Robert Ruffo
Well-known member
That's not true, nor fair. Argo had lots of dialogue - many large releases do.
Steven Spielberg Predicts 'Implosion' of Film Industry
- Thread starter David G. Smith
- Start date
That's not true, nor fair. Argo had lots of dialogue - many large releases do.
Robert Ruffo
Well-known member
"You deliver that" meaning you deliver feature content almost for free. That is not a good business model that can break even, let alone make a profit. Piracy has hurt too - and it delivers $0.
After reading this excerpt, there are a few things that Lynda Obst seems to be skipping over...
1- Hollywood Accounting ( I don't buy the "Hollywood Only Makes a 10 Percent Profit" statement )
2- Hollywood dug it's heels in, kicking and screaming against any new technology, so if these technologies are now biting Hollywood in the *ss, they've got nobody to blame but themselves. The whole "region code" distribution model should have been burned to the ground in the 1990's. The Internet is global, the markets are global, partitioning things into little control-freak fiefdoms was a stupid idea right from the get go.
adkimery
Veteran
How is regional distribution stupid and how is global video distribution (which is only a few years old) more profitable right now? I mean, if I want someone in France or Australia to view my movie/tv show I'll sell it to a distributor that works in France or Australia. Self-distributing there would increases my costs, while at the same time cutting out money I'd make by selling to a distributor. Hypothetically if Netflix had global distribution do you think they could/would pay as much for global distribution rights as all the different territories would collectively? Maybe, maybe not. I don't know. Things are changing but it will take time as there are so many entrenched players globally.
The business models that exist now have evolved over a century and I'm always surprised when people expect large companies to turn on a dime (especially when the large companies are infamous for not turning on a dime).
-Andrew
You have to keep up with the market, or you die off like the dinosaurs.
Hollywood could have taken the lead on new technologies if they had wanted to, but instead they stuck their heads in the sand and hoped all this nasty digital tech would go away...
I remember back in 2003 when VALVe Software created their STEAM platform, and most of the gaming/entertainment world thought they were nuts at the time. Now they are a 300 person company with revenues of 4.5 billiion per year, and STEAM may soon become a movie distribution platform. ( VALVe has plans to expand STEAM to support business and technical software sales, Educational software sales, and Video distribution )
There's nothing bad about regional distribution provided you don't try and lock people into artificial constraints. This is one reason for the rise of digital pirating, where some regions get a film on DVD or Blu-ray 9-18 months before other regions, so people look for alternative means of obtaining the same content.
Is $0.99 almost free? While iTunes is only taking in about a 1% profit margin, the artists are making money.
Yes piracy hurts, but a lot of the claims from the MPAA & RIAA are wildly exaggerated. In this digital age, the best way to fight piracy is to let consumers consume the way they want to. iTunes fought mp3 piracy a lot more than any lawsuit.
Offer new release movies to stream through Amazon or Netflix for $8 or $5 or $10 or $25 or $2 (someone can figure out this math to make a profit). Do this globally & you'll probably see a big drop in piracy & still make a profit. (Well only if you budget appropriately to make a profit. $250m for John Carter is a risk & not surprising when profits didn't follow, $220 for Avengers or $115 for a Star Wars prequel is a safe bet b/c you have a proven track record.)
adkimery
Veteran
The major label dinosaurs were supposed to be killed off by P2P almost 15 years ago. By way of things like Netflix, HBO GO, Amazon streaming, iTunes etc., the movie/TV content producers and distributors are adapting. Is Barnes & Nobels doing well? No, but I don't see the whole sale dying off of book publishers just yet.
How specifically? Given the current distribution models, the already signed contracts, the 10's of millions of dollars it takes to make TV the fact that streaming has only become viable in the past few years (and then only in areas of first world countries where broadband is affordable and available)... Can movie studios suddenly stop pre-selling to foreign distribution to make their budgets? Can production companies suddenly afford to fund their own TV shows instead of partnering with networks or cable channels?
