🎬 Flops = New Hits

👋 Good morning! Apple TV is delivering on the "vibrant new identity" it promised (beyond just dropping the + sign). The streamer's psychedelic new logo intro comes with a three-second musical sting courtesy of Billie Eilish’s brother/producer Finneas, who took to Instagram to call the gig an honor. Whether it'll reach 'ta-dum' levels of iconic remains to be seen. Check back in five years.

You've got Dailies. Happy hump day. Here's your mid-week dose of industry intel to power through the rest of the week. 👇

CLOSEUP
🤔 Box office flops keep doing well on streaming…

Sony's theatrical flop 'Madame Web' became its most-watched Netflix movie of 2024. Same story with 'Kraven the Hunter' and ‘Ghostbusters: Frozen Empire’ topping streaming charts despite tanking theatrically. This pattern keeps repeating: movies that bomb in theaters are becoming streaming hits.

This disconnect hits Sony especially hard. Without its own streaming platform, Sony relies on licensing deals with Netflix that pay based on domestic box office performance. So when flops become streaming hits, Sony still gets smaller checks. Now they're pushing to change the game: they want Netflix to share viewership data (including who starts, who finishes) and pay based on streaming performance, rather than theatrical results.

Sony's push points to a bigger problem facing Hollywood: post-theatrical revenue isn't what it used to be. With box office increasingly unpredictable, flops sting more than ever. This is Sony's way of addressing that reality. Other studios have tackled the same challenge through elaborate windowing strategies:

• Universal puts films on Peacock first to drive subscriptions, licenses them to Netflix after some time, then brings them back to Peacock

• Warner Bros keeps films on Max, then cherry-picks titles to license elsewhere

• Paramount's planning something similar—Paramount+ first, then shopping to a second streamer (Amazon, Max, and Hulu are all bidding)

• Sony, without a platform of its own, can only try to change how the payment math works

The bigger picture: Insiders doubt Sony's payment restructure will work. But what is clear is that streaming is changing how Hollywood values content. Box office used to be the metric, but that might make less sense when flops become streaming hits. There’s just no consensus yet on what should replace it.

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WIDESHOT
🎬 Coca-Cola, video podcasts, and Australia…

🥤 Coca-Cola's controversial AI holiday ad is back for round two. Remember last year's AI-generated ‘Holidays Are Coming’ spot that didn't exactly go over well with the creative community? Coke's back with another synthetic commercial from LA-based AI studio Secret Level, this time featuring animated animals instead of the uncanny valley humans. The math on this one stings: what normally takes 50+ people to produce needed just 20. Secret Level and Coke execs insist brands will ultimately spend the same budgets to create more ads rather than pocket the savings (we'll see about that). Last year's backlash didn't hurt viewership—the ad racked up billions of impressions. Coke's AI chief says "the genie is out of the bottle," and they're already eyeing AI ads for March Madness and beyond.

🎙️ The video podcast land grab is accelerating. Netflix has sent dozens of requests to major talent agencies WME, UTA, and CAA to sign video podcast creators ahead of a planned Q1 2026 platform launch. The aggressive recruiting push comes alongside reported talks with iHeartMedia to license its video podcast library. That news alone sent iHeart's stock surging to its highest levels since August 2023. Add in last month's Spotify partnership for shows like The Bill Simmons Podcast, and the picture becomes clear: Netflix wants what YouTube has. Co-CEO Ted Sarandos has been floating this idea since an April earnings call, and why not? Video podcasts deliver hours of viewer engagement for a fraction of what it costs to produce, say, another season of ‘Stranger Things.’

🇦🇺 The streaming platforms just got Australian content quotas. Starting now, services with over 1M Australian subscribers have to invest 10% of their local spending (or 7.5% of revenues) into Australian originals. That means Netflix, Prime Video, and the other big players need to fund local dramas, kids' shows, documentaries, and arts programming. The legislation finally arrived after months of delays and basically puts streamers on the same playing field as traditional TV. Industry groups like the Australian Writers Guild are thrilled. The streamers? Not so much. They've been warning this could mean higher subscription prices for everyone. But Australia's moving ahead anyway, joining Germany, France, Switzerland, and Canada in the growing club of countries instating similar requirements.

