Will Streaming Peak and 10 More Questions for Hollywood in 2022

·10-min read

2022 figures to be another year of massive change in Hollywood.

Three major deals — Amazon’s purchase of MGM, CAA’s merger with ICM, Discovery’s takeover of WarnerMedia — all are on track to become a reality in 2022 (more on that below). That means more reorganizations, more layoffs and more consolidation from others seeking to compete in a content-based industry undergoing massive change.

Plus, the pandemic continues to rage into its third year, which threatens the recovery of movie theaters and other live events while potentially hastening even more change.

Here are some of the biggest questions looming over Hollywood this year.

1. Will Sony Pictures or Lionsgate finally find a buyer?

The race to consolidate over the last few years has naturally led to speculation about whether Lionsgate or Sony Pictures, the last two remaining large film/TV studios, will get swallowed up by a competitor as the streaming wars head into their third year.

Will this year finally be when one, or both, find willing dance partners? Following Amazon’s purchase of MGM last year, many expect Apple with its massive cash on hand to finally make a major entertainment purchase of its own. As we said in our 2022 predictions piece last week, don’t overlook Roku as a surprise suitor.

Lionsgate is already looking to sell or spinoff Starz, a sign that many in the industry perceive as a necessary step to look attractive to potential buyers.

2. Will there be a streaming slowdown?

The last two years have seen the streaming industry explode, both in those making content and those devouring it (especially during pandemic lockdown). That could change in 2022, as the industry gets closer to its peak and more of society opens up. For the first time in four years, there isn’t a major streaming service set to launch. By the end of 2022, there may even be fewer streaming services.

When Discovery and WarnerMedia close their deal in a few months, many expect the new Warner Bros. Discovery to marry its two streaming services, HBO Max and Discovery+. While that will no doubt start with some sort of bundle offering, Discovery execs have already hinted at an outright merger.

Smaller streaming services like Peacock and ViacomCBS’ Paramount+ and Showtime are fighting for customers with a smaller war chest than their rivals. Peacock in particular could be facing a cold spring once the NFL season and the Winter Olympics are over.

Streaming subscription growth also slowed after the record-breaking uptick of 2020, especially by the end of the year. That growth is expected to keep slowing among U.S. consumers. Streamers are betting that international growth will make up the difference — but that has yet to be seen.

squid game netflix
Investment in foreign language content will grow as streaming services look for the next “Squid Game” (Netflix)

3. When can we stop grading the box office on a COVID curve?

Given the record case numbers seen by the Omicron variant and the chance of another variant bringing another surge in 2022, there’s a chance that COVID-19 could continue to plague theaters worldwide for another year. But at some point, Hollywood will have to take serious stock of how the pandemic has accelerated changes in audience interests and moviegoing habits.

COVID concerns may have kept older audiences at home and factored into the box office struggle of films like Disney/Twentieth Century’s “West Side Story” and Warner Bros.’ “King Richard,” but what happens if the 55-plus crowd doesn’t return even when things are safer? If theatrical grosses for Oscar contenders, festival purchases and other mature fare doesn’t ever return to pre-pandemic levels, will there be enough to sustain the economy for art-house cinemas and the specialty market?

2021 showed that low-budget horror and franchise blockbusters can still bring in the masses, and there’s evidence showing that family films will rebound whenever COVID finally dies down. Whether people are interested in seeing anything else on the big screen instead of on streaming is a question studios will need to find an answer for in 2022…if the pandemic will let them.

4. Can award shows validate their existence?

In 2020, award shows’ hemorrhaging ratings could be blamed on virtual telecasts due to the pandemic. But in 2021, the Oscars, Grammy and Emmys largely returned to in-person gatherings, even if elements of the broadcasts were modified for COVID protocols. While some bounced back from their pandemic-fueled ratings lows, it still wasn’t enough to stop the industry-wide decline: The Oscars hit a record low of 10.4 million viewers, less than half of what the 2020 show managed.

To make matters worse, the decline appears to be irreversible. Despite producers attempts to make these three-hour kudosfests seem fresh, there’s just too many other ways to find out who won Best Actor. The Golden Globes, among the biggest ratings draw on the calendar, were pulled from TV this year amid turmoil within the Hollywood Foreign Press Association.

Will 2022 provide some much-needed vindication for the beleaguered industry?

Lina Khan
FTC chair Lina Khan (Getty Images)

5. Will the FTC block any of the big media deals?

Last year was the year of the mega-deal. Discovery bought out AT&T’s Hollywood ambitions with its $43 billion deal for WarnerMedia. Amazon is paying $8 billion for MGM. CAA is merging with rival agency ICM. All of those deals are expected to close this year.

Normally this is a formality, and we expect it to be for Discovery, whose deal has already been approved by European regulators. But with Federal Trade Commission chair Lina Khan signaling a much tougher stance on antitrust laws, many of these deals figure to get a great deal more scrutiny to win government approval. In Amazon’s case, there is already no love lost between Khan, who has previously signaled her desire to rein in the ecommerce giant.

