Netflix makes quietly aggressive aggregation play

Streaming Media 

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Everyone predicted that streaming services would have to aggregate but no-one thought Netflix would be first mover.

The streamer quietly released a stealth bomb that immediately sent analysts and industry watches into overdrive. Only the bare terms of the deal are known. That, it will distribute the channels and on-demand content of French commercial broadcaster TF1 to Netflix members in France, beginning next year.

The ramifications of the deal reach far beyond the shores of France, where the announcement was made. If successful, Netflix will have jumped a start on all its rivals who have so far resisted, or failed to entice, broadcasters anywhere to share their entire schedule and programme output with a third party streaming platform.

The Hollywood Reporter goes so far as to call Netflix ‘the new cable TV’ as a result.

Pointedly, Netflix called it a “first-of-its-kind partnership” which contains no ambiguity about plotting further distribution pacts of this kind in Europe and the US.

Greg Peters, co-CEO of Netflix, made the announcement at Cannes Lions, the annual festival of advertising attended by every leading brand and creative agency in the world, immediately attracting maximum attention.

This carriage deal will see TF1 Group’s live channels and on-demand content from TF1+ available to Netflix members in France as part of their existing subscription, “without ever having to leave the service” noted Netflix, equally transparent about the streamer’s intent to lock TF1 audiences into its platform.

No financial or other details of the tie-up have been released including how subscription and advertising revenues will be managed.

French broadcaster streamer initiatives have not taken off. Salto which was an SVOD joint venture between TF1 Group, France Télévisions, and Groupe M6, launched late 2020 and shuttered in 2023.

By contrast, Netflix has at least 10 million subscribers or nearly 40% of households with an internet connection in France, according to estimates.

Believing the deal unique and describing it as “very innovative”, Enders Analysis analyst François Godard told The Hollywood Reporter that it “pivots Netflix into aggregation.”

He added, “[Netflix are a trial-and-error company. So maybe they will wait first to see how it goes in France” before making other similar moves elsewhere.

PP Foresight analyst Paolo Pescatore also told THR, “While rivals grapple to understand streaming and continue to figure out what to do with legacy businesses, Netflix remains one step ahead. Free-to-air broadcasters have got no choice but to either collaborate with each other as a final resort or partner with a streamer.”

“It is a win-win for all parties,” he argued. “For free-to-air broadcasters, it gives them a new lease on life, for Netflix, a broad range of programming, and users [get] reduced fragmentation by having more in one place.”

TF1 Group CEO Rodolphe Belmer, himself a former board director at Netflix until 2022, said in the release: "As viewing habits shift toward on-demand consumption and audience fragmentation increases, this unprecedented alliance will enable our premium content to reach unparalleled audiences and unlock new reach for advertisers within an ecosystem that perfectly complements our TF1+ platform." 

The move came as a surprise to French news agency AFP who quoted Belmer [in a report in Le Monde] ahead of the announcement insisting that the deal did not risk “cannibalization” of TF1+ and was “truly complementary”. Belmer added that the TF1 group had done “lots of analysis” and expected a "significantly net positive" business effect.

The streamer touted the ability to watch shows broadcast on TF1 such as the drama Broceliande and talent contest The Voice although Netflix's Peters noted to AFP of the strength of TF1 in sports and live - “areas that we don't operate in a large way right now.”

Among current sports content TF1 has FIBA Womens Basketball, highlights from the FIFA Club World Cup and Diamond League Athletics.

Both parties have co-produced shows including Les Combattantes,  L’Agence and Tout le bleu du ciel.

TF1 group reaches 58 million monthly viewers through its broadcast channels and serves 35 million users on its TF1+ streaming service. Through Studio TF1 (formerly Newen Studios), the company manages over 50 production companies and labels across France and international markets, making it a key player in content creation and distribution.

BTS: How To Train Your Dragon

IBC

This remake of a classic animation works from Roger Deakins’ original lighting design, a colour palette plucked from the Faroe Islands and puppeteered dragons, explains DoP Bill Pope.

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All too often the live action remake of a classic animation falls flat but the makers of How To Train Your Dragon have miraculously retained the charm of the original in part by not straying too far from the template.

Take perhaps the original’s iconic image of sensitive teenage Viking Hiccup reaching out to touch the nose of a supposedly fearsome dragon called Toothless. Pope noticed that in the animated feature the scene was lit with a lavender sunset.

“That was a bold choice. It's easier done in animation than in reality but I decided I was going to do it anyway and I got so much kickback – ‘What are you talking about doing a lavender sunset?’ But sometimes the sunset is lavender so why not remind viewers of what was a lovely fragile colour it was for that scene.”

Director Dean DeBlois, who made all three previous animated features, returns for Universal’s live action reboot and invited Pope to shoot the film on the recommendation of Roger Deakins, the celebrated British DoP who had acted as visual consultant to the franchise. It was Deakins who had selected the lavender hue and Pope, who shot The Matrix and Baby Driver, had no hesitation in following “the master’s” cue.

“Roger shot those movies,” Pope says. “He just did it in a computer rather than with a camera. They have Roger’s signature touches such as ‘Roger’s yellow.’ He knew that the story is based on reality by which I mean we’re in the Viking world. So what colour light do you have? You have daylight, moonlight and firelight. Why mess with that. I wanted audiences to feel at home with the experience that they had in the animated movie, so I didn't alter anything.”

