A 3 Hour Tour . . . A 3 Hour Tour

You may be busy pregaming the Oscars so I'll make the takeaways clear and portable:

1. The chaos surrounding the Oscars telecast matters because it is the funhouse mirror reflection of the reshuffled Hollywood studio hierarchy in this era of unrestrained mega-conglomeration, and
   
2. Even before the winners are announced, it is clear that Netflix — and not Disney — is now the industry's hegemon. I'll explain how this happened, what it means, and, as bonus for anyone who gets to the end of this piece, why Netflix's days are already numbered.

It has obviously been a disastrous year for the Academy — when it comes to the telecast. Offstage, recent efforts to dramatically expand and diversify the membership have changed the mix of nominees and will likely change the winners as well. Black Panther's long list of craft nominations is part of that. The Academy Museum of Motion Pictures will finally open later this year. Their preservation and grantmaking operations are, apparently, humming along.

But the TV show is a mess. Last year's was nearly four hours long. The ratings were terrible, and in response, the Academy has done all sorts of things to try to improve them — starting with saying it wanted to improve them. This has made every change seem mercenary, when the show is designed to belie the idea that the movie business is simply mercenary, and defensive, when defensiveness is maximally unglamorous.

Things started downhill immediately after last year's show when the Academy's new President John Bailey faced a sexual harassment charge (he was cleared). Rolling through this year's endless awards season, the Academy managed to 1. undercut its biggest award; 2. create controversy around the host; 3. promise to make the show less musical and less fun; and 4. devalue a handful of its other awards by threatening to shunt them off to the commercials. And all of these blunders seemed so easily avoided. I have spent months embedding the Jags Fan Reaction GIF: Why didn't the Academy vet the name for the "popular film" category? Why doesn't Kevin Hart delete old tweets? Why didn't the Academy read them? Why would he ever tweet that shit? Why are they so hellbent on saving a couple minutes of walkup time that they would screw up the rhythm of the telecast?

In August, they announced a new Best Picture for "Popular Film," bailed on the idea in September, and followed up in November by confirming that the idea was an attempt to fix the declining ratings of the telecast.1

In December, the whole cycle of abandonment went into overdrive, with Kevin Hart named host on the 4^th and bailing on the 6^th, without deleting the homophobic tweets that led him to resign from the gig in the first place. Early in January, Ellen DeGeneres — whose turn as host set a viewership record just 5 years ago — tried to broker his return; that failed and Hart finally, finally said he wouldn't host on January 8^th. As a result, the broadcast will be hostless.

Three weeks later, the Academy announced that only two of the five nominees for Best Song would be performed — "Shallow," from a Star is Born and "All the Stars," from Black Panther — the two that actually were hits. Naturally, there were objections, and a week later they relented. Then, just this week, Kendrick Lamar basically gave them the brushoff and said, "I'm staying in Europe," so he and SZA won't be performing "All the Stars." Nor will anyone else. (Bette Midler is already busy singing the Mary Poppins song.) So in the end the broadcast will save some time by not singing the DisneyMarvelABC song.

Then, in February, again as part of an attempt to speed things up, they announced the finalized plans to give four awards during commercials, showing the acceptances later on in the show and saving the long walks to the stage. (Just putting the things under the winners' seats and pulling an Oprah was not, apparently, under consideration.)

The responses to this move — "Why don't you just make the tv show you want? Editing and Cinematography sont l'essence du cinema! Those of us who love movies will stay up late we promise" — were utterly predictable and exactly not what the Academy wanted to hear. Again, since the whole point of the show is to transcend contradiction between art and commerce, they don't want to leap into the role of profit-maximizing philistines. At the same time, the show is essential to the Academy: it brings in about $130m a year, costs about a third of that to put on, and spins off the rest.

If the reactive position the Academy has adopted has a source — and everyone seems to think that it does — it is ABC, which has the rights to broadcast the show until 2028. And if it is ABC, then that means it's Disney, ABC's parent company. It would appear that Disney rules the Hollywood roost. But if Disney is calling the tune, and doing it this badly, that in turn shows how dependent the company is on some of its legacy media holdings that are going to be hard to shake, a tough-to-manage sinkhole in an era of cord-cutting. The chaos at the telecast reflects both Disney's power and its problems.

