While some studios’ streaming operations have already started reporting small profits, Ampere’s study looks at the timelines for consistent profitability, taking into account income from subscription and advertising against content costs, staff and marketing costs, depreciation and amortization to predict the point that businesses reach consistently positive earnings before income and taxes (EBIT). The study excludes sports streaming operations.

Disney is likely to reach profitability as early as the first quarter of 2024, according to the firm — two quarters earlier than the entertainment giant itself has predicted. Following closely behind will be Warner Bros Discovery by the third quarter of 2024. Both Paramount and NBCUniversal are expected to achieve the goal by the first quarter of 2025.

By 2028, Ampere expects that the studios will earn between $1 billion and $2 billion EBIT per year from streaming based on their current market footprint alone. Additional geographic expansion would lead to even more upside.

Ampere says the shift will be primarily driven by studios’ cost-cutting efforts, particularly related to content and staff, and the move to embrace advertising. The latter has the opportunity to provide significantly more growth and profit than currently predicted by the models, Ampere notes, which are based on known existing operations.

“A confluence of factors as varied as the end of Covid-19 lockdowns, geopolitics and the cost-of-living crisis created the environment that forced the studios to reassess the return on investment of the streaming direct model. The cost rationalization of the last 12 months has now positioned the industry for genuine streaming profitability in relatively short order,” Ampere Analysis executive director Guy Bisson said in a statement.

“Passing that milestone will impact multiple windows within the entertainment value chain,” Bisson added. “It will enable a return to flexibility and experimentation and a realization that existing models are already in place to fully exploit studio output when streaming direct takes its rightful place as one window in the broader value chain.”

Profitability of the streaming direct model could also lead to an acceleration of free streaming, including free ad-supported streaming television (FAST) channels.

Disney, which narrowed losses in its streaming division by 70% year over year to $420 million in its fourth quarter of 2023, has said its streaming business is on track to reach profitability by September 2024.

Meanwhile, Warner Bros. Discovery turned a $111 million profit in its direct to consumer division during its third quarter of 2023 — a $745 million year-over-year improvement and its second profitable quarter in a row.

NBCUniversal’s Peacock, which narrowed its losses to $565 million in the third quarter of 2023, compared to 614 million a year ago, said it expects peak losses of $2.8 billion in 2023 down from previous guidance of peak losses of $3 billion, and “meaningful EBITDA improvement” in 2024.

Paramount Global, which saw its direct to consumer division’s losses narrow 31% year over year to $238 million in the third quarter of 2023, expects full-year streaming losses for 2023 to be lower than in 2022, with fourth quarter 2023 losses similar to the fourth quarter of 2022. The segment remains on track to drive “significant earnings improvement” in 2024.

The post Streaming Industry Could Turn Consistent Profit Within 18 Months, Research Firm Predicts appeared first on TheWrap.

In the lawsuit, originally filed in March 2022, consultant David Carde accused Endeavor of stealing an analysis of the company that he sent unsolicited to CEO Ari Emanuel in 2019 after Endeavor’s recent failed IPO. Carde claimed his analysis led directly to the company’s $10.3 billion IPO in the spring of 2021, and that he hadn’t been credited or compensated.

However, in a ruling issued Dec. 12 and unsealed Friday, Judge Gregory Keosian shot all of that down, noting that Endeavor doesn’t accept unsolicited submissions and thus Carde never had an implied contract with them.

Latham & Watkins, the law firm representing Endeavor, didn’t immediately respond to a request for comment from TheWrap. But in a statement provided to media, L&W partner Jessica Stebbins Bina said, “We are pleased with the court’s decision granting summary judgment in favor of our client, Endeavor, holding plaintiff’s idea theft claims absolutely meritless. As the court recognized, Endeavor does not accept unsolicited submissions, and never entered any contract of any kind with plaintiff.”

Endeavor’s effort to go public was, initially, a success. However the company’s share price has underperformed and its largest shareholder, private equity powerhouse Silver Lake, is now trying to take it private again.

THR first reported on the lawsuit’s dismissal.

This article was updated to correct a misattributed quote.

Pamela Chelin contributed to this report.

The post Endeavor Prevails in IP Theft Lawsuit Linked to 2021 IPO appeared first on TheWrap.

Starting in January, legacy Lionsgate+ subscribers who joined via Prime Video Channels in Brazil and Mexico will gain access to MGM+ for R$14.9 ($3) per month and MX$59 ($3.42) per month, respectively.

