Back To The Future

Back To The Future


Repost of our CEO Adam’s blog post earlier this week on the next steps and future of movie industry.

The future of the film industry has been debated by legends of the screen from the great Steven Spielberg  to a recent open letter by Martin Scorsese . One thinks the future looks bright, the other sees inevitable change.

As artists who have created some of the best content in the last 4 decades, they are well placed to talk about this business. Spielberg is also a businessman who has had a principle interest in DreamWorks since its inception in 1994.

I spend a lot my time discussing this industry with a wide range of people from journalists through to marketing practitioners through to distributors and exhibition. We all share a common passion for the business, but we all tend to view it from a different side of the same coin.

There are 2 key issues as I see it:

  1. 1.    The blurred line between art and commerce
  2. 2.    The changing nature of the distribution and marketing model

So is film an art-form or a business? Its both of course, but the reality is it’s a business first and an art-form second (it was the opposite in the 70’s for example when film hit a creative peak). Breaking it down into simple terms, film is a product. Products are financed. Financing requires investment and therefore a return. Movies aren’t made for fun, they are made for money. Every time a movie makes money, it perpetuates a cycle of MORE (MORE product, MORE work for film makers, MORE investment in the industry, MORE confidence) not necessarily better. Every time a movie loses money it perpetuates a cycle of LESS (LESS opportunity for that film maker, LESS confidence in their ability to deliver better results, LESS investment, LESS product, LESS jobs). Now many people are in denial about this. But that’s the reality of living in a capitalist society and our existing macro-economic environment.

One of the most subjective terms we have in our business is ‘quality’. Who determines what constitutes quality? Journalists? Awards? Todays business is ALL about the consumer. Why are we moving towards a franchise business? Because audiences demand it by voting with their feet. The consumer decides. So we ought to listen. That doesn’t mean there shouldn’t be an independent industry, but they are challenged by a distribution and marketing model that requires change and innovation.

I have a huge respect for journalists and industry experts but the reality is that their influence has waned in recent years. We now live in a peer to peer society where influence is no longer generated by ‘experts’. Consumers would rather listen to sources they trust, primarily their friends. Hence peer to peer. So as influence migrates to the consumer, as marketers, we need to focus on effective awareness, targeted segmentation and one to one marketing.

And here is that other issue for independent film. Its becoming cost prohibitive to compete with the big players. There is less space in the theatre (in Italy, there are 700 movies released a year in a market that closes in the summer making it a 9 month market versus the 12 months we enjoy). In todays market, you open or die. Media has proliferated so finding the right channels for awareness are more challenging. Traditional media has become too expensive, and quite frankly, if you want to reach 30 million European cinema goers, why market to 300 million people, some of which never go to the cinema? I would argue this is not effective awareness. Its just throwing a large net into the sea and seeing what you get back.

Every time I read an article about challenges in the film industry they focus on the distribution model. I’d like to see more attention on changing the marketing model. If your audience have the greatest influence, speak directly to them. LISTEN to them. Don’t just make a TV spot, talk AT them and expect them to come. If you build it, they most certainly will not come. If you listen and engage, they may.

I see very bright things ahead for the industry but there will be further change before this happens. Unfortunately I believe more Independent distributors will go to the wall. I believe that there will be more studio consolidation and I also believe we will see a mini-major acquire a Studio before too long. Exhibition needs to find its mojo. Because it’s run primarily by venture capitalists, they have stopped caring about the people that matter the most. Their audience. If you want to see how it’s done properly, go to the Arclight in Los Angeles. They still believe in the cinema going experience and they love their consumer.

In terms of marketing it’s only a matter of time before we see the model shift. Who’s going to be the brave one who buys 1 or 2 key TV spots in prime time and focuses the rest of their investment in other more cost effective channels? Who’s going to take a much more integrated approach towards marketing and less siloed? I’d like to see the power move away from media agencies and I’d love to see a new approach to incentivising change in the business. Risk should be rewarded, not punished with the threat of redundancy. An incentive based system would produce better results and more focus across the lifecycle of the product.

That’s not to say no-one is doing it right, but I do see a step change on the horizon. Fun times ahead.