That is, if DisneyABCESPNFoxMarvelPixarLucasfilm were really the swaggering player that its roughly 35% market share suggests it should be, then they wouldn't be making the nice movie people unnecessarily nervous, and they wouldn't have let this process get so out of hand in the year when Black Panther is up for a truckload of awards. They certainly wouldn't have botched the rollout of the "popular film" award, or lost out on Kendrick and SZA performing on the show. The American antitrust regime is in tatters, and under Robert Iger, Disney is reaching an unprecedented position of IP dominance, yet when it comes time to give themselves prizes for their newfound dominance, as Robert De Niro put it in the classic DisneyMiramax film, Cop Land, "YOU BLEW IT."

In contrast, if you want to see confidence in action, look no further than Netflix. This year, thanks mainly to Roma, Netflix has almost as many Oscar nominations as Disney (15 to 17) and is bound to win more. It paid to get Orson Welles's final film, The Other Side of the Wind, finished, to the delight of cinephiles everywhere. (It is easy to find folks suggesting that if ABC is making unreasonable demands, the Oscars should just move to Netflix.) As for ratings, Netflix doesn't even feel obliged to tell anyone how many people watch its shows, unless it wants to flex in public. Unlike the recent ratings declines for massive live events like the Oscars, Golden Globes, and even the Super Bowl, Netflix explained to its investors that it managed to get 40 million subscribers to watch its series You and 80 million to watch Bird Box.2

In addition to awards success and ratings confidence, Netflix has also been able to position itself as an industry ally. Coming into 2018, the MPAA — the trade association for the major studios — knew that it was going to lose one of its members when Disney finished buying Fox (or those parts of Fox that make movies). That purchase meant that the number of MPAA members would go from 6 to 5 (Disney, Paramount, Sony [Columbia/TriStar], Universal, and Warner Bros.). With Paramount and even Columbia in, let's say, some duress, there was a worry that soon there might no longer be a critical mass of major motion picture producers necessary to make the group go. The MPAA maintains the ratings administration, but it is also how the studios lobby for tax credits, intellectual property protections, favorable export environments, and so on. And then, in January, Netflix joined, which made plausible the idea that Amazon would join, too — and that the moderately collusive Hollywood machine might spin on.

Now installed as temporarily benevolent hegemon, though, will Netflix be replaced in turn? Yes. Not because it has production troubles. Frankly, production is going amazingly well and remaining nimble in its evolving mix. And not because these are the same folks who nearly Quikstered themselves out of their brand equity. The problem is strategic: the tech-company assumption that being the first-mover streaming platform gives them license to run up the scale to the point that when, eventually, the audio-visual entertainment bubble pops, they will be left standing like a colossus over the wreckage of their competitors — that strategy is wrong.

When someone tells you there are 500 scripted series and that is too many and something has to give, ask yourself why. Because the "something has to give" model assumes that there won't be sufficient return on capital to keep plowing money into production and, well, that isn't where we are now. Because just entering the production arena in a serious way in the U.S. are Amazon, AT&T (which bought Warner Bros. and announced that it wants HBO to be HBO x 4), YouTube (which is Google), and Apple (which is sitting on a cash pile of $285 billion or 19 years worth of Netflix's 2019 production budget). If these players come off the sidelines in a serious way, no amount of overproduction is a sufficient barrier to entry. These companies are 4, 8, 9, and 22 on the Fortune 500. Netflix is down at 261. Everything Netflix has done right will either inspire more competition (Disney's Disney+; HBO x 4) or make it an attractive acquisition. That part of the story may come quickly, or it may run long. Roma's successes may only speed it up.

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JD Connor is an associate professor of Cinema and Media Studies at the University of Southern California. He is the author of Hollywood Math and Aftermath: The Economic Image and the Digital Recession (2018) and The Studios After the Studios (2015).

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