Kamala Harris, Hollywood Needs You
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Last year, Hollywood labor’s anger seemed to boil over, as two strikes shut down the town. This year doesn’t seem to be much better, since production hasn’t returned to pre-strike or pre-pandemic levels.
Appropriately, during the strikes, antitrust briefly became a talking point. The WGA released a report on concentrated power in Hollywood, following up a previous report on the topic. After you read my take, I recommend reading the WGA’s two reports; the WGA and I agree on a lot of solutions to fix Hollywood’s issues. Ironically, though, during those strikes, a lot of workers actively blamed capitalism for the sorry state of workers. (The phrase “late-stage capitalism” got tossed around a lot.) As I argued last week quite extensively:
The problem in Hollywood isn’t capitalism, but the need for more, freer, better markets.
I’m not here to make the case for more, freer markets today, as I think my last article “Here’s a 7 Point Plan to Save Hollywood Workers and the Marketplace” covered that quite well. Instead, as sometimes needs to happen, we need to discuss the meta-narrative around Hollywood consolidation, big business and why antitrust doesn’t seem to be a priority.
Not just that, but it’s an extremely opportune time for the Guilds and Unions to not just write reports, but to actually influence Democratic politicians to support a pro-competition agenda. In particular, they need to focus on convincing Kamala Harris (and hopefully the rest of the Hollywood entertainment press) to continue the Biden administration’s antitrust agenda.
“Hollywood” Loves Consolidation, or Why Everyone Seemingly Disagrees With Me
As I laid out last week, I think that the best way to improve Hollywood is to make it more competitive. Full stop.
Raise your hand if you agree with me.
Okay, keep your hand up if you also host/write/record a newsletter/column/podcast?
Anyone?
It certainly isn’t the people I listen to around town. When I read articles or newsletters from almost every other reporter/pundit/analyst in Hollywood, to be clear, I don’t read anyone who agrees with me.1
Seriously, of the five biggest entertainment industry analysts/commentators, each one not only avoids criticizing mergers, but in many cases, actively promotes additional consolidation. (I don’t like to name names when I’m being negative, but I’m sure you know who I’m talking about. They host the biggest podcasts and edit the largest industry trades.) The people with digital megaphones in this town want to see Apple buy Disney, Amazon buy Paramount, Comcast buy WBD, and more. They say things like, “Eight streamers are too many and they need to consolidate!”
So why do they think that?
I think it’s because these powerful pundits talk to business leaders on a regular basis, and business leaders want consolidation. If you have a lot of sources all telling you that companies need to merge to survive, you’ll believe them.2
Really, the question is, “Why do executives believe that industry consolidation is good?” And I can provide a few explanations, some of which are charitable and some of which aren’t.
Big Tech is a colossus. Looking at it from the perspective of traditional entertainment leaders, the massive tech behemoths (Google, Apple and Amazon) are spending billions, likely losing billions (though I can’t prove it), and using their massive platforms to steer customers to their new streaming platforms. In that world, consolidation seems like the only response.3
Consolidation begets consolidation. If all your rivals are buying up competitors, at some point, if you don’t consolidate as well, you’ll get left behind. But this just exacerbates the problems of market power; it never solves them.
Less charitably, business leaders want market power. I could write a lot more on this—and I may!—but market power is really useful for a business leader. If you have market power, you can pay suppliers less and charge customers more, meaning better profits. That makes your life easy. Don’t get “suppliers” wrong in this sense, either: I’m talking about talent! And below-the-line workers. Those are the folks who “supply” Hollywood with their raw goods.
Indeed, the result of my recommendations from last week is that, with much more competition, profits/money/value would shift either up the value chain—to customers in the form of better and cheaper television—or down—to talent in terms of more money. What gives way in that scenario? Industry profits, though revenue and employment might stay high. (That would also explain why stock analysts support consolidation by the way.)
Profits going down is literally the nightmare scenario for executives. Profit (free cash flow in particular) is “the goal”. Sure, society isn’t as well off because the market doesn’t create as much value, but they win. That’s the key.
Is Kamala Harris Listening to the Executives or the Average Hollywood Worker?
As soon as Kamala Harris clinched the nomination for the Democrats, business leaders began jockeying for her attention.
In particular, Reid Hoffman, the founder of Linked-In who actually wrote a book about why tech companies should seek to monopolize industries, spoke out on this issue. Hoffman has donated millions to Democrats, pledged more to the Harris campaign, and then led a fundraising tour for Harris in Silicon Valley. When asked what he wants from a potential Harris administration, Hoffman mentioned removing Lina Khan as head of the FTC. Other business leaders have since backed him on this, though, as the NY Times’ Dealbook newsletter pointed out, they probably shouldn’t have been so vocal, since they’re saying the quiet part out loud.
