Monday, 4 March 2013

Online TV and Movie Content. It's killing Television. It's killing Cinema. It could kill Advertising because it's ad-free.