Netflix Slays the Sacred Cows of Cannes – So What Comes Next?

Netflix Slays the Sacred Cows of Cannes – So What Comes Next?

The changes coursing through the entertainment industry are manifesting themselves at the film festival

The talk of Netflix is everywhere in Cannes. Not Netflix per se, though also that, but more significantly the changes coursing through the entertainment industry and manifesting themselves at the film festival: the rise of the streaming services, the sheer volume of content being produced and the magnetic appeal these new services have for leading artists in film.
Director Noah Baumbach (“The Meyerowitz Stories”), Spike Lee (“Rodney King”), Bong Joon-ho (“Okja”) are all here in Cannes, all with films that they’ve made for Netflix. At the press screening of Baumbach’s film at 8:30 on Sunday morning, the curmudgeons still hissed and booed at the sight of the red Netflix logo when it rolled across the massive screen, just as they had done when Netflix’s other competition entry, “Okja,” had screened two days earlier.
But the filmmakers are voting with their feet and so are the actors. As a community they are lined up making television and film projects at Netflix, Amazon and increasingly Hulu, and nothing done by the guardians of Cannes – who want movies seen on big screens first and if possible exclusively – is going to stop them.
Many filmmakers say they cherish the freedom they are given at the less top-down (and probably overwhelmed) streamers, even if the money they make is notably less. (Studios aren’t paying what they used to, but they offer back-end residuals, which Netflix cannot.)
For the moment, the trend is going to continue. Now that veteran Universal-based producer Scott Stuber has gone to Netflix to run its moviemaking division, even more talent will migrate there. The indie film veteran Ted Hope’s presence at Amazon Studios has already had a similar confidence-building impact among artists.
In a heated discussion among a group of producers, financiers and directors on Sunday, the pros and cons were debated. Among business-minded folks, a broad consensus has been building for some time that Netflix and Amazon are living in a bubble of their own making, gorging on making content at an unsustainable pace.
One well-respected insider said that Wall Street is not measuring Netflix or Amazon by normal profit and revenue standards, so the stock is flying high on numbers like subscriber growth rather than, say, ebitda. (That is earnings before interest, taxes, depreciation, amortization) Once that euphoria has faded, he and others predict, the streaming companies will not be able to spend freely on content the way they do today. Another noted that the role of a film festival like Cannes is to embrace all strands of the filmmaking art, whether from countries around the world, or short, medium and long works or stories told on non-traditional platforms. (But it did raise the question of how long these events should be called “Film Festivals,” when so many include other forms of story-telling.)
For his part, Stuber, who took over the job of running Netflix’s movie division earlier this month, said that he is aware of the coming pitfalls in the Netflix business model. Standing in the garden of a Cannes villa for a Netflix blow-out party on Sunday (the kind big studios used to throw), he described a coming approach in which the movie studios function more like a streaming business, and the streaming business functions more like the studios. He hinted that the windows holding back major movie content faces imminent demise, a move that Netflix will have to respond to competitively as well.
For the moment, Netflix is the star of the Cannes show. Off to one side, a boyish Baumbach basked in the afterglow of his premiere at the Grand Lumiere theater, the kind of experience a filmmaker lives for. Greta Gerwig and Julianne Moore gabbed at the stone table with Lisa Hoffman, while Dustin Hoffman took congratulatory greetings from all and sundry.
Hoffman wept openly at the ovation he received at the premiere. At the party, he described the wonderful but painful process of bringing forth Harold Meyerowitz, an obsessively narcissistic sculptor whose sons (Ben Stiller and Adam Sandler) struggle to escape him, or at least understand his hold on their lives. Hoffman said his son called it “comedy used as a weapon.” Stiller described the emotional wallop of seeing the film at the premiere after having finished it many months ago.
And there at the front entrance to the Gatsby-like villa stood Ted Sarandos like a proud papa. He is visibly unperturbed by the fuss his company has created at the festival, and seems both determined and focused to continue his and CEO Reed Hastings’ ambitious strategy.
But there was no doubt that Sarandos too was moved by the experience of seeing “Meyerowitz” on the massive screen. So, perhaps, there will always be Cannes, for all of us.

'To defy fate, embrace the journey!'