ICYMI
⚡️ Quick hits…

📺 Jon Stewart's sticking around for another year at ‘The Daily Show’ through December 2026, scoring his third extension since returning in 2024. The move's part of Paramount's new Skydance-led strategy to double down on proven franchises like South Park and Spongebob rather than chase shiny new things.

🏆 TikTok's throwing its own awards show Dec. 18 at LA's Hollywood Palladium, streaming live on TikTok and Tubi while honoring top creators across 13 categories. Instagram announced its own creator awards last month, yet another sign the creator economy now rivals traditional media's cultural influence.

🏛️ California's DOJ warned against Warner Bros. Discovery's sale, saying further Hollywood consolidation "does not serve" the economy or consumers. The statement follows three rejected takeover offers from Paramount and sniffing around from Netflix and Comcast, with the Writers Guild also opposing any merger.

⚾ World Series Game 7 pulled in 26.9M viewers, baseball's biggest audience in eight years as the Dodgers squeaked past the Blue Jays 5-4 in 11 innings on Fox. The nail-biter peaked at 33.1M viewers during those final moments and beat the last Game 7 in 2019 by 10%, making it the most-watched MLB game since 2017.

LAST LOOKS
AFM Packages 🤝

• Daisy Ridley will star in the true-story drama ‘Killa Bee,’ playing ICU nurse and MMA fighter Bryony Tyrell, with Capture launching sales at AFM. (more)

• Renée Zellweger will star in David Yates’ psychological thriller ‘Phantom Son,’ produced by AGC Studios and her Big Picture Co. (more)

• Thomasin McKenzie and Ansel Elgort will star in ‘Dinner With Audrey,’ with Michael Shannon in talks to join. (more)

• Shailene Woodley will star in the psychological thriller ‘Ultra,’ playing an ultramarathon runner during a 135-mile race through Death Valley. (more)

• Frank Grillo and Maria Bakalova will star in the sci-fi survival thriller ‘Override,’ which has begun production in Belfast. (more)

• Jason Isaacs and Tom Vaughan-Lawlor will star in Steve Kenny’s Dublin-set thriller ‘Silverback,’ with Bankside Films launching sales at AFM. (more)

• Charlie Plummer, Toni Collette, Isabela Merced, and Anthony Hopkins will star in Morten Tyldum’s ‘Ibelin.’ (more)

• Pete Davidson and Ella Purnell will star in the cosmic romantic comedy ‘That Time We Met,’ directed by ‘Theater Camp’ co-helmer Nick Lieberman. (more)

Film Development 🗒️

• Brendan Fraser and Rachel Weisz are reuniting for a fourth ‘Mummy’ film, directed by Radio Silence duo Matt Bettinelli-Olpin and Tyler Gillett. (more)

• Paul Dano will star in A24’s road drama ‘The Chaperones,’ alongside Cooper Hoffman and David Jonsson, directed by India Donaldson. (more)

• Netflix has acquired Amy Sherman-Palladino’s ‘Eloise’ adaptation, starring Mae Schenk and Ryan Reynolds. (more)

TV Development 📺

• FX has ordered a ‘Snowfall’ spinoff series starring Gail Bean and Isaiah John, set in 1990s Los Angeles amid the rise of West Coast rap. (more)

• Gideon Raff will showrun and executive produce Apple TV+’s international espionage thriller ‘Safe Houses,’ based on Dan Fesperman’s novel. (more)

• Matt Bomer will star in Hulu’s YA drama pilot ‘Foster Dade,’ directed by Dan Minahan. (more)

• ‘Nobody Wants This’ is renewed for S3 at Netflix. (more)

Business 🤝

• Chloé Zhao and Nicolas Gonda have launched Kodansha Studios to produce live-action films and series based on manga. (more)

• Obsidian Studio has partnered with Ron Howard and Brian Grazer’s Imagine Entertainment to develop AI-enhanced live-action film projects. (more)

• Don McGregor is set to become Paramount’s top global TV distribution executive. (more)

• Paramount Pictures has hired Lionsgate veteran Shaun Barber as head of domestic theatrical distribution. (more)

• The Wonder Project has drawn over 500,000 Prime Video subscriptions in its first three weeks, led by family-friendly hits like ‘House of David.’ (more)

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