It could be a bit bumpier ride than those executives would like.

6. What will Warner Bros. Discovery look like (and who will be David Zaslav’s No. 2?)

Since we very much expect Discovery and WarnerMedia to close their $43 billion merger, the next question immediately becomes how Discovery CEO David Zaslav will run his new mega company. Most importantly, who does he pick as his top content executive?

WarnerMedia head Jason Kilar has acted like anything but an outgoing CEO and will stay aboard at least until the deal closes. Can Zaslav talk him into staying on in a senior role? Does he have someone else in mind? After years of realignments and reorganizations, WarnerMedia is heading for another one.

On the streaming front, HBO Max and Discovery+ will be tied together in some way. What does that look like this year and how soon do those two inevitably combine?

7. Will Nielsen still be the ratings currency?

Nielsen, long the go-to industry source for TV audience measurement, has found itself under increasing pressure to more accurately measure how many people are watching. The ratings giant has been besieged by multiple instances of miscounting viewers and even lost its accreditation last year from the Media Ratings Council.

Recognizing the threat of losing its supremacy, Nielsen plans to finally roll out a way to measure viewership across multiple devices in a product it calls Nielsen One. But that won’t be fully implemented until a year from now at the earliest.

Is this the year networks and advertisers finally ditch Nielsen as their go-to currency? NBCUniversal has been very open about their desire to create a new way to measure who is watching, especially as linear TV ratings seem more outdated each day.

8. Will Netflix gain any ground in gaming?

For the last two years, the streaming wars have been dominated by Netflix, Amazon and Disney — with others like ViacomCBS, Comcast’s NBCUniversal, Apple and Paramount also making smaller waves.

But the streamers increasingly recognize a new competitor for consumers’ time: gaming.

Netflix is trying to get ahead of the game by expanding into the space. Last year, the streaming giant hired former Facebook and EA executive Mike Verdu to lead its gaming push, which began with an acquisition of Night School, the creators of the popular supernatural thriller game “Oxenfree.” Netflix rolled out its first slate of games in November, which are included as part of its customers’ monthly subscription, with an initial focus on mobile games.

Netflix is facing more competition than ever for subscribers. Will its gaming push keep them ahead of the pack?

9. Will 2022 mark the beginning of the end for regional sports networks?

Fewer industries are facing a greater existential crisis than the cable bundle, with regional sports networks in particular staring at their own extinction. The bundle keeps shrinking, as 25 million subscribers have cut the cord in the last 10 years. Most expect the pay-TV world to dip as low as 50 million subscribers, which would represent less than half of those who paid for cable during the halcyon days of 2014.

NBC Sports Network just shut down, with executives owning to the fact that the business is in decline. It’s even bleaker for local sports. Sinclair’s purchase of 21 regional sports networks has plunged the company into debt and cut its stock price by more than half. Cable and satellite operators are dropping RSN channels — or at least trying to move them to a higher tier. Dish Network doesn’t carry and its CEO argues its customers don’t miss them.

With cable news getting into streaming this year, that leaves RSNs as the only part of the legacy model that has yet to cross over from the bundle. Sinclair is trying to change that with a local sports streaming service, though it’s not clear how many digital rights they own of the 43 teams its networks carry.

MoviePass co-founder Stacey Spikes (Getty Images)
MoviePass co-founder Stacey Spikes (Getty Images)

10 Can MoviePass get a second life?

If the news of MoviePass returning late last fall turned so many heads, it’s because the old MoviePass erupted and flamed out so spectacularly that it became impossible to ignore. MoviePass’ original co-founder Stacy Spikes is back leading the charge, but it was after he left amid the company’s acquisition by Helios and Matheson that things got crazy. So it’s anyone’s guess as to whether it can overcome the company’s tarnished brand or if it will look anything like it did before. And when Spikes spoke to TheWrap in November, he made clear the subscription service would cost more than $10 a month.

But more importantly, is there still a place for a company like MoviePass when every exhibitor copied the company’s business model with its own rewards programs for frequent moviegoers? Or when a global pandemic disrupted and accelerated so many habits about how people go to the movies in the first place?

11. Can Clubhouse bounce back?

In 2021, Clubhouse continued to grow as a social media newcomer, hitting a high of 96 million new installs in February. But since then, the social audio app seems to have stalled both in growth and in maintaining interest among its users.

Some experts attribute that slowdown to poor scalability and slow integration of social features — others note that more established social-media rivals such as Facebook and Twitter have launched their own audio-based features. While Clubhouse has inspired many other platforms to introduce their own live audio features, the question that remains is whether Clubhouse can truly stand on its own to compete against the other social media players.

Jeremy Fuster, Antoinette Siu and Brian Welk contributed to this report.

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