Second-guessing Viewers is a Tough Business
Content Insider #851 – Building Content
By Andy Marken – andy@markencom.com
Source – Constantin Films
“When two hunters go after the same prey, they usually end up shooting each other in the back. And we don’t want to shoot each other in the back.” – Col. Douglas Mortimer, “For a Few Dollars More,” Constantin Films, 1965
We can’t wait for the winter/spring bridge to be behind us.
Yes, it’s the cold and slush but it also means the constant parade of award extravaganzas are in the rear-view mirror and we won’t have to endure all of the “breathtaking” excitement for another nine months.
Golden Globes, Emmies, BAFTA, Oscars are all mixed in with the fantastic film festivals like Cannes, TIFCA, Sundance, Berlinale, Tribeca and SXSW. They celebrate the good stuff from awhile back and the great content that is being delivered up for judges to crown as the crème de la crème.
The accolades flow like studio/network party champagne, proving that movie theaters and day/time TV still reign supreme even as all of the movies/shows sooner or later (usually sooner) are streamed and rated by the ultimate judges … viewers.
First, they have to buy or build the content they think will capture the most eyeballs. Then, they have to slot it (somewhere) then they have to promote it (everywhere), then count the seats in seats (home or away) and even before the numbers are in, they’re promoting the project to the industry in hopes of getting a statue or two to give the film/show a second viewer boost (and bragging rights to prove they made the right call).
Then, they have to start the process all over again for the next project.
If they smell something isn’t right, some of the projects get killed before the final cut, others are simply shelved for a tax write-off, or they’re shown until the studio/network think they’re about to peak and pulled to be put in the library for … later.
Total Budget – Investing in a film production is just the beginning of the cash outlay needed to get the project on the many screens, including the marketing investment which can quickly climb if folks want the project considered for an award. That’s where the serious work is done.
But still, the money is spent–especially if it’s a movie that is more easily tracked financially.
Look at the chart above. The budget is important but the cost of marketing the project dwarfs the price of the people and production.
The storyline can be solid, the people dynamic, the production/post done to perfection and still …
It’s what makes the industry so d*** much fun and the weird thing is they never give an award/statue for great marketing–especially when so many avenues for making money with a project have faded.
Happy Returns – Many of the earlier avenues for making money on a film have dwindled such as pay TV and discs; but most of the studio/streamers plan on increasing their returns with content for their streaming services and increasingly, their ad-supported services.
The market is no longer measured by what happens at home but what is invested and earned globally.
Increasingly, studios/streamers are sorta interested in what happens in the theater, but the cost/return potential isn’t nearly as good as what is earned “out there.”
Dropping the project into a TV schedule gives a little ROI. Knocking out DVDs provides even less. Other ancillary channels are okay, but the real opportunity/challenge is signing up subscribers everywhere.
Home View – A movie, even one that has a decent global theatrical release, has more opportunities to expand views on a global scale as subscription and ad-supported streaming increases.
And we’re not talking about small potatoes, or a few tickets sold.
We’re talking about 8B plus folks, 1.72B TV households and don’t forget emerging countries like Africa where people may not have a TV, but they have a smartphone that is their everything screen.
More than 200 services located in the Americas and countless more around the globe all want to capture a big chunk of that family entertainment spend.
Because subscribers are departing scheduled TV, they’re being very cautious about how they’re investing their content dollars.
In 2022; broadcast, cable and digital networks rolled out 2,264 new series in the Americas. Last year 1,784 and this year is even more bleak.
Where do you think most of them land?
Yep!
The day of following a show for five, 10, 15 plus years is gone.
The long, long series will stick around until the actors retire or the audience fades.
But don’t worry if you’re peak TV faithful, you won’t find any dead airtime when you switch the channels because there’s always the cheap stuff … games, reality and unscripted stuff.
The younger studio/network/streamer services are investing as fast as they can to capture as many of the finicky subscribers as possible; and unless you have a good read on the subscriber viewing habit database, it’s a tough haul.
But there’s money in them there clouds … just ask the folks who know how to process, mash and work the data.
Take a closer look at where the major streamers stand now when it comes to subscribers and average revenue per user (ARPU), according to the companies’ most recent earnings reports.
- Netflix: 247.15 million. Netflix still sets the standard for streaming services, at least in terms of global reach and is expected to add 10.4M by the next reporting period because of their lower-cost ad-supported offering
- Amazon Prime Video: 200 million+ …
- Disney+: 150.2 million. …
- Max: 95.1 million (sort of) …
- Paramount+: 63.4 million. …
- Hulu: 48.5 million. …
- Peacock: 28 million. …
- ESPN+: 26 million. …
- Apple TV+; 25M (est)
- Starz – 15.79M
Minimize Churn – Streaming service bosses understand that there is a heavy investment needed to acquire a subscriber and even more when they replace a subscriber that has left the service. The key is to keep them as long as possible, even if it means they move to lower-cost ad-supported services which can actually produce even more profit than the subscriptions.
And to improve their ARPU (average revenue per user), nearly everyone has added an economic ad tier and are diddling with their versions of bundled service:
- Disney combines Disney+ with Hulu and ESPN+
- WBD puts together Max (formerly HBO, HBO Max), Discovery+ and players to be named later
- Verizon – Netflix/Max bundle
- Charter – Disney + more to come
Other generational disruption relationships will roll-out this year as bosses test the waters with different business modes to stabilize/increase subscriptions.
Source – Paramount
But it depends on the data how it is analyzed … and used.
One thing is for certain, studios/networks/streamers will continue to invest in content that appeals to their present and prospective subscribers.
It has been painful to watch the old fave fall out of favor.
Super-hero projects from DC and Marvel used to be the money in the bank, guaranteed winners … until they weren’t.