The Amazon-owned streaming service will be rebranded to MGM+ across Latin America to align with the change that occurred in the U.S. and European Union. MGM+ is currently the European Union’s second highest ranking Prime Video channel.

With the addition of the Latin American market, Lionsgate and Starz content will be available to MGM+ viewers in 24 countries around the world, including Germany, Austria, Italy, Spain, Netherlands, Belgium, Brazil, Mexico, Argentina, Bolivia, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Panama, Paraguay, Peru, Venezuela, Nicaragua and Uruguay.

MGM+ in Latin America will become the exclusive home of Starz TV series including “Power,” “Power Book I-IV,” “Black Mafia Family,” “The Serpent Queen,” and “Spartacus” and film franchises such as “The Hunger Games,” “Kill Bill,” “Saw, “”Twilight,” and the films of “Tyler Perry.” Other available content will include “Mad Man,” “Nashville” and “Weeds.”

“The expansion of MGM+ in the Latin American market further cements Amazon’s commitment to invest in and grow the MGM+ brand, and to enhance the subscriber experience,” Prime Video Studios vice president of corporate strategy Chris Brearton said in a statement.

The post MGM+ Expands Across Latin America With Lionsgate Content Licensing Deal appeared first on TheWrap.

The inquiry will focus on X’s compliance with DSA obligations related to countering the dissemination of illegal content in the EU; the effectiveness of its measures taken to combat information manipulation, such as Community Notes; the measures taken by X to increase transparency of its platform; and a “suspected deceptive design of the user interface” in relation to the blue checkmarks linked to certain subscription products.

“Today’s opening of formal proceedings against X makes it clear that, with the DSA, the time of big online platforms behaving like they are “too big to care” has come to an end,” European Commissioner for the Internal Market Thierry Breton said in a statement. “We now have clear rules, ex ante obligations, strong oversight, speedy enforcement, and deterrent sanctions and we will make full use of our toolbox to protect our citizens and democracies.”

The EU’s decision follows a preliminary investigation, which included an analysis of a risk assessment report submitted by X in September, its transparency report published in November, and its replies to a formal request for information, which, among others, concerned the dissemination of illegal content in the context of Hamas’ terrorist attacks against Israel.

Under the DSA, X is classified as a Very Large Online Platform (VLOP), in which it must “diligently identify, analyse, and assess any systemic risks in the Union stemming from the design or functioning of their service and its related systems, or from the use made of their services.”

VLOPs are also required to notify individuals or entities of content moderation decisions in a “timely, diligent, non-arbitrary and objective manner,” providing information on “the possibilities for redress in respect of that decision.”

Additionally, they cannot design, organize or operate their online interfaces in a way that “deceives or manipulates their users or in a way that otherwise materially distorts or impairs the ability of the users of their service to make free and informed decisions.”

They also must compile advertisements from the platform and make them publicly available until one year after they were presented through a searchable and reliable tool and provide researchers with “effective access” to platform data.

In a statement, X said that it “remains committed to complying with the Digital Services Act and is cooperating with the regulatory process.”

“It is important that this process remains free of political influence and follows the law,” the statement continued. “X is focused on creating a safe and inclusive environment for all users on our platform, while protecting freedom of expression, and we will continue to work tirelessly towards this goal.”

Moving forward, the commission will continue to gather evidence through additional requests for information, conducting interviews or inspections.

“The opening of formal proceedings empowers the Commission to take further enforcement steps, such as interim measures, and non-compliance decisions,” the EU added. “The Commission is also empowered to accept any commitment made by X to remedy on the matters subject to the proceeding.”

The DSA does not set a legal deadline for the duration of the investigation. Factors include the complexity of the case, the extent to which the company concerned cooperate with the Commission and the exercise of the rights of defense.

The post EU to Investigate Elon Musk’s X for Misinformation, Lack of Transparency Under New Digital Services Act appeared first on TheWrap.

Based in Los Angeles and reporting directly to Thorn, Gold and Schwachenwald will serve as senior vice president of development and senior vice president and head of scripted production, respectively. The pair will be responsible for overseeing all program development and production of series owned and produce under the Fox Entertainment Studios banner.

Meanwhile, Rowe, who will also be based in Los Angeles and report to Gold, has been named vice president of development.

Gold most recently served as Paramount Network’s senior vice president of original programming, where he was responsible for the development of Spike and the newly rebranded Paramount Network, where he developed “Yellowstone” and “Waco.”

Between 2010 and 2014, Gold was president of television at Parkes/Macdonald, responsible for spearheading the company’s entrance into television and the development and launch of “The Slap” and “Crossbones” for NBC.