While respectful of Deakins’ work, Pope is underselling his responsibility in translating the story into a different medium. He attributes its success to the casting both of actors and the puppeteers who played the dragons on set.  Mason Thames who plays Hiccup was only 16 when filming began in January 2024.

“Mason is an incredible young actor and it became apparent to me, the camera department and everyone that this kid has such self-assurance and physical awareness of what he's doing all the time,” Pope says. “He’s like Buster Keaton. It turns out that he studied dance as well as acting. After meeting Mason, now I think all actors should take dance classes.”

He adds, “The second most important decision was hiring the guys who did the puppeteering for War Horse.”

They are members of Brighton-based puppeteering troupe Puppets With Guts who worked on the National Theatre production as well as films including Fantastic Beasts and Where to Find Them.

“Now you've got a kid who can really act playing against dragons who can act back and are completely inhabiting the space for real.”

Pope is no stranger to this process having shot the live action between nine year old Neel Sethi playing Mowgli and sets of Jim Henson Company puppeteers playing various animals for Jon Favreau’s Jungle Book (2016).

“Even if the animal was a sock puppet the puppeteers were so into the part that the kid’s imaginations was fired. It just made performances so strong. Mason's awareness of space and the ability to actually reach out and touch the dragon or move with the dragon makes such a difference. We have a stage with a large village, the Chief’s house and full-sized dragons. There’s no guessing with blue screen.”

While Framestore took charge of hundreds of VFX shots the production based itself at Titanic Studios in Belfast which is where Pope’s photography began to take shape. For instance, the training arena in the film was designed as a 360-degree practical set enabling unbroken camera movements and dynamic action sequences.

“Dean understood that when you bring an animation into the real world, the more real you are the more believable it will be. On top of which you can’t replicate half of the things in the original, like flying dragons into the sky and having them dive down. Dean and I talked for three months going back and forth until we realized that we couldn’t solve this in the abstract. We had to get into the physical space with stunt people, puppeteers and actors in order to figure it out what we could do. We pre-visualized a lot but even this was kind of rudimentary and only came into focus on set.”

He says that DeBlois wanted to shoot IMAX from the get-go in order to showcase the flying scenes but that the studio execs weren’t interested. “Two weeks out from production the figures came back from Christopher Nolan's Oppenheimer which made hundreds of millions of dollars for screenings in IMAX. The studio turned around and said, ‘Hey, we got an idea., we want to do this in IMAX’ and I'm like, ‘But we start shooting in two weeks!’

“I’d shot all my tests and everything was prepped. Of course, we switched at the last minute but I didn't want to work off a crane or to be slowed down or have to do all the things that are required when shooting with a big heavy camera.”

He opted to shoot the action scenes with the IMAX approved ARRI LF and to retain his original camera choice of Alexa 35 with its old-fashioned film frame size using anamorphic lenses.

“Dean and I felt like the intimate scenes would be best in that size frame because you want to be seeing the actor's faces and not call attention to anything outside of that.”

Many scenes were designed to mirror the fluid, dynamic camera work of the animated films. By combining traditional dolly shots with advanced gimbals, Pope and his team created smooth transitions between grounded human interactions and sweeping dragon action, capturing both the intimate and the epic.

Inspiration for the rugged geography of Berk and colour scheme came from a recce in Iceland and the Faroe Islands. “That’s where dragons live, right? We fell in love with both places and flew many hours in helicopters finding locations.”

In fact, they couldn’t use most of the locations to shoot in because they couldn't get close enough to the cliffs. “I photographed from the helicopter but because hundreds of thousands of birds are flying all over the place you can’t get a helicopter close. Even if you took a drone in there it’s going to go down. So we decided to scan everything with Lidar and build it in a computer. It's photoreal. I saw side-by-side comparisons of the photography and the Lidar and couldn’t tell which was which.”

The action scenes of flying dragons was shot on a blue screen stage with the Lidar scans applied as backgrounds.

“The colour palette of the movie is the palette of the Faroes. There's a red layer of iron oxide that runs throughout those cliffs. There are various shades of brown and then this streak of red in the rock, the ocean is turquoise, and the skies are lead grey. Even the buildings in the Faroes reflect that. They're painted the green of the grass and the turquoise of the sea. They’re painted the red of the rock. You can see that native Faroese build on what they see so we decided to do the same thing.

“I came back with handful rocks, each one of them a different colour, and gave them to the production. This is the Faroes in your hand. Everything was painted with those colours so we ground the story in that world. It was really one of the most worthwhile scouts I’ve ever been on.”

Pope continues, “That's what filmmaking is. It's collaborative. If you want a palette, you all have to agree on what that palette is. If you want a feeling, you have to all agree on what it is because it's not my choice or the director’s or the VFX people or animators. Everybody has to feel the inspiration and understand the direction. Filmmaking is a journey. I get this one section of the trip. The editor gets another section. Visual effects another and so on. If the film is going to work you have to do this as a team.”

Pope has made successive movies with new techniques and new technology from helping shoot bullet time in The Matrix to Jungle Book by way of puppet animation Team America: World Police to VFX heavy Marvel productions like Spider-Man 2 and the live action CG blend of Alita: Battle Angel. He says he is not necessarily drawn to this type of production although acknowledges that by reputation he gets more offers for work that carry a tech element.

