| KPop Demon Hunters is now the most-watched original movie in Netflix history, edging out Red Notice, a film that cost at least twice as much and featured two of the biggest movie stars in the world (The Rock and Ryan Reynolds). The film’s success is a reminder of an old Hollywood adage: Nobody knows anything. Sony sold the film to Netflix rather than risk losing money on a theatrical release. Netflix put its marketing muscle behind Happy Gilmore 2. Toy companies didn’t see it coming, which is why we aren’t overwhelmed with consumer products. It wasn’t even clear this would be a massive hit after it first came out. The movie was a slow burn. It debuted at No. 2 on Netflix’s top 10 list and has been dethroned from first place by a couple of other movies since then. But audiences loved the movie, which has never dropped out of the top two. This is not the first time this year that a massive blockbuster caught everyone by surprise. It happened with A Minecraft Movie and to some extent with Sinners. The surprise hit is also something of a Netflix trademark. The company had higher hopes for The Get Down than Stranger Things and spent more on a Dave Chappelle comedy special than the first season of Squid Game. Media companies have more data about their audiences than ever before and yet many executives feel more unsure than ever. They are overwhelmed given the volume of competition. We’ve been collecting questions from readers over the last few weeks, and a lot of them were about this movie — and Netflix more broadly. Let’s answer a few of them. In the wake of KPop Demon Hunters will studio deals with Netflix change? Sony agreed to produce movies for Netflix as part of a larger deal licensing its theatrical releases. That agreement is going to expire soon, and Sony is about to bring its rights to market. The Netflix deal has worked out well for Sony. Its movies routinely rank among Netflix’s top titles, even when they weren’t big hits in theaters. Netflix would like to keep the Sony movies — and keep commissioning originals from the studio. But Netflix signed a deal for new movies from Universal and will feel less pressure to overpay for Sony. Amazon, which lost the Universal deal, is a contender for the Sony movies. HBO will bid as well, though it has had a hard time competing with the larger streaming services for these deals. It’s hard to say if Sony will want to keep making original movies for others. Getting paid to make movies for Netflix is a pretty good deal for a studio that wants to sell more product than its theatrical division can handle. Perhaps Sony can bake in some protections in the case of the next KPop Demon Hunters. (Of course, if Sony had known the film would become a smash hit, management would have kept the movie for itself.) Is YouTube the only service that might actually dent Netflix’s dominance in the next decade? YouTube and Netflix are the two biggest streaming services — it’s not even close. YouTube is much bigger in viewership — and revenue if you include its subscription business. Disney accounts for a greater share of TV time than Netflix, thanks to TV networks like ABC and ESPN. But its share is going down. It’s hard to see a traditional Hollywood player gaining much ground on Netflix, especially given its huge advantage overseas. But that doesn’t mean Netflix lacks competition. The competition is broader than just Hollywood. It’s a fight for attention. It has become trite to say this, but it’s true. Netflix is competing with TikTok and podcasts and video games. That is why the company has explored all three categories. Netflix also lacks major sports rights, which limits its share of engagement and advertising for the time being. Is Comcast really going to just sit on its hands and let Peacock flounder while also losing internet subscribers? Comcast hasn’t invested as aggressively in streaming as some of its peers because entertainment isn’t its main business. Shares of Comcast rise and fall because of the performance of its cable and broadband businesses. Cable has been in decline for a long time. Broadband has been struggling for a couple of years. And the leadership at Comcast is intent on figuring out how to compete better in those arenas. While entertainment is a secondary concern, the company isn’t neglecting Peacock. Comcast just spent a fortune on NBA rights and is making an aggressive bid for baseball. The company agreed to sell Peacock via Amazon Channels, increasing its distribution footprint, and is raising prices. Management isn’t going to spend $20 billion a year programming Peacock, but it’s trying to make things work. The company needs to better define Peacock’s place in the market. If you went up to the average person and asked them what they watch on Peacock, would they have an answer? The service has a lot of sports, but it also has sitcoms and some more female-skewing reality programming. Are you optimistic that the next media deal for Major League Baseball will satisfy owners, players and fans? These next deals are a stopgap. Baseball didn’t want ESPN to opt out of its current contract and is trying to make the best of a bad situation. The league is lining up of all its rights so it can strike a few massive deals in 2028, when all of the MLB rights expire. The biggest challenge for baseball is local rights. Baseball is a more local sport than football or basketball. The business of regional sports networks is in terminal decline, and no solution has emerged. MLB’s streaming product lets you watch your favorite team if you aren’t in that city. (I can watch the Los Angeles Dodgers while in New York, for example.) But most people want to watch the team in their own market. ESPN would like to consolidate all of the local rights on its streaming service. Amazon has dabbled in this area as well. They will be able to aggregate some of the rights, but teams like the Dodgers and New York Yankees have little reason to cooperate so long as they are getting paid handsomely by RSNs. Sports costs keep ballooning. Is there a