I think it's disingenuous to just say "hollywood" blew it when there are hundreds (if not thousands) of companies across the globe that are involved in creation, distribution and financing of movies/tv shows. It's a concert of chaos, not a single entity driving the whole thing.
The business models aren't the same though w/games and movies/tv shows. Typically publishers pay developers to make games. Publishers then sell the games to retailers who then sell it to consumers. As opposed to TV/cable distribution where the network/cable channel pays for the production of content, gets exclusive distribution rights (for their given medium), and recoups their costs via advertising and/or subscriber fees. I can buy Left for Dead from a number of retail stores but if I want to watch new episodes of Law & Order SVU I'm tuned into NBC or NBC.com.
But regional distribution (or any distribution) only works if the regional distributor can get value for their purchases and that's difficult when they can get undercut by illicit distribution. Pre-Internet this wasn't a big deal because they costs of manufacturing and distributing pirated goods on a large scale was prohibitive. Now global distribution is a click away. Everything is changing for content producers, distributors and consumers.
-Andrew
You're ignoring one thing: People are honest.
If I can download a song for free illegally, or buy it online for $0.99, a lot of people will pay the $0.99 instead. Yes a lot of people will still download the track illegally, but there is lots of data that says you don't lose 1 sale for every 1 illegal download. (Or many people who download illegally, would not have purchased the thing anyway.)
Now if you take away that $0.99 option & an honest person has the "choice" of an illegal download or a $16.99 CD when all they want is the one song, many people will then take the illegal download b/c they feel the $16.99 CD is unfair / out dated.
Game of Thrones is one of the most pirated TV shows, and I really wonder what those piracy numbers would look like if you could "rent" an episode for $0.99 instead of having to pay $100/month for the delux cable package w/ HBO.
David G. Smith
Steak Knife Member
Sony and Disney are testing a new model to start streaming movies while they are still in theaters. They say they are doing it to decrease piracy.
http://www.theverge.com/2013/6/24/4458644/disney-sony-on-demand-streaming-korea
http://www.theverge.com/2013/6/24/4458644/disney-sony-on-demand-streaming-korea
I don't think the Broadway model is sucha bad idea. I ddon't think it should be much more expensive, but they put films to bluray and netflix so quickly that I have no incentive to go to the theater. My TV is big, has amazing contrast and sharpness, so I'm not really thrilled to go to the theater. What would draw me in is a perfect projection, 4k projection, and the studios taking chances on better scripts. Plus if it took a year ffor a film to hit bluray id likely pay to go see it.
David G. Smith
Steak Knife Member
Yeah, looks like the prices are going to go up for "Premium" programming and such. If Hollywood isn't careful they may "Business model experiment" themselves into irrelevancy pretty quickly.
More on the $50 "World War Z" tickets and premiums.
http://www.huffingtonpost.com/2013/06/26/world-war-z-ticket-prices-50_n_3505153.html?utm_hp_ref=entertainment
...But until recently, very few seem to be proactive about anticipating what the market wants and being ready to be part of this new multi-platform digital distribution environment.
I have a good friend who is a senior VP with one of the major Canadian entertainment networks ( they run a dozen or so of the top cable TV networks in Canada ) and we've talked about the changes that they are making, but they are only making changes because they have to not because they want to. Everything they are currently doing is reactive, instead of being proactive.
I brought up VALVe and their STEAM platform because VALVe clearly saw the future 10 years before anyone else did. The gaming market thought VALVe was completely nuts when they invested most of their time and capital into STEAM. The general consensus in 2003 was that STEAM would just be a giant money pit for VALVe, and might kill off the company within a year or two.
The major Hollywood players could have been proactive and embraced new technology the way VALVe did 10 years ago. They could have been the ones to bring iTunes or NetFlix into existence before anyone else did. Do you remember how well Apple's iTunes was received when Apple first announced that they wanted to make iTunes a movie platform? ( the public could not wait to get their hands on it, but major Hollywood players were looking for the quickest way to kill iTunes ASAP )
...But the major players have been avoiding changing their business model any way they could. They could have killed off the threat of Bittorrent by producing a better version of Bittorrent to distribute their content at a reasonable price. The Internet can be a great distribution platform, but you have to first embrace and enhance the on-line experience for your customer base.
