Creatively Disrupting Hollywood

A crowd applauding, eager for more.

For the Hollywood Studios, disruption is bad; very bad. But for everyone else in the Media & Entertainment industry, it is long overdue and badly needed.  Particularly for the two most important groups:  Audiences and Investors.

A decade ago, streaming services were the new and shiny toy of Hollywood Studios. They all had one, or were working on it. They had to. Netflix and Amazon had proven that expensive telecommunications infrastructure was obsolete. All one really needed to compete with the Studios to deliver entertainment content was broadband internet and a nice user interface. 

Today, streaming services have effectively replaced the cable box, becoming the go-to platform for content consumption. But the more things change, the more they stay the same. Thankfully for the Studios cum streamers, film finance still relies heavily on Studio-distribution agreements in which creatives sell the intellectual property rights to distribute content in the hopes of both producing their film or television series and having it delivered to audiences.  Studio bosses know, however, that the days of absolute monopoly on distribution and delivery of entertainment content are coming to an end. 

In recent years, all of the Studios have increased prices on their streaming services, and the creator’s fees are yet to be priced in. This has culminated in some additional profits for the Studios and the recent WGA and SAG-AFTRA strikes; perpetual price hikes while creators fight for fair compensation cannot continue. Major studios have a stranglehold over content distribution, causing many creators and production companies to suffer in the current climate. There has to be a change in the business model that equally compensates both the content creators and the distributors. Creators must expand their scope and look beyond the content. This means exploring new revenue streams that allow them to maximize their earnings. 


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As we’ve seen in other industries, namely the tech sector, disruption will undoubtedly lead the way. Streaming, during its introduction, was the entertainment industry’s biggest disruptor. So, what is the next development that allows smaller content creators and production companies to level the playing field? Let’s take a look at some of the options at hand. 

Live Events and Experiences

The music industry is a great way to forecast upcoming trends in Hollywood. Major labels first implemented internet streaming to combat piracy. Soon after, it made its way to Hollywood. 

However, streaming does not account for much of a musical artist’s revenue. In fact, musicians make the majority of their money selling tickets to live shows. In some ways, releasing music is a promotional tool to sell concert tickets. A live experience brings in more money per fan than the music itself. 

Big Hollywood studios like Disney and Universal have been doing this for years. A ticket to watch a Disney movie in the theatre costs between $10 and $20. On the other hand, a one-day pass to Disneyland costs ten times as much at around $179 (for an adult). Comcast also recently reported that its theme parks revenue climbed 22.4%, primarily due to the demand for Nintendo and Harry Potter attractions. Even smaller studios, such as A24, host pop-up events. In 2019, the distributor held a limited event prior to the release of Uncut Gems. While these events are great for promotion, is there a way to ‘flip the script’ and develop a new revenue stream for creatives with long-term viability?

One of the significant elements of Disney and Universal’s theme park success comes from their recognizable IP. This is what draws the fans in to spend more money. Therefore, independent studios and creators require similarly well-known IP to pull off a successful string of live events in the long run.  But without heavy investment in actual theme parks, how can this done?  One possibility is the production set itself as an attraction.  ‘Guests’ might just pay for the experience of seeing the wonder, technical skill and hard work that goes into production first hand.  The more well-known the production team is, the more demand there might be.  The ‘IP’ would be in the brand of the production team, something the Studios don’t yet require creatives to sell.


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They can still generate revenue in the short term if they can capitalize on the release of the content.  In the meantime, the creatives take in some money during production.  They may build up a fan base along the way.  While it may not be as profitable as a theme park, it still brings in money that can be used to compensate the creators. 

Merchandising

Once again, taking a cue from the music industry, creators can generate additional revenue by releasing merchandise based on the film’s content. The major studios with franchisable IP already sign lucrative merchandising deals with manufacturers. You might think selling merch is only an option if backed by a well-known property, but that isn’t the case anymore. 

Merchandise, especially sold in limited quantities, can become valuable collectibles over time. Take, for example, Brian De Palma’s Body Double. To this day, fans are hunting down t-shirts and hats from a film released almost forty years ago. This goes to show that independent films have a high potential to become cult classics, which, in turn, increases the demand for merchandise. 

Manufacturing and selling merchandise has never been easier for independent filmmakers. With streamers and online shopping so prevalent, the payment rails are already established. Setting up an online store is as easy as setting up a website. Most creators can even outsource the manufacturing and shipping to third parties, leaving them responsible for nothing but the creative design. 

There is also a whole world of digital collectibles that is yet to be fully tapped. The rise of Web-3 and NFTs, combined with social media, creates massive potential for digital merchandising. This is bound to represent a new profit stream for studios, and independent creators should also be exploring these avenues as they release content. 

Gaming

Video games, rooted in franchisable IP, could be the future of profit maximization. Many major studios, such as Disney and Warner Brothers have a long and storied history within the Gaming sector. Streaming giants like Netflix have also entered the fray, releasing mobile games based on their original content. 

Maximizing IP potential through video games is not a new concept. Golden Eye 007, based on the James Bond film of the same name, was a massive hit during the late 1990s. It is considered to be one of the greatest games of all time and introduced James Bond to a whole new generation of kids. This allowed the franchise to penetrate a new audience and kept the franchise culturally relevant. 

A notable example of Hollywood diversifying into gaming is Annapurna Interactive, a subdivision of Annapurna. Since its establishment in 2016, Annapurna’s gaming division has published around thirty titles. This includes games like Stray, which received seven nominations at The Game Awards 2022 and even won the Best Independent Game that year. In fact, the game was so popular that a feature film adaptation is currently in the works


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Annapurna Interactive represents an entirely new revenue stream for the company while also helping develop and maximize its IP. Smaller creators with fewer resources can look into the Netflix route, focusing on mobile gaming, a rapidly growing billion-dollar industry

Artificial Intelligence

Artificial intelligence represents Pandora’s box of disruption. There are many fears about what could happen as AI technology improves over the next few years. While many focus on the disruption to the job market, it does have the potential to impact consumers on a massive scale to the advantage of creatives. 

With AI, filmmakers can instantly change faces and voices, allowing users to have a truly unique and personal viewing experience. Imagine a world where you can see yourself as the main character of your favorite TV show.

Companies such as Flawless AI can remove language barriers, making the original content universally accessible to all types of audiences. Content creators can also gain better insight into consumer preferences with machine learning on the backend analysing user data. Creators can use this data to better understand their audiences and target preferences.

While independent content creators might fear the implementation of AI in creative industries, many tools are available to them to improve content creation workflow and consumer targeting. This reduces the production costs for filmmakers while expanding the target audience, undoubtedly leading to increased revenues.

Final Thoughts

These are some examples of how the tides might turn within the entertainment industry. The ideas mentioned above are already in motion with the major Studios and have been for decades. However, smaller companies and content creators can also access these avenues for revenue diversification. If the studios’ hegemony over the content distribution system continues, creators will need to find new sources of profit. While gaming, AI, live events, and merchandising might not directly disrupt the current system, they offer a new pathway to profitability. And best of all, audiences and investors will handsomely reward creators who lead the charge.

1 Comment

  1. i think there’s still much disruption on its way in distribution – the internet has made it incredibly cheap to reach a mass audience, and platforms like YouTube let users upload their own content. There will be much more of this and new ways for creators to monetise. We may also see commissions sold to audiences directly. And of course production costs will continue to drop as tech gets better. My guess is we’ll see more new branded curators, and some of the old ones will disappear.

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