Blackstone Snaps Up Studio Lots for a Slice of Streaming Riches
TV and film locations are a relative bright spot in commercial real estate, but even they are challenged by Covid-19.
Stuck at home during the Covid-19 pandemic, Americans have been streaming movies and TV with abandon. They’ve plowed through Tiger King and the much-acclaimed production of Hamilton. Millions have even made time for game shows as low-brow as Floor is Lava (pretty much what it sounds like), which turned into a hit for Netflix Inc. At the peak in late March and early April, people in the U.S. were devouring in excess of 160 billion minutes of streaming video per week—the equivalent of about 8 hours per person, or twice what they had a year prior, when a trip to the cineplex didn’t run much risk of contracting a deadly virus.
Against this backdrop, Blackstone Group Inc. decided to buy a 49% stake in three Hollywood studio lots. Hard times have always been a boon for escapist entertainment, but the Blackstone deal, which the company said was completed Aug. 3 and valued the properties at $1.65 billion, was a long-term bet on streaming. Even after the pandemic, companies such as Netflix, Amazon.com Inc., and Walt Disney Co. will need stages to feed the world’s bottomless appetite for video.