When The Fish Stinks From The Top, How Does Gutting It Help?

Happy New Year indeed.  If you are or happen to know any of the approximately 500 employees of the media companies of Amazon who woke up on the tenth day to learn they were no longer employed, you probably are adding a couple of additional NSFW adjectives between the words Happy and New.

Look, all things considered, at least they got to enjoy their respective holidays.  An awful lot of other people (hi, CBS) learned of their fates during holiday parties.  And, hey, these are tough times and the business is more unforgiving than ever.   And when you’re in the position that Prime Video czar Mike Hopkins finds himself in, having to absorb an entire studio that hadn’t exactly been churning out hits of late, sometimes you have to make hard decisions.  As FORBES’ Cailey Gleeson reported:

Amazon issued a memo to employees Wednesday morning announcing plans to cut “several hundred” workers in its Prime Video and MGM Studios, while its video game live streaming service Twitch is laying off around 500 people, marking the tech firm’s latest round of cuts after 2023 saw record-breaking layoffs for the company.

“Throughout the past year, we’ve looked at nearly every aspect of our business with an eye towards improving our ability to deliver even more breakthrough movies, TV shows, and live sports in a personalized, easy to use entertainment experience for our global customers,” Hopkins said in the memo. “As a result, we’ve identified opportunities to reduce or discontinue investments in certain areas while increasing our investment and focus on content and product initiatives that deliver the most impact.”

And in the wake of this bombshell, trade media responded as they are want to do in this day and age with follow-up stories at a breakneck pace.  It took both Peter White and the intrepid Nellie Andreeva for DEADLINE to issue this detailed followup:

Details have emerged about the cuts, which were described by one source close to the company as a “bloodbath”. Senior execs let go include Nancy Cotton, Arturo Interian, Marcy Kaplan, Chris Castallo and Uri Fleming across different divisions.  Most of the exits are a result of the integration of Lindsay Sloane’s MGM Scripted Television team alongside MGM+ and the Barry Poznick-led MGM Alternative TV under Chris Brearton, VP, Corporate Strategy, Prime Video and Studios. Sloane and Poznick’s teams will continue to work closely with the studios teams in developing for Prime Video and also will continue to produce for outside networks and streamers. 

Also impacted by layoffs in a consolidation move are multiple other Amazon MGM Studios teams, including Studio Marketing, Business Operations (Production, Post & Business Affairs) and Amazon MGM Studios Distribution teams, as well as the company’s Local Originals business.

Amazon Studios Head Jennifer Salke and Brearton just addressed the organizational changes and the layoffs in internal memos, also revealing a consolidation of the Amazon Studios and MGM theatrical distribution units.

Follow-ups revealed more and more familiar names, most of whom were the rank-and-file soliders following the orders of their generals.  Per White and Andreeva: Amy Suh, Development Executive, Genre Series, Amazon Studios, Vanessa Martinez – Creative Executive, First Look & Overall Deals, and Sonya Strich – Development Executive, Genre Series at Amazon Studios.  Anthony D’Alessandro later filed a separate story about Amazon Studios MGM Senior Production & Development Executive Sandino Moya-Smith .

At least the announcement from the head of Twitch was somewhat contrite, as the WALL STREET JOURNAL’s Joseph D’Avila conveyed:

It has become clear that our organization is still meaningfully larger than it needs to be given the size of our business,” Dan Clancy, chief executive of Twitch, said Wednesday in a blog post.

And having seen some of the numbers of viewers in real time that such investments as live WNBA games were getting, analagous to some personal friends’ random online trivia night gatherings, one can understand why a course correction was necessary there.

And redundancies in merged businesses have to be addressed.  There’s way too many of them going on these days, but as long as Wall Street rewards stockholders and executives when head counts are lowered, that’s gonna be a fact of life.

But in the case of Prime Video, the fact that so many soldiers had to learn their careers were in limbo from someone with the track record of Jen Salke is just downright galling.

Salke has committed billions to passion projects that, pure and simple, were largesse of the highest order.  The feverish bidding for the rights to the expansion of LORD OF THE RINGS–reportedly topping at $715M for one season– was done at her behest.  It was launched head-to-head with HBO MAX’s roll-out of its GAME OF THRONES followup HOUSE OF THE DRAGON, with the promotion of NFL Football in concert.  You couldn’t unsee the overwhelming omnipresence of promotion on a delivery box or truck.  How’d it do?  Let FORBES’ Eric Kain remind you:

Amazon’s Lord Of The Rings drama, The Rings Of Power, was a flop. Not only was it snubbed almost entirely during awards season, it turns out that a mere 37% of people who started the show actually ended up finishing it. Just under two-thirds of all Rings Of Power viewers quit watching the show before the finale, missing out on some truly ghastly television in the process. A 37% completion rate is incredibly bad and a terrible bit of news for Amazon and its shareholders. It’s a stunning rebuke of everything Amazon Studios and the showrunners have done so far, and should result in a major shakeup across the board. If I were Jeff Bezos, I’d be livid. Heads would roll.

