The Return of the Kilar
This week witnessed the re-emergence of the former CEO of the former Warner Media, Jason Kilar, in a piece he wrote and published in the Wall Street Journal this past Monday. I have mixed feelings about Kilar's reign at Warner Media. I liked the idea behind "Project Popcorn," pushing the entire WB film 2021 slate during some of the worst of the Covid times onto the then fledgling streaming service, HBOMax, but I think Kilar showed his inexperience with the community by not even bothering to communicate with the talent behind all those films before announcing the plan. Kilar's emotional intelligence was slightly lacking in that instance. That said, this article was an interesting read.
Kilar begins in 2010 with an in-depth description of how the industry was riding high on cable bundles, DVD sales, and increased ticket prices, all leading folks in the industry to believe the fun could never stop. And then, the bottom fell out. Although Kilar positions it more as an adjustment to smartphones and streaming, one aspect he leaves out is that after the bottom fell out of the DVD market, international began all the rage, especially in India and China. Many felt they were new gold mines, and for a while, they filled that hole until they didn't. And we all went headfirst into the streaming era. Kilar doesn't offer an opinion on the rise of streamers; as the first CEO of Hulu, he might be slightly biased. Still, with the dive into the streamer era, all the conglomerates thought they could be the next Netflix, throwing cash raised on cheap debt to anyone and everyone. They were always looking for a boost in subscribers until Wall Street decided that a little thing called profit still mattered. Another aspect that Kilar misses is how the studios more or less built Netlfix by lending them their content versus actually trying to develop their own service and saving them the hassle of repurchasing it, which many subsequently did at great expense. Although one could argue that was Hulu, its structure was confusing to consumers and investors, so it didn't become relevant until it started offering Live TV.
Kilar still has an enduring passion for the business and its power to create moving and fantastic stories that stretch across generations. This was one aspect that Kilar needed to focus on more during his tenure at Warner Media. Many viewed him solely as a disruptor, a "tech bro" sent from up north to fail fast and often. At least, judging by this article, he wanted to push the industry to the next level. He does offer solutions: (a man after my own heart) such as revitalizing the theatrical experience (uh, yes, please, as I have said till I'm blue in the face on Hollywood Breaks.) Also, potentially eventizing big cultural shows such as House of Dragon in a theater (hat tip to HB contributor Robin Geisen, as she has mentioned this repeatedly.) He also suggests creating more personalized digital experiences in a more "differentiated and personalized way," which sounds like the meta-verse to me. He also should have mentioned something about the lack of leadership in general and a new upcoming leadership class, which will be a big problem unless addressed soon (more on that below.) However, Kilar is one who truly believes the industry will innovate once we get through this bumpy period. As we often say on Hollywood Breaks, this is a time of immense change and opportunity. It just simply takes the right people taking advantage at the right moment. I wouldn't be surprised if Kilar resurfaces elsewhere in the business. Cinemark perhaps?
Prime Time
Speaking of saviors of the industry looks like Amazon is gunning for that top prize. Last week came the announcement that Amazon plans on investing up to $1 billion in theatrical films with an output of about 12-15 films per year. Most of those films will come at first from the newly acquired MGM, with Amazon Prime ramping up over the next few years. Still, the news was met with loud hosannas across the industry, including a nice bump to the cinema stocks. This is all good news as far as I'm concerned. Theaters need this lifeline, and hopefully, it provides an opportunity for the theatrical experience to evolve, which, as we've previously discussed, it simply must do. Message to AMC et al., you have an opportunity here, don't blow it.
Last week also brought the news that Amazon Studios head Jennifer Salke would expand her purview to include the recently acquired MGM, both its film and TV operations. While the structure isn't simple (MGM Marketing Head Stephen Bruno will now report to Amazon Studios Marketing Chief Sue Kroll, who will report to Salke), it does settle some of the questions of who is running things over there at Amazon. Now that it has been finalized, there is still the big question of who will run the MGM film side (Vernon Sanders, who runs Amazon TV, will oversee MGM TV reporting to Salke.) Emma Watts was supposedly courted, and then Amazon passed on her, so the chair remains open. Here would be an ample opportunity to start thinking about the future and look to a diverse slate of execs other than the same group that has been running the studios for the last few decades. Salke spent the bulk of her career in television, so she may not have the level of exposure to some of the younger talent at studios around town, but all she'd have to do would be to make a few phone calls, and I'm sure a few names would percolate up. There is ample talent around town right now. Amazon and Salke need to expand their horizons beyond the same names that have been bandied about over the last few years. There is risk involved, but this is a business of risks. There are no sure things, but Amazon could make a statement by finding someone who may not necessarily be on everyone's radar. Find the next Thalberg or Zanuck so the industry can prepare for the future and not rely on its past.
Pages from the Commonplace Book
Wednesday marked the 81st anniversary of the attack on Pearl Harbor. Most of you already know the famous quote from FDR and "the date that will live in infamy," but I thought this week, we might turn to one of our staunchest allies during the war, Winston Churchill, the prime minister of Great Britain. Writing about the night he found out about the attack in his history of WW II, Churchill wrote:
"I thought of a remark . . . that the United States is like a gigantic boiler. Once the fire is lighted under it there is no limit to the power it can generate.' Being saturated and satiated with emotion and sensation, I went to bed and slept the sleep of the saved and thankful."
The boiler analogy represents the limitless possibilities of which our country is capable when we all work together. Given our current cultural and political climate, one wonders how hot that boiler would burn today.
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