Applying Occam's razor, given that this process has repeated for years over multiple franchises, the conclusion is that the core audience is not who you think they are. Online commentary creates a strong visibility bias. Reddit is perhaps the most egregious example of this.
Watching it happen over and over, my impression has been that:
(a) Creative leaders (producer, director, writer) hired for these projects chafe at having anyone tell them what to do (and this especially includes the source material!).
(b) Creative leaders hired for these projects are typically not themselves fans, and do not elevate anyone who is a fan to a position of authority, and so lack even an awareness of the material. And critically, an awareness of what current fans enjoyed in it. Which is sometimes a feeling or deeper than just "these specific characters or places."
(c) As big budget projects, and costly rights acquisitions to start with, there are powerful committees put in place to keep creative on the rails, who are even more (a) & (b) themselves.
As a result, there is literally no one in the room with a powerful voice who understands why so many people liked this thing.
Say what you want about recent Marvel & Star Wars, but Feige/Favreau/Filoni seem to have a better sense and balance of "Why did people like this thing originally?" and "What will attract people who aren't fans?"
there is always an inherent bit of arrogance anytime someone reworks the works of the original creator, so i'm still not sure what you're distinction is. just by attempting to update/modify the story signals you think your version is better. arrogance.
Hubris the size and shape of someone named Jackson? The BBC for making an animated Hobbit? No written tome is ever going to come out unscathed in a TV/film adaptation. Have you seen the Amazon Jack Ryan series, the Without Remorse movie?
Hubris, arragance, etc. You're coming back to words that mean the same thing. Just because it's a work you personally are not familiar does not make it more/less egregious that someone has taken the material in their own direction from the original. It's just that you have a personal connection to the orginal and may or may not like the reworked version.
There are some people for whom the name Tolkien means something, usually something very specific and beloved.
If those people aren't the core audience, why did they pay out of the nose to use that name in the first place? They could do a fantasy story written all in-house, and save themselves the money. If you're right, the audience should be almost as big, and they get to skip the part where they're accused of grave-robbing.
No, Tolkien-lovers aren't the core audience. Every casual viewer that enjoyed or have heard of Lord of the Rings are. Because that groups is about a billion people, not tens of thousands.
Like me, I enjoyed the trilogy. I don't care if this new show isn't in "the spirit" of Tolkien (judged by someone far after his death, how much does that even mean?), I'm gonna watch it because I've heard of the IP before and want to try it out.
For Rings of Power, I think the show itself is very confused on who the "actual audience" is. They tried to go after each segment, but the writers lacked the kind of skill and finesse needed to actually perform that miracle. (Which is possible, just really, really difficult.)
Every casual viewer I've spoken to is very meh on the show.
I don't see how it is not possible to make good product for both. That is the fans and general audience. Appeasing the later is pretty low bar. Instead it seems that shows are aimed at the vocal non-fans at social media.
I don't think that is true. There is some complaining, but in general popular franchises are popular for reason. There likely were enough things that appealed already substantial audience. Just keep those in and adapt what has to be adapted for different medium.
I'm not saying make a product for only the fans. But stay honest to source or previous material.
Ockham's Razor doesn't apply in adversarial situations.
We know the big operators purchase these franchises (economic wrappers around fictional universes) to pursue profit. They modify the stories and characters to optimize profit, they've been doing it for about a century, and they're very good at it.
The evidence doesn't back you up here. The Rise of Skywalker made half as much money as The Force Awakens. Rey and Rose Tico merchandise didn't sell. Viewing figures for recent Disney Marvel TV shows have been extremely low. Star Trek Discovery can't be viewed in many countries because no network broadcasts it. Netflix's attempts at woke series tend to get cancelled after the first season. And so on. The poor performance of woke entertainment products is visible for all to see.
I think it's best explained not by ideology as such, but by self-handicapping. If you're facing a hard exam that you have no idea if you can pass no matter how hard you try, you can study hard, and risk the humiliation of failing... or you can kick back, relax, do a little partying, do a little mildly illegal drugs. Then if you fail, you can say you weren't really trying, you didn't really care that much. And who knows, you might even still succeed, and then you get the satifaction of being so good you didn't even have to work hard!
For a modern Hollywood director, if you put in just a little obnoxiously "woke" stuff, just a pointless gender or race swap, or maybe make someone gay or trans who wasn't in the source material... Now if it fails just for being bad, you can claim it failed because of those handful of people who complained about it online.
So it's not that the "woke lobby" has that much power to force directors to "cast diversely" or something, it's just that it's a convenient excuse for everyone involved. Nobody ever got fired for choosing IBM, and nobody ever got fired for making a film look a bit more like affluent modern America.
I would argue that the problem is less due to franchise fatigue than it is to low quality and needlessly confrontational writing. Classic drama tends to have a universal quality to it that transcends any particular time, place and culture, and it's this quality that has been lacking in woke entertainments from the last five or so years.
Take Squid Game for example. I don't speak Korean and know next to nothing about Korean society, yet its core story about a group of people in desperate circumstances being forced to constantly reevaluate what they're willing to do to survive resonates with me just as well as if the show had been set in any other country.
Compare that with The Rings of Power, where Galadriel is portrayed as a perfect warrior woman whose biggest source of antagonism is the weak and unprincipled men around her. Or She-Hulk, who has to explain to Bruce Banner that men telling her how to do her job makes her a better Hulk than him.
Young progressives lap this stuff up but it leaves everyone else cold, including many women. In years to come, these stories are not going to be loved. These films and TV shows are not going to top any polls. The characters are rotten, unlikable and will not live on in anyone's hearts.
Alienating fans doesn't mean you can't also alienate and bore the general audience as well. It's definitely true that wokeness heavily contributes to some of these failures, but the alienation of fans is not exclusively about wokeness to begin with, nor is wokeness always the main driver of mediocrity. Consider boxing matches that now revolve around YouTube stars, and the most recent Diablo's financial success.
The point is that vocal fans who demonstrate their wrath or joy online are a very minor part of what makes a production succesful or unsuccessful.