Kevin Mayer Says There’s ‘Not Enough’ Alarm Over Hollywood Becoming ‘Less and Less Relevant’

Veteran entertainment executive Kevin Mayer sounded the alarm bells on the lessening relevancy and profitability of Hollywood, which he said has not been rung enough.

“Not only is Hollywood becoming less and less relevant and less and less time spent on it, the time is spent is less profitable,” Mayer said at a Monday Paley Dialogue event in Los Angeles, noting that streaming is “fundamentally less profitable” than pay TV. “There is a very substantial, secular challenge that the industry is facing … there’s been some alarm, but not enough — this is quite alarming, actually.”

Mayer, who heads Candle Media alongside Tom Staggs, added the “challenge” has been reflected in stock prices across traditional media companies, saying “they’ve gone sideways for years.”

Hollywood’s loosening grasp on audiences, of course, is linked with the rise of social media, as Mayer notes “more and more influencers are becoming the celebrities of youth, much more so than maybe even movie and TV stars are today.”

Mayer noted that from baby boomers through Gen Z, each cohort is “monotonic” when it comes to traditional media viewing, meaning that the percent watched is “shrinking” across generations, while time spent on social media and playing video games is only growing. “It’s already shifted — the center of gravity in youth is not Hollywood,” Mayer noted.

“The older cohorts … we’re not going to be around forever, and the younger cohorts, if it continues in this path, as younger people will get born and become more unique consumers, and the ones that are already young become a little older, you’re going to see the inexorable math is going to work against Hollywood,” Mayer continued, noting Hollywood won’t “disappear” but will instead battle the growing irrelevancy. “It’s set in stone. It’s going to happen.”

Due to the shrinking landscape seen across the TV and film industry, Mayer said it’s “inevitable” that more “defensive M&A” might take place over the coming years as companies scramble to take extraneous costs out of the equation to maximize their chances to survive.

“One very efficient way to take costs out of the system is take two companies, combine them,” Mayer said, adding that the “heartless” side of these economics means cutting jobs. “That’s what has to happen to maintain your profitability and to be able to keep producing things. It’s inevitable in a shrinking business that companies combine.”

While Mayer calls YouTube the “most relevant content provider,” the key difference for Mayer between traditional media companies and social media lies in the stories told on each platform, pointing to content on YouTube and TikTok that might include “a quick 30-second joke, a 9-second dance video, cooking tips [or] travel tips.”

“That’s not really storytelling — that’s useful information and information you might just be interested in, and a joke can entertain you, but it’s really not a story,” Mayer said. “Storytelling is not really the center of gravity for YouTube —there’s some storytelling we do on YouTube — most isn’t; most of it is snippets and things of that nature. It’s taking up a lot of mindshare, though.”

Mayer sees the value in YouTube through the engagement seen by “CoComelon,” which is produced by Candle Media’s Moonbug, on the platform, which was previously the biggest YouTube channel in the world before it was surpassed by Mr. Beast, with 180 million subscribers at the time it was acquired by Moonbug.

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