The 'Netflix Effect' ?

Randall_Oelerich

Randall_Oelerich

Veteran
Just thinking today. About netflix and other streaming movie services. And Redbox. And Hulu.com Seems it is pretty easy to watch a movie these days, in fact easy to watch quite a few movies in a given week, month, year. Got me to wondering about what I might call The Netflix Effect -- the world running out of movies for couch potatoes to watch. A bit like kiva.org which today stunned me at almost running out of poor people needing loans for people on kiva to loan to (NPR recently did an interview with Kiva, there are so many people jumping in on kiva that they are finding it hard to find people for the lenders like me [i love kiva.org, frickin amazing concept] and others there).

So I wonder-- could the Netflix Effect portend a future not far off when there is a high demand for making movies, lots of movies, either through the studio system or indie prodcos or short filmmakers or webisodes or whatever? To fill the void that could be coming? There are a limited number of theaters, but for direct to DVD, or for that matter direct to streaming netflix (which has ruined me, I swear I am sprouting potatoe spud roots out of my legs these days), the potential could be huge for a need for new movies.

And if such a demand appears soon, that would mean a demand for writers. Screenwriters. :)

Just rambling,
randall
 
I think to a degree we've already seen this with cable/satellite/broadcast tv: the sheer quantity of old material being endlessly recycled through their schedules suggests they have long ago run out of enough new media to keep the pipe stuffed. But they seem to prefer endlessly re-running old stuff to producing or purchasing enough new stuff to make much of a difference. Probably a big cost benefit, to that.
 
The 20 year old barista I talked to this morning had never heard of North by Northwest, and she had not a clue who Cary Grant was. Cary Grant?!? So I guess there are plenty of movies for the younger generation. But then we do have an aging demographic in the USA, not sure how that will factor in. I'd sure like to be a fly on the wall (well, not if anybody nearby has a fly swatter!) at Neflix corporate, hear their views on buying up indie features from indie filmmakers, even cheesy low budget horror or romcoms, etc.

Sad Max said:
I think to a degree we've already seen this with cable/satellite/broadcast tv: the sheer quantity of old material being endlessly recycled through their schedules suggests they have long ago run out of enough new media to keep the pipe stuffed. But they seem to prefer endlessly re-running old stuff to producing or purchasing enough new stuff to make much of a difference. Probably a big cost benefit, to that.
Click to expand...
 
A backlog of available older media being available doesn't guarantee an interest in watching it...
 
*shakes head*

*shakes head*

Ugg, young people... what the heck. A lot of people my age thing a movie from 1985 is "an old movie." I don't get how you can be so uneducated about an art form that is only about 100 years old. It's not like you have thousands of years of movies to see, haha.

People should know these things.
 
Same way as people can be uneducated regarding history, biology, physics, public policy, medicine, literature...all it takes is s stiff dose of intellectual laziness. Which we have around here, in spades.
 
Wow, what an interesting question. You know, I think that almost everyone on this forum has been wishing, hoping, dreaming and praying for that magical day when our little independently made magnum opus will be magically sent out to the masses and will find an audience that will embrace it. But, it doesn't seem to be happening. What are now, 15 years into the DV revolution, and most of the micro-cinema revolution that was alive and well in the late 90's seems to have died a quiet death. The more I think about it, the more I am convinced that the technological advances that make it possible to put more movies out there for folks to see has also created tremendous competition for these same folks time and attention. While I am right there with you about Netflix, which I think that is the best thing since slice bread and could not contemplate not being without it, I still find that I sometimes keep movies around for weeks before I get to watch them. Which sucks, because I have never had less then 400 to 500 hundred movies in my queue since I signed up for the service. I scroll through my queue and ache sometimes that I don't have more time to watch what all the movies I want to. I can just imagine what folks that are less "Movie oriented" than I am think. I am just wondering if the fictional narrative feature film is a form that is compatible with the internet generation? These days, devoting 90 to 120 minutes to a movie, especially one that does not have the guaranteed draw elements that the Hollywood product has to offer, stars, state of the art effects and 100 million dollar production values, is a hard sell. Especially when there is also limited time to check you email, your Tweeter feed and your Facebook updates. In the mean time, you can talk to a naked girl with a live video feed.
That being said, I am absolutely blown away by what I think is going to be an expanding demand for video content creators in the foreseeable future. I mean, shi* man, they just put video content into magazines for Pete's sake. I know, it is just a limited thing, now, to promote the CBS fall TV line up, but don't think it will stop there. I think that individuals that can put together compelling moving images and sounds to tell stories, and persuade people, will be in demand like never before in history . I just am not that convinced that the format of this demand is going to be tied to the fictional narrative feature film format, i.e, stories told over 120 minutes. I think the demand is going to be for the artist that can capture our hearts, and minds, in 10 minutes, 5 minutes, or twenty seconds. Welcome to the internet age.
 
