Film industry’s biggest challenges in 2020

Last year was one for the movie-history books: 2019 gave us the highest grossing movie ever in “Avengers: Endgame,” Netflix continued to cement itself as a corporate patron of original storytelling with awards movies like “The Irishman,” and Disney’s purchase of Fox further solidified the company as the Hollywood power to be reckoned with as its movies accounted for nearly 40% of domestic grosses.

While these milestones mark success for powerhouses Disney and Netflix, dig beneath the surface and you’ll find plenty of questions about what they mean for the future health of the film industry. If “Endgame” can make $2.8 billion, why would any studio ever want to take a gamble on something that might only make a modest few million at best? If Netflix continues to grow as a go-to distributor for original prestige titles that play for just a short time in limited release, what does that mean for moviegoing’s future?

In this time of change, the industry is facing a wide range of challenges as it steadies the course into the era of streaming wars. Here are some of its biggest hurdles in the year ahead.

Inclusivity Challenges

A USC Annenberg Inclusion Initiative report released in the fall put it simply: Inclusion in Hollywood continues to proceed at “a very slow pace” and inconsistently. It’s a fact that’s played out most recently in the 2020 BAFTA nominations, which saw only white actors and male directors.

2019 marked an increase in women-directed films: 19 of the 125 or-so wide studio releases were female helmed, an increase from just four the year before. Greta Gerwig continued to prove her stellar writing and directing chops with “Little Women” and Chinese-American Lulu Wang offered her entirely original family drama “The Farewell.” Meantime, three other women-directed titles, “Frozen II,” “Captain Marvel,” and “Hustlers” will pass $100 million, showing studios there’s money to be made with women behind the camera.

But at the same time, IndieWire’s Tambay Obenson reported that of the top 100 movies of 2019, 34% featured a lead or co-lead of color, compared to 27 percent in 2018. But the number directed by filmmakers of color fell from 26 percent in 2018 to 18 percent in 2019.

At its best, cinema can help bring audiences from different backgrounds together and help them navigate and understand the world around them — and that world is full of diversity in gender, ethnicity, sexuality, and class. The measure of success in this realm is straightforward: Studios should aim to make movies with casts and crews that better reflect society. And there’s more work to be done.

Income Inequality

As mega-corporations like Disney make billions every year and the biggest showrunners and filmmakers are inking hefty deals with studios and streamers, the riches have not been trickling down to those on the lowest rungs of the Hollywood ladder. Assistants struggle to make ends meet on salaries that in many cases aren’t much more than minimum wage. In addition to making sky-high rent in Los Angeles, assistants at agencies must dress to impress while set PAs and writers assistants need to pony up for movie tickets and streaming services in order to keep up with everything new, all as part of a system that has long promised the possibility of realizing dreams if you pay your dues — which often means low pay, long hours, and tough working conditions.

The #PayUpHollywood movement, sparked in the fall by veteran writers Craig Mazin (“Chernobyl”), John August (“Big Fish”), and Liz Alper (“Chicago Fire”), has many declaring the system is broken. It’s started gaining traction, with showrunners Adam Conover (“Adam Ruins Everything”) and Ayelet Waldman (“Unbelievable”) among those reportedly negotiating for higher assistant pay on projects they’re developing and Verve giving entry-level employees as much as a 40% pay hike.

As the streaming war ramps up and the industry continues to consolidate, executives and creatives in power should think about how they want the industry to look in this new era. Advocates say entering Hollywood on the ground floor is increasingly open only to those with family support, a factor that undoubtedly limits the perspectives of stories told in moves or on TV along ethnic and class lines.

Unstable Streaming Wars

It’s boom times for both original, high-quality content and well known library titles as Netflix and Hulu are facing new competition from the likes of Apple, Disney, WarnerMedia, Quibi, and NBCUniversal, all of which are have launched or will soon launch their own streaming services. It’s an environment that led HBO to pick up TIFF breakout “Bad Education” for nearly $20 million and NBC paying $100 million per year for five years to stock its Peacock service with “The Office.”

It’s all but assured we’ll see even more eye-popping deals as companies battle for subscribers dollars’ and embrace the prospects of operating streaming platforms at a loss in order to make that happen. But as streaming continues to grow in importance compared to theatrical releases, there will eventually need to be a method to the madness. Netflix is already thinking about how it can mirror blockbuster theatrical paydays by offering bonuses for films that win awards or pull in a large number of viewers, a move that could help set the standard for how talent is compensated in this new era.

CGI’s Existential Crisis

It’s an exciting time for visual effects when Will Smith can convincingly battle against a younger version of himself in 120 fps in “Gemini Man” and a 76-year-old Robert De Niro can be de-aged to lifetime of more youthful moments in “The Irishman.” But recent movies indebted to CGI advancements haven’t all been well-received by audiences.

The unexpected appearance of the namesake character in the trailer for “Sonic the Hedgehog” led filmmakers to go back and tinker with his appearance before the movie’s planned February 14 release. The so-called “digital fur” donned by Judi Dench and Taylor Swift in “Cats” became instantly notorious long before the film was released in December, which came apparently before it was even finished — Universal sent a second version of the film with more complete CGI to theaters after it was exhibited to audiences for a week.

While these movies are testaments to the countless people who work tirelessly on bringing fantasy to life and to the stunning technological advancements realized in just a few years, they’re also evidence that studios need to think more tactically about spending on such expensive CGI spectacles. Universal is reportedly looking at a $70 million loss for “Cats” after poor box-office performance and has ceased the awards campaign for the film after dreadful reviews.

Quandaries at the Box Office

The statistic only tells part of the story: 2019 was one of the top-three best years ever at the box office, with over $41 billion in worldwide grosses. That’s largely thanks to a banner year for Disney, the studio that has become synonymous with franchise installments like “Avengers: Endgame,” which broke the worldwide gross record when it brought in $2.8 billion.

Meanwhile, original, mid-budget theatrical releases are an ever-rare breed. In an era when familiar tentpoles like “Endgame” set the standard for moneymaking (i.e. an enormous profit is guaranteed) filmmakers and studios have struggled to find a way to apply the low risk, high reward formula to original stories. It’s why no traditional studio would touch “The Irishman” with its very expensive VFX — even though director Martin Scorsese is as much of a one-man franchise as Hollywood could ask for — and why Netflix released that film and “Marriage Story,” the prestige drama from director Noah Baumbach.

One curious outlier exists in “Knives Out”: Rian Johnson’s original murder mystery, a crowdpleaser since its Toronto premiere, has so far grossed $247.32 million. Perhaps expectedly given the returns, that movie is reportedly getting the franchise treatment as Lionsgate looks to develop a film centered around Daniel Craig and his Southern detective character.

When it comes to original movies that stand on their own, “1917” director Sam Mendes suggested after his Golden Globe win that the onus is on filmmakers to make cultural moments that need to be seen in a theater — think explosions that need to be heard on surround sound and gorgeous cinematography that just can’t be done justice on a TV. Could his World War I epic scratch the same itch as the latest Marvel movie? After it goes wide on Friday, studios just might have found their next formula for success.