I think VALVe's STEAM platform could easily be applied to movie distribution, and I fully expect VALVe will do really well with it once they can convince the content companies to come on board. ( VALVe currently has 30 million members for it's STEAM platform, and these members are spread out all over the globe ) Think of all the old movies that are no longer in distribution because they aren't financially profitable using the current DVD / Blu-ray platforms, where something like the STEAM platform ( or NetFlix ) can make them viable again.
...And companies like VALVe are short-circuiting this process, where members can purchase content ( sometimes older content at very low prices, like buying $5 DVDs or Blu-ray movies from a retail store ) and have access to the content they purchased from any computer on the planet ( only one computer at a time ), and their is a 30 million member community built up around this content. I can easily see this model being applied to books, movie, and TV content, but somebody has to be forward thinking enough to do what needs to be done to get it off the ground.
VALVe has even started a "GreenLight" system, where developers can raise funds and connect with their audience while new games are being developed. Developers can now gage how popular their ideas are, and know directly what their audience wants from them. ( I can see VALVe's "GreenLight" system being applied to film projects the same way that KickStarter or IndieGoGo does )
I've been hugely impressed with how Shane Carruth has been quite successful ( on a small scale, $443,106 so far, which may not include Amazon sales ) with his new "Upstream Color" film, that he made available on DVD, Blu-ray, or live on-line streaming while it was opening in theaters. ( I could have ordered the Blu-ray right away, but I really wanted the movie theater experience first. I will order the Blu-ray this Fall when I am ready to watch it again. )
adkimery
Veteran
Some people are honest.
I wonder what HBO's bottom line would look like if they jumped to direct-to-customer delivery too soon and burned the bridges w/the companies that allow they to earn over a billion dollars a year? HBO GO is certainly a first step and when the numbers make sense I wouldn't be surprised to see it offered as it's own subscription service. But on the other hand HBO is owned by Time Warner so that makes the waters muddier than they already are.
That's pretty much every business out there. Even Jobs said you can't predict what people will want, you have to tell them what they want. There's a good book called "The Inventor's Dilemma" and it focuses on why it's nearly impossible (for many reasons) for large, established players to successfully pioneer disruptive innovation in their own fields.
You keep comparing one company that started one service (for a number of reasons including self-distribution) to 'Hollywood' as if Hollywood was a singular entity. Valve is also an incredly unique company (if you haven't read their employee handbook you should stop reading this post and go read the handbook, PDF link) so it's not surprising that they do things other companies don't. Valve is it's own dev, publisher and distributor, all it's games are self-funded and it owns all of its IP. Not very many places like that and it gives them a lot of freedom.
On the polar opposite side of the spectrum is your typical movie or TV show where IP ownership, financing, production, distribution, etc., can easily be splintered across a dozen different companies. Movie Studio X can't just up and create a bit torrent killer because it most likely signed away the distribution rights of all it's films to pay for the making of it's films. Sure, once the contracts expire Movie Studio X could take a chance and boldly go where no movie studio has gone before... or they could just licence their content to another traditional distributor and cash a giant check. Back in the day ABC bought the broadcast rights for the first two Harry Potter films and cut a check so big that it covered over half the production budgets of both films combined. Is Apple willing to pay upfront like that? No, which is a big reason why iTunes gets treated like a red headed stepchild by Hollywood. A while ago (2010ish mabye) I remember reading that, on average, movie studios made about 0.5% of the revenue from the iTunes Movie Store. I'm sure things have changed a lot since then, but if Distributor A is basically willing to pay for half your production costs and Distributor B offers no money up front but just a cut of the sales from a relatively small sales channel, which one would you go with?
Hollywood, well some parts of Hollywood, has tried to come together to launch things like Hulu and UltraViolet (pay once, play anywhere DRM) but trying to all the major players in content creation and distribution to come together and move in a uniform direction is like trying to herd cats (smaller players) 800 pound gorillas (larger players) that hate each other. All happening on a global scale of course.
