Welcome back to What I’m Hearing, and happy end of the longest January in recorded history. Looks like I’m not gonna make it to the big FireAid benefit tonight, but I’ll be at the second-worst table at the Clive Davis fundraiser on Saturday, and in somewhat better seats at the Grammys on Sunday, so say hello if you see or hear me. 💫 💫 Kim Masters officially starts at Puck on Monday, joining us from The Hollywood Reporter and, before that, Vanity Fair, Esquire, and The Washington Post. Once she gets going, you’ll see Kim’s excellent writing and reporting twice a month in this space, and I’m sure her fingerprints will appear elsewhere, too. So reach out, say hi, and drop her news tips and story ideas at Kim@puck.news. With Kim’s arrival, there’s now zero reason not to be a Puck member, even if you really hate me. Just click here to join our growing community! Let’s begin…

Thursday Thoughts…

NOW the Oscar race is getting interesting: Pour one out for the Karla Sofía Gascón Oscar campaign, right? That seems to be the sentiment in awards circles after the Emilia Pérez star was forced to apologize today for old tweets insulting Muslims and George Floyd. Gascón probably wasn’t winning anyway, but it’s far from clear how much this scandal actually hurts the movie’s chances for best picture. Emilia Pérez is officially this season’s Green Book, a movie loved by Academy voters in 2018 but widely loathed online and criticized by the progressive left for representation issues and stereotypes. If you remember, that movie also endured an Islamic tweet controversy, when it was revealed that screenwriter Nick Vallelonga posted that Donald Trump was “100% correct” that Muslims in New Jersey celebrated the 9/11 attacks. Didn’t matter for Green Book, though it’s tougher here because Netflix’s Emilia campaign narrative has been built around feeling good about voting for its history-making transgender star. (No matter that GLAAD has condemned the film.) Now, for many voters, those feelings are probably… more complicated. Netflix needs to work hard to contain the blast radius.

More P.E. cash for managers: A group of talent managers from Entertainment 360, which just closed a rich minority investment from the Carlyle private equity firm, gathered for a little celebration at San Vicente Bungalows last night. CAA’s Kevin Huvane happened to be there, which led to a nice moment—and not just because CAA and 360 share big clients like Margot Robbie, Anne Hathaway, and Salma Hayek Pinault, wife of CAA owner François-Henri Pinault. If you remember, Huvane’s late brother, Chris Huvane, was a manager at 360, and Kevin helped Chris make the transition in 2010 from publicist and editor at GQ to the talent game, until his death by suicide in 2022. I’m told Kevin gave an emotional toast last night to the 360 crew, who have come a long way in a management business that is suddenly hot with investors. If you’ve been following, Guymon Casady, Evelyn O’Neill, Darin Friedman, and the rest of the 360 partners are the latest beneficiaries of the recent rush of private equity into management. I wrote about the trend back in September, but this 360 deal is a minority growth investment, not a majority sale, like TPG’s recent acquisitions of Untitled and Grandview, or Brillstein’s purchase by the Wasserman agency. The P.E. crowd seems to have taken note of the billions TPG generated from its 13-year relationship with CAA and decided that management firms are just as intriguing. There are unique risks, of course, but investors Todd Boehly and Peter Chernin both chased this 360 deal, as did Gerry Cardinale’s RedBird Capital and Crestview, which invested in the Gersh agency in 2023. Ben Fund at Carlyle closed it, and he’s now betting on the thesis that as Hollywood talent either wants or is forced to be more entrepreneurial, their reps/partners will benefit. And everyone at 360 is getting a check. (Usual disclosure: TPG is an investor in Puck.)
Apple’s new production chief: Apple TV+ hasn’t had a head of physical production since Bruce Richmond left last summer. But I’m told that Apple has lured Ty Warren, who was laid off from Netflix in 2021, out of semi-retirement to fill the job. Best of luck to Ty in convincing Severance producer Ben Stiller to adhere to agreed-upon budgets.
A rare moment of agency unity: Tragedy can bring together sworn enemies—even talent agents. Today, CAA, WME, and UTA together hosted a Q&A with Steve Soboroff, who’s spearheading the fire recovery effort for L.A. UTA’s Jay Sures and WME’s Richard Weitz led the chat, but invites went to employees and clients of all the Big Three agencies. CAA, for instance, has 35 “severely impacted” employees, meaning their homes are either gone or uninhabitable.
Box office over/under: Universal’s lower-budget, animated Dog Man has been surging lately to a projected $30 million debut. Some services suggest even higher, so I’ll take the over. Warners’ under-marketed horror-thriller Companion is stuck at $9 million. Given the great reviews, I’ll take the over there, too.

