Friends & Elevated Content Generators,
I started substacking because the Hollywood I knew seemed to have been rapidly replaced by the Big Tech streaming system. (...and because I wanted to talk to all of you more, which has worked out, and I'm so grateful for that.) What’s most unsettling to me about the streamers isn't their tech culture or their pretending two minutes should count as a view to inflate their ratings. It's their sheer size. It's as if they are all TV studios, TV networks, movie studios, and movie theaters under one roof. And even the lesser among them are poised to be global behemoths. As if that weren’t enough, they are merely shiny, loss-leading, Los-Angeles-based outposts of Big Tech & Yuge Telecomm, which doesn't mean that they are small: it means that they are infinitely empowered to blow money while they swallow whatever is in their paths. Soon, like three, maybe four winners in the streaming wars will control all of the film & TV that gets made for the whole world (…and then jack up the prices). So the whole world will get its entertainment exclusively from its biggest companies. And I don’t say this lightly, but that is Orwellian as fuck.
Or maybe that won’t happen.
In the next decade, it’s possible that the federal government could try breaking up the streamers on the grounds that they are monopolies, or at least come after their parent companies in ways that imperil their Hollywood operations. Really! I’ll try explaining how that could happen.
…and why it would be good! And it’s not because there’d be more streamers, but because there’d be more, bigger companies supplying streamers, which would introduce more competition and expertise into a market that needs both.
(Plus, you wouldn’t only be pitching to streaming execs, too many of whom seem to have come from other, more data-y parts of their parent companies and maybe don’t get it yet, or others who started in the business and seem excited by but also just a touch uneasy with their new surrounds…)
People used to get that Big was Bad…
Until very recently, my only association with “monopolies” was a chapter in my 8th grade history textbook about Teddy Roosevelt, so I’d understand if you think I’m reviving some quaint historical trivia. But I’m not the one doing so: Young, wonk-y people – who the DC press and legal establishment refer to as “hipster anti-trust” – want to bring back the bygone tradition of trust-busting. Having toiled away in think tanks that no longer get Silicon Valley backing, the DC equivalent of zines, they are getting their big break. The White House is looking to them to regulate Big Tech – the owners of Hollywood. And the hipsters’ cherished predecessors came after both movie studios and TV networks, back when those companies enjoyed monopolies too, just like the whole streaming system does today. Now, you could skip to where the font goes back to not-italics…
But if you’re looking for the more scholarly telling… I read this book called Goliath by a guy named Matt Stoller, whose brother, Nick, directed FORGETTING SARAH MARSHALL (do I have your attention now?). Matt’s work is equally revelatory…
He argues that there's this whole history of anti-monopoly populism in pre-Reagan America that has been sort of lost to history. A distrust of big corporate power -- not just populism, or a concern about inequality, but a much more specific suspicion of big business getting bigger -- was a constant presence in American newspapers (and, presumably, at the steel mill, the union hall, and in law schools too…) People understood that yuge companies were threats to functioning markets (by driving down prices before gouging desperate customers & keeping wages low) and democracy (by buying politicians and media) and societal health generally (indulge just one example that shocked me: Andrew Mellon had a monopoly on the materials and factories needed to mobilize for WWII and could’ve prevented the US from defeating Hitler had FDR not hired the right lawyer to go after him). Politicians heard it loud and clear, cheering on as they feds broke up monopolies every damn day: not just Standard Oil, but A&P supermarkets, AT&T, GE, Mellon Bank, RCA, Alcoa Steel and thousands and thousands of little ones too.
This history has been brought to the surface by other hipsters as well, most notably Lina Khan. As a third year at Yale Law in 2017, she wrote a paper arguing the government should break up Amazon. Her main point was that Amazon got scary when it expanded from selling products from third parties to leveraging its omniscience about customers and sellers to start making everything itself at prices that nobody else could compete with… and thus drove tons of people out to business… and then got real creepy and bought the cloud.
In the four years since that paper was written, the world has realized Lina Khan was right, and she has become something of a star. Biden is supposedly about to nominate Khan to the Federal Trade Commission (FTC), where she’d be joined by two other democrats in leading a part of the executive branch dedicated to controlling monopolies whose enforcement powers haven’t really been flexed in my lifetime.
Now that Big Tech is all of a sudden wildly unpopular, anti-trust actions feel possible. AOC & Josh Hawley are calling to chop up Facebook and Google. Europe and Australia are already way out ahead of us. Yes, these companies are goliaths, but we know which way the wind is blowing.