point where networks and platforms can no longer justify the economics? Every time you think a league has finally overreached, someone comes around to pay more money. Both Major League Soccer and Formula One looked like they were going to have to reduce their demands, until Apple paid them. Major League Baseball looked like it was in a pickle after ESPN opted out, but now it’s working on a combination of deals that will be worth hundreds of millions of dollars. American football is only getting more valuable. Basketball just locked in a huge payday for the next decade. Ultimate Fighting Championship just doubled its money at a low time for the sport. Some bidders are getting more selective about where they want to spend their money, but newer bidders emerge to fill the gap. And you could argue we are in the early days of sports at YouTube, Netflix and Apple. The market will change if one of these streaming services folds or mergers with a peer. That would require an act of humility that is rare for media moguls, as we explained here. Any update on your 3Arts reporting? Lionsgate has been looking to sell a stake in 3Arts, the management company that represents Mindy Kaling and Tina Fey, among others. But it hasn’t reached a deal, and it doesn’t sound like one is imminent. The studio is in a tricky spot. The mini-major may forever regret not accepting a buyout offer for the entire company from Hasbro many years ago. Lionsgate acquired Starz to break into streaming. Then Starz became less desirable and Lionsgate split up. 3Arts is a good asset, but it makes a lot of its money from older TV shows that it produced. The labor stoppages of 2023 and the broader industry pullback on spending have hurt the financial results of all talent representation businesses and production companies. Lionsgate wants more money than a lot of bidders are willing to pay based on the numbers. Lionsgate itself is also in play. Legendary Entertainment, the producer and financier of Dune, has explored merging with Lionsgate. But that will only happen if Lionsgate accepts it’s finally time to say goodbye. Why haven't we seen new movie or TV studios crop up? For the same reason I just outlined with 3Arts. Independent studios have been crushed by the contraction in Hollywood over the last couple years. It’s a hard time to get financing to start a new studio in an industry that isn’t growing. As Asian markets expand globally, do you see Western studios losing dominance? Netflix already spends billions of dollars funding programming in Asia because a large portion of its customer base lives there. It has recently touted planned investments in Thailand and South Korea. Western record labels are investing heavily in Latin America, Africa and India, among other markets, because they are following the growth. But major Western media companies will control less of the Asian market, with one or two exceptions. (Netflix is quite strong in a few markets.) Local repertoire is more and more important, not just in Asia but all over the world. And while those artists will depend on Western platforms like Spotify, YouTube and Netflix for distribution, they won’t need their help for production and creation. Consider the growing strength of China in gaming and movies. Are people spending less on entertainment or news? They spend just as much as ever. More, in fact. What is “Ebitda” or whatever you guys are saying on The Town podcast? Ebitda stands for earnings before interest, taxes, depreciation and amortization. It’s a way of looking at how much profit a company makes from operations before you factor in financing expenses, taxes and other costs related to investments. The best of Screentime (and other stuff) | People are finishing more TV shows | More than half of the people who watch popular TV shows actually finish them, according to new data from market researcher Digital i. The firm measured a sample of viewers of the 20 most popular new titles from the past three years and the completion rate has increased each year. Completion rate is one of the most important metrics for streaming services. It’s great if millions of people start watching a show. But if they don’t finish, there is a good chance they didn’t like it and/or won’t watch a second season. Why might the completion rate be going up? There are fewer shows being released, so we aren’t quite as spoiled for choice. The number of episodes in each season is also going down. The average seasons a couple years ago ran nine or 10 episodes. That has since fallen to seven. Early Oscar favoritesThe fall film festivals have arrived, which means it is also the unofficial start of Oscar season. The Hollywood trades have already started to make predictions, and it appears as though Universal’s Focus Features and Netflix have the largest share of contenders. John Malone speaksThe press shy media billionaire is doing some interviews to promote his new memoir. CNN has become “a left-leaning, anti-Trump news service,” Malone told the New York Times. Malone is a major shareholder in CNN’s owner. Barstool steals from The RingerSports media star Ryen Russillo is leaving The Ringer and allying with rival Barstool Sports. Put another way, Russillo is leaving Bill Simmons for Dave Portnoy. Russillo hosted one of The Ringer’s most popular shows and was a regular on Simmons’ show during basketball season. He is now starting a company and will create a new show. Barstool will invest in his company. Deals, deals, deals - You can now buy Peacock from Amazon’s Channels store, ending the service’s holdout. That leaves Netflix and Disney as the only major streaming services not sold via Amazon.
- Fox struck a new deal with Google’s YouTube TV just ahead of the new NFL season.
- Amazon put its head of sports in charge of Prime Video in the US.
- Podcasts are raking in money from live events.
- Netflix is the new home of the World Baseball Classic… in Japan. The streaming service keeps testing sports.
If you aren’t watching the US Open, what are you doing with your life? | 