“I started out in this business doing music videos for 10 years (for Peter Gabriel, Metallica, Chris Isaac, Motley Crue among others) and each of those have an element of trickery. Today are we shooting the promo backwards or at six frames a second or whatever the visual gag is for the video so that by the time I got to my first movie Darkman [directed by Sam Raimi in 1990] which is a VFX movie I just knew what to do. I’m not afraid of new technology. It’s just an arrow in the quiver.”

So what does Pope think of AI in terms of a threat or an aid to cinematography?

“We might struggle to keep it as a tool but the human brain has to be in charge. I've not seen any AI that touches real filmmaking, nothing that crosses the Uncanny Valley at least not yet. You’ve got to be wary of it, but I’m not afraid of it.”

Dragon design

Framestore’s dragon design was based on specific animal behaviours. Toothless’ movements for example are inspired by the agility of salamanders and the grace of black panthers. The Gronckle is a combination of the flight patterns of bumblebees with the stocky movements of bulldogs, bullfrogs and hippos. The Deadly Nadder features precise, bird-like movements inspired by parrots and emus.

While the dragons’ fire was digitally generated the SFX team provided real pyrotechnic bursts on set to create interactive lighting, heat and impact points. These practical effects gave actors and stunt performers something tangible to react to.

Inspired by technology used in the Fast & Furious films, the SFX team created dynamic hydraulic rigs to simulate dragon flight and allowed the actors to experience realistic motion.

Also, a 70-foot Viking ship was placed on a 12-ton hydraulic platform to replicate the swaying and rocking of ocean waves for maritime scenes.

The Viking village set itself featured working gas systems to power torches and flames, and dragon arena doors were also fully mechanized, allowing them to open and close dynamically during action sequences.

Dragon puppetry

Full-scale foam heads were built for each dragon species based on digital sculpts created by the VFX team, giving actors tangible points of interaction during filming.

For Toothless, the team constructed multiple heads, each designed for specific actions in the story. These included a puppeteered ‘hero’ head to allow the puppeteer to create a realistic dragon performance for the actors to interact with, and a ‘wrestle’ head for the more explosive action sequences.

Bringing Toothless to life required a team of five puppeteers. His long tail was so extensive that it required three puppeteers to operate it, in addition to one controlling the head and another managing the torso.

The actors even took an animal interaction training course at a horse farm to familiarise themselves with handling large creatures. In addition, they participated in puppetry workshops, introducing them to the different dragons and their distinct characteristics all in a bid to ensure authentic interactions.

While the production did not use traditional animatronics, the Toothless puppet featured cable-controlled moving jaw and ‘ear plates.’ The team also designed a series of interchangeable eye inserts that allowed for modifications to Toothless’s eye shape allowed him to convey a range of emotions from anger and curiosity to playfulness.

Five minutes with colorist Phil Choe / Standard Art

interview and words for Sohonet

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Five minutes with colorist Phil Choe / Standard Art | Sohonet

Standard Art is a new boutique color grading studio set up by veteran colorist Phil Choe and dedicated to elevating visual storytelling. The Boston based facility only launched at the turn of the year and is already crafting stunning, cinematic looks for creative agencies and music artists.

Choe has an impressive 18-year track record of excellence, having collaborated with renowned brands such as Adidas, Coca-Cola, Chopard, Ivy Park, Jaguar, Nike, Pantene, Progressive and Puma at houses including Nice Shoes and Assembly. 

“Whether you're working on an indie film, a commercial, or a feature production, my passion is help you achieve a look that not only captivates but resonates,” Choe says. “Together, we create stories that linger long after the credits roll.”

‍What is your experience so far of running your own business?

It's tough but satisfying! As a business owner there are a lot of things you’ve got to do aside from the artistry. First, I had to set up this space in Boston with my Baselight, monitors and fast internet. The last thing I wanted to be concerned about was the streaming side of things. Having used ClearView since the pandemic I was very comfortable making it an essential part of Standard Art. I knew how it works. I know there is zero latency and, most importantly, I know clients are confident using it too. 

‍How do your clients like to work with you to set color and collaborate?

In the old days, pre-Covid, clients would come in and we’d set the look and then they would just wait while I did the first pass. Maybe they’d go out and get lunch or go to another meeting and return a few hours later. Now, they don't have to wait around. People are just more comfortable working remotely. 

Creatives, especially, are so busy now because they're being asked to oversee and juggle a lot of projects at once. Streaming sessions saves them time when they don’t have to commute. It’s simply more convenient for them to be able to join in wherever they are. ClearView gives them the flexibility to tackle color and meet the deadlines for everything they have going on.

‍How do you use ClearView?

I have three monitors: My main OLED in front of me, the client monitor and I’ll often stream a ClearView as well. I'll check all three because at the end of the day although my mastering format is going to be for my OLED, I like to see how the campaign looks when it’s streamed on YouTube or Instagram on whichever device people will view it on in the real world.

In the days before the pandemic clients were so adamant about coming in and insistent on seeing a calibrated monitor with you in person. They felt they had to see what the artist was seeing, to verify that the mastering was going to be perfect. Now, remote sessions have become an accepted standard and ClearView has done a lot to calm people’s minds.