Nearly every movie ever made is available to me within a couple of days, between the various services for renting, buying or illegally obtaining. And yet there is a huge list of movies I haven't seen. It's been a while since I've watched any full features, actually. Why? Right now I'm pretty tired and a bit sore, having been working since very early. I have school tomorrow, and need to prepare for it. And work the next day. Not all day, but a decent chunk of it. I need to get some stuff to repair my clarinet, too. I think the sax is fine, but if I have extra cork I might consider redoing it. Not to mention I need to get dinner ready and spend some time with my girlfriend. And I have computer games I need to play at least a little more to make the investment worthwhile. And more school work.

My point here is that people allocate only a certain amount of their time to watching films. That will not increase because of availability. How long has television existed? How long have video stores existed? How many people have honestly run out of things to watch, if they are open minded enough to get the stuff that would be produced with a high demand? It's not a big number, because after a while you get diminishing returns no matter how much distribution exists. The majority of people simply are not interested in more quantity than they can already find, especially if it's not a big budget studio work.
 
I recommend that you read Chris Anderson's "The Long Tail" which dives deep into the economics and sociology behind stuff like this.

I've come to terms with the fact that cinema is an art form in popular decline. I doubt there will ever be another Spielberg. There will never be another Gone With The Wind. That shared mass hallucination experience of everyone seeing a movie in the theater is probably gone forever. With abundance we are also tearing down the potential for large-scale shared cultural touchstones.

I'm fine with this. Unfortunately, direct-to-DVD and other modern distribution methods carry with them this stigma of failure which is flawed in this day and age. The theatrical experience is becoming non-competitive, financially, and the audience is finding other ways to spend their time and money. This is a trend that will only continue. With it, the idea that you haven't "made it" if you don't get a film on the big screen needs to go away also. That status is not necessarily a bar of quality and certainly not a bar of financial success. Of course, that reality will be a long time in sinking in, and will leave a lot of dissatisfied filmmakers from our generation. I'd guess that most younger filmmakers will have a much easier time accepting it.
 
I don't care if I made a movie that was straight to DVD, I fully expect that my first feature will just be sold to a DVD distributor. No big deal. Usually theaters are a loss-leader anyway, even for major studios that's often true. They are a way to get your product out there, maybe break even, make your money back on DVD sales, where the real money is.

Of course I want my film to play in a theater, which it 100% will, but at a film festival not for wide distribution. You have to understand if you're a filmmaker that only about 150 films go very wide every year, so the odds of getting in there are pretty slim unless you're a huge director with a huge budget.
 
Jonathan your film might go straight to DVD, but I predict even the DVD will go the way of T-Rex. I am cautious buying DVDs these days, because I believe it will all transition to streaming over the net, and also simply loading up a few movies on a USB flashdrive on one's keychain (actually Blockbuster is likely going to try that I heard), while filling up for gas, etc. TVs are already being sold with streaming built into them. I have a Roku box that does that for me now. Blu Ray players are sold with streaming built in. As high bandwidth gets more common, why deal with a disc when it is all there by streaming? Also, cell phones are soon to incorporate tiny built in projection systems to display e.g. movies coming to your cell phone to a 36" display on e.g. a motel wall. I still think the demand for streaming movies will rise as existing inventory is used up-- it might take 5 or 10 years but at some point the demand will outsource the supply. I recall watching one movie each Friday night when movies were expensive and only on VHS tape; but now it is so common to watch movies. And yes the younger generation multitasks and has a shorter attention span; but the demographics are of an aging older baby boomer generation, that has seen or in 5-10 years will have seen so many movies, but will be retired and have need of more movies to fill their queue. If only we could time travel a bit into the future to know what will play out.
 
