Wednesday, October 12, 2011
The Film Industry
The Film industry today is a vast and complex system operating all over the world. The industry employs over a million workers and can produce revenues and costs over a billion dollars. However, in the recent years the film industry has been in constant battle over new technologies, that are shaping the future. The primary revenue stream for the film industry today is based on how much money they can get off movie theaters, DVD, cable TV, OnDemand, and other ancillaries sales. This means that most of the money made is after the movie has been released. Many A picture movies generate "30 million within 14 weeks" of initial theatrical release. When accounting for home video, foreign and ancillary revenues, these revenues can double.
Today some of this revenue is being threatened, a big proponent to this change is social networking, piracy, streaming, and movies on Demand. Also today going to a movie is not an event like it used to be. DVD sales are beginning to decline, which were a huge piece of the revenue stream. Recent technology is also becoming a threat to the film industry. Digital technology and the internet are transforming Hollywood.
Most movie studios are moving to replace film with digital technology, also many film companies are moving and evolving into producing smaller projects with lower costs, which will reduce the risk of losing more money. Many film industries are also trying to battle piracy with legal actions. Most film companies are accepting the fact that most people are viewing movies on smaller screens, going to a movie is not as big as it once was. In recent years there has been a decline in ticket sales. This means that most film industries are evolving into companies that try to reach the audience by other means; subscriptions, and OnDemand are both things that the movie industry is trying to use to save their profit.
As we have seen in recent years, major movie studios are using franchises to help keep the economic edge. That being said, as a viewer we are going to see more and more sequels especially on the big screen. The studios are able to save money because the idea is already there and they still have a solid fan base. Some will say that this is killing creativity but in my opinion, producers will have to be even more creative to pull in a new audience. In years to come Hollywood is going to have to adapt to these economic shifts. Certain movies that may be deemed a risk will not be produced. Profit will be key to the future of film. The way of thought is also going to be changing in the future.
If I was an executive within the industry I would be facing many tough decisions and challenges in the coming future. In my opinion, the battle against piracy is something that as a executive we cannot win. So one adaption I would make would be to offer our consumers or audience a cheap and better offer than downloading illegally. I believe subscriptions will be a major component to the success of the film industry. Imagine if you were able to pay a monthly few, and every new movie you were able to see. The costs would be cheaper than going to a movie, and also the quality of the movie would be greater than online. Also I would be able to expand this idea to a much larger audience. People enjoy movies, and they will enjoy them in the future, but as technology changes people want to easiest and cheapest way to see the movie. As an executive I need to corner the market and offer the easy accessible movie.