Even when clients do come in, they request a ClearView for someone who couldn't intend. Lately, what I’ve have found particularly useful is the ability for clients to mark-up the stream using the annotation tool. You can set the notes to disappear after a few seconds or be marked up more permanently. It’s all in the browser. 

‍What gives you confidence that your remote clients are seeing what you're seeing?

Prior to our streaming session, there's a list of things I’ll ask them to do. I prefer for them to be on Google Chrome and then I go through the Mac displays with them to tweak the color temperatures and brightness and so on. If their room is particularly bright I’ll ask them to lower the blinds. It’s also about their confidence that they are seeing the same picture I am. ClearView gives them that confidence. It's great to have a product that works like it's supposed to.

I’d say the majority of my clients now choose streaming. They're so comfortable with streaming sessions for review and approval and even to set up the look that they don't need to be physically present. I have clients on the West Coast, in London and all over the world. If it wasn't for having ClearView we wouldn't be able to do this.

‍What's the next step for your business Phil? 

I’ve thought about this a lot because I definitely feel we could expand with an assistant or producer or maybe a junior artist to take on the extra work. That's a discussion that I’m going to have to have but again, I’m only a few months in and I don't want to expand too quickly too fast. I want to grow the business organically and see how it goes. 

 

Resistance may be futile: Animators unite to right and work with AI

IBC

What happens when the tortoise of animation meets the hare of artificial intelligence? Speed is AI’s superpower but it threatens to wipe away jobs and craft. IBC365 is on the ground at the Animation Film Festival in Annecy. article here

The art of animation was born from hand drawing and painting frame by frame by frame but the speed at which AI can fast forward the process on top of existing computerisation excites and terrifies those who believe it brings essential efficiencies while casting jobs, if not the very bedrock of the craft, aside.

The great AI debate dominated discussion at Annecy animation festival with everyone from Andy Serkis and Matt Groening to Deadpool director Timothy Miller weighing in.

“Even if you can’t blame AI for the current crisis in animation it is crystallizing discussion,” summed up Flavio Perez, R&D Technical Director at French animation studio Les Fées Spéciales.

A demonstration against GenAI by international animation unions, federations and workers from the US, France, Ireland, Spain, Belgium among others was staged at the festival.

Calling GenAI “a copying machine that is flawed, destructive and expensive to run” a statement by the unions warned against “unjustified techno-optimism” and that “the absence of humans is a feature, not a bug, of GenAl.”

What is clear is that AI is driving huge transition in animation but no-one knows how it will play out.

“If anybody tells you where it is headed they are lying,” said Miller, Oscar-nominated owner of VFX studio Blur and creator of the animated anthology series Love, Death & Robots.  “This is a tool that invents other tools and the pace of change is exponential – something humans don’t excel at. You have to keep an open mind and embrace AI. I want to use it for good not evil.”

Presenting the premiere of his new feature Animal Farm (which could be read as an allegory for artisans against the machine) director Andy Serkis said, “Our version was not made to satisfy any algorithm,” although he did not reveal if animation partner Cinesite had used any AI in its production.

“My gut feeling is that AI will never have a sense of humour,” declared The Simpsons creator Matt Groening, in town to share his career experience with animation students. “I think humans are needed.”

“I’m not saying it won’t get intelligent, but right now it’s stupid,” added The Simpsons’ showrunner Matt Selman. “Artificial disinformation is ridiculous, the amount of nonsense its piping in people’s brains.”

Roberto Cardenas, a 2D animator from Chile understood why animators would want to explore AI “if it engenders better storytelling but calling it a ‘tool’ is disingenuous,” he said. “AI is designed to remove creative choice. While humans are required to intervene to correct AI today, its development is only headed one way.”

Seasoned artists speaking on the panel ‘AI for Animation?’ knocked back the suggestion that AI would take over but agreed on its disruptive influence.

“We all want to make non-derivative work from our own ideas and to control AI,” said Thierry Paalman, Head of technology at Belgium’s Submarine Animation. “We have traditional workflows and use AI to give more time to our artists.”

Calling AI a “creative explosion” Arvid Tappert, Senior Director at LA’s AI-driven production company Asteria explained how AI was boosting R&D and accelerating development from months to days.

“We are proving AI can be a creative sidekick, not a replacement. It means we can try new ideas and play around really quickly to extend creative possibilities. You can combine old techniques with AI and still remain in control. Plus, it’s really fun. I can still use my own style but find lots of exciting ways to push my style in ways I couldn’t do a few years ago.”

Efficiencies are welcomed but there were concerns that reliance on AI to get from A-Z without the intermediate steps would erase skills.

“Repetition is where you refine your craft. Creativity is diluted using AI,” said Quentin Auger, Co-founder & Head of Innovation, Dada! Animation. He shared results of an AI workshop he organised for French animation students. “Many [of them] felt controlled by the machine and that AI generated outcomes that were so much trash they couldn’t use them.”

It is the “journey not the result” said Paalman which not only improved storytelling but made the artist better as a result. AI powered short cuts will lead to a “collective deskilling” he worried. “If you have senior people feeding prompts into LLMs and they don’t hire juniors any more then production becomes more about curation than creation.”