How much of what Valve sells is it's own content and how much of what Valve sells is third party content created in the traditional developer/publisher business model?
So a system where companies can react to what customers want instead of being proactive about doing something new?
Like I said before, everything is changing for everyone (consumers, creators and distributors). I'm not defending 'old media' or wishing/expecting things to stay the same (the last 7 or so years of my career have been spent on things that wouldn't have been possible 10-15yrs ago) I'm just saying that I think it's unrealistic to expect giant companies to flip their business model on it's head when the new business model isn't mature enough yet to scale to the needs of these companies. Overall I think traditional distribution will change much more than traditional content creation and that there will be lots of expansion resulting in the old co-existing with the new as opposed to the new out-right replacing the old.
Apologies if anything is incoherent. I wrote this in the dead of night with bloodshot eyes but I wanted to post back soon because I think discussions like these are interesting.
-Andrew
VALVe covers a full spectrum of business models. Yes, in the beginning it was their own content that got the STEAM platform off the ground, but STEAM has evolved significantly over the past 10 years. With the "Green-Light" projects, developers can raise funds to pay for development, create a community around their new game IP, and get feedback from that community to ensure that there is healthy demand for their product when it is finally finished.
I focus on VALVe and STEAM because they are probably the biggest innovators to date, but there is no reason why other companies can't do the same thing. EA has tried several times to replicate STEAM but they always fail in the end because they don't cater to their audience the way VALVe does. STEAM offers great value to their customer and the STEAM DRM is pretty much invisible to the end user, so overall it's a great user experience to their 30 million members.
From my perspective when Spielberg writes about the coming implosion of Hollywood, much of this stems from the lack of innovation and lack of value that larger Hollywood companies are offering their customers.
Being force-fed 3D films is all about bigger profits for the studios and nothing about what consumers actually want.
Going the $50 ticket route is another dead-end, so these companies are going to have to learn how to produce great content with a lower budget, or move aside for the ones that can make this work.
David G. Smith
Steak Knife Member
Well, the business model for movies is changing.
It looks like that new Vimeo pay video on demand deal has its first movie with "Names" coming. An experiment in theatrical and Vimeo VOD simultaneous release.
http://entertainment.time.com/2013/06/25/straight-to-vimeo-big-name-movie-milestone-for-video-sharing-site/
It looks like that new Vimeo pay video on demand deal has its first movie with "Names" coming. An experiment in theatrical and Vimeo VOD simultaneous release.
http://entertainment.time.com/2013/06/25/straight-to-vimeo-big-name-movie-milestone-for-video-sharing-site/
Very curious to see how this one works out. I guess the proof will be if the film-makers go the same route with their next film.
The studios created the mess. They decided they needed to pay exhorbitant talent salaries, or to spend $200 million on a film, or to spend zillions on marketing. Time was, the promotional/marketing budget was equal to about 10% of the production budget. Hell, they no longer have to spend a couple million just to strike release prints. Unfortunately, if 4K (and possibly higher-than-8-bits color depth) is the future for home viewing, seeing a movie in a theater will offer little if anything over watching it at home.
1st, I hardly have any concern about being fair to the den of thieves that reside in Hollywood. 2nd, I'll see your "Argo", and raise you a "Pacific Rim" "White House Down" "Battle Ship" "Iron Man I, II, III," "Avengers", "Transformers I, II, III," Pirates of the Carribean I, II, III," "Olympus Has Fallen" "GI Joe: Retaliation" "Fast and Furious 1-6" etc.
Spielberg wasn't talking about movies that have been released. He was projecting a trend that might result in its demise. No one is saying that all good movies wouldn't see theatrical release. You just might have to sort through more "GI Joe: Retaliations" to find them. If the standard budget is 200 million+, they're going to need more than domestic release to recoup. Consequently, that means more content that can spread over the globe and can appeal to a multicultural audience which probably explains all the "Let's blow up the White House" movies of late (We are so loved across the globe). Anyway, that trend might dictate less yapping and more CGI driven fare. It stands to reason that HBO is the logical place that more cerebral content will find its home where it can be shown with no commercial interruptions.