Project Targets – Not everyone likes every movie/show that is produced and even genre leaders have their cycles. Based on their subscribers data, streaming services invest in content that will appeal to/keep current subscribers while hopefully attracting new subscribers.
Today, they’re taking a more thoughtful, more analytical approach, focusing on the genre that have the broadest appeal and then measuring, analyzing the shows/movies in real time to determine which drive buzz and accelerate/prolong subscriptions–locally and globally.
Korean, Bollywood, and Nollywood titles have proven they have excellent travelability in some ways because viewers in the Americas have become less than surprised/excited/inspired with the veiled variations of the usual slasher, good guy/bad guy, romcom shows/series.
“The repurposing of the same old storylines with a different cast and slightly different ending has certainly turned viewers, especially with the younger audience,” Allan McLennan, CEO 2G Digital Post, said. “First of all, many of the titles streamers are reviewing and licensing/buying are production gems that have a solid track record locally and are produced by very excellent production teams.
“That makes them important to consider,” he added. “But even more important is the fact that today’s younger audiences not only like the new, well-dubbed projects but they seem to really love sub-titles that give content with an international feel/flavor combined with well-executed dialogue.
“As a result,” he concluded, “all streamers have an extensive cross section of intellectual property being produced by independent production services offering up projects to help services internationalize their content libraries economically and profitably for everyone concerned, including the subscribing public.”
Extended Life – Studios are always on the hunt for those films that have a basic foundation – IP – that they can use to build more movies and shows to retain/build a strong following. That used to be superhero IP but it has rapidly fallen behind, replaced by newer, better heros and villians.
By focusing on local/global movies and shows, what they’re really looking for is intellectual property (IP) they can nurture and grow–preferably across film and series platforms like Alien, Rocky, Terminator, Godzilla, Bourne, Indiana Jones, Mad Max, James Bond, Planet of the Apes, Star Wars, Lord of the Rings, Star Trek and other projects that were revisited and refreshed over the years with many of the films also finding their way into show series.
It doesn’t happen often enough but just enough so streamers are willing to invest in promising content rather than the cheap (O.K., inexpensive) unscripted stuff.
What has historically happened though is that game developers have gone to the theater and said, “Man that movie would make us a lot of long-term/forever money as a spin-off game we could sell, rent, sell ads in and have folks buy up tokens, passages to hidden rooms and all kinds of ****”
Game On – A growing number of well-developed/executed films have racked up a strong theatrical and home viewing and have been turned into successful video games.
O.K., so no one really said that out loud but … they thought it.
The IP that has traveled best have emerged from the video game world, according to Ampere Research and a couple of our gaming industry analysis friends – Roblox, League of Legends, Among Us, Fortnight, Minecraft, Super Mario, Grand Theft Auto, Sonic, Need for Speed, Mortal Combat, Halo, Resident Evil, Pokémon and…well, you get the idea.
Most are owned by major studios; but there are still plenty of opportunities lurking around in the game rooms for streamers who can recognize the value of leveraging a fan base and can develop a franchise that is unique in a very competitive market.
Netflix saw the cross-pollination potential when they surprised Wall Street and purchased a couple of game houses and began developing/releasing titles.
They saw what Disney has profitably seen for years … there’s a longevity with subscribers that is tough to beat.
Ampere Analysis said they expect to see a healthy growth in cross-format IP from games and video projects.
But wait … there’s more.
It turns out that IP (game and video) can also be turned into some audience-grabbing animation that attracts audiences across the movie/game audience, young and old.
Recent successes include:
- Super Mario Bros. Movie
- Spider-Man: Across the Spider-Verse
- The Little Mermaid
- Elemental
- Puss in Boots: The Last Wish
- Teenage Mutant Ninja Turtles
- Wish
Animated World – Animated films/shows have emerged in a number of genre and were some of the few projects that didn’t have to suspend production during the Hollywood strikes. And while Japanese anime has historically had a niche following, Netflix has turned the content into a very profitable portion of their library.
Leading animation studios include Sony Animation, Disney Animation, Pixar, Cartoon Network Studios, Illumination, Lucasfilm Animation, Nickelodeon and Nippon Animation.
And the audience-winning fare has ranged across the genre spectrum.
While outstanding animation talent exists around the globe, Netflix leveraged its Asian office activities and relationships a few years ago, tapping into a solid list of Japanese anime titles attracting more subscribers everywhere.
Even though the films/series often don’t have non-English subs, the company has developed one of the strongest Japanese libraries in the streaming marketplace including One Piece, Hunter X Hunter, Naruto, Vinland Saga, Pokémon, Beyblade Burst Surge, Dinosaur King, Baki and well, enough anime content to keep you involved for days regardless of the screen you use.
You won’t see many games, animation or anime highlighted/celebrated in the overhyped, awards “contests” and TV shows that only industry members attend/watch but they’re the ones ordinary folks watch again and again and …
Source – Constantin Films
Appointment TV and it’s shrinking subscriber base is investing judiciously this year (and next) focusing on the more “economic” projects like contests, games, reality and unscripted subjects while the studios/networks/streamers save their scripted projects for increased growth in the larger potential streaming marketplace.
Monco in For a Few Dollars More had been around enough that he knew that folks wanted their content, their way, on their screen. Rather than get into a heated argument about the changing tastes of home viewers,
he simply said, “I guess I better leave before you go and lose your temper!”
Consumers dictate the content they want and there’s no turning back because demand and variety will only grow.
Andy Marken – andy@markencom.com – is an author of more than 800 articles on management, marketing, communications, industry trends in media & entertainment, consumer electronics, software, and applications. An internationally recognized marketing/communications consultant with a broad range of technical and industry expertise especially in storage, storage management and film/video production fields; he has an extended range of relationships with business, industry trade press, online media, and industry analysts/consultants.