Laura Yeo, Executive Producer, Blur Studio felt strongly that AI generated films “made by one or two people in their bedroom devalues all the work that goes into ideation and storyboarding and the work of all artists.”

She said, “Most of the things we hear now is about how fast you can do something in AI. Consumers want to see new content straight away and producers need to deliver on that otherwise the momentum [behind a show] will be lost. AI can help us make the best content as quickly as we can by solving creative questions at the cheaper part of the process [in pre-production] instead of at the back end when it is very difficult and expensive to change.”

Nicolas Dufresne, independent director and developer said that he felt most creatively stimulated when physically writing or drawing. “It is the actual gesture of drawing which, for me, generates inspiration and craftsmanship.”

He wasn’t opposed to using AI for specific tasks but warned against lazy reliance on the tech. “When you do topology, texturing or coding you are also learning about math. You learn by practicing but if the machine does it for you – or you’re being pressured to use AI - there's no way to learn something else. There's no serendipity.”

Radioactive topic

For Dufresne the only answer was collective action to regulate AI’s use. “People are afraid when they don’t have power and they don’t have the choice about their tools so the only way to improve this is to collectively think about what we doing for the public good. The only people who do not want this are the major AI developers like OpenAI.”

While artists and animators can be trusted to use AI to improve quality that wasn’t the case with “shareholders, clients and producers,” he said. “They only think about money. When your client doesn’t know what a good animation is or when you say you need a week to do justice to a shot yet they know an AI can do it in minutes, this is the real danger.” 

For that reason, perhaps, even where AI tools are proving creatively beneficial few professionals want to advertise it.

“People are keeping their use of AI hidden,” Perez said. “Some of those people are in the audience, but don't want to talk about it because it's kind of radioactive.”

Condemning the growing volume of animated content as “junk food that doesn’t make kids feel anything,” Dr Essam Bukhary, CEO of Saudi headquartered Manga Productions said the company was training its animators in the fundamentals of drawing while introducing AI into its pipeline.

Invest in human brainware

“We must use AI – but half use it,” Bukhary said. “We will use it to cut costs and make smarter use of process. It is part of our R&D strategy. At the same time, we should not only think of output but also about input. That means developing AI models that are based only on our material. It means investing in the ‘brainware’ of the next generation by training them in the basic skills of drawing and animation, of managing characters and IP. That is the way we compete globally.”

More than 4,000 Saudis have been trained by Manga in manga, anime, and video game creations – including with internship programs at Japanese giant Toei. Another project launched in conjunction with the Saudi state has seen 3.5 million local students take manga classes online.

“I can say with full confidence that AI will not be able to replace us but those using AI better than us will replace us. AI may generate high quality production value but it will not create emotion.”

Cutting costs is a good thing

While there were no commercial projects showcased at Annecy as ‘made by AI’ the bottom line is that the tech’s creeping involvement in all aspects of the industry is unstoppable.

“For over five years we’ve been trying to get our own IP off the ground,” said Alex S. Rabb CEO & Co-Founder, Digic Pictures, a Hungarian studio which makes animatics and animated shorts for movies and video games including Assassin’s Creed. “Every respectable studio wants to make their own stories in their own style and make cool stuff but it is expensive. AI tools will help you tell those stories which would otherwise never get made.”

Miller echoed, “No movie should cost $200 million to make but there are stories that I would like to tell that are too expensive to do with traditional technology. The stories I want and should be able to tell are not films for kids or four quadrant pitches so nobody will give us the money to do them at a high level.

“I welcome the fact that AI might bring some of these stories into the realm where we can actually afford to do them. I don't want to do the same thing with fewer people. I want to make more, full stop.”

Miller who directed Terminator: Dark Fate (2019) pointed to a character in the movie who uses AI technology to fight back against the AI-dominated Skynet.

“She implants the AI in her body. The sequel to that film would be about the fusion of machine with human intelligence to create something new and different. I know this sounds too science fiction for most people, but I believe that the end result of where we are headed won’t be man against machine it's going to be the two of them together. My hope is that we can use that technology to make ourselves better and I will be first in line for implants.”

WBD drops linear ballast to float Max

Streaming Media

Having trailed the move a year ago, Warner Bros Discovery (WBD) chief David Zaslaf has followed through on plans to split the company in half.

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The company is to separate into Streaming & Studios and Global Networks by mid-2026 effectively undoing the $43 billion merger between WarnerMedia and Discovery in 2022.

In doing so, WBD is pursuing the same course as Comcast which also spun off its cable business into a new division (called Versant) to remove the anchor from what both companies see as the more buoyant streaming future. For WBD this is centered around HBO Max, which is now in 77 markets, while Comcast is betting on Peacock. Last month, Lionsgate completed the separation of its cable and streaming channel, Starz into a new company.

Matt Trickett, Head of Media, Ampere Analysis says, “We have seen several of the US Studios hone in on what they think is core and non-core to their business moving forwards and the conclusion is that growth in their streaming businesses, buttressed by a strong slate of premium content from their various studio production entities - namely TV series and movies - is the central strategy.  This split will give the Management of the Streaming and Studios business a core focus to optimise HBO Max in current markets, push on with roll outs and partnerships in markets where it is not yet present and bring more alignment to production for its streaming business.”

