Video Entertainment is Global, Local

Content Insider #872 – Perfect Location

“There are places out there you can’t find on any map. They’re not gone, they’re just lost.” – Nate, “Uncharted,” Columbia Pictures, 2022

Folks, just because Hollywood sneezes, the film/TV show industry doesn’t have a cold.

Sure, the production of content for the big and small screen is “off” here in the US; but for all the right and wrong reasons, the industry did it to itself.

Since the completion of the first Hollywood sign in 1923, the US (more specifically, California; and more specifically yet, LA) has nurtured the idea that the entertainment industry revolves around us.

The industry started in New Jersey but relocating to Southern California was really a no-brainer – climate and try/fail/try again mindset (personal opinion). Slowly, it moved back across the country, so we have creative production locations spread across the nation.

Today, the US film/show industry produces, and more importantly consumes, about 40 percent of the entertainment fare.

So, when the dual creative strikes shut down productions around the country, it was somewhat logical that a lot of the television and movie folks would say the global industry is in a slump and it will take a year plus to recover and get back to a new normal.

But the industry has changed (advanced) a lot since 1923.

Here in the US, creative centers have cropped up around the country – New York, New Jersey (yes, it’s back), Atlanta, Seattle, Austin, Phoenix, everywhere – and they’re offering awesome incentives/tax subsidies to attract content production in their areas as opposed to the rather high costs of producing in LA.

At the same time, Canada started to build out their content creation centers in Toronto, Montreal and Vancouver, highlighting their production-friendly features – trained, skilled technicians and support folks who mostly shared the same language.

Shows and movies moved almost seamlessly across the border, and it became the North American entertainment market.

While the US declared its independence from England in 1776 and Canada became a co-equal in 1785, the three still shared a slightly similar language, so video story production there for local consumption here was easy, especially since Britian offered advanced production facilities and incentives.

That’s the way the content industry pretty much stayed for years with English-speaking content created in relatively close English-speaking countries.

Back in college, we got hooked on “foreign” films – French, German, Asian, you name it – but we had to go to a local art theater to enjoy them.

The theaters only showed the crème de la crème of content because it was hard – and expensive – to translate the dialogue which streamed along the bottom three inches of the screen.

Sure, the words – when they were translated – didn’t match the lip movement or action but still, the films were awesome.

But life and priorities change things.

With all the stuff on TV just a remote click away, it was easy to think that the video content industry began and ended with American English shows/movies.

But in 2007, Netflix, followed shortly by Amazon Prime, changed that.

Streaming Sweeps – Households in the Americas quickly embraced the idea of streaming shows/movies they wanted to see without advertising as they turned from broadcast networks and cable pay TV bundles.

It didn’t take long for the former DVD shipper (they mailed out their last disc – True Grit – September 29, 2023) and global etailer to persuade American households that watching what you want, when you want and on the screen you want – all without ad interruptions – was great entertainment.

While studios – and networks – initially thought the two had lost their collective minds, they stuck with their theatrical and TV schedules until people in the two countries began abandoning their TV stations and expensive pay TV bundles for the streaming convenience, quality and lack of 20 minutes of ads for each viewing hour.

In no time (O.K., 3-5 years) every studio and even broadcast networks offered a streaming service to the point where Deloitte reported that 88 percent of the households had at least one streaming service.

A Forbes study last year found that the average household now has 2.8 streaming subscriptions.

But even before the two fledgling streaming services had a significant number of streaming subscriptions in the Americas, they set their eyes on reaching the global market – 1.72B TV households.

Global Content – Economic content streaming put good/great content on people’s TV screens and on the mobile devices in emerging countries.

Regardless of the screen size or age of the screen, people around the globe wanted good/great entertainment.

And while some people don’t have a TV set, virtually everyone – 5.4B of the 8.1B people on the planet – have access to internet-streamed content.

Connected – It’s perhaps overstating things, but almost everyone who wants to be connected to the world around them has internet access for their TV, computer, smartphone or device.

More than 63 percent of the world’s population has internet connectivity and one or more portable/mobile device.

Looking at all streaming content arena — original, sports, and library TV and movies — Ampere expects overall personal/home entertainment market to be about $46B this year and the video content reach covers 92.7 percent of the globe.