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lol, sometimes I really do think about creating a folder, "10 Most Common Posts I Don't Want to Write For the Millionth Time" -- ok that's a bit long, but you get the point ;)

I have to conclude that -- even if it's Bill Gates or Steve Jobs or someone that smart -- when someone starts talking about how it's "all going to be streaming," they don't quite have a realistic grasp of technology and where we stand today. It's not so much that the theory or advanced application is lacking, it's that the basic reality is lacking.

Take, for instance, these things:

1) We have lasers that cause damage like from Star Wars. Yes, it's true. But do you see these in current application? No.

2) We are at the cusp of being able to solve the aging problem. Numerous research is being conducted with strong promise that one day, aging will be a thing of the past, much like Malaria. But does anyone really know this? No, they still think somehow "aging is just what happens." It's not.

3) We have robots that can do an amazing variety of tasks, and do them extremely well, throw a baseball, hit a baseball, mimic human actions and even emotions. But do we have these in our homes? No.

Technology is amazing, and the technology we have developed in prototype form or in advanced research is remarkable! But what is actually available to the vast majority of the public is 20-40 years behind!

That's the case with what you're talking about, so that's why I say that maybe people who think this are either too focused on what could be, in the distant future, or don't have a basic grasp of what's available and what it takes to make this happen. Blu-ray will be the best way to watch movies for at least 10-15 years, presuming we don't quickly transition to something like Red-ray, a 4K type of disc with 4K projection systems or TVs. I don't see that happening because it's just too difficult, once again, to redo all of this technology in any small time frame. 15 years? Sure.

But again, I've written up this post like 100 times already, how do you think I'm going to stream movies in any effective sense being *the* person *you* want to cater to as a studio head (I spend $400/month on Amazon.com buying DVDs and Blu-rays, and I have a Netflix subscription, etc.)?

1) Internet speeds are FAR too slow. They aren't even close actually. Unless we all have fiber optics, there is no hope for streaming video whatsoever. And right now almost nobody has fiber optics. I don't even have that option and I live in downtown Los Angeles in a luxury condo building, not in the boonies like a lot of people! For me to download a 1 gig file for instance will take me about 15 minutes if it's going pretty fast. So for me to download a Blu-ray disc's contents it is going to take me at least, what, 5 hours? 8 hours? It's not going to work out at all.

2) Where the hell am I going to put a 25 gig file or a 50 gig file? I have THREE THOUSAND DISCS!!! Maybe some poor people only own 8 Blu-ray movies or 8 DVDs or something (what's the point of having a player if you don't have at least 50 movies?! I don't get it...), but I have roughly 3,000 discs full of media. There is not a hard drive on this earth that could hold anything close to that reliably. And since I would never, ever trust my media to one hard drive, it would take a RAID system, perhaps RAID 5 or something so it could play fast like my data for films I shoot but it would be redundant as well. So what am I looking at needing here maybe 500 terabytes? We have at most 2 TB internal drives now, and for all intents and purposes most drives are only 1 to 1.5 TB. I can get a 12 TB RAID unit for just a butt-hair under $10,000.

And in case you are thinking, yeah well, technology progresses fast. Does it? I have a Western Digital hard drive from 8-9 years ago, it was 80 gigs, and an external. It was standard at the time. Today standard is 500 gigs to 1 TB. Even at 1 TB that means in 8 years or so, the drives got 12 times bigger. That's wonderful. But 12 times 2 TB is still only 24 TB drives and that's almost 10 years from now. That won't hold my movie collection.

So that means that the two main things -- the ONLY TWO THINGS that matter -- are completely unresolved and have no hope of being resolved within the next 10 years, I would argue 15-20 years, even 25 years. I don't think we will have fast enough Internet connections in 75% of American homes until 20 years from now, and that means everyone has Fiber connections or at least a T3 or OC3 type of connection. Something ridiculously fast, way faster than cable can provide, which is relatively slow for that much data. And all of this is again assuming that 1080p is the ultimate standard for home video. That remains to be seen. I can definitely see 4K being the next generation of video, and at that rate we're talking about needing roughly 6 times as much data storage and bandwidth.