The linear TV division will retain up to a 20% stake in Streaming & Studios to “enhance the deleveraging path for Global Networks”, according to WBD. It includes CNN, HBO, TNT, Discovery Channel, as well as Eurosport and TNT Sports in the UK, and currently reaches 1.1 billion viewers across 200 countries and territories but will assume most of WBD’s debt that runs into the tens of billions of dollars.

The main revenue driver at Streaming & Studios will be streaming. “Investing in HBO’s world-class programming which differentiates and drives the platform, and prioritizing the operating principles that have put the Studios on a path back to their target of at least $3 billion in annual adjusted EBITDA,” explained a WBD release.

In an analyst call Zaslav who will head up the streaming services went further. He called the motion picture business “probably the smallest part… it’s very hit-driven.”

“The secret sauce for us is the highest quality content and library, together with local content, together with local sports,” he added. “That will be our global recipe.”

Peter Jankovskis, an analyst at Arbor Financial Services, said the split would help investors get a better understanding of each new company's value.

“When you make the business less complicated, analysts can go in and do a better job of determining what the business is actually worth," he told the BBC. “It's a very competitive market right now, so many firms are trying to segregate out the streaming portion or the content portion of their businesses so that the remaining business can be valued separately.”

Sports rights question

U.S. sports rights including NCAA March Madness, the French Open, NASCAR, Major League Baseball and the NHL will reside at Global Networks, and its management team led by current WBD CFO Gunnar Wiedenfels will determine how best to monetize the streaming and digital rights

"Internationally, sports will largely coexist, both on linear and streaming, as they do today," Wiedenfels said.

The Global Networks division becomes a potential acquisition target with a merger between it and Versant one possible option.  Mark Lazarus, Versant's CEO, told CNBC Sport last month he was interested in bidding on sports rights to gain distribution heft with pay-TV operators. Acquiring TNT Sports could be a major step in that direction.

Noting that at the point of split, slated for mid-2026, WBD’s Global Networks will still be tied to the Studio and Streaming business through a 20% retained stake (although that is expected to reduce over time), Ampere expects this also means content supply between the two divisions will, to a degree, remain intact.

“It is important that the current HBO Max proposition is not significantly diluted by a reduced supply of content as it builds momentum,” says Trickett. “It may also give the Global Networks division more flexibility to choose how its content is utilised moving forwards.”

In the UK, the pathway has already been cleared to a degree with structural changes taking place earlier this year – the Eurosport channels previously available on Discovery+ have been closed and this content now sits with the premium TNT sports service.

“WBD is in the process of buying out the remaining 50% share of the TNT JV from BT,” notes Trickett. “The question in the medium term is how much of a strategic driver WBD thinks a premium sports service is in the UK and in what way some form of integration with HBO Max could help drive uptake of the overall services, as HBO Max goes DTC in this market.”

 

Hollywood is over: Time for creators to take charge

IBC 

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Film and TV professionals, studio executives and kit manufacturers are urged to open up to the creator economy or face ruin.

If the media and entertainment industry continues to be protectionist and fails to “open its eyes” to the creator economy, it is going to lose everything.

“I know how much it hurts for many of us to admit it, but admitting we've been beaten is required in order to rearm and reinvent our industry.”

That was the warning from Michael Cioni, media tech evangelist and CEO of AI tool startup Strada, during a speech given to leading figures at the Hollywood Professional Association (HPA) earlier this year.

Cioni pinpointed YouTube and the wider creator economy as the main threat to the domination of studios.

Others, including Batman v Superman producer David S Goyer, have urged studios to play an active part in upending their century-old business model if they want to survive.

Hollywood auteur Darren Aronofsky has even launched an AI company called Primordial Soup to produce AI content, the first of which is a short film made with Google DeepMind’s research team and its video and audio generator Veo 3.

“I know if I were 27 right now, trying to make my first film, it would be me and five friends in a room with computers trying to figure out how this all works and what type of stories we can tell,” Aronofsky told the Financial Times.

“Filmmaking has always been driven by technology,” he said in a statement. “After the Lumiere brothers and Edison's ground-breaking invention, filmmakers unleashed the hidden storytelling power of cameras. Later technological breakthroughs – sound, colour, VFX – allowed us to tell stories in ways that couldn't be told before. Today is no different. Now is the moment to explore these new tools and shape them for the future of storytelling.”

This is a sentiment shared by Cioni: “Five years ago I didn’t think that there was anyone that could compete with us on the level of cache that we have built in our industry. I didn’t think they could compete with us in terms of our technology because it’s too specific and bespoke. They couldn't compete with us on talent since we have the best below and above the line. They couldn't compete with our budgets and they certainly couldn't compete with our history.

“But today, I'm not so sure.”

Hollywood's Competitive Moat

Cioni described the bureaucracy and standards surrounding the creation process of cinema and TV content as having outlasted their purpose.

“Hollywood has built this incredible competitive moat – a boundary that was so effective in anchoring the constant pursuit of high quality. In order to maintain that quality, we introduced a lot of friction. It is expensive and super complicated to do production, post-production, distribution, exhibition, marketing.”

This moat also acted as a barrier to entry to outsiders, keeping control within the hands of a few studio execs. Not any more.

