Thursday, May 8, 2008

Digital Is the Future of Entertainment and, I guess, Warner Bros. hasn't figured that out yet

I came across two articles today, the first one was Media, Entertainment Execs: Digital Is the Future - but How to Get There? on some site called marketingcharts and the second one was Warners axes Picturehouse, WIP on some other site called The Hollywood Reporter. At first, I was going to write two separate posts, but when I started thinking about it, I thought I could tie them together. It'll be long and I may ramble, but who knows? I may come up with something good here...

Everyone knows who Picturehouse and WIP (Warner Independent Pictures) are, right? If not, for shame... you should. Picturehouse is the joint venture between HBO and New Line and they released "The Orphanage", "Pan's Labyrinth" and "King of Kong: A Fistful of Quarters"... WIP is the specialty division of Warner Bros. and they released "Funny Games", "A Scanner Darkly" and "The Jacket". None of those films would be considered 'indie' by our readers, but by Hollywood standards, these are as indie as they get, but that's really not my point. The point is, you have to take a step back and see what this means... and keep in mind that New Line was shut down and consumed by Warner Bros., as well. Consider this quote in there, "After much painstaking analysis, this was a difficult decision to make, but it reflects the reality of a changing marketplace and our need to prudently run our businesses with increased efficiencies." Translated - We can't figure out how to make money on this indie shit, we're going to stick to making films that do make us money and keep our investors happy, such as: "Harry Potter", "Speed Racer" and "Dark Knight". And with that, the divide between the studios and indie filmmakers widens...

Now, let's look at the other article, where media and entertainment executives agree that digital is the future, but they don't know how they're going to get there. If you're too lazy to actually click on the article and read it, I'll sum up: no one's making money on downloading, VOD, digital advertising or user-generated content right now, yet content is being developed for consumption on those formats. New platforms and new ways of delivering content is where things are going and they're all going to pursue a "multi-screen" distribution strategy, which includes theatrical, TV, online, mobile, everything... Finally, in the future, they almost all agree that the advertising supported business model is where it's at. So, in conclusion, your entertainment content will be available in various formats to be played on whatever device you want, it will be ad supported (so, it won't cost you anything, ie. TV) and it will be available whenever and wherever you like, on demand. I'd like to focus on one aspect of this... and that's the 'on demand' part. With Tivo, VOD and digital downloads, we're basically at that point now, but it's just a matter of how long it takes for everyone to adopt. Further, by definition, 'on demand' means that the consumer picks WHAT they want to watch, WHEN they want to watch it... and to get those consumers eyeballs, you better have choice. If I want to watch a low-budget, indie horror, by golly, I'm going to watch one... whether you have it or not. Media companies are going to have to have a lot of content available, as to try to keep me from going to another provider... and it's not like you need a massive warehouse to house a shitload of content because digital content doesn't take up shelf space, it's just stored in a computer. Now, let's juxtapose this with the first article...

Entertainment executives admit that we're going digital and people are going to want more choice, yet Warner Bros. is steering away from making smaller, niche films and they're sticking to making high-gloss, PG-13 theatrical releases... which, in my mind, just means a whole lot of the same, generic releases meant for a mass audience. I could REALLY rant at this point, but let me bring this all together and tell you why it's good for the indie filmmakers of the world... the media and entertainment landscape is obviously moving to where people can consume any kind of media on numerous devices and when that happens, your film is just as easily put out there as "Speed Racer" or "Dark Knight". If you think about it, the market for these big budget theatrical releases is fairly saturated right now and the market for indie films is not. Seriously, if I want to see "Iron Man" today, I can... but if I want to see "Evil Ever After", I probably can't. So, really, for indie horror, there's way more demand than there is product... and that means there's a market that's waiting to be served. The long and short is, it's just too costly right now to make sure that everybody who wants their copy of "Bikini Bloodbath" gets it. However, the executives themselves say that's changing... the market place is going to open up and there's going to be lots of consumers out there who are ready to buy your indie film and, hopefully, when that time comes, you'll be ready. Meanwhile, the big studios will be sitting around, wondering why no one's going to see "Harry Potter 8" and the latest Kate Hudson romantic comedy in the multi-plex.

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