You know something is real when some billionaires get pissed at other billionaires.
Harris is fundraising a lot from business leaders, so it’s a fair question to ask if she’ll retain the excellent antitrust energy of the Biden campaign or return to a more Reagan/Clinton/Bush/Obama worldview, where consolidation is allowed, if not actively encouraged. Remember, Biden finally ended a forty-year period of very little antitrust enforcement starting in the 1980s, and what was enforced were usually weak remedies that companies immediately violated.
Biden, to his credit, reversed that trend. And I’m somewhat optimistic, because Harris went a long, long way to reassuring competition-minded folks last week in her first big public policy speech emphasizing “price gouging” and industry consolidation.
Though I’d be lying if I said I wasn’t still a little nervous. Will Harris take on Hollywood too? Hollywood executives, power brokers, and industry leaders, many of whom want consolidation. As Matthew Belloni discussed on a recent podcast, Kamala Harris is very good friends with Dana Walden, the head of content at Disney and a potential successor to Bob Iger. I don’t know Walden’s opinions on antitrust…but if you’ve followed Fox and Disney’s history, consolidation was a big part of it.
Unfortunately, Talent Isn’t Vocal About Antitrust
It’s not news to say that Hollywood is a fairly liberal née progressive place. Me writing that isn’t breaking any ground, is it?
But just because an industry is liberal/progressive/left-wing doesn’t mean it focuses on every issue equally. And when so many urgent issues seem like crises that need to be addressed immediately, some political issues get shoved to the back burner.
I’d argue that’s happened with pro-competition/strong antitrust enforcement policy in Hollywood. Between Me Too, Oscars So White, COVID-19, Hot Labor Summer, gun violence, and more, something seemingly boring and regulatory like antitrust lawsuits just don’t get folks in this town excited.
But it should!
Hollywood talent needs to put antitrust “on the agenda” or inject it “into the conversation” or make it “part of the narrative” as soon as possible.
And I mean soon soon. It’s an election year after all!
If Harris just speaks to rich executives, she’ll hear what a lot of pundits hear, which is that the industry needs consolidation to survive. That consolidation is good. When you write big checks, it comes with the opportunity to speak your mind, and that’s going to influence Harris. But that doesn’t have to be the case.
Kamala Can Be Persuaded…and The Unions/Guilds Should Take the Lead
If you’re a Democrat, there are a lot of reasons to be excited about Kamala Harris. There’s no doubt that she’s energized millions of Democrats and single-handedly reversed the fortunes of the campaign. Plus, so far, her messaging has been excellent. Check out her very even-handed (and smart) approach to price gouging last week.
We just need to ensure she delivers on a “pro-competition” agenda for Hollywood as well. When I first started writing this article last week, I was way more worried, but now I’m hopeful she will support the pro-worker agenda for Hollywood.
But there’s still work to be done.
As I wrote for The Ankler last year, the strikes of 2023 really should just be the start for political organizing for Hollywood. The unions/guilds need to put their considerable heft, manpower and energy behind breaking up the entertainment industry so it is more competitive across the board. A more competitive Hollywood is one where workers win since they have increased bargaining power.
The Hollywood trade unions started the work last year. Now is the year to follow up.
The Harris campaign needs union support too. SAG-AFRA, WGA, DGA, IATSE, and the Teamsters can influence the campaign, especially in this crucial time period. Put it this way: Hollywood executives and business leaders are trying to influence the Harris campaign, shouldn’t the unions and guilds?
So that’s my recommendation to Hollywood workers: influence the current administration by any means necessary. Specifically…
Make the case online. The Harris campaign reads Twitter. If many Hollywood celebrities advocate for breaking up Hollywood/Big Tech, they’ll listen.
The unions need to put out specific policy positions advocating for more competition in Hollywood across the board.
Hollywood talent should fundraise for the campaign, but make sure antitrust is on the agenda.
Advocate for FTC Chair Lina Khan and DoJ Antitrust head Jonathan Kanter to keep their jobs too.
At the height of the strikes, Hollywood talent spoke with remarkable unanimity on the need for reforms to help talent and workers. I think they could unite again, and strategically, that’s what they should do.
Fun exception: Ted Hope wrote some very kind words about my article, and as an independent producer, he’s seen a lot of these problems firsthand. (And he worked at a mega-streamer.)
While I come to my antitrust beliefs based on my reading of economics and competition, it probably helps that I don’t have sources telling me the benefits of consolidation.
This is, to be generous, the explanation for Paramount+ and Warner Bros. Discovery’s woes. Sure, their leadership may or may not have helped, but it also may not have mattered.