye Dunaway the wrong envelope, resulting in the "La La Land"/"Moonlight" best picture fiasco," reported PBS.org.
Tyler Perry Studio Expansion on Hold
Tyler Perry's Georgia studio expansion has been put on hold. The $800 million dollar expansion which included adding 330 acres to his studio's current campus, has been stalled over the introduction of Sora, the opens source AI tool that generates complex visual scenes through text prompt.
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The idea that the visual medium of film production, including the big budget alt-universe or animation films, can be reduced to a text prompt, has many in the industry concerned over the potential loss of employment and are concerned if another hit in an industry whose business model is in continual flux, is on the horizon.
For the business side, the bloated budgets necessary to create blockbuster animation or alt-universe films translate to a higher return, lower upfront or production costs results in greater profit, simple economics. And for the creators, their work has become obsolete, as animator teams will be drastically reduced if Sora, becomes widely used, even live action special effects become easier and less expensive to shoot.
Perry, who was interviewed by The Hollywood Reporter, responded to the question regarding Sora's capabilities with this response, "I no longer would have to travel to locations. If I wanted to be in the snow in Colorado, it's text. If I wanted to write a scene on the moon, it's text, and this AI can generate it like nothing. If I wanted to have two people in the living room in the mountains, I don't have to build a set in the mountains, I don't have to put a set on my lot. I can sit in an office and do this with a computer, which is shocking to me."
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Talent Coalition Buys Westwood Theater
The famous Fox Westwood theater built in 1931, and the scene of thousands of movie premieres over its 93-year history, has been bought by a coalition of talent with plans to renovate the theater to state of the art, while maintaining the landmarks historical value.
Led by a who's who of Hollywood's director's actor's and producers, including "JJ Abrams, Judd Apatow, Damien Chazelle, Chris Columbus, Ryan Coogler, Bradley Cooper, Alfonso Cuarón, Jonathan Dayton, Guillermo del Toro, Valerie Faris, Hannah Fidell, Alejandro González Iñárritu, James Gunn, Sian Heder, Rian Johnson, Gil Kenan, Karyn Kusama, Justin Lin, Phil Lord, David Lowery, Christopher McQuarrie, Chris Miller, Christopher Nolan, Alexander Payne, Todd Phillips, Gina Prince-Bythewood, Reitman, Jay Roach, Seth Rogen, Emma Seligman, Brad Silberling, Steven Spielberg, Emma Thomas, Denis Villeneuve, Lulu Wang and Chloé Zhao," reported The Hollywood Reporter.
The group will pool their talents to redesign the property, and the theater will remain open during the renovations.