Before that, he served as the head of television for Curtis Hanson’s Deuce Three Productions, producing the CBS drama “Three Rivers.” Between 2004 and 2007, Gold was senior vice president of seres development for Fox, where he oversaw the network’s entire drama slate and developed “Prison Break” and “Bones.” Prior to that, he served as Spelling Television’s senior vice president of development.

Schwachenwald most recently served as Paramount Television Studios’ senior vice president of physical production, where she oversaw shows including “Fatal Attraction” for Paramount+ and “Cross” for Amazon Prime. Before that, she served as Skydance Television’s senior vice president of physical production, managing series including “Grace and Frankie” and “Reacher,” as well as co-productions “Condor” and “Jack Ryan.”

Schwachenwald began her career as a physical production executive at MTV in 2006 after transitioning from being a freelance line producer. She spent 11 years with MTV, producing and managing all formats as vice president and head of scripted physical production. She supported all aspects of scripted production, current and development on projects such as “Awkward,” “Faking It,” “Teen Wolf,” and “The Shannara Chronicles.”

Rowe most recently served as Fox Entertainment’s vice president of animation, where she developed “Krapopolis,” the upcoming Jon Hamm-led “Grimsburg,” and the Sony Pictures Television co-production “Universal Basic Guys” and oversaw the animated comedy “HouseBroken.” Prior to joining Fox in 2020, Rowe was an independent producer and showrunner with credits including the Comedy Central special “Desi Lydic: Abroad, Hood Adjacent,” Seeso and NBC’s “Shrink” and the Australian format of “The Bachelorette.”

The appointments come as Fox Entertainment has unveiled a series of broadcast direct deals to develop projects wholly owned by Fox and produced by Fox Entertainment Studios.

Creatives under these deals include Curtis “50 Cent” Jackson (“Power,” “For Life”), Rodney Rothman (“Spider-Man: Into the Spider-Verse”) and Adam Rosenberg, producers Carol Mendelsohn (“CSI”) and Julie Weitz, writer/producer/director McG (“Supernatural,” “Lethal Weapon,” “We Are Marshall”); writer/ producer Justin Adler (“Life in Pieces,” “Maggie”), creator/writer/producer Matt Nix (“Burn Notice,” “The Gifted”) and actor/producer Oliver Hudson (“The Cleaning Lady,” “And Just Like That”). 

“In strategically building out Fox Entertainment Studios, we’ve been diligent in surveying the landscape to develop creator and producer-friendly models that embrace both our content and business objectives,” Thorn said in a statement. “Ted, Julie and Khoby are a seasoned team with deep relationships throughout the global community that give us a strong foundation to evolve our business as it continues to grow.”

The post Fox Entertainment Taps Julie Schwachenwald, Ted Gold, Khoby Rowe to Lead Scripted Production and Development appeared first on TheWrap.

The New York Times reported last month that Netflix halted nearly $3 million worth of ads, citing X estimates. But TheWrap has come across posts by Netflix advertising its films “Maestro” and “May December.”

When asked for comment, an X spokesperson confirmed to TheWrap that Netflix has resumed advertising on the platform. Representatives for Netflix did not immediately return TheWrap’s request for comment.

On Nov. 15, Musk endorsed a verified account named @breakingbaht, which wrote, “Jewish communities have been pushing the exact kind of dialectical hatred against whites that they claim to want people to stop using against them.” He responded to the post, writing, “You have said the actual truth.”

The “actual truth” tweet came in conjunction with a Media Matters report that found X not adhering to agreed-upon brand safety measures for advertisers’ content. It found the social media platform placing its ads alongside content that “touts Adolf Hitler and his Nazi Party,” prompting multiple brands to suspend their advertising, including Disney, Paramount, Apple, Sony and Lionsgate.

On Nov. 16, X CEO Linda Yaccarino responded to the controversy, tweeting that “X’s point of view has always been very clear that discrimination by everyone should stop across the board — I think that’s something we can and should all agree on.”

“When it comes to this platform — X has also been extremely clear about our efforts to combat antisemitism and discrimination. There’s no place for it anywhere in the world — it’s ugly and wrong,” she wrote. “Full stop.”

The following day, Musk called advertisers the “greatest oppressors of your right to free speech.” He proceeded to file a lawsuit against Media Matters on Nov. 20.

During the Times’ DealBook Summit on Nov. 29, Musk told advertisers who suspended ad buys to “go f–k yourself.”

