Hollywood is slowly getting back to work, but the days of peak TV aren’t coming back – The Mercury News

Wendy Lee, Stephen Battaglio and Thomas Suh Lauder | Los Angeles Times (TNS)

LOS ANGELES — Ever since the actors’ strike ended last year, Hollywood’s workforce has been asking one question: When will the entertainment industry’s production economy start its long-awaited comeback?

A full nine months after the debilitating “hot labor summer” and fall concluded, a picture is starting to emerge of an industry in a state of modest recovery. New data indicate that, after a long period of significantly reduced activity, some companies are commissioning more shows again, but the comeback remains incredibly slow.

Many entertainment executives and workers at various levels have become resigned to the idea that the film and TV business has become permanently smaller — and the heights of dealmaking in 2021 and 2022, the so-called peak TV era, will never return.

“We’ve been in a stage of reset,” said Alice Thorpe of London-based Ampere Analysis, a market research firm focused on media and entertainment.

Recovery for the streaming sector has been led by Netflix and Amazon, which are responsible for a large share of the programming launched since the end of the writers’ and actors’ strikes. In the first half of 2024, Netflix commissioned 149 programs in North America, the most since the first half of 2022, according to Ampere data.

Traditional broadcast television, cable and streaming commissions in the U.S. and Canada by major entertainment companies increased 39% to 1,013 programs in the first half of 2024, compared to the second half of 2023, Ampere said. The data, which factor in green-lights from Warner Bros. Discovery, Netflix, Amazon, Disney, Apple, Paramount and Comcast, did not include theatrical movies.

But that number was still down 9.9% compared with the first half of 2023, according to Ampere data. Even more striking is the decline from the first half of 2022, when those companies green-lighted 1,515 programs in the U.S. and Canada.

Back then, the streaming TV universe seemed limitless. Hollywood studios pumped out new shows, streamers paid big money for top talent and promotional discounts for subscribers were plentiful. That golden era’s demise began in 2022, when streaming leader Netflix reported subscriber losses, and continued as studios pared back expenses. They canceled shows and movies, raised subscription fees and laid off workers.

While Netflix has been declared the winner of the streaming wars by Wall Street and remains one of the few profitable companies in that space, it’s unclear when the cuts will end at others such as debt-saddled Warner Bros. Discovery and soon-to-be-sold Paramount, which is in the process of cutting 2,000 jobs.

Hollywood insiders had been hopeful that business would bounce back after last year’s strikes, but many workers are still struggling to find jobs. Now, “survive ’til ’25” is the mantra for many. Others have moved out of town or switched careers.

The worry that more strikes were looming held back studio activity, some say.

As the unions representing crew members negotiated their contracts with studios earlier this year, several shows set up production in London rather than risk interruption due to a work stoppage, said Robert Halmi Jr., chief executive of Great Points Studio, whose company has sound stages in New York, Atlanta and in the United Kingdom.

Now that the Hollywood Teamsters and the International Alliance of Theatrical Stage Employees have reached deals with the studios, Halmi believes a turnaround is ahead.

“We finally for the first time have no [U.S.] strikes on the horizon,” Halmi said. “All the barriers are out of the way now.”

His company is opening a new 1 million-square-foot facility in Yonkers, N.Y., and it is already completely booked through next year. “Shows are looking for space now,” Halmi said.

Much of the renewed activity is happening outside the U.S.

Netflix and Amazon are green-lighting programs in North America. However, roughly 60% of their commissions in the first half of this year were on other continents, as they sought to expand their audiences by creating local-language content in hubs like India, Spain and Germany, according to Ampere.

The film business for years has had to contend with the flight of U.S. productions to locations that are cheaper and offer generous government incentives. Making a show abroad for the small screen also can be significantly cheaper than producing it in the U.S. It can cost $8 million to $10 million an episode for a drama series shot in the U.S., whereas the same show in Europe with tax credits can be made for as low as $4 million an episode, according to estimates from industry experts.