Then the hard drive issue, they need a massive breakthrough, not the incremental breakthroughs that have happened so far, and yes there is research into different ways to store data that perhaps are far more effective and could give us this monumental breakthrough, but again, to talk about that as a realistic alternative right now? It makes no sense.

That's why I don't understand the slow adoption to Blu-ray, which will be a dominant format for at least as long as DVD, for 10-15 years. There are no alternatives whatsoever now. Even downloading House episodes on iTunes in HD, they are not true HD. It's like 1.3 gig files for a 40 minute show? Makes no sense. It should be FAR bigger than that, and you can tell they are compressed to hell because it looks pretty bad even on my 28" computer monitor, let alone if I played it on a 40" or 50" HDTV where Blu-ray looks so pristine.

I personally do not want my media on a hard drive, no thanks! Little songs that I can backup easily and cheaply? Sure. But movies? No. I like discs.
 
You might be right Jonathan. But I am not rushing to buy any more discs, DVD or Blu Ray, these days, because of the move towards streaming video.
http://seekingalpha.com/article/113283-blu-ray-may-be-short-lived-as-streaming-hd-moves-in
I crunched some numbers and right now it is technologically possible for netflix et al to stream blu ray at 10 megabits/sec or 0.01 gigabits/sec, meaning a 30GB br movie, 240 gigabits, would stream in 400 minutes. But I read in the news recently of a new code just bought up that will cut video file sizes in half or more, same quality. And even new codecs coming soon. Meaning that 400 minutes will easily drop to 200 minutes, and likely 100 minutes in the next few years, meaning br streaming might become common. Now I do not have 10Mb ISP service but I know many people do, so that speed and even faster is also coming to the masses. I have two storage bins of DVD movies in my basement-- I am done buying discs when I can just get them through the mail with netflix, or as instant play DVD quality currently. I have a br player but i quit renting br because of frequent codec issues and unplayability. I guess only history will tell what happens. I remember my first internet experience at 300 bits per second 25 years ago, and now we are at 10,000,000 bits per second for home ISP. I wonder what the limit is?
 
Technological progress is exponential, not linear. The fact that it took, say, 20 years to progress to a certain data density, anagathic treatment or throughput doesn't mean that it will take another 20 years to double it.

http://www.androidtech.com/knowledge-blog/2006/11/web-30-manifesto-knowledge-doubling.html

Of course there are market forces, economies of manufacturing and scale, etc but the advance from last decade's tech to what you can hold in your hand today is not representative of how the next decades' advances will progress.
 
From this netlix blog / netflix: (Nov 2008) "This is Neil Hunt, Netflix chief product officer, with some technical background on the Netflix encodes used for streaming. We get a lot of questions about this, so I'm going to go deep....[snipped]...We believe Moore's law will drive home broadband higher and higher enabling full 1080p60 encodes in a few years."
 
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We've strayed pretty far off topic with this BluRay stuff. The medium that the product is delivered on doesn't really matter so long as the delivery is fast and the supply is near-infinite. In that respect, I don't think Randall's core argument holds water - demand will not outstretch supply in any meaningful way as far as total number of movies goes. There are already tens of thousands (probably hundreds of thousands) of completed films out there. Like books, there are more than you could have time to watch in your entire life - and that's possibly true even if you just look at titles in English! Are most of them any good? No, not really. Are there a lot of good titles hiding in obscurity, yes. And that's where supply will open up the market, expose those films that have been lost to obscurity (filmmaking is only occasionally a meritocracy, as much as we might like to think otherwise).

Another thing that will happen is that more films will be made about very specific, experimental, or fringe topics. So while the supply of movies about [example off the top of my head] meth abuse in small town America may be relatively small, and the movies may be relatively unpopular, there will be more and more over time as filmmakers make the movies THEY want to make, not the ones that are commercially viable according to the traditional math. Of course, a great many of these films will STILL not be commercially viable, and we'll end up seeing a lot of people put out first films only before realizing they can't recoup their costs or that the effort isn't worth it. And most of these films will fall into obscurity just as quickly as they probably deserve, while a few gems will get discovered. This can happen via Netflix, via iTunes, via any streaming service that comes along. It would never happen in your Blockbuster.