Now that sounds like a big deal – and it is – but as an interesting sidebar, it’s worth considerably less than the gaming industry, which should top $145B this year and revenue is expected to reach $312B by 2027.

With the top 10 streaming services headquartered in the Americas, that $46B looks attractive to California/LA officials as well as Hollywood producers, directors, actors, crews and support organizations.

But…

Original streaming content itself is also growing. It is expected to rise 13% to $27 billion and is expanding.

World of Content – While content creators in the Americas like to think that they are the center of the film/show universe, streaming has enabled us to know and appreciate that great content is produced around the world and increasingly, we want to watch it.

Content for TV, movie houses and streamers are coming from territories including Germany, Brazil, Australia, Saudi Arabia, India, South Korea … the four corners of the globe.

Why?

On Location – To deliver authenticity, creatives have been searching out locations that provide just the right background, environment and mood for their films/shows.

Studios have been doing exotic location shooting for years, whether it’s the timeless thrill of Lawrence of Arabia (Jordan, Spain, Morocco) or the cult classic Predator (Mismaloya, Mexico).

But as Hollywood worked to develop projects in other worldly environments, simply choosing a location became difficult and expensive.

Virtual Set – Because of the early work of ILM (Industrial Light & Magic), nearly every new studio being constructed today includes large or small virtual LED sets that allow producers to locally and economically create film/show environments from anywhere in the world … and beyond.

Creatives inside and outside the industry solved the problem with virtual production facilities that use CGI (computer-generated imagery, augmented reality, motion capture, large/small LED walls, Unreal Engine, Nvidia GPUs (graphic processor units) and a strong dose of imagination and talent.

Folks could be in the heart of Africa, the deserts of Saudi Arabia, the mountains of Sweden, or the jungles of Indonesia during the day and still be home for dinner with the family in the evening.

There’s no location search, housing/feeding 20-100 plus folks, transportation or added insurance required; just great shows/films that content creators/producers produced for local and global consumption.

Sure studios, producers and actors still continue to like and search out exotic locations.

But streaming changed the dynamics of content creation, production and distribution.

Entertainment Everywhere – Streaming services have shown that people – regardless of where they live – like and appreciate good shows/movies and the services can now economically deliver the content to their family/personal screens.

Streamers, unlike broadcast operations looked beyond their borders to reach/entertain/inform/educate people around the globe.

There was only one slight little problem.

If streamers were going to “sell” their service’s content in a foreign country, they had to produce 30-40 percent of their content in the country.

That “restriction” actually proved to be a real benefit to streamers.

Now available in 190 countries and with a worldwide subscription base of 270M plus, Netflix – and the other services – quickly found it to be a competitive advantage because while folks “over there” wanted to watch American shows/movies, people here and in other countries also wanted to see the creative work from other countries.

Global Production – To obtain subscribers in countries outside of the Americas, Netflix and other streamers have to produce a lot of their shows/films locally for distribution. The requirement has proven to be a benefit to streamers and consumers because it also means that content can also be selectively offered to subscribers and … we like it. Some countries have been banned.

Country, state and local governments provided financial incentives as well as permit and staffing assistance that has proven to be very appealing to studios and streamers.

It has also proven to be advantageous to struggling US networks to develop and produce shows such as FBI: International (Hungary), CSI: Sydney (Australia) and other shows/TV films in other countries.

A key reason for network, studio, streamer management is financial.

Rather than contend with the costs and challenges of doing business in California and to a lesser degree in other locations that provide better tax incentives like Georgia, New Mexico, New York, Toronto and other production centers in the Americas; other countries are making it faster, easier, more economic to develop video stories in their areas.

Tighter Budgets –Today, studios and streamers understand that it can be more economic to produce films/shows in other areas of the Americas as well as in other countries, which is important when budgets are “tight.”

For example, if a major Hollywood film requires a budget of $140M, an average European production costs $6M, while an average Nigerian film is produced for $40K, according to World Cinema.

No, film/show production won’t abandon the Americas for capital reasons because it is still the most attractive, desirable entertainment market in the world,gg followed by China and India.

But regions such as Europe, Asia, the Middle East, Sub-Saharan Africa, Australia and Latin/South America are making it more enticing to produce content for their local citizenry as well as folks in adjoining countries and around the globe.

