This post is actually the genesis of WHY there is PICTURE THE MOTION. It came first from a personal experience with entertainment. I’ve realized along the years how I’m watching, consuming, experiencing content changes as because of the content offer in the market as due to my own behavior. So I did some researches to see if any trends could back what I think it’s happening: we are at the edge of a paradigm shift in the entertainment industry as the status quo is profoundly changing. And I’ve recently read Tom Goodwin’s post, a Media Expert, in The Wrap, that made me think I could be right. We – users, audiences, professionals – are in the middle of this industry ecosystem transition.
Here are 5 major reasons that define this paradigm transformation in entertainment:
1.The Movie Revenu polarisation
First, if you take a look at the movie offer you can observe 2 striking trends:
- Although there are more and more films being released, the gross box office concentrates more and more to a very selected top list of mainstream movies. It trends closer to a Pareto equilibrium: only 20% of the released films will generate 80% of the box office. There are more agents eating the cake but very few got a sustainable part of it.
In 2015, you can see that it was around 40/60 with the top 20 out the 100 biggest worldwide releases of the year:
The concentration of the revenues is even more important looking at the top 5 releases all from major American movie studios:
This ⅕ of the top 20 generated half the gross value. This trend will end up making only the top 20% of the movie releases being valuable: in other words, only major Studio franchises like Marvel, Pixar, DC Comics look profitable. And that directly impacts where movie investments are made. Ultimately, it pushes the 80% other releases to find alternative ways of fundings and distribution.
- Plus, the volume of theatrical tickets sold trend to decrease. According to the Motion Picture Association of America, the decrease was observed early 2014:
And that will directly impact the global gross value generated. Indeed, if you decrease the volume sold, you need to increase your prices to compensate. That can keep going on, if prices can be adapted as fast as the decrease. But that’s a risky bet if you want to be sustainable in the long term.
Indeed, according to the International Trade Administration of the United States; “during the years 2014-2017, box office revenues are projected to grow only 3.3 percent on average each year and growth is expected to decline in 2018 with only a 2 percent increase.”
Looks like people “running away” from movie theaters is a too fast trend after all to rely on this traditional business model.
2. The content offer paradox
Traditional movie channel vertical, which is watching movie in theaters as we know it today, is obsolete. However, it doesn’t mean people are watching less films and content in general. On the contrary, even more with online content. But they are probably not willing to pay more. Actually, it seems the more you can watch the less you want to pay. According to GfK’s recent Home Technology Monitor Study release in August, only 46% of consumers have ever bought or rented a digital movie or TV show. In contrast, 86% of consumers have rented or bought a DVD or Blu-ray in the past, and 78% have done so with a VHS tape.
Why people were paying the price to see more content before but not anymore?
First, because entertainment always comes after the household rent, utility bills and groceries. So, considering this budget getting endlessly higher in order to watch more is just not an option.
Because, based on a basic market rule, abundance resonates as “free” through demand’s eyes. Would you pay for oxygene when it’s just out there? Why would you when you just have to open Youtube to find free entertaining videos? Imagine that there is currently an estimate of 300 hours of new videos uploaded on Youtube EVERY MINUTE.
Then, you end up on a paradox: you have an abundance of content – the offer – but almost no asking price for it – the demand:
Here, the price axis should reflect the price you pay based on the production cost of the content. With Digital, you can imagine that the cost of producing content can easily reach a plateau. The production cost could be today only the price of your iphone since you can shoot short film with it. And the demand won’t be willing to pay any price because if one content has a fee, I just have to check on the tone of others that are free.
3. The value transition into experience in Entertainment
Does that mean that the market is broken? I don’t believe so, it just needs to find its value elsewhere. Production cost is not anymore the good indicator to value the market. Digital caused this shift. This is no longer a market ruled by the offer but now by the demand. Offer has to adapt the pricing methodology and reinvent the value of the market. I think the entertainment is slowly transitioning from a business model that was copying the “Goods” economic offer to the “Experience Economy“. This distinction is based on the Pine and Gilmore (1999) economic offers.
I believe entertainment was always meant to be an experience economy, but the business models the industry applied are making the transition step by step.
- When Entertainment looks like a “Good” economic offering: Based on the most traditional business model, it’s what makes more sense for a customer. You “make” a “tangible” product in order to be sold. So film was industrialized into a good, like a movie ticket, a VHS or a DVD. You buy a movie for a certain price. With such model, everything looks very profitable because you have a large demand (the audience) but a limited “inventory” (DVD in a store).
- When Entertainment looks like a “Service” economic offer. Well, DVD were great, but they took a lot of space in your living room. So, if you want to watch more, you need to find another way to have them “delivered“. No problem, the answer is the digital offer: Buy your movies online! VOD – SVOD – Catch Up TV , there are many online “services” that solve this problem.
So the offer rules the dynamic of those 2 economies, but can’t that much on the last one:
- When Entertainment becomes an “Experience” economy. Now that I can access to a huge amount of content online, where is the value of this? More for more for even more? I have only one brain. “Consuming” movies gets boring. I can binge watch but I’m looking for something more qualitative & memorable and for real sensations.
This deals with way more personal feelings from the audience. People have to decide whether they want to be part of an experience or not. If they think this experience is worth more their time than another. And they are the only one who can claim if it was a “good” and “valuable” experience. They know its value and so set their price!