As for the streaming debate - I think JonathanLB et al seriously underestimate the growth of complementary technologies. Not only do hard drives continue to grow in size, but streaming technologies continue to develop. And connection speeds continue to increase. Add those three factors together and it's not hard to see anyone who wants to pay for it having the bandwidth to stream pretty great looking HD within 5 years time, if not much sooner. The platform already more or less exists. Someone needs to develop the business and the software. BluRay may still look better (for now) but in 15 years it will be remembered as a collector's format in the same way LaserDisc was. Most people aren't adopting it because it doesn't make sense for most people. And most people certainly don't own 3000 titles.

Nobody except hard-core DRM advocates really want discs. Retailers don't want them. Consumers don't want them. Manufacturers don't want them. They have a technological advantage in quality, for the moment, but everyone is itching to eliminate that so that the physical product no longer exists.
 
Depends which retailers and manufacturers, I guess.

Brick-and-mortar retailers probably don't want to see physical media vanish - leaves them with a lot less to sell in their stores.

Manufacturers who manufacture media and players probably would prefer not to see billions of dollars' worth of business disappear, too.

Now, in their capacity as manufacturers (making the product) and retailers (selling access to the product), the production and distribution outfits certainly see it differently.
 
My 2 cent ramblings:

VOD is here and will dominate in the future -- that's why there is a push for theatrical 3D and the talk this year at the markets is all about when the new VOD distribution systems will take effect and how it might play out. No one knows the outcome. We are going through a change similair to the 1950s when TV arrived and threatened theaters; they came up with cinemascope and other attractions to fill seats. Theaters will continue but may very well decline in numbers. IMO, Physical media (CDs,DVDs) will still be around because it often makes sense for the consumer (me & you) to keep a physical copy becuase the pace of technological change and businesses going out of business, license access/approval nightmares, etc, -- sometimes it's much easier to put a disc in the machine rather than jump through hoops on the internet.

The netflix opportunity is excellent for everyone with a product worthy of distribution. We can make great movies using what we currently have. We can shoot 1080p movies that come close to the look of what a major studio can put on the screen: good enough to make our audience happy. You just might need to find some great FXs artists --- just like the majors employ.

Our real challenge is in promotion. A typical film cost around 76 million and Promotiing it costs around 36 million. That's a around a 110 million dollars on average. The majors are having trouble with Promotion these days. Their usual channels are changing and not as effective as they'd like. We too can use the next marketing channels....internet... & of course, Word of Mouth is the best promotion. Promotion seems to make a difference, read up on the Inglorious Bastards and see what the Weinsteins have done... they are in a make it or break it situation so they have to succeed. We don't have the money but there are ways to get the word out there -- but the story has to be worth it.

It sounds crazy but a little cheapo budget film can look really great and draw an audience --- but it needs a GREAT STORY. This is something that can't be skipped and all of us can be on even ground with a major studio if we use our minds well (this is a real challenge.) The Story must be solid...maybe even better than solid. We have one thing the studios don't have: we can fail without failing, whereas they are hugely risk aversive and can't fail. If they do, they loose their jobs, house, career, studio. We, most often, have to survive other ways and do film making on the side, so failure is the most likely outcome for us, therefore we don't count on success to the degree a major studio does. The statistics prove over and over that being succesful at film making is a rarity regardless of our belief in ourselves and project.

So how does this Failure Prone Mode help us compete? We can take chances, they can't. They have too much to loose. We can take chances and be FRESH. This is really our only advantage. We can tell a story in a new and exciting way that engages an audience. They must return a profit so they avoid anything unproven and could fail. So our advantage is to be the pioneer that leads the Hollywood pack. It sounds strange, but that's how it works. They depend upon little ole you & me to figure out the new territory, and if we are successful then they wine & dine us, with lawyers, contracts, meet stars, etc. so they can sign us up & bring us into the ranks with the big boys... while the Hollywood establishment is busy copying our new invention and rides on our coat tail to the bank.

There will be many indies who will become major players through this new VOD channel system and will be wined & dined by the studios because they have proven they can tell a story and make a buck. Merit is the name of this game. You simply have to be world class in your work... and this isn't easy.

IMO, If there was ever a time of real opportunity it is now. When big changes occur there is confusion and opportunity, that time is now. So, work hard, work smart, keep your eye on the ball and be ready to try over and over after being rejected and facing failure. Though it will be tough, the coming opportunities will be better than it ever has been.
 
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