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Can Streaming Companies Replace Hollywood Studios? (vanityfair.com)
"Movie-theater attendance is down to a 19-year low, with revenues hovering slightly above $10 billion," reports Vanity Fair, arguing that traditional studios should feel threatened by nimble streaming companies like Netflix and Amazon, which produced the film Manchester By The Sea -- nominated for six Oscars.
An anonymous reader writes:
Amazon CEO Jeff Bezos attended the Oscars, prompting host Jimmy Kimmel to joke that if the film won, "you can expect your Oscar to arrive in 2 to 5 business days, possibly stolen by a GrubHub delivery man." But it's a symbol of an inevitable disruption in Hollywood. "Studios now account for less than 10% of their parent companies' profits," writes Vanity Fair, adding "By 2020, according to some forecasts, that share will fall to around 5%... Some 70% of box office comes from abroad, which means that studios must traffic in the sort of blow-'em-up action films and comic-book thrillers that translate easily enough to Mandarin. Or in reboots and sequels that rely on existing intellectual property." Former Paramount CEO Barry Diller famously said "I don't know why anyone would want a movie company today. They don't make movies; they make hats and whistles."
The article makes the case that Hollywood, "in its over-reliance on franchises, has ceded the vast majority of the more stimulating content to premium networks and over-the-top services such as HBO and Showtime, and, increasingly, digital-native platforms such as Netflix and Amazon. These companies also have access to analytics tools that Hollywood could never fathom, and an allergy to its inefficiency."
The article argues that with A.I., CGI, big data and innovation, "Silicon Valley has already won," and that "it's only a matter of time -- perhaps a couple of years -- before movies will be streamed on social-media sites."
The article makes the case that Hollywood, "in its over-reliance on franchises, has ceded the vast majority of the more stimulating content to premium networks and over-the-top services such as HBO and Showtime, and, increasingly, digital-native platforms such as Netflix and Amazon. These companies also have access to analytics tools that Hollywood could never fathom, and an allergy to its inefficiency."
The article argues that with A.I., CGI, big data and innovation, "Silicon Valley has already won," and that "it's only a matter of time -- perhaps a couple of years -- before movies will be streamed on social-media sites."
Hollywood could have been utilizing these services for at least a decade, and probably helped push the technology along. They would rather have people visit a theater since their profits can be higher and media tightly controlled.
I don't go to movies, and haven't for about a decade. The mandatory 15 minutes of commercials, price for the film, hassle of parking, insane price for drinks and a snack all add up to a big "no thanks" from me. If they streamed I'd probably pay for a movie now and then, but as is I wait for it to be on TV.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
Picture, better at home
Sound, better at home
Food, better at home
Seating, better at home
Rest of Audience behavior, more controllable at home
Other than a lock on new releases the theatres have nothing. Producers would make more money with a secure direct to home pay per view service.
Like i.e. Netflix, that wanted to be a disruptor, and then went ahead and did the exact same fucked up international licensing, "sorry, even our own shows are unavailable in $yourcountry, 'cause we prefer money and licensed it to $local-media-mafia"...
Hollywood has become far too much a churn factory. Producing the same content endlessly...
Netflix has really grabbed the reigns at producing a wide variety of content. Yes Netflix has Marvel stuff too, but even that is better than what Hollywood produces!
The other reason Netflix will dominate is they are not afraid to make content available worldwide regardless of what audience it was produced for. The Netflix show 3% was targeted at the Brazilian audience but I really enjoyed the story and actors. No studio would have produced something like that and showed it in the U.S., at best they would have done a crappy American focused remake that watered down the point dramatically.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
It seems 2 different things to me. The content producers and the content distributors are different groups with different specialties. The top producers and physical studios can rent themselves out to Netflix if the deal is right, for example. Neither is stapled to each other.
The fact that Netflix and Amazon have produced a hit or two doesn't mean they will take over most content production. If they find a nice niche, competitors will copy that niche.
Table-ized A.I.
Pirating is a drop in the bucket. I'd bet that most people would be perfectly happy to pay for Movie X if they could watch it at their leisure and not have to spend $20-30 for the privilege when all is said and done.
Sooner or later the prices will find their way to what people are willing to pay or the traditional methods of consuming them will dry up and be replaced by video on demand and streaming. I haven't gone to a theater to see a movie in years. That doesn't mean I stopped watching "immersive" content. I simply ponied up for a high end home theater system and watch content that I want WHEN I want at a price that I'm willing to pay.
Possibly there were a few places in history, like Shanghai for a half decade or so, where a business would have used an abacus and the telegraph concurrently. It would be a historical abberation, however.
Follow the money.
Many, many moons ago studios owned the theaters and there were enforced anti-trust actions. A few years back I started wondering who owned what and found something interesting. Large amusement companies own the theater chains. They also hold large stakes in the studios and many production companies.
Ya know how we sometimes stories about how a musical group get's a million dollar contract for 2 albums and all the production costs are billed by the record company against the contract... And all the companies and services being paid are subsidiaries of the record company?
It seems to work the same way in movies. Except they got smart enough to not do it directly and the big amusement companies collect at every step of the way.