4. Maximise the experience is no longer enough
So you want to take back the control of how you experience content, great. How? Did you count how many times you check on your smartphone today? Across how many devices you can watch a video at home? When you commute? Pretty busy I guess, I’m right?
Indeed, nowadays you have so many possible points of contact with content, that it reaches a constant peak of content flow. Abundance of content, devices, formats, times within one day ask your brain to be pretty savvy.
Users are now multitasking. According to Deloitte Consulting’s U.S. Media & Entertainment Leader “more than 90% of millennials are typically engaged in four different activities when in front of the television. These consumers expect to access video content 24/7“. According to the report THR’s Social Media, “88% of consumers increasingly use Facebook and Twitter to supplement traditional entertainment experiences. Within the study, it was found that consumers spend more time on social media platforms on a weekly basis than watching TV, viewing films, or finding clips on YouTube; even more than listening to music and texting. Even when people are watching TV or films, they are also on social media.”
I’m the first to see how digitalization changes my behaviors. Since I watch around 3 films per week and many TV shows, I usually have my smartphone and tablet around, checking on social networks and several movies apps. I have maybe around 7 movie related apps downloaded on my smartphone.
Actually, Mobile Apps save my “movie experience” today. From picking, rating, buying, reviewing, and learning more about a movie, I have an app for that. At this point, if you look for more qualitative experience, you need to optimize your time with tools that help to do so. And I think that is the kind of answer people find through Mobile platforms – especially apps.
Looking for watching the maximum of content doesn’t make sense anymore, as there is only 24h within one day. Do you remember all the videos you watched on your Facebook feed? It’s great to have so many content around, like one for everybody’s taste, but you don’t want ending up being victim of such overwhelming and limitless access.
Tom Goodwin highlighted a good point in his post. He mentioned that how we watch content has reached such complexity of options that it demands imminent changes through innovations; “We’re in a status quo before a paradigm shift. We’re at peak complexity, […]. I now need to select my remote before I decide what show to watch. I need to remember the 13 perfect button presses to watch Jon Oliver on demand. We have SVOD, AVOD, streaming, stored content, broadcast — it’s messy. […] All [those options] chipping away — but none delivering the final blow to consumers who are increasingly frustrated being spoiled by the simplicity of a Google search bar or access to everything in one place via Spotify.”
Having access to many content, it’s great. But if you want to “optimize” and “value” your experience, you need tools that help you simplify, fasten, and improve your access. in order to have the BEST experience, the HOW must help the WHAT to make it unique.
5.The Why of the experience is changing roles & relationships
Indeed, I previously talked about HOW you experience the content could be optimized when here, I will focus about the WHY you experience it. I borrow this distinction between the WHY, the HOW and the WHAT from the talented TED speaker Simon Sinek. Mostly his idea that everything comes from the WHY. If the WHY makes sense, then, the 2 others should follow and serve this WHY.
WHY are you experiencing content? Tricky question. It depends on your level of engagement.
For many, it is going to be very simple to answer: To spend a good time. Having a memorable, enjoyable, and qualitative good moment alone or maybe shared with friends.
Based on Walmsley B. & Franks A. publication The Audience Experience: changing roles and relationships – Key Issues in the Arts & Entertainment Industry, those people are the majority who have a passive participation. They are “audience members who may be highly engaged and loyal, but prefer to spectate rather than take part, […] or who just want to turn up and be entertained”. And you have the active participants who are “those willing to try out or join in arts activities themselves.” So what is their WHY? Being part of a community? Make better content? Being inspired and inspire in return?
If so, you need a certain amount of skills and a community around you that helps make it happens. And this is when the democratization of the creative process makes sense and redefines the roles of the professionals and the audiences:
- Professionals: theirs WHY is no longer being the Gatekeepers of a close doors creative process, but more Facilitators who help building the best experience possible by audience development, trust and relationship. They use audience intelligence and understanding to ensure that the audience experience is exceptional. To do so, this relies nowadays on data science and innovative digital tech.
- Passive Participants: They can like, retweet, share feedbacks, and let the community knows their needs to improve their HOW and WHAT.
- Active Participants: They can be the in-between community which feeds the creative dynamic. They can be users, creators, analysers, founders, producers, or reviewers. This is the best spot for innovations and testing new projects. Like a LAB, they can experience how to create inspiring experience! They change the status quo of the vertical creative process to a more horizontal one.
So, industry and consumption trends show that we can expect a paradigm change because all the aspects of the business are profoundly evolving: as on the Offer side as on the Demand. It has been ongoing for years since it’s a step by step transition. It’s an exciting time where you can redefine your WHY, your HOW and your WHAT when it comes to experiment content. With the larger volume of content and the digitalization, audiences trend to wear several hats. Aiming to a more democratized creative process, you gain the ownership of your experience that you can optimize, enrich and make unique. When the current status quo is built on Entertainment as only leisure, the paradigm shift brings the idea that you can figure how you get and participate to the best experience out. I love this sentence from Walmsley & Franks work, which I think sums this paradigm shift up: “Everyone is the architect of their own experience, and at some stage in the creative relationship, responsibility and control have to be shared or handed over.” And if you are an architect, you need tools, to test, to share and to learn from others. You need to THINK, EXPLORE & INSPIRE.