“What would happen if there was a world of storytelling that didn't require any friction? This is what our industry is facing. It really is time to wise up.”

The biggest competitor is YouTube because its core business is the same as old school M&E. “It's to create stories, tell them, and entertain,” Cioni said. “But there is something about YouTube that we do not have. They have no friction. There is no friction because the ability to create, edit and distribute it has, has absolutely no friction.”

Kit manufacturers need to adapt

YouTube’s runaway success, particularly in the last five years, has galvanised the creation of new production tools to service the creator economy. Unlike the specialist equipment sold to the film industry and broadcasters, these tools are designed for general use, they are cheap, and need little specialist skill. In other words, they have zero or low friction.

Microphone maker Rode was one of the first examples of this. According to Cioni, its business was transformed by adding a USB port to a microphone targeting the creator economy.

“Rode goes from a sideshow of microphone technology to the go-to microphone. They sell millions of microphones with this USB technology to make it low cost and scalable.”

Similarly, relatively inexpensive cameras from RED were introduced at a time when no one in Hollywood was shooting digital. Blackmagic Design targeted creators with an Apple MacOS version of Resolve at a time when Hollywood pros were still doing digital intermediates on dedicated computers.

Beyond these well-known brand names are new technologies which have snuck up under the radar of the traditional industry. Among them are lighting vendors Aperture and Cream Source, accessories maker Kondor Blue, Chinese drone giant DJI (maker of the Ronin 4D camera rig used to shoot Warfare and Adolescence), and asset management system Frame.io [co-founded by Cioni and now owned by Adobe].

“Once you are building directly for the creator economy, you have the ability to serve a much larger group,” he argued. “Once you get more feedback and everything that you do gets used by more and more people, it allows you to move faster. The power of this is something all [traditional broadcast and cine tech] manufacturers should understand.”

Other tools targeting production using mobile phones include Bscript, Moment, SmallRig, Splice and CapCut, the TikTok editing app. With 300 million users, CapCut can claim to be the world’s most popular editing system.

“You don't think 300 million editors are going to make a dent? This is going to change everything. This is the threat we're facing. Our sphere of influence has gone. It can't come back. We can't outpace these things,” Cioni said.

What viewers actually want

Anyone who maintains that professionals know better than any YouTuber about how to create quality long-form content is just complacent, Cioni said.

“I'm not suggesting that they can make better quality content. I'm asking, does it even matter when consumers’ tastes change and we aren't serving them.”

For instance, the fastest growing new market in M&E is video podcasts, a format that didn’t exist a few years ago. “It's a completely new invention and Hollywood had nothing to do with it.”

Netflix is now looking into podcasts as a form of content attracted among other things by the relatively low cost of production compared to normal scripted TV. Most recently, it launched The Big Pitch With Jimmy Carr, a 10-part podcast produced in partnership with BBC Studios.

Another example that speaks directly to studios is the 2023 low budget horror Talk To Me. Made for $4m by Australian YouTubers Danny and Michael Philippou and picked up for distribution by A24 it grossed nearly $100m (with a 94% rating on Rotten Tomatoes).

“Given how easy it is for the creator economy to compete with us, the power of the studio could shift from green-lighting (creating) stories to just distributing them,” added Cioni.

Amazon Studios, for example, has started distributing content from MrBeast that is still created and controlled by him. A24 did this with Talk to Me.

“The point is, you don't have to be a movie studio to make a movie. Every movie studio could have a [similar] success 52 weeks a year if you [only] knew how. But we've got decades of experience working against us,” Cioni warned.

Studios and the technology community that serves it are handcuffed by standards, practices and rules around equipment and content presentation that YouTubers simply don’t have. This is further compounded by the shrinking technology gap, which means production is no longer owned by a heavily capitalised few.

“The creator economy are early adopters. When I find a new technology, I have to go through six months of procurement just to try it. That is already stifling progress,” Cioni said.

Shrinking technology gap

To drive home the narrowing of the technology gap, Cioni provided a side-by-side comparison of footage from an ARRI Alexa Mini – the “gold standard” cine camera; a large format 65mm Fuji GFX100 capable of recording 8K (costing less than $8k) and an iPhone 16. All were fitted with the same Nikon Prime lenses (the iPhone had a depth of field adapter and was run by a Blackmagic app) and lighting conditions.

The results appeared to show that a camera that costs close to $100,000 [Alexa] and one that costs around $1,000 [iPhone] are not dramatically different. “This is the visual proof that accessibility has got so narrow that we need to think twice about it,” Cioni urged.

“I am not saying that the iPhone is better than Alexa. It's not. But this is why we can get beaten by the creator economy because they're willing to try everything. They have no reason to hold back. They're never going to use a rule of what camera is approved or not to make a decision on what to use. That is such a huge advantage that they have over our system.”

Furthermore, while the look a camera produces will always be top priority, there will be a point within the next 5-10 years where the image quality gap will almost totally evaporate.

What to do

Cioni ended his presentation with some advice for what industry professionals can do to mitigate the impact of the shifting landscape.

“We need to learn to influence the influencer,” he said. “If you can't figure out what that means, you're going to be missing out on an opportunity, because they love us. They meme us. They cheat us. They copy us. They take our movies and carve them up and make them funny. We are able to influence them. We can change the market just by influencing them.”