In addition to the economics, almost every country is investing in studio facilities and educating their creative teams in every phase of film/show creation, production, post work and technology.

Global Production – Governments and local businesses around the globe have been building facilities and training people to become polished professionals in film/show technology and storytelling.

Shortly after the dual strikes in the Americas, Otis College of Art and Design and Wetwood Economics and Planning Associates published “The Day After Tomorrow,” a study (read it here) noting that beyond the strikes’ short-term effects, the industry itself was evolving and globalizing.

For example, Saudi Arabia’s Neom Media Hub features state-of-the-art purpose-built production facilities.

It includes 50+ volumetric and standard stages, production/support facilities. It also includes a unique educational/training/mentoring facility to train people in all phases of creation/production.

The facility seems to address every phase of workflow, work and production processing as well as complete planned living/working areas.

To top it off, they offer a 40 percent-plus cash rebat!

Unabashadely, their goal is to out Hollywood Hollywood.

But they are far from alone in their quest to capture more of the global video story production market.

The Japanese video content business is nearly a century old with a strong history and creative facilities/capabilities in place to develop local and international video stories.

Relatively young (founded in 1945), South Korean content development/production is gaining global attention.

France – often called the birthplace of cinema – as well as Germany, Spain, Hungary, the Netherlands and every country in the EU have served their local/global markets.

Tollywood, Bollywood and other regional Indian film industries have long been known for their creation of action, exotic, romance and horror films; and Hindi and Telugu projects are finding American audience interest thanks to films like RRR, Jawan, Dangal and other films.

New Zealand and Australia have recently joined in the entertainment industry spotlight thanks to shows and films that have gained worldwide attention such as Godzilla x Kong, Kingdom of the Planet of the Apes, Furiosa: A Mad Max Saga.

African content produced in Ghana, Zimbabwe, Uganda, Kenya, South Africa and Nigeria has captured the audience attention and interest in the Americas as well as other countries thanks to Netflix, Amazon Prime and Disney streaming services.

With nearly 70M streaming subscribers, Latin and South America has finally gained the attention of streamers/producers and is quickly growing their production facilities and talent pool to refine and expand their different and unique way of telling stories.

In other words, folks like good/great video stories regardless of where they are produced.

“It wasn’t that long ago that streamers were focusing on developing local content for local consumption,” said Allan McLennan, CEO of 2G Digital Post, “But today, they understand and appreciate that a show or film that ticks all or most of the boxes is something they’ll sign up for, watch and keep coming back for more.

“In addition, that understanding and appreciation came at just the right time because historically, localization – subtitles, closed captions and overdubbing was time-consuming, difficult and expensive,” he added.

However, the industry has undergone a rapid transformation which has made it fast and economic to localize shows and films for audiences.

While English is often considered the most widely spoken native language –380M, Chinese and Spanish are more widely used – 1.3B and 486M respectively. It’s interesting to note that there are nearly 30 languages in the world that have 50M plus first language speakers.

“Today, studios and streamers want – and are able – to wring the complexity and cost out of making their content available to the widest audience possible,” McLennan noted.

“Creating subtitles is the fastest and least expensive means of localizing and people have quickly found it’s an easy and enjoyable way to really great content, McLennan emphasized. “But localization services are steadily improving so that if the content owner, studio or streamer really wants to have the film/show done with perfect lip-sync and local language we’re able to do it more quickly and more economically.”

In other words, it’s becoming better and more expected by the global audience.

According to Verified Market Research, localization of global films/shows is becoming an important part of the solution for making projects available to anyone, anywhere. Their analysts also forecast that the film dubbing market will approach $3.6B in a couple of years.

Meanwhile, Research Future predicts that the global translation service market will exceed $47B by 2031 as the demand for entertainment eliminates country and language borders.

The increased availability of global shows/films is important, necessary even, because it enables people to understand and appreciate that the more, we’re different, the more we’re the same.

Or, to make the time you relax and watch great content more important, all you have to do is remember what Sully said in Uncharted, “I’m offering you a way out of here. A chance to see places you’ve only read about in books.”

In other words, you’re not just sitting there filling your time watching the content, you’re actually learning something important.

That’s also important when you’re a part of the content creation, production and distribution industry because there is always more work to be done.

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.