When David Ellison defended Paramount Skydance’s purchase of Warner Bros. during a conference call Monday, he stated that it was a necessary move “to compete effectively with the leading streaming services in today’s marketplace.” According to the Skydance CEO, Netflix, Google, Apple, Amazon, and all the Silicon Valley bros touting AI and sports betting had reached new heights on the billionaire mountaintop. Ellison, quite simply, couldn’t climb said mountain without buying his way to the top. But for the average viewer—who largely couldn’t care less which streamer a film or TV show comes from so long as it’s enjoyable, affordable, and easy to find on your TV—Ellison stating that he needed the merger to compete doesn’t sound like something we needed as well.
It sounds much worse, actually. For starters, every entertainment merger throughout history has preached giving us more content, only to eventually make less. When the Walt Disney Company bought Fox Studios in 2019, the studio went from producing 15 to 24 films a year to just five to six films a year.
And when Warner Bros. merged with Discovery in 2022, it simply abandoned several finished projects as tax write-offs. Skydance is about to face the same problem. Ellison says that he’s committed to producing 30 films a year between the combined effort of Warner Bros. and Paramount, which would mean zero reduction in either studio’s current production calendars.
Yet Ellison also plans massive layoffs to cover roughly $6 billion of the new company’s reported $80 billion debt. A report issued by Los Angeles County in August estimated that the merger will likely result in the loss of around 4,500 film and TV jobs in the city over the next three years. The reduction will “make us leaner and more nimble and free up capital to invest in the stories, creators and technology that matter most.” It’s tough to imagine how fewer people will produce the same number of movies per year.
And much as with the Disney/Fox Studios merger, valuable IP like Harry Potter, Batman, Game of Thrones, and Yellowstone will likely take up much more of the company’s focus than new, original ideas from creatives now left with one less studio to pitch to. So how will Skydance pull off its ambitious, never-been-done-before plan? Speaking at a finance conference in March, Ellison suggested to the audience that generative AI technology has the potential to act as a “force multiplier” for entertainment companies.
For example, he outlined a specific scenario in which AI could allow the studio to screen-test multiple different versions of a film so that it could quickly learn from audiences what they liked and what they didn’t. I’m sure actors and directors will love AI remixing their work dozens of times to tell them how it could have been better. That is, if they still have jobs at Skydance come Monday.
Extract — continue reading at the source.
