6 Takeaways From TheGrill 2022: Hybrid Models Work, Content Still Rules and Abortion Worries Loom

After two days of intense conversations at TheWrap’s annual Grill conference, one thing is clear about this moment in entertainment: Content is the name of the game.

Not only are Candle Media’s Kevin Mayer and Tom Staggs investing heavily in content companies with the $25 billion war chest of Blackrock, a half-dozen top dealmaking bankers who spoke on our mergers panel say that the entertainment industry will continue to see heavy acquisition activity in the space, despite Wall Street’s foul mood.

We learned that Hollywood is groping its way forward to make room for both streaming and theatrical business models. Neither are thriving and neither are in their death throes. Paramount distribution and marketing chief Marc Weinstock is sure that there’s room for both robust theatrical releases and streaming – but of course the guy who released “Top Gun: Maverick” thinks that.

“Hybrid” might just be the new byword – a mixed streaming and theatrical model for movies, and as far as streaming goes, a hybrid model of subscription and advertising. That big new shift for streaming is already underway.

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And if there are too many streaming companies, for the moment all of them need storytellers and content. Many storytellers were at our producers roundtable and discussed, among other things, the constraints on a profitable business model for what used to be traditional producing.

Here are my five takeaways:

Content Is Queen.

I say “queen,” because content companies are commanding huge numbers in the marketplace, but they don’t control the realm. This week, Brad Pitt’s Plan B became the latest production company to seek a buyer, or additional capital, in hiring Moelis & Co., while David Ellison’s Skydance raised $400 million from Ten Cent and others. Carlos Jimenez from Moelis, who is leading the Plan B deal, was on our panel and confirmed that even though some acquisition deals are on hold – like Brian Grazer and Ron Howard’s Imagine Entertainment, whose sale seems stalled – many other deals are in the pipeline.

Meanwhile, Kevin Mayer and Tom Staggs have bought 11 companies – including Reese Witherspoon’s Hello Sunshine and “Cocomelon” home Moonbug Entertainment — for a combined enterprise value of over $4 billion. Building an empire from scratch in this fast-changing and unpredictable environment is difficult, but that is precisely why content is such a critical focus. I asked Mayer if he is seeking to build a distribution arm, and he confirmed that – No, he’s not. He is uniquely interested in premium content, for every imaginable platform.

NFTs are down but not out.

The most pungent comment on this topic came during our panel on NFTs: “I think about it as a digital good that actually will provide the foundation for true monetization in the internet,” Melody Hildebrandt, the chief information security offer at Fox and president of Blockchain Creative Labs said. “Like the sense of property rights that can exist in an online sense that I think can facilitate what the new model of what a new Internet should be and help with the right monetization framework to appropriately be able to have both creators and communities be able to monetize and own things in a real way.”

Abortion is on everyone’s mind.

In panel after panel, abortion and the lack of access to abortion access in multiple states is a problem that needs to be solved for an industry that makes movies and television shows all over the country. There is a lot of anger that is swirling around this, and with good reason.

As producer Sera Gamble put it plainly at the producers roundtable: “It is so f—ed up to have to tell your boss that you need an abortion.”

Loeb & Loeb’s Ivy Kagan Berman asked a panel of industry pro-choice activists whether the right move was simply to boycott production in states where abortion is no longer a right, the answer was not a rapid Yes. (To my surprise.) The issue involves local laws, union guidelines, whether to punish workers in, say, Georgia for the decisions made at their statehouse, and whether it amounted to abandoning women in states where they are left without support to seek abortions.

It is indeed a very complex issue, with hard moral choices. I, for one, think a hard line should be drawn if women’s rights are to be valued as human rights.

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Live events need to raise the bar to get people back in real life.

This sounds obvious, but issues like security and safety, amid the plethora of competition for time and leisure, remain barriers for the live event industry to return to pre-pandemic levels of attendance. The experts on our panel emphasized that the specialness of the experience will matter a lot – even with all the pent-up demand to get outside. Companies like Oak View and On Location are working to create shiny new experiences in shiny new venues that will uplevel to what audiences now expect.

Can Disney can do without the headache of linear TV?

One guy who used to work there thinks so. Kevin Mayer, former chief strategy officer and also the guy who successfully launched Disney+ for Bob Iger a couple of years ago, didn’t get the top job. That went to Bob Chapek. I asked him (sneakily) whether he thought Chapek was doing a good job. Diplomatically, Mayer said Chapek was dealt a crappy hand.

True enough, Chapek took over Disney just as COVID disrupted the world. But Disney’s stock has been down 40% year to date not because of COVID. “I think they could” live without ESPN and ABC, said Mayer. ”It’s hard to see a huge future for linear TV in entertainment.”

Mayer believes that Disney’s core business are the big brands he helped bring in-house: Marvel, “Star Wars,” Pixar and Disney itself, with a dash of 20th Century (formerly Fox). Focusing even more closely on those assets, plus the streaming service and theme parks – that’s the business, he said.

People are eager to be back together in person.

I was thrilled that people flew down from San Francisco, jetted in from Atlanta and drove up the damn 405 from San Diego to be at TheGrill. They thought it was worth it – and they wanted to connect in person. So did we.

See you next year!

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