PRO Tip Sheet: 5 Insights From This Week

This week we reported how the strikes caused a drop in ad spend, how Elon Musk’s tweets spurred an advertiser exodus, how WB’s move to shelve “Coyote vs. Acme” is sparking mistrust and the potential win for studios with “synthetic performers.” [5 Insights From WrapPRO]( The impact of the Hollywood strikes became clearer. We reported on how the strikes caused a 22% drop in ad spend and explored how Elon Musk’s promotion of antisemitic tweets spurred an advertiser exodus from X. We also delved into how Warner Bros.’ move to shelve “Coyote vs. Acme” sparked distrust with creatives, documented how Hollywood progressives are in crisis over left-wing support related to Gaza and analyzed a potential win for studios in the actors strike with “synthetic performers.” 1. [Elon Musk Seems ‘Hell-Bent on Destroying’ X, Say Media Experts]( By Korach and Alexei Barrionuevo | Source: [WrapPRO]( - Musk's recent antisemitic comments and the placement of ads next to hate speech pose a serious threat to X's future on the heels of a significant advertiser exodus. - Advertisers, including IBM, Apple, Disney, and Warner Bros. Discovery, have suspended ads on X due to concerns about content placement and adherence to brand safety measures. - Musk filed a lawsuit against Media Matters, alleging exploitation and seeking damages, in response to an exposé on X's failure to uphold brand safety measures. - Prior to the advertiser exodus, X's ad revenues were already projected to fall by 54.4% year-over-year, and the platform's value has plummeted since Musk's $44 billion acquisition. - Musk's actions risk diminishing X's cultural relevancy, with competitors like Meta's Threads gaining traction, and data shows a decline in adult users seeking news content on X. [Keep Reading]( Cyber Week Sale: 50% off WrapPRO subscription. [Subscribe]( 2. [Has ‘Coyote vs. Acme’ Sowed Distrust Between Warner Bros. and Creatives?]( By Kristen Lopez and Scott Mendelson | Source: [WrapPRO]( - Warner Bros.' decision to shelve the completed animated film “Coyote vs. Acme” for a tax write-off sparked an intense backlash from directors, raising concerns about the studio's commitment to creative work and impacting trust within the creative community. - Despite Warner Bros. claims that the film didn't align with their shift towards theatrical releases, critics see the move as a bait and switch, echoing past conflicts with directors like Christopher Nolan and the cancellation of “Batgirl.” - The cancellation triggered Rep. Joaquin Castro to call for a congressional investigation into the practice of shelving films for tax purposes, labeling it as “predatory and anti-competitive.” - Warner Bros. reversed its decision five days later, expressing willingness to sell the film, but doubts linger about the lasting damage to relationships with directors and the studio's credibility. - Industry insiders suggest the incident reflects broader issues at Warner Bros. Discovery, with cost-cutting decisions affecting creative work, leading some to question the studio's reliability as a partner and expressing concerns about an erosion of trust in future collaborations. [Keep Reading]( 3. [Hollywood Strikes Prompt 22% Decline in Combined Ad Spend for Films, TV Shows, Streaming Services]( By Lucas Manfredi | Source:WrapPRO]( - Hollywood strikes led to a 22% year-over-year plunge in advertising spending on films, TV shows, and streaming services, totaling $2.9 billion between May and October, with studios facing challenges in reshuffling content schedules. - Television and streaming services experienced a more significant impact, with ad spending dropping 27% to $784.7 million and 28% to $894.6 million, respectively, attributed to increased film inventory after the COVID-19 pandemic compared to a 12% decrease in film ad spend to $1.2 billion. - The combined advertising spend for films, TV shows, and streaming services from January to October 2023 decreased by 8% year-over-year to $5.5 billion, reflecting the spread-out nature of content due to the strikes and lower rates associated with less- fresh content and potentially smaller audiences. - Nearly 11,000 brands invested $42.6 billion in TV ads during the nine-month period, marking an 11% year-over-year decrease, with some brands shifting to YouTube and social media platforms, which experienced unexpectedly strong quarters. - As Hollywood productions resume, MediaRadar's CEO anticipates ad revenue recovery in the next six months but cautions that the return of some brands may take a year, emphasizing the competitive streaming market and the likelihood of major studios learning from the experience by moving more business outside the U.S. [Keep Reading]( 4. [WaxWord: Hollywood Progressives Face Crisis Over Left-Wing Support for Gaza — ‘You Didn’t Show Up on Oct. 7’]( By Sharon Waxman | Source:WrapPRO]( - Hollywood progressive Jews, including prominent figures like Lawrence Bender, express a deep sense of hurt and anger over perceived lack of support from fellow progressives during the recent Israel-Hamas conflict, leading to a crisis of confidence among longtime friends. - The disconnect between progressive Jews in Hollywood and the broader progressive movement has grown into a significant crisis, with questions raised about the silence of women’s groups on the use of rape against Israeli women and the seeming contradiction in support from LGBTQ groups for a regime that opposes gender identities. - The discordance extends to previous movements supported by Hollywood progressives, such as Black Lives Matter (BLM), with criticism for overlooking the anti-Israel stance in the BLM charter that condemns Israel for "the genocide taking place against the Palestinian people." - The Anti-Defamation League (ADL), an organization created to combat antisemitism, faces a sense of betrayal as it previously supported movements like Black Lives Matter and #MeToo, but now receives no comment from BLM on the recent Hamas attack. - The rise of left-wing antisemitism is highlighted by Hollywood producer Matti Leshem, who argues that many progressive causes have been distorted by a neo-Marxist agenda, leading to a narrow view of the world as oppressed versus oppressors, particularly evident in the portrayal of Israelis as colonial white oppressors. [Keep Reading]( 5. [‘Synthetic Performers’ Win Big in SAG-AFTRA Agreement With Studios]( By Peter Csathy | Source: [WrapPRO]( - The recent actors' strike settlement addresses AI protections in Hollywood, but a significant loophole exists in the section covering “Generative Artificial Intelligence,” allowing producers to potentially replace human performers with AI-generated “Synthetic Performers.” - The settlement requires producers to give notice to the union and an opportunity to bargain if Synthetic Performers are used, relying on producers to act in good faith, raising concerns among SAG-AFTRA members about potential exploitation of AI in place of human talent. - Synthetic performers, requiring no negotiations, contracts, fees, or care, pose a tempting option for budget-constrained producers, and the lack of robust safeguards raises the risk of AI-generated performers replacing humans on a meaningful scale. - While the technology for fully convincing synthetic performers is not yet widespread, the rapid pace of advancement suggests a future where AI-generated influencers like Miquela, a synth with millions of followers, could soon star in major film or television productions. - SAG-AFTRA's negotiators acknowledge the threats of generative AI to Hollywood talent, and ultimately U.S. copyright law is a crucial guardrail, since producers know that the Copyright Office does not yet offer protection for fully AI-generated work. 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