Dearth of Content

The amount of content being produced under a “TV” umbrella is continuing to grow.  Other smaller form content is also growing.  The question remains about what kind of quality is included in these numbers.  455 entries were totaled by FX Networks for 2016 and the count is at 342 to date for 2017.  Streaming services lead the charge in growth with 62 this year and 79 yet to air compared to 51 last year.

With all this content, it is interesting to note that there aren’t more attempts to start streaming services.  SEESO, a comedy service at $3.99/month with shows by Dan Harmon and full seasons of SNL is closing its doors.  Facebook and Amazon Now are looking to jump into the user created content as well as scripted services.

This is a good read on short form content.

The question remains, when will quality become a discriminator against the volume of material out there?

Marketing and Bundling: Disney’s New Star Wars VR

Disney has announced that it will release a VR experience at shopping malls.  Star Wars:  Secrets of the Empire will first appear at Downtown Disney in Anaheim and Disney Springs at Walt Disney World.  The Void which is partnering with Lucasfilm to create the experience has worked on similar projects.  Part of the immersive experience involves creating VR controllers that match props from the film for the experience.

This is just the first wave in a premium offering of VR outside of the normal Google Cardboard experience.  With IMAX theaters investing in VR equipment for similar experiences expect to see similar packaged experiences with all sorts of movie franchise releases.

TV boxes are dead, we just don’t know it: Xfinity Update

Comcast has released more concrete details on its bid to join the parade of small, bundled TV packages targeted for millennials.
Xfinity Instant TV is projected for release in the later half of the year. They are still testing prices, but it sounds like they're shooting for the $15 a month range according to Variety.

At first that sounds high, until looking at what others are doing.

The Sling skinny bundle starts at $20/month with Sling Orange with 30 channels and $25/month for Sling blue with 40+ channels with a few channel overlaps. Add-on packages ranging from $5 for kids bundle to $15 for HBO.

As a baseline, DirectTV Now offers 60+ Live Channels at $35/month with HBO and Cinemax add-on for $5 each, and Starz add-on for 8$. There are of course discounted bundle options for Internet and phone bundled together.

HBO Now comes in at $14.99/month. (This is also how much you would pay to get HBO through its prime account)

HBO seems to be the most responsive by finding a way to get their content on whatever platform is out there. I'm curious what's different with HBO through Sling as a $5/month add-on.

Coupled with Amazon's distribution moves and the fact that Apple is no longer going to be making any devices that don't support apps, media business is going to be about who can get their product on multiple platforms or create a self contained ecosystem like we looked at last time.

TV cable boxes will become simply an internet router with the ability to "airplay" from any device.

What would you be willing to pay for?

MGM’s Single Property Streaming Service: Stargate Command

MGM announced its upcoming streaming service called Stargate Command which will air their new show Stargate: Origins, July 20, 2017 at the San Diego Comic-Con.  The streaming service is set to be the most comprehensive collection of the Stargate franchise available with both paid and free elements.  There will be community hubs and elements also available.

“Stargate Command will open a new door for the community to celebrate and interact with all content in a way that has never been done before,” said Chris Ottinger, president of MGM Television.  (Stargate fans click here.)

Looking at different platforms for distribution of created content like Netflix, Amazon, or traditional Movie studios and TV networks, the question then becomes should this be the way studios handle large tentpole franchises?  Is there an avenue here for the Indie filmmaker?  I see full blown universes like Marvel, Star Wars, and DC being profitable with stand alone streaming services.  They have large followings and large libraries of content.  The only reason a studio wouldn’t do that is to leverage their tent poles to sell less desirable content by bundling them together.  If you want to buy Wonder Woman as a Cox, ATT or other streaming service, you have to also buy “King Arthur: Legend of the Sword.” 

The Indie Filmmaker may not be able to get enough traction or create a large enough library, but the door is open, you just need to get server space, an app developer, and really cool content.

The Netflix Problem:  The Price of Prestige

Every time we turn around Netflix has paid out big dollars for someone’s show.  Indie and beginning filmmakers drool at the thought of Netflix buying their show.  Even though Amazon offers a better financial return than Netflix, it doesn’t have the popular stigma that a “Netflix” show does.