Amazon Studios chief Jennifer Salke has done her level best to spin this news. “This desire to paint the show as anything less than a success — it’s not reflective of any conversation I’m having internally,” Salke says, adding “That’s a huge opportunity for us. The first season required a lot of setting up.”

And CITADEL?  A mere $300M gambit, based on a concept that Salke personally championed?  Let Kain’s colleague Paul Tassi refresh your memory on how THAT  was faring as it was playing out its arc last spring:

I consider myself pretty plugged into the major shows on TV or streaming services at any given time, and yet here we are with Citadel’s second-to-last episode airing yesterday on Amazon Prime, and I swear at least anecdotally, I have not heard a single person, in my online or real-life circles, talk about this series unprompted.  That’s what I’m attempting to find out, but Amazon has essentially said next to nothing about the show since it’s launch. At the time, the headline was that Citadel debuted to “big viewership” on Amazon, with Amazon Studios head Jennifer Salke saying “Citadel, the #1 title on Prime! In its series debut, this show attracted one of the largest global audiences in the history of Prime Video – such an incredible performance for new and original IP.”

Both CITADEL and RINGS OF POWER have somehow been spared cancellation, even in a landscape where underperforming series are consistently collateral damage at streamers.  And Salke remains to oversee these doubling downs, with her staffers instead becoming the collateral damage.

If nothing else, Salke has demonstrated a remarkable ability for spin, which I guess makes any layoffs in PR justified.  There was probably no one on her team more effective at tone-deaf word salad creation such as the examples above than was she.

And, indeed, Amazon’s future on many levels does look promising.  I’ve enthusiastically crowed about how they’ve one-upped Netflix in the battle for a scalable universe of subscribers capable of viewing ads, which gets put to the test at the end of this month.  Thursday Night Football numbers were up double-digits in its second season. They are aggressively pursuing other live sports rights with MLB and the NBA.  Moves like that are right in Mike Hopkins’ wheelhouse.  Having worked for him twice, I know this fact better than most.

I also know when an executive has turned a blind eye and a deaf ear to the counsel and recommendations of a group that somehow still got referred to as a “team” as they were being told they are no longer employed.  And so did THE WRAP’s Ryan Mach when he published this revealing look at how Salke’s personal favorites compared on viable metrics against the barometer of her more “formulaic” series.  As he wrote in the analysis that accompanied this graphic that we mused about last fall:

Prime Video’s content budget hit $16.6 billion in 2022, and this year, it’s predicted to reach $20 billion even as the competition tightens spending. The search for a “Game of Thrones” yielded epic fantasies “The Wheel of Time” and  “Lord of the Rings” prequel “The Rings of Power,” as well as high-concept sci-fi shows like “Citadel” and “The Peripheral.” Amazon executives have defended the strategy and say it’s delivering. But reports say that inside the company, there’s a sense of frustration with the failure of these shows’ huge budgets to translate into huge audiences.

Data from Ranker Insights confirms the sense that Prime Video’s most costly shows are being outperformed. And not by competing streamers: Rather, Amazon’s most expensive series are failing to measure up to other Prime originals — shows that are more straightforward and often less pricey.

I’d like to believe Salke saw this data.  It sure sounds like someone else did, because a lot of the goals and visions that Hopkins alluded to sound like it came straight from the conclusions of that analysis, and probably a lot more data we’re not privy to.

It would appear she probably just wrapped fish with it.

I sure hope she’s now on a much tighter leash.  I sure hope she actually is buying into the new direction she laid out for what remains of her “team”.  I sure hope she’s having a few more different internal conversations besides the ones she owned up to.  Particularly since there are far fewer colleagues now to divvy up her valuable time with.

Because now that she’s opted to sign off on gutting her team rather than take any ownership of the massive failures that called for some action, the spotlight should be squarely on her to make good on those “opportunities”.

And if she doesn’t deliver on the incredibly optimistic beliefs she has somehow convinced her leadership she can deliver, then, without question, her Amazon career should wind up with the same fate that she delivered to so many others at the outset of 2024.

Sleeping with the fishes.

Until next time…

 

 

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