Cannes: China's Jetsen Takes Stake in Tom Cruise's 'American Made' (Exclusive)

Cannes: China's Jetsen Takes Stake in Tom Cruise's 'American Made' (Exclusive)

Yuriko Nakao/Getty Images for Paramount Pictures International
Tom Cruise

The Universal film stars Cruise as real-life American pilot and hustler Barry Seal, who ran drugs for Pablo Escobar and was recruited by the CIA for one of the biggest covert operations in history.

Chinese electronics and digital entertainment company Jetsen Group has taken a stake in Universal Pictures's upcoming crime thriller American Made, directed by Doug Liman and starring Tom Cruise.
The Beijing-based tech and media firm, which has a market capitalization of approximately $3.6 billion on the Shenzhen Stock Exchange, shared news of the investment with THR at the Cannes Film Festival. 
Jetsen declined to disclose the size of the investment, but described it as a "significant stake." The company executed the deal via its Jetsen Cultural Industry subsidiary, which is focused on entertainment content development and acquisitions. The deal entitles Jetsen to a share of American Made's box-office revenue in China. Jetsen's digital media subsidiary, Jetsen Huashi, also gets exclusive Chinese digital rights to the film. The company will pair with Beijing-based cinema chain Dadi Theater Group — the country's third-largest exhibitor — as co-distributors of the movie in China. 
Previously titled MenaAmerican Made was formerly set for release in January, but Universal pushed back the North American opening to Sept. 22 — a better position for prestige dramas.  
The film stars Cruise as real-life American pilot and hustler Barry Seal, who ran drugs in the 1980s for cocaine kingpin Pablo Escobar and was recruited by the CIA to run one of the biggest covert operations in history. (Cruise himself is a trained pilot.)
Domhnall Gleeson, Jesse Plemons, Sarah Wright, Jayma Mays, Lola Kirke and Caleb Landry Jones also star in the film, which is being produced by Brian Grazer, Ron Howard, Doug Davison, Brian Oliver and Tyler Thompson.
China's Perfect World has an ongoing $500 million slate financing deal with Universal, but that doesn't include any distribution rights.
Beijing Jetsen's media subsidiary, Jetsen Huashi, has become a major player in China's increasingly online-driven entertainment landscape. The company acquires digital media rights to Chinese and international film and TV titles including local rights for VOD, SVOD, OTT, IPTV, etc.and re-licenses packages of content to China's leading mobile and online platforms, such as iQiyi, Youku, Tencent and others. 
The company has been such an aggressive behind-the-scenes buyer that it says it now holds the digital rights to a full 90 percent of all Hong Kong films ever made. The company recently acquired the exclusive digital rights to Michael Fassbender's Assassin's Creed for China.

Looks Like The WGA and Producers are taking it to the deadlinel

The Hollywood Reporter

Studios Present New Offer to Writers as Mysterious Memo Warns "Be Ready to Strike"

David McNew/Getty Images
Picketers and supporters of the WGA during a February 2008 demonstration in Burbank

A walkout at an economic cost of $200 million per week seems increasingly likely — but could still be averted. Meanwhile, a reported memo from the WGA isn’t actually from the WGA.