Part of that is because Netflix shows are continually in the running for awards.  91 Emmy nominations this year alone for show’s like “Stranger Things,” “House of Cards,” and “The Crown.”

While its current valuation by Morgan Stanley as of March 2017 stands at $11 Billion, Netflix generates about half the profit per hour viewed of traditional TV Networks.

What’s the price of prestige?

The question is how long can Netflix sustain their model of shelling out big bucks when it has $3.34 Billion in debt obligations and $15.3 Billion in content obligations, and about half of that wasn’t reported on their last statement according to a report in Variety.

While the general public is not going to know what Netflix’s target subscriber number will be before it begins to scale back, the bad news is that it’s safety net in this situation is the price of subscription.  Raising the subscription price by $1 would raise $1 Billion incrementally a year from when it chose to do so.

The reality is that eventually Netflix will raise its prices and cut back on programming.  Let’s face it, the shows that are most successful are the ones that have been built totally in-house.  Tack on to that, that there are several companies prepping to release actual viewership of these shows that to-date have been unavailable to anyone outside of Netflix.

There are still a few years before this happens, but it will happen.

The Secret to Wonder Woman’s Success

Wonder Woman continues to open doors and break some boundaries especially for a tentpole superhero movie. It has reached a male to female viewer parity which is rare in an industry where the target audience is generally males 18-34.

They also attracted 6% more infrequent movie goers than normal. They also attracted a larger 50+ crowd than normal, which according to a study by Movio released at CinemaCon has a larger attendance rate than expected with 6.8 movies per year versus 5.2 movies a year for the average movie goer.

Read more at Variety.

But why?

I believe it comes down to a simple reality I would call story. While it had the superhero moments in spades, the story was more than just about spectacle and trying to overwhelm the senses. It had heart and showed what it meant to be human.

 At the Karlovy Vary Intl. Film Festival a panel discussed the Central and Eastern European film industries need for better script development.

As reported in Variety, an American writer and Sundance Film Institute expert Erik Jendresen said,

“We can’t hold onto our vision in Hollywood. It’s a fear-based industry where they value money, not story. Studios are concerned only with tentpoles. They have no connection to heart and soul and storytelling, even though they act like they do.” He added that if you want to write films about basic human interaction, “you’re on your own.”

I’m currently in a class on leading creative development from a producer’s perspective. It is interesting, because I absolutely agree that decisions are being made out of fear, but when you go back to the basic thought of where does any movie come from, a script. A single script out of thousands and thousands, handled by hundreds of hands before it even gets the green light to get made, and even then can fail. Some people say all the interference made the movie fail, but as a writer I also know that if no eyes but mine see my script it could be junk. So of course there’s fear, but what’s the alternative?

Netflix, Amazon, and now even Facebook are going after content. There are opportunities for more stuff to get made and released. On the flip side, if you scroll through their content library you can find an even larger range of shows and films that fail even though we only talk about the popular ones like “Orange is the New Black” or “House of Cards.”

Wonder Woman succeeds because of the story told. Star Wars IV – VI succeeded because of the story told. Script development is not an easy process, but studio’s like Pixar absolutely depend upon it.  

See Ed Catmull’s book Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration

The Quantum MBA:  Where the Media Business, Story, and Technology Collide

Welcome to the Quantum MBA blog.  I’m Dan and I’m about to finish my MBA with an emphasis in Film Producing.  In this blog, I want to share my thoughts on all aspects of the Media and Film Industry from emerging trends in business and technology and how those impact story and those of us out there trying to get our stories told.

No longer are we restricted by available technology, but reading the markets and understanding how everything fits together is still largely a mystery to many of us.  Not only will we explore trends as they emerge, but I would also like to explore:

1. Business Models for the Indie Filmmaker.

2. Virtual Reality and Augmented Reality in the entertainment space

3.  The utilization of story as the key resource that differentiates the value proposition we offer as filmmakers from everyone else.

I hope you will join me on this journey.

Dan, The Quantum MBA