“If somebody’s going to try to blackmail me with advertising, blackmail me with money. Go f–k yourself,” he said.

But he also apologized, saying that he “handed a loaded gun to those who hate me, and arguably to those who are antisemitic.”

“For that I’m quite sorry. That was not my intention,” he continued. “I should in retrospect not have replied to that particular post.”

Musk maintained that his agreement was largely taken out of context and “subsequently clarified in replies, but those clarifications were ignored by the media.” He added that a trip to Israel and meeting with Prime Minister Benjamin Netanyahu was not “an apology tour” for the post and other widely publicized instances of antisemitism at X.

The New York Times has estimated that X could lose as much as $75 million in advertising revenue by the end of the year due to the suspensions.

The post Netflix Resumes Advertising on X After Elon Musk Controversy appeared first on TheWrap.

Wall Street giants KKR, Apollo and Blackstone have pulled back on their promises to fund big catalog buys, still not spending the $3 billion they collectively pledged in October 2021, in large part because the rising rates made it harder to justify loading up the assets with the amount of debt they had planned to use.

The firms had planned not to provide cash, but to finance the deals with debt, a frequent strategy in the private equity world. But increased borrowing costs would depress the cash flows music rights owners could expect, making high-interest borrowing less appealing.

The FT wrote that KKR, which began its investments in music royalties earlier than its rivals, has not bought music for at least a year. Despite its $1 billion partnership with BMG, KKR reached just “a handful” of deals, including for songs by ZZ Top in December 2021 and John Legend in January 2022, the report said, citing a person familiar with the matter.

The report noted that KKR this week hired an advisory firm to evaluate options — Wall Street language for exploring a sale — for its $1.1 billion in music assets, which includes a catalogue of 62,000 songs, which also includes work by Lorde and The Weeknd.

Apollo has not made a new equity investment in song royalties for at least two years, The FT said, after spending just $200 million of the $1 billion it pledged when it backed HarbourView Equity Partners in October 2021.

HarbourView has since looked to other investors for cash, the report said. The firm this year announced deals for the catalogs of Blackbear, Wiz Khalifa and rapper Nelly.

Blackstone, which backs Hipgnosis, has spent just shy of $700 million out of the $1 billion it pledged, including headline-grabbing deals with Justin Bieber and Justin Timberlake. But Hipgnosis is dealing with a shareholder revolt, including votes to restructure the business and reject a proposal to sell some of its assets to Blackstone.

Higher interest rates also serve to make more traditional financial investments more attractive, Nat Zilkha, a former KKR partner who had led the firm’s moves into music, told The FT, which has shifted private equity firms’ attention away from music investments.

“As a result their interest in less liquid, less well-understood asset classes has waned,” said Zilkha, who left KKR at the end of 2021 but is still an adviser. “Music is near the top of that [list]

The post Music Catalog Boom Slowed as Wall Street Trio Bailed Amid Interest Rate Hikes appeared first on TheWrap.

“The Times’s problem has metastasized from liberal bias to illiberal bias, from an inclination to favor one side of the national debate to an impulse to shut debate down altogether,” Bennet wrote in a lengthy essay for The Economist’s 1848 Magazine headlined, “When the New York Times lost its way.”

“All the empathy and humility in the world will not mean much against the pressures of intolerance and tribalism without an invaluable quality that [Publisher A.G.] Sulzberger did not emphasize: courage,” he wrote.

The scathing commentary recounts Bennet being unceremoniously dumped by the Times after he published an OpEd by Arkansas Sen. Tom Cotton calling for the use of U.S. troops to be deployed to cities where protests in the wake of George Floyd’s murder had morphed into looting and riots. Bennet maintains that Sulzberger at first supported its publication, noting that then-President Donald Trump shared a similar view, but that backlash among Times staffers and on social media swayed the publisher into calling Bennet and demanding a resignation “with an icy anger that still puzzles and saddens me.”

“Whether or not American democracy endures, a central question historians are sure to ask about this era is why America came to elect Donald Trump, promoting him from a symptom of the country’s institutional, political and social degradation to its agent-in-chief,” Bennet wrote. “There are many reasons for Trump’s ascent, but changes in the American news media played a critical role.”

“Trump’s manipulation and every one of his political lies became more powerful because journalists had forfeited what had always been most valuable about their work: their credibility as arbiters of truth and brokers of ideas, which for more than a century, despite all of journalism’s flaws and failures, had been a bulwark of how Americans govern themselves,” he continued.

