2023 was a particularly intense year for Hollywood. Aside from the challenges brought on by the SAG-AFTRA and Writers Guild of America strikes, there were myriad issues plaguing networks, production companies, distributors, and talent, all of which ultimately flow downstream to the end user — the viewers. Many of the trends and landmark decisions we saw in 2023 will continue to play out in 2024, affecting those who work in or simply enjoy the fruits of the entertainment industry.
From critical legal developments, to the rise of Artificial Intelligence, to the future of streaming, here is a list of ten Hollywood issues to keep an eye on in 2024:
- Starting in 2024, there is mandatory federal reporting of the “beneficial owners” of almost every entity. All talent in the industry and their loan-out companies will have to register with the federal government, and that is just the tip of the iceberg. Many productions, especially independent films, form LLCs to protect the interests of investors. These companies will now need to carefully disclose all relevant information regarding the parties overseeing the entity. This is sure to come as a shock to many.
- We’re not far off from seeing a filmmaker release a feature-length film that is produced entirely with AI, including the screenplay, visuals, actors, and music. Reactions to such an endeavor will certainly be strong.
- Keep an eye on the multiple class actions accusing AI companies of copyright infringement for uploading copyrighted content. If those cases are successful, either AI in Hollywood will get stopped in its tracks or there will need to be a global settlement giving some compensation to copyright owners.
- Due to the increased cost to consumers of subscription video on demand (SVOD) streaming through tiers and multiple providers, 2023 saw stagnation in these platforms. Meanwhile, there was rapid growth of free ad-supported content, through free ad-supported television (FAST) and advertising-based video on demand (AVOD) such as Roku, Amazon Freevee, Crackle and others. Free streaming will likely continue to surpass SVOD in 2024 as consumers continue to consider the impact on their wallets.
- Speaking of SVOD streamers, it is likely many platforms will disappear or drastically restructure after running up a mountain of losses, leaving only a few still standing. What was once the hottest commodity in town is now a money pit with no profitability in sight.
- Have pity on the Metaverse in 2024 as it dies a quiet death due to people’s lack of enthusiasm to wear heavy, expensive goggles at home. This spectacular rise and fall has proven that just because everyone’s talking about it doesn’t mean it’s worth talking about. There will continue to be developments in the space, but gone are the days of companies touting their half-baked metaverse projects.
- In 2023, the U.S. Supreme Court reached a monumental decision holding that Andy Warhol’s painting of Prince infringed the copyright of the photograph it was based on. In 2024, keep an eye on how lower courts interpret and apply the 2023 Supreme Court decision, and expect that the fair use defense may be pared back significantly. With this, we may see significant impacts on cases involving the right of publicity that traditionally employed the “transformative” defense, which may be reversed, with the defense transitioning to question the actual new use of the image.
- South Korea is not alone in being a source of creative, compelling content, and in the new year we can expect foreign content to accelerate. As the labor strikes persisted, we saw Netflix increase its investments in productions abroad, including in South Korea. Other streamers may follow suit and invest in content from foreign countries — such as Colombia and Nigeria — so long as they are afforded better control over production, competitive financing, and diversity in their content supply sources.
- Watch the growth of impulse buying, as Amazon and other SVOD providers seek to figure out how to continue tapping into the “Holy Grail” of click-through e-commerce. It may only be a matter of time until viewers can make impulse purchases like shopping the exact outfit an actor is wearing.
- As a tide of money overcomes resistance, we may see an increase in financing from Saudi Arabia. It’s already abundantly difficult to get a movie financed, and many will never secure the sizable budgets needed for a successful project. New financing opportunities will continue to be very attractive to filmmakers struggling to get their projects off the ground.
In the new year, we can expect external forces such as shifting consumer preferences, economic instability, and technological advancements to influence the entertainment industry’s path. While change can be unnerving, there is great excitement over potential growth and untapped creativity. Industry insiders who stay abreast of these trends may benefit from new opportunities in 2024.
Schuyler (Sky) M. Moore is a partner practicing entertainment, corporate and tax law at Greenberg Glusker.