He urged manufacturers to build a “technology migration path” that addresses creators. “If you're building a specific product that is niche or it’s in a specialty space, you are taking an enormous risk. Instead, you need to realise that if you build for the creator economy, you can serve both communities. It's possible. There are companies doing that.”

The principles of frame rates, camera formats and colour spaces may have served the industry well, but are now out of date and hampering creative innovation, he argued.

“We do not need a list of cameras that are approved for us to shoot on anymore. We don't need 11 pages of an RFP just to get the green light to test something.

“You need to reconsider these standards and practices and recognise that the creator economy doesn't have [them], which is why they can actually move faster.”

And there was a final word for the studios which was essentially to give up the keys to the crumbling kingdom and hand over creativity to the creators.

“Studios have the ability to set this all in motion, because you are the most powerful. You have the money. You have the cache. You have the buildings, the resources, the libraries and the histories. You control so much of this.

“What we need you for is not to give us script notes, and not to actually give us notes on the cuts and decide if this is a good project or not. That's not your power anymore.

“Your power is in exhibition and distributing and marketing, because you can take a small film like Talk To Me, and you can get it in front of 100 million people. That's where the power of the studio should be focusing itself.”

Warner Bros. Discovery Drops Linear Ballast to Float HBO Max

Streaming Media

Having trailed the move a year ago, Warner Bros Discovery (WBD) chief David Zaslaf has followed through on plans to split the company in half.

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The company is to separate into Streaming & Studios and Global Networks by mid-2026 effectively undoing the $43 billion merger between WarnerMedia and Discovery in 2022.

In doing so, WBD is pursuing the same course as Comcast which also spun off its cable business into a new division (called Versant) to remove the anchor from what both companies see as the more buoyant streaming future. For WBD this is centered around HBO Max, which is now in 77 markets, while Comcast is betting on Peacock. Last month, Lionsgate completed the separation of its cable and streaming channel, Starz into a new company.

Matt Trickett, Head of Media, Ampere Analysis says, “We have seen several of the US Studios hone in on what they think is core and non-core to their business moving forwards and the conclusion is that growth in their streaming businesses, buttressed by a strong slate of premium content from their various studio production entities - namely TV series and movies - is the central strategy.  This split will give the Management of the Streaming and Studios business a core focus to optimise HBO Max in current markets, push on with roll outs and partnerships in markets where it is not yet present and bring more alignment to production for its streaming business.”

The linear TV division will retain up to a 20% stake in Streaming & Studios to “enhance the deleveraging path for Global Networks”, according to WBD. It includes CNN, HBO, TNT, Discovery Channel, as well as Eurosport and TNT Sports in the UK, and currently reaches 1.1 billion viewers across 200 countries and territories but will assume most of WBD’s debt that runs into the tens of billions of dollars.

The main revenue driver at Streaming & Studios will be streaming. “Investing in HBO’s world-class programming which differentiates and drives the platform, and prioritizing the operating principles that have put the Studios on a path back to their target of at least $3 billion in annual adjusted EBITDA,” explained a WBD release.

In an analyst call Zaslav who will head up the streaming services went further. He called the motion picture business “probably the smallest part… it’s very hit-driven.”

“The secret sauce for us is the highest quality content and library, together with local content, together with local sports,” he added. “That will be our global recipe.”

Peter Jankovskis, an analyst at Arbor Financial Services, said the split would help investors get a better understanding of each new company's value.

“When you make the business less complicated, analysts can go in and do a better job of determining what the business is actually worth," he told the BBC. “It's a very competitive market right now, so many firms are trying to segregate out the streaming portion or the content portion of their businesses so that the remaining business can be valued separately.”

Sports rights question

U.S. sports rights including NCAA March Madness, the French Open, NASCAR, Major League Baseball and the NHL will reside at Global Networks, and its management team led by current WBD CFO Gunnar Wiedenfels will determine how best to monetize the streaming and digital rights

"Internationally, sports will largely coexist, both on linear and streaming, as they do today," Wiedenfels said.

The Global Networks division becomes a potential acquisition target with a merger between it and Versant one possible option.  Mark Lazarus, Versant's CEO, told CNBC Sport last month he was interested in bidding on sports rights to gain distribution heft with pay-TV operators. Acquiring TNT Sports could be a major step in that direction.

Noting that at the point of split, slated for mid-2026, WBD’s Global Networks will still be tied to the Studio and Streaming business through a 20% retained stake (although that is expected to reduce over time), Ampere expects this also means content supply between the two divisions will, to a degree, remain intact.

“It is important that the current HBO Max proposition is not significantly diluted by a reduced supply of content as it builds momentum,” says Trickett. “It may also give the Global Networks division more flexibility to choose how its content is utilised moving forwards.”

In the UK, the pathway has already been cleared to a degree with structural changes taking place earlier this year – the Eurosport channels previously available on Discovery+ have been closed and this content now sits with the premium TNT sports service.

“WBD is in the process of buying out the remaining 50% share of the TNT JV from BT,” notes Trickett. “The question in the medium term is how much of a strategic driver WBD thinks a premium sports service is in the UK and in what way some form of integration with HBO Max could help drive uptake of the overall services, as HBO Max goes DTC in this market.”