Now for today’s Comcast earnings and the new normal at Netflix…

Kabletown at a Krossroads

Comcast’s Brian Roberts has a decision to make with Peacock, a subscale, money-losing, U.S.-only streamer whose growth has been tied mostly to exclusive sports programming. As Netflix and the other global platforms pull away, new numbers add urgency to the push to merge or bundle.

Matthew Belloni

These days, only the global streaming services can convince hundreds of entertainment journalists to schlep to deep Hollywood during the morning rush hour and stare, mouths wide open, at a gushing fire hydrant of content. Among the Netflix programming that drenched me in the back row of the Egyptian Theater on Wednesday, there were lots of engagement tools—sorry, premium scripted and unscripted series—that looked decent, featured big stars, and that I instantly forgot once the next celebrity appeared to introduce their own mechanism of engagement. On the movie side, more of the same. Netflix chief content officer Bela Bajaria reminded us that Netflix subscribers watch an average of seven movies per month, though she declined to reveal what percentage of those seven are actually made by Netflix. But with apologies to Matt Damon (and his RIP cop drama with Ben Affleck), only Guillermo del Toro’s Frankenstein looked to me like it deserved more than the direct-to-Netflix treatment.

A MESSAGE FROM OUR SPONSOR

10 Academy Award^® Nominations including Best Picture Best Actress (Cynthia Erivo) Best Supporting Actress (Ariana Grande) 7 BAFTA Film Award^® Nominations including Leading Actress (Cynthia Erivo) Supporting Actress (Ariana Grande) 5 SAG Award Nominations including Outstanding Performance by a Cast in a Motion Picture PGA Award Nominee Darryl F. Zanuck Award for Outstanding Producer of Theatrical Motion Pictures

For more information on WICKED, visit universalpicturesawards.com

At this point, though, traditional notions of quality or even audience satisfaction matter less than they ever have at Netflix, right? Not that Netflix doesn’t make some great stuff. It’s just that most of these shows and movies will be popular on Netflix because they are on Netflix. The programming is high-volume, algorithmically curated, and served to the exact cross-section of the platform’s 300 million members who are most likely to click on it. That’s regardless of whether the show or movie is particularly good or bad, or whether the intended audience is simultaneously folding laundry or updating their Hinge profiles. No shame, of course… passive viewership has always been a hallmark of the TV industry (hence the power of the “lead-in” for all those years). But the question of whether the Netflix 2025 slate “looks good” is kinda silly. They’re gonna have a huge year, and an even bigger year after that, and the approval of the critics and journalists assembled in the Egyptian—a vintage Hollywood movie theater that Netflix bought in part to pretend that it’s not just a global TV channel—hardly matters to a service of such scale and technological sophistication.

The Peacock Narrative

Regardless, the Netflix onslaught only served to remind those of us in the audience that the company is effectively replacing a big chunk of the global cable TV business at the exact moment when the owners of those networks are working to unload them as fast as they can. Unfortunately for Comcast, whose execs hopped on its fourth-quarter earnings call ready to talk up its plan to spin off USA, E!, and the rest of the NBCUniversal networks that don’t feature Bozoma Saint John and her fellow Housewives, the narrative was hijacked by some unfortunate numbers. The overall Comcast financials were fine, and the studios unit, on the backs of Wicked and The Wild Robot, delivered $3.3 billion in revenue—up 6.7 percent from the same quarter last year. (No mention of the marketing costs associated with Wicked, of course.) But the cable subscription and broadband units are losing subscribers faster than expected, meaning the diverse revenue streams that have always been a welcome buffer for the company dubbed Kabletown on 30 Rock are increasingly problematic, themselves. Comcast shares dropped 11 percent today. The latest Peacock numbers definitely didn’t help. The U.S.-only service is stuck at 36 million subscribers, same as last quarter, with a quarterly loss of $372 million, which is down from $825 million a year ago but still an outlier among legacy media streamers, most of which have found a path to profitability. As the LightShed Partners analysts noted, Peacock has racked up more than $9 billion in losses since its 2019 launch and is projected to lose more than $1 billion this year, just as the cost of a new NBA rights deal kicks in. Despite that, as MoffettNathanson analyst Craig Moffett argued, “There was no fall-off in subscribers after the end of the Summer Olympics. That’s a win.” Is it, though? The only content that meaningfully perks the feathers at Peacock is live sports. And, more specifically, NBC Sports programming that is only on Peacock. That’s incredibly expensive, of course, and the leagues and their fans don’t love having to track down games on subscale platforms. Plus, while it’s good news that a big chunk of those Paris Olympics fans stayed with the service months later, the Games don’t happen every quarter. And despite the Peacock-exclusive games in the new NBA deal, playoff exclusives are rare and don’t begin until 2026. Here’s that subscriber sign-up chart from Antenna that I referenced a few weeks ago:

