I’ve never seen The Mandalorian. I don’t have Disney+. But I know who Baby Yoda is, and I’m pretty sure Disney is counting on that. Hollywood, in case you haven’t been paying attention, is going through some radical changes. There may be some lessons for healthcare in them.
Credit: Mike Raab
2020 has been the year of streaming. Moviegoing isn’t entirely dead in the
pandemic, but it may be on life support, with major chains like Regal
and AMC
barely staying out of bankruptcy. “Yes, there is pent-up demand to see
movies in a theater,” Hollywood insider Peter Chernin told
The New York Times. “But people change their habits.”
Indeed, they do. A new
Press Ganey survey found that telemedicine visits shot to 37% of all visits
in May, then settled down to around 15% – far above less than 1%
pre-COVID-19. Habits do, indeed, change,
even in healthcare.
Hollywood has made some
startling announcements in the past few weeks that illustrate how swiftly changes
are coming to the entertainment industry:
Disney: Disney expects to have 100 new titles – TV shows
or movies – each year for the next few years.
Disney chairman Bob Iger noted
modestly: “The pipeline of original content we’re
making is much more robust than originally anticipated.” Of particular
note, though, CEO Bob Chapek said, “Of the 100 new titles
announced today, 80 percent of them will go to Disney Plus.”
NYT characterized the move as: “Here is a 97-year-old company making a jump to direct-to-consumer hyperspace.” (If you don’t get the reference, you probably didn’t get the Baby Yoda one either).
The strategy appears to
be working. Disney said
that its year-old Disney+ streaming service already has 87 million
subscribers; it had originally projected to reach this number by 2024. Now it expects to reach 260m subscribers by
2024. And those numbers do not include
Disney services Hulu (39m) and ESPN+ (12m).
Collectively, Disney now expects up to 350m subscribers by 2024.
Warner Bros:
Although Disney expects some of
its movies to still have theatrical runs prior to streaming, Warner Bros announced
in early December that all of its 2021 releases will be available for
streaming on its HBO Max service upon release, rather than after the “traditional”
90+ day wait (outside the U.S., where HBO Max is not yet available, the movies
will still be in theaters first). It had
previously
announced that its big 2020 release – Wonder Woman 1984 – would be
released this way. Shares of major
theater chains dropped precipitously after the latest announcement.
Credit: CNN
“We see an opportunity
to do something firmly focused on the fans, which is to provide choice,”
WarnerMedia CEO Jason Kilar wrote. That’s all well and good, but it’s worth noting
that Warner Bros is owned by AT&T, and AT&T views this strategy as a
way to instill more loyalty to its wireless services, even at the potential
cost to theater revenues.
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If you’re worried about
the original streaming service – Netflix – don’t be. Although its growth has slowed, that’s partly
because it already has close to 200m subscribers worldwide. Its stock is up over 50% YTD, and even the announcements
from Disney and Warner didn’t seem to shake that. Similarly, Amazon Prime has
over 150m video users, more than half of them in the U.S., and continues
to invest heavily in new streaming content.
It’s a new world for
Hollywood. Brooks Barnes, NYT entertainment
reporter, wrote:
“one Warner Bros. executive told me that “the town” felt like a dismantled
movie set: The gleaming false fronts had been hauled away to reveal mere mortals
wandering around in a mess.” Another
Hollywood insider told him: “I see this as a time of opportunity. Sometimes you have to take it down to the
studs and build something new.”
Healthcare’s “false
fronts” have been torn down too. We’ve
exposed our glaring lack of public health infrastructure, our inability to
generate enough PPE, our testing has been abysmal, and now our hospitals,
particularly our ICUs, are overflowing. We’re
used to handling expected elective surgeries and even “normal” emergencies, but
were caught flat-footed by a pandemic.
If ever there was a time to take healthcare “down
to the studs and build something new,” this is it.
We’ve seen dramatic
declines not just in office visits but also in use of preventive
services and screenings, elective
surgeries, emergency
room visits, even heart
attacks. We just don’t know if these
declines are good or bad. Researchers
Allison H. Stokes, PhD, and Jodi B. Segal, MD, suggest
in Health Affairs: “We
see a unique methodological opportunity to evaluate the harms of low-value care.” Another researcher, Dr. H. Gilbert Welsh
agrees,
telling NYT: “We are in the midst of an unprecedented natural
experiment that gives us an opportunity to determine the effect of a
substantial decline in medical care utilization.”
But will we take advantage
of that opportunity, or will we just go back to our old ways once the vaccines
work their magic?
E.g., will healthcare
just expect patients to go back to the theater?
Or will major healthcare companies bet big on the future: “streaming” (aka
telehealth) as the main consumer point-of-contact, with patient convenience as
a main driver? Where digital is the
norm?
Disney’s physical locations – its theme parks – are hemorrhaging money, and Warner Bros has suffered dramatic declines from theater revenues, but both are betting big on their virtual strategies – and the markets are rewarding them. Warner says its announcement is only a strategy for 2021, but, as NYT put it:
It will be almost impossible to go back, and it may force other studios to abandon the old model. Fans trained to expect immediate gratification will not be eager to return to the days of giving theaters an exclusive period to play movies.
We shouldn’t expect
patients to go back to the “old” healthcare system either.
I’m not expecting healthcare to have a Baby Yoda caliber
idea, but it can certainly do better than its current Jar Jar Binks
strategies.
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