Episode Summary
Executive Summary: In this episode of 'This Week in Startups,' hosts Jason Calacanis and Lon Harris analyze the streaming industry, focusing on Apple's content strategy, the state of Hollywood budgets, and the impact of the WGA and SAG strikes. They discuss Apple's potential acquisition of Disney, the success of auteur-driven films like 'Killers of the Flower Moon' and 'Barbie,' and the challenges of franchise fatigue. The conversation also covers AI's role in creative industries, the importance of profit-sharing for actors, and recommendations for shows and films.
Main Topics: Apple's Content Strategy and Potential Disney Acquisition (Priority: 5/5): Discussion on Apple's high-quality, auteur-driven content approach for Apple TV+, and rumors of Apple acquiring Disney. The hosts debate the implications for consumers and the creative community. Hollywood Budgets and Franchise Fatigue (Priority: 5/5): Analysis of escalating production budgets (e.g., 'Secret Invasion' costing over $200M) and audience burnout with sequels and franchise films, contrasted with the success of original IP like 'Barbie' and 'Oppenheimer'. WGA and SAG Strikes: Residuals and AI (Priority: 4/5): Overview of the writers' strike resolution, including AI protections and residual sharing, and the ongoing actors' strike over revenue-sharing models (e.g., 2% of streaming revenue). AI in Creative Industries (Priority: 4/5): Debate on AI's role in ideation and content creation, with hosts expressing skepticism about AI's ability to generate truly original or emotionally resonant work. Theatrical vs. Streaming Release Strategies (Priority: 3/5): Comparison of Apple's hybrid theatrical/streaming model (e.g., 'Killers of the Flower Moon') with Netflix's streaming-first approach, and the benefits of multi-platform availability. Recommendations for Shows and Films (Priority: 2/5): Hosts share personal recommendations, including 'Fall of the House of Usher,' 'The Diplomat,' 'Mr. Inbetween,' 'Past Lives,' and 'The Burial.'
Key Arguments: Apple's focus on quality over quantity in content creation mirrors its hardware philosophy, leading to higher consistency and critical acclaim. Escalating budgets (e.g., 'Secret Invasion' at $200M) are unsustainable; studios need to reduce costs to remain profitable. Original IP with strong auteurs (e.g., 'Barbie,' 'Oppenheimer') can outperform franchise sequels, but studios often draw wrong lessons from successes. Theatrical releases can boost streaming viewership by generating buzz, as seen with Apple's strategy for 'Killers of the Flower Moon.' Profit-sharing models (e.g., 2% of revenue for actors) could incentivize better performance and retain talent, similar to NBA player contracts. AI is useful for data entry and ideation but cannot replicate human creativity or emotional depth in storytelling.
Data Points: Apple's 2022 revenue: $394 billion - Compared to global film industry revenue of $77 billion, highlighting Apple's financial capacity to invest in content. Apple's 2022 profits: $100 billion - Greater than the sum of global film industry revenue, making content spending a small fraction of profits. Budget for 'Killers of the Flower Moon': $250 million (estimated) - Compared to 'The Irishman' ($159M) and 'Wolf of Wall Street' ($130M adjusted), showing budget inflation. Budget for 'Secret Invasion': Over $200 million - Criticized as excessive for a show with poor visual quality. Budget for 'Barbie': $140 million - Grossed $1.4 billion, demonstrating high ROI for original IP. Budget for 'Oppenheimer': $100 million - A three-hour biopic that performed strongly at the box office. SAG's proposed revenue share: 2% of streaming revenue - Estimated at $2.4 billion over three years, rejected by studios as too high. NBA player revenue share: 51% - Used as a comparison to argue for fair profit-sharing in Hollywood.
Pivotal Quotes: "I don't even know how some of these budgets are getting as high. Like Secret Invasion, that Marvel show that didn't even look very good. People are saying it costs over 200 million to make. It's getting crazy." — Jason Calacanis: Criticizing unsustainable production budgets in the streaming industry. "If Oppenheimer and Barbie have shown this, that original IP done well with auteurs, can win the day. Why isn't Disney and other folks getting the memo on this?" — Jason Calacanis: Questioning why studios continue to prioritize franchise sequels over original content. "Creative stuff, I think, it's just not a good fit. Creative stuff is what humans are very good at. That's the word. We should have AI do all the data entry stuff that we're bad at or that it's hard for us to focus our minds on so that we can be freed up to be creative." — Lon Harris: Arguing that AI should augment rather than replace human creativity.
Implications: The episode suggests a shift toward auteur-driven, quality-over-quantity content strategies, with potential for more profit-sharing to stabilize talent relations. Studios may need to reduce budgets and embrace hybrid release models to adapt to changing audience preferences and strike outcomes.
About This Week in Startups
Jason Calacanis covers startups, tech, markets, media, and all the hottest topics in business and technology. He also interviews the world’s greatest founders, operators, investors, and innovators.