Bennet said he believes Sulzberger shares his viewpoint, based on interviews and the publisher’s own writing defending “independent journalism” — “or, as I understand him, fair-minded, truth-seeking journalism that aspires to be open and objective.”

But he maintained such values have “fallen out of fashion not just with journalists at the Times and other mainstream publications but at some of the most prestigious schools of journalism.”

Bennet stated that journalism today requires a particular kind of courage “in an era when polarization and social media viciously enforce rigid orthodoxies, the moral and intellectual courage to take the other side seriously and to report truths and ideas that your own side demonizes for fear they will harm its cause.”

“One of the glories of embracing illiberalism is that, like Trump, you are always right about everything, and so you are justified in shouting disagreement down,” he continued. “This is how reasonable Republican leaders lost control of their party to Trump and how liberal-minded college presidents lost control of their campuses. And it is why the leadership of The New York Times is losing control of its principles.”

The post Former NYT Editorial Page Editor Blasts the Paper for ‘Shutting Down Debate’ appeared first on TheWrap.

Ari Emanuel’s Endeavor Group has invested an undisclosed amount in Chess.com, the site said Thursday. The popular site also signed with Endeavor’s entertainment agency, WME.

“WME will work with Chess.com to build on the global popularity of chess across digital media, fashion, film, food, music, sports, television, and theater,” the company said.

The agency’s efforts “to amplify the game of chess” will include developing non-scripted content including documentaries, along with attempts to create celebrity-centric moments and crossover content to attract new audiences.

The goal is “fueling the game’s growth by elevating its profile in mainstream media,” said the company, which is led by co-founder and CEO Erik Allebest.

Chess.com, which was launched in 2005, hosts more than 10 million games daily among more than 150 registered users. The number of active users more than doubled since the pandemic, helped by lockdown boredom as well as “The Queen’s Gambit” sparking a new interest in the game.

The company noted that the ancient strategy game’s popularity is growing across all age groups.

Last year, Chess.com announced a “major investment” from private equity firm General Atlantic, which previously backed Snap, Slack, TikTok, AirBnB and a host of other startups. As with the Endeavor infusion, the company did not disclose the amount General Atlantic invested.

Endeavor’s strategy of investing in trending businesses has created a sprawling sports and entertainment conglomerate with a range of genres built on top of WME, one of the business’ top representation agencies. Most notably this year, Endeavor led the combination of its UFC with WWE to create the TKO Group in September, which Emanuel also leads.

“Chess.com’s unique community, content, and competition is a driving force behind chess’ increasing popularity,” Emanuel said in a statement. “We are excited to help further expand their reach and bring more fans to the game via content development, brand partnerships, events, premium experiences, media rights, and licensing opportunities.”

The post Endeavor Group Makes Investment in Chess.com appeared first on TheWrap.

At his revived annual end of the year press conference — Putin skipped the ritual last year as the war in Ukraine floundered — the leader was asked about Biden administration claims made last week that the Russian government rejected a “substantial” proposal for the release of Gershkovich and former U.S. Marine and Michigan corporate-security executive Paul Whelan, who was arrested in 2018.

“It is not that we have refused to return them,” Putin said, The Wall Street Journal reported. “We want to reach an agreement, and these agreements must be mutually acceptable and must suit both sides. We have contacts with our American partners in this regard, and there is an ongoing dialogue.”

“It is not easy,” he continued. “I will not go into details, but in general it seems to me that we are speaking a language that we both understand. I hope that we will find a solution.”

Putin said that “the American side must hear us and make an appropriate decision—one that suits the Russian side as well,” The Journal reported.

Gershkovich, 32, was arrested on March 29 by Russia’s Federal Security Service while he was on a reporting trip in the Russian city of Yekaterinburg. He is accused of being a spy. The U.S. government declared him“wrongfully detained” a few weeks later.

His detention while he waits for his Jan. 30 trial has been repeatedly extended, most recently last month, keeping him in in Moscow’s Lefortovo Prison, The Journal reported.

National Security Adviser Jake Sullivan said on Tuesday that Gershkovich’s release is a “top priority” for the Biden administration. “We’re not going to rest until we bring him home,” he said.

“Evan has been wrongfully detained for more than 250 days for simply doing his job as a journalist, and any portrayal to the contrary is fiction” the Journal said in a statement. “We will stand with Evan and his family for as long as it takes and continue to demand his immediate release,”

The post Vladimir Putin Says He’s Hopeful for ‘Mutually Acceptable’ Agreement to Release Detained WSJ Reporter Evan Gershkovich appeared first on TheWrap.