Note the spikes at Peacock in January tied to the NFL playoff exclusive and around the Summer Olympics and another NFL moment. Peacock’s own numbers tell the same story. The first quarter of 2024 generated 3 million new subscribers, same as Peacock added in Q3 with the Olympics. The other two quarters? A 1 million sub loss in Q2 and then the flat numbers in Q4, respectively. Not great. So, what’s the path forward here? Mike Cavanagh, the Comcast president and NBCUniversal C.E.O., waved away the growth problem by citing the NBC-Peacock synergies. “We’re not really running a Peacock-only strategy,” he said today. “We’re running a broadcast-plus-streaming strategy and looking to optimize that over the years ahead.” Now that the NBCU cable networks are being banished to Deal or No Deal Island (a.k.a. SpinCo), that NBC-Peacock duo should emerge with a clearer narrative.

A MESSAGE FROM OUR SPONSOR

For more information on WICKED, visit universalpicturesawards.com

But that can’t be a long-term solution. Peter Supino, managing director at Wolfe Research, agrees that “Peacock needs to do something,” he told me today. “Peacock has 36 million subs and $5 billion of revenue four and a half years since launch, while we forecast Netflix 2025 North American streaming revenue at $20 billion, and Disney U.S. streaming revenue near $15 billion before ESPN Flagship launches.” Not a flattering comparison, especially since Peacock is domestic only, unlike its competitors. Which is why Supino and others believe something transformational needs to happen. That likely means two types of deals: bundles and mergers. Bundles are already happening and are easier to execute. Currently, Peacock isn’t even available in Amazon’s Prime Video Channels program, though I’m told that may be in the works. A larger joint venture with Amazon, or with Paramount+ or Max, would help with subscriber churn. Bundles don’t necessarily improve engagement, though, and, as Supino noted, “that is the essential ingredient for long-term revenue growth.” So that leads to the inevitable M&A discussion that has consumed Hollywood for the past few years. We all know that Warner Bros. Discovery C.E.O. David Zaslav wants a transformational deal. Do Roberts and Cavanagh? That’s been the open question, and the triple-whammy of broadband weakness, the cable TV spinoff, and the issues at Peacock suggest the right time may be approaching. “Looking forward, we like the industrial logic of merging Warner/Max with NBCU/Peacock, once each company has cast off its dying cable networks,” Supino suggested. The question: “Can Roberts and Zaslav/John Malone agree on price and control?”

Finally… One fun thing…

Check out the latest Nielsen streaming movies chart. Yes, that’s Kevin Costner’s summer flop Horizon: An American Saga—Chapter 1 sitting at No. 1. Thank Warner Bros., which included Horizon in its latest money-grab licensing deal with Netflix. (Five of the top 10 films are WB titles that recently arrived on Netflix.) With Horizon—Chapter 2 still unreleased and Costner looking for money to film two additional installments, there’s only one solution here: Netflix should pick up the entire Horizon saga…

See you Monday, Matt Correction: The John P. Middleton v. Roy Lee trial begins February 3, not February 2, as mentioned on Tuesday. Got a question, comment, complaint, or an eight-figure settlement check to write Donald Trump? Email me at Matt@puck.news or call/text me at 310-804-3198.

O.M.B. Aftershocks

LEIGH ANN CALDWELL

Sex, Lies & Nvidia

WILLIAM D. COHAN

Boiler Room

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