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Content Insider #879 – Crowd Pleaser
By Andy Marken – andy@markencom.com
“We’ve all been raised on television to believe that one day we’d all be millionaires, and movie gods, and rock stars. But we won’t. And we’re slowly learning that fact.” – Tylor Durden, “Fight Club,” Fox 2000 Pictures, 1999
We’ve been reading a lot of “expert” reports lately on what’s right/wrong about the entertainment industry, who is causing all of the problems, what people need to do to get things back on a growth track and how the industry is going to be better next year or the following year or …
Let’s be honest.
The internet changed everything, and we continue to see it change the industry. It’s especially true of Hollywood that is trying to hang onto yesterday and find its new place in tomorrow.
The creative work for the cinema is hurting the most because it’s been hit – and is continually hit – on so many fronts.
Shrinking Back – Movie theater ticket sales are “bouncing back” but are still below those of 2017-2019 which have been declining since 2002 in the Americas and around the globe.
Folks project that the box office is coming back (recovering from the pandemic and strikes) but ticket sales are still more than 20 percent below those of 2012-2019 which were down about 30 percent since 2002.
Gen Xers and baby boomers seldom or infrequently go to the movie theater while the younger crowd who grew up first with TV and then streaming with fresh, new shows/movies, never really developed the movie theater habit.
A 45–90-day theatrical window isn’t going to change that because soon the movie was going to be available on their home/personal screen.
Historically, lower ticket sales in the Americas were masked because of international distribution.
Global Theater – The more than 200,000 cinema screens globally have experienced lower attendance with fewer core frequent attendance. The newer viewing options are less expensive and require little to no advanced planning.
Profit Center – APAC (Asia-Pacific) used to be profit centers for Hollywood studios because people tended to go to the theater more frequently. But even people there are feeling the burden of expensive concessions, the inconvenience of having to go out for their entertainment and the distraction/disruption of others in the audience.
This, plus the fact that people are aware of the fact that the project will be soon available on their home screen gives people good alternatives. Especially when they have a large screen (40-55 in), surround sound and added conveniences such as pause capabilites, home viewing becomes more desireable.
In addition, the quality, quantity and variety of films that are now available seems almost limitless on the streaming services.
Earlier, the improvement in the content would have been enough to improve things for local theatergoers; and, if the production team was fortunate enough, perhaps get the films in theaters in a few other countries.
But increasingly, stuff made “there” can be seen “here,” regardless of where here is.
Yes, we’ve often wondered why it is so difficult to catch a movie here in the US that people have been raving about in Europe, Asia, Australia, or even elsewhere here in the US.
After all, Hollywood is hellbent on sending their stuff over there to get over the production cost hump.
Disruption changed that … for the good.
Streaming is obviously one of the changes.
Governments said if you’re going to get our folks to watch your stuff, then 30 +/- percent of your stuff has to be stuff from our content industry.
No brainer …
Every studio boss knows it’s less expensive to work almost anywhere but the US and the financial incentives are also better.
Netflix and Amazon said, “H*** yeah.”
Global Production – Streamers live on having constantly new, different content. Video story production centers around the world have stepped up to meet the demands.
It didn’t take them any time at all to figure out they were not only saving money but … people in the Americas loved it.
The other was the six-month shutdown to adjust salaries.
Thanks to the fast, reliable and economic localization services provided to the industry by folks like 2GDigital, the dubbing and subtitling is flawless.
Local, International – Content development/production has steadily improved everywhere. Until streaming services broke down country barriers, it was difficult to see/enjoy them, but all of that has changed with the international services focus on viewers everywhere.
As a result, we’ve been able to enjoy Chinese films like Crouching Tiger, Hidden Dragon: Sword of Destiny; The Wandering Earth and Indian projects like RRR and Bade Miyan Chote Miyan.
Of course, when we go to Puerto Vallarta, which we do several times a year, we watch local TV in the evening and usually catch a few movies at Cinemark or Cinepolis.
On our last trip, we saw Un Monstruo Mil Cabezas (A Monster with a thousand heads). It was about a woman fighting the insurance company and all we can say is it gave my wife some … ideas.
We also caught Una Pistola en Cada Mano (a gun in each hand), a comedy about male identity crisis. All my wife did was look at us and shake her head in agreement.
We don’t catch many movies in the theater at home but watching them when you’re in another country is a great way to improve language skills and not look/act/talk like an ugly American.
Oh yeah, make sure you understand the phrases and words because script writers, directors, actors the world over tend to use unfiltered dialogue and it can be … embarrassing (or worse).
We’ve wondered several times why after returning home the idea of going to the theater disappeared from our entertainment considerations.
But we’re not alone.
Entertainment Shift – The quality and quantity of good/great films available on your home screen or the screen in your hand has changed the way people think about where, when and how they watch movies.