Hollywood moved closer to its first major strike in a decade Sunday, with studio and WGA negotiators scheduled to meet at 2:00 p.m. as the Alliance of Motion Picture and Television Producers presents what may be its last offer in advance of contract expiration less than 36 hours away, The Hollywood Reporter has learned.
It’s anticipated that WGA negotiators will then need to caucus privately to consider the offer and may not provide a substantive response to company proposals until Monday, leaving scant hours to go until 12:01 a.m. Tuesday, at which time the guild has said it will walk out if no replacement deal is in place. That doesn’t preclude the possibility of an extension, however, if progress is being made.
Meanwhile on Sunday, a memo to WGA strike captains surfaced that tells them to “be ready to strike Tuesday,” according to press reports which THR has not been able to confirm. As reproduced in the reports, the memo also suggests that an extension is possible, and tells recipients to remove personal items of value from their studio offices Monday and to invoice the companies Monday for any outstanding fees.
Those reports described the memo as being from the WGA, but this does not appear to be accurate. The memo as reproduced is unsigned and when asked for a copy, the WGA told THR, “The Writers Guild has not issued any memos to members or updates on the status of negotiations.” What about memos to strike captains? “Contract captains are members,” responded the guild.
The memo as reproduced also inaccurately says the parties “will be back at the table Monday,” when in fact they are resuming Sunday. The missive’s authorship remains unknown.
The writers struck for about one hundred days in 2007-08, costing a wide swath of the California economy an estimated $2.1 billion to $2.5 billion. Adding a bump for inflation, that suggests that a strike this year could cost about $200 million per week.
The WGA and the AMPTP had no comment for this story.
A host of issues remain on the table, and a source familiar with the companies’ thinking told THR that the guild has been presenting little guidance during bargaining as to which issues it considers key and which it will give way on. But the WGA on Friday reiterated its view that its proposals bear only a “reasonable” cost and are readily affordable to the companies, so what the companies interpret as lack of guidance may in fact be a signal that the guild considers most or all of its proposals essential.
Among the issues in play is script parity, the guild’s demand that writers be paid the same for television scripts regardless of platform, including network shows, basic cable, premium TV and digital (streaming video-on-demand, or SVOD) platforms. The guild argues that the same work should garner the same pay, but the companies reject across-the-board parity as absurd, given the lower production budgets of some shows and platforms. Some of those platforms do pay network rates when the show’s budget exceeds contractual thresholds.
Another issue: The companies are only offering 2 percent annual wage increases, even though they gave the directors 3 percent. A phenomenon of parallelism across entertainment unions called pattern bargaining indicates that the companies will eventually offer the same 3 percent. That could come with Sunday afternoon’s proposal. But the fact that Kabuki theater is still playing out even with expiration so close is not a positive sign.
Further widening the gap: The WGA wants a range of so-called “outsize increases” — that is, a variety of category by category increases at levels above 2 or 3 percent. The companies agreed to a few increases of this sort for the DGA, as they often do for the various unions, but a source says that the WGA is requesting a wide panoply of such increases.
Indeed, the parties appear to be a whopping quarter-billion dollars apart in their proposals, with the companies looking to spend somewhat north of $180 million over the three-year term of the deal and the writers at $468 million. Were the companies to suddenly toss in $200 million or so to bridge the gap, they would risk upending the deal reached with the DGA several months ago and emboldening the actors union, SAG-AFTRA, to up its ask by several hundred million dollars when its negotiations start in about two weeks.
It’s highly unlikely the companies will do that, particularly since Wall Street analysts generally believe that a strike would not have a material effect on most parent companies’ share prices. But it’s also hard to see how the guild on Monday will back off from what was effectively a line in the sand drawn on Friday, just three days earlier.

On the issue of “span” — essentially, the payment of overages when writers work longer on episodes of short order series — the companies have expanded the categories (job titles/seniority) of writers to whom their proposal would apply.
However, the parties still disagree on what constitutes a short order series, that is, a series with a season short enough that it triggers the problem and remedy. The companies want their proposal to apply to series of about 12 or 13 episodes or less, while the WGA wants this protection to apply to series of 16 episodes or less, a larger universe. THR calculations suggest that the average series length is now about 12 or 13 episodes.
In addition, the companies want pro-rata overages to kick in when the writer works more than 2.6 weeks on a script. The WGA previously was seeking this protection whenever work exceeded two weeks on a script. It’s not known whether the WGA has now agreed to the studios’ figure.
On SVOD residuals, the WGA continues to press for more than the enhancements the DGA received. Such an outcome is unlikely, because of pattern bargaining.
On the issue of infusions into the guild’s troubled health plan, THR is told that the parties are close to agreement.
Many writers view the last strike as a success, but crewmembers are among those who feel otherwise, with one longtime IATSE member writing THR this week, “I am furious that they have once again put the entire industry into jeopardy! The writers …  are not in the slightest concerned about how this will play out, how many people will once again lose homes, tap their savings and so on. A strike will kill what’s left of Hollywood.”
Added the crewmember, “I am beyond angry at the writers who seem to think that Hollywood would not exist at all without them. They are a piece of the machine that is made up of us all.”

Picketers and supporters of the WGA during a February 2008 demonstration in BurbankOffers (and Counteroffers) on the Table