Soon after its inception, Hollywood was a target of trust-busting feds. The FTC first went after the studios in 1921 – which can’t be that long after the first Jew settled in Santa Monica. And by 1948, the government had won: “the Paramount Decree” ended the omnipotent studio system ruled by Louis Mayer by forcing the studios to divest from exhibition (owning theater chains, pressuring independent theaters to play their movies etc.). Then, in 1962, Attorney General Bobby Kennedy stopped Lew Wasserman from combining Universal (studio) with MCA (agency) – which is exactly what the writers just stopped the agents from trying to do. And then in 1970, Nixon’s White House went after TV: “fin-syn” curtailed the Big 3 networks’ rise to dominance by forcing networks to play more shows they didn’t own, making space for TV studios, syndication, and arguably the rise of cable TV.
The government’s rationale for breaking up past monopolies in film & TV feels awfully applicable today: Streamers also produce and own most their content (and want to own all of it), and of course, streamers are the medium for exhibition: the streaming app is the movie theater and the TV network. So it’s no exaggeration to say the streamers already comprise an oligopoly, as pointed out by the enviably-named Paris Marx at OneZero.
What could these hipster whippersnappers on the Federal Trade Commission actually do to Hollywood?
Well, they could try breaking up the companies that own streamers, namely Amazon, forcing them out of the business.
They could also work with the DOJ and vote to block further mergers, like one between NBCUniversal & HBO Max – which Wall Street has suggested is their only path to survival (and which seems way less ridiculous when you remember your reaction when you first heard Disney was going to buy Fox).
Also: they could come straight for streaming.
So… what would bold anti-trust action against the streamers look like?
Following 1. the precedents in Hollywood history in both film & TV and 2. the big idea in anti-trust about companies who own sales platforms not also becoming their dominant seller, the path is clear: The streamers could and should be halved. Ideally, they should stream (exhibit), but they shouldn’t produce (finance & own content). Or, more realistically, given that the genie is already out of the bottle, at least they shouldn’t own such a huge share of what’s on their platforms. That’s to say they shouldn’t become fully-walled gardens.
Instead, there should be a new regulatory regime for streaming – call it fin-stream – where streamers have to license & offer more content they don’t own. The business would be healthier if companies who actually had entertainment in their DNA were streamers’ primary suppliers – just like independent TV studios used to be. Or even like movie studios in the earlier part of the streaming era, where selling off movies to Netflix kept Paramount afloat. Under fin-stream, there’d be more incentive to start and invest in companies like Blumhouse and MGM. And Netflix’s production apparatus would be spun out into a new company that could sell to anybody.
Federal regulation of the streamers could ameliorate some of the worst shit they’ve brought to Hollywood. It could restore the balances of power that have sustained the industry in ways that are good for artists & producers. I’m convinced that anti-trust is the path towards restoring back-end profit participation — an issue that pseudonymous hero Film Crit Hulk has unpacked in all its direness. Fin-stream regulation could be helpful though: the streamers would eventually lose the leverage that allows them not to disclose ratings. In fact, without being able to own everything in perpetuity, ratings would matter more to the streamers than they do now. Independent studios could insist on getting real numbers and being paid when people like their work.
Big Tech approaches film and TV like a busy & bloated person approaches breakfast. It knows it will need content to survive, but it feels a little queasy about it and can’t be bothered to make it with any reasonable care and so will put it off and settle for a too-big lunch (like, you know, giving Ryan Murphy nine figures, and then feeling worse). And I think that’s what seems unprecedentedly bad about the situation: their indifference, their not really wanting to get their hands dirty in making stuff. It seems to come out in every anecdote about dealing with Netflix, the best version of which is: “They gave us too much money and left us alone.”
The indifference manifests in ways of doing business that we all know are guaranteed to produce bad work more often than even the old, flawed ways did. The miniature-writers’ rooms for shows they only want to run for a couple seasons, before anybody involved ever gets leverage -- or before fans can really get attached. Or overpaying movie producers up front in exchange for their back-end participation – where the streamer might as well just say: “There’s nothing in this for you if it turns out great, so don’t bother.”
Does any of that feel sustainable?
Not long ago I thought that high budgets for film and TV and people’s willingness to pay for tickets & HBO protected Hollywood from extinction-by-disruption. Till recently, they have. But the goliaths want to offer only the minimum viable smorgasboard of content so that you don’t cancel your subscription. And while they certainly don’t mean to do so, they’re bringing down people’s expectations for quality and cost. Do kids instinctively get that movies are different from YouTube videos? Could the film business in 2030 look more like journalism in 2010?
To me, the most urgent reason to regulate Big Tech has nothing to do with Big Tech. It’s about protecting the worlds they’ve colonized — maybe especially when they think they’re saviors.
Hollywood Forever Y’all,
Max