Sure, part of it is the ticket/concession costs; but you have to go when they’re showing the film, drive there/home and occasionally be in a dark room with people who simply wanted to have fun rather than watch, study, follow the movie.
In other words, streaming spoiled you/us.
And it influenced folks not just in the Americas but around the globe:
But …
Despite the lack of seats in seats, content creation has steadily increased around the globe as indie and international titles/shows find acceptance with audiences.
Established US studios have had it especially tough.
They’ve had theater owners screaming for them to save them.
They watched their secondary source of income – pay TV – level out at a new historic (and we believe sustainable) low.
Studios continue to struggle to optimize their film inventory while learning a completely new industry where consumers dictate what they will watch and when/if they will select certain films to view.
With varying degrees of aspiration, the technology-based streamers quickly – and carefully – selected projects that met present and potential subscribers’ entertainment similarities.
Exclusive – People increasingly select their streaming services first on the availability of original, unique content and on the ease of viewing. Then they make their service selections based on their total entertainment budget.
While Apple TV is often considered “less than” a major streaming player, it has carefully selected films/shows that the user data told them could, should, would be of interest to the broadest number of the firm’s 1.4B users worldwide.
Amazon Prime has taken a totally different approach, blending steady investment on exclusive content with familiar shows/movies and constantly adjusting the inventory mix to stay abreast of interest and budget changes.
Disney is not only a global entertainment company but also one with a strong understanding of technology and how to use it. The company has made steady improvements in “helping” theaters while focusing on new/different content for its international/local audiences while slowly improving subscriptions and profits.
First Choice – When people cut the pay TV cord, Netflix is generally their first choice for home entertainment followed by Amazon Prime. US studios struggle to balance the needs of movie houses and their direct-to-consumer bottomline. In addition, hundreds of smaller streamers have focused on specific genres to capture profitable subscribers.
Netflix continues to be the first choice for people who move to streaming regardless of where they live.
Even before film production shut down in the US, they were using subscriber data to guide the selection of movies/shows folks wanted to view even before they really knew it.
Seriously…
Hidden Interest – Movie theaters would be reluctant to take on a steady series of specialty projects such as anime in the hopes of filling seats but streamers have been able to increase subscriptions with a variety of genre from a wide range of countries.
Oh sure, we sorta liked anime. But for us, a little goes a long way.
But globally there are people – young/old, male/female – who devour as much of it as possible regardless of which screen they use.
As we’ve noted, we like international content, but we didn’t have a clue that folks really wanted to get into Korean, Japanese, Indian, African, Latin American films/stories like they did.
The internet and global streaming has made it possible for people to easily become aware of new, different and unique projects.
With close to 270M subscribers worldwide (70 percent outside the Americas), it is easier for Netflix to have a sound understanding of what people want to watch before they commit to a new project. Matching viewer entertainment tastes with film story lines makes it easier for them to acquire/develop films people will really want to watch.
Juggling Act – It takes a lot of work to make it look easy for you to enjoy the specific movies/shows you want. Netflix spends a lot of time/money to find just the video projects that will keep the firm’s global subscribers coming back again and again.
While Netflix – and Amazon – have pared back their content creation/acquisition budgets slightly, they have shifted more of their film/show budget to internationally sourced materials.
And while WBD, Paramount (regardless of who ends up owning the shell) and Peacock (?) have all slashed their international investments to focus on stuff they’re familiar/comfortable with, Netflix has maintained its attention on the global viewer(s).
The lower production costs and very inviting tax incentives have made it easier for the company to identify original, co-produced or licensed projects.
According to Ampere Analysis, about 30 percent of viewer attention is devoted to non-English titles, which is like a non-issue as we noted earlier because localizing content becomes a non-issue thanks to services like 2GDigital.
The result is a steady flow of freshly curated, localized content – movies, shows, games, sports – that keep everyone in the household connected.
And yes, the focus on global development/acquisition also provides a buffer when it comes to political and labor shifts.
Movies in theaters will continue to be “important” for a reduced segment of the population. But as Tyler Durden noted in Fight Club, “We haven’t given people the frequency, the consistency, the programming to make it a strong habit where you always know ‘Friday, I’m at the movies.”
That gave streaming the opportunity it needed to find a firm and growing position in the entertainment industry.
In the long run, the convenience, quality and variety of shows/movies to watch as well as the opportunity to select the cost (time/budget) people are comfortable with will become more important to people than the made-in-Hollywood label.
Remember, there are people who like to punch, there are folks who like to be punched and then … there’s the rest of us who just want to watch.
We’re a watcher … not a fighter.
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. Internationally recognized marketing/communications consultant with a broad range of technical and industry expertise, especially in storage, storage management and film/video production fields. Extended range of relationships with business, industry trade press, online media and industry analysts/consultants.
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