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Inprogress
Well-known member
Personally I think Hollywood at large just got greedy, hence sequels and prequels and follow-the-blockbuster-recipe movie with the same characters in different names and faces doing the same things. Yes, Hollywood is a business and they will sell the hell out of what is hip and happening, however for me, the hip and happening cows are being milked dry possibly cause the one's making the decision on which movies to make are accountants and not people who can see a story. Like accountants who decide about the engineering of cars.
How do you determine if a new script is a successful movie - compare it to previous movies. I agree, an engineer shouldn't run a company, but an accountant shouldn't be an engineer.
What could be happening, and I'm merely looking at some crowd funding a some local movies produced lately locally, is that the main budget for a film will come from private investors who will take the risk of a movie but who above the risk, actually want to see the movie be made cause they believe it is a good story. It is a movie they will want to see and the people making the movie (the creative team) is trusted and either really captured the investor imagination, or is known for being able to tell stories well that people want to see.
Sequels are boring mostly cause Hollywood is riding the wave of the first movie (in my experience)- and it is getting boring really fast - hence so many 1st editions have open endings or hints just in case it does REALLY well they can slap together a sequel to ride the wave. I've watched countless of, what would you call them, B-Movies over the past two years, movies I've never heard of before, but I saw an obscure name in the DVD shelve and the synopsis looked good, and the movie, the story was well told (in terms of script and production). But, those movies likely didn't have the Hollywood marketing budget hype.
Good stories told well attract audiences, it might attract them over a longer period, but it attracts - be it $500mil movies or $10mil movies. I think the same applies to movies as applies to websites - content is king. I am of the opinion, Hollywood at large (and I say Hollywood merely cause it encompasses the studios and those single source big players making the investments) have become greedy spewing out blockbusters in the hope marketing hype will make up for the the lack of movie substance - movie substance which is story - and the Hollywood distribution is suffering accordingly as viewers (listeners of stories) turn to other avenues of storytelling entertainment.
However, along with this, as mentioned, other new markets are emerging with their own distribution models and content creation - and getting your story out there has become easier - the more complex your story, the more it will cost to tell well, and the more difficult it will be to get out there - but it is still easier today than 50 years ago.
How do you determine if a new script is a successful movie - compare it to previous movies. I agree, an engineer shouldn't run a company, but an accountant shouldn't be an engineer.
What could be happening, and I'm merely looking at some crowd funding a some local movies produced lately locally, is that the main budget for a film will come from private investors who will take the risk of a movie but who above the risk, actually want to see the movie be made cause they believe it is a good story. It is a movie they will want to see and the people making the movie (the creative team) is trusted and either really captured the investor imagination, or is known for being able to tell stories well that people want to see.
Sequels are boring mostly cause Hollywood is riding the wave of the first movie (in my experience)- and it is getting boring really fast - hence so many 1st editions have open endings or hints just in case it does REALLY well they can slap together a sequel to ride the wave. I've watched countless of, what would you call them, B-Movies over the past two years, movies I've never heard of before, but I saw an obscure name in the DVD shelve and the synopsis looked good, and the movie, the story was well told (in terms of script and production). But, those movies likely didn't have the Hollywood marketing budget hype.
Good stories told well attract audiences, it might attract them over a longer period, but it attracts - be it $500mil movies or $10mil movies. I think the same applies to movies as applies to websites - content is king. I am of the opinion, Hollywood at large (and I say Hollywood merely cause it encompasses the studios and those single source big players making the investments) have become greedy spewing out blockbusters in the hope marketing hype will make up for the the lack of movie substance - movie substance which is story - and the Hollywood distribution is suffering accordingly as viewers (listeners of stories) turn to other avenues of storytelling entertainment.
However, along with this, as mentioned, other new markets are emerging with their own distribution models and content creation - and getting your story out there has become easier - the more complex your story, the more it will cost to tell well, and the more difficult it will be to get out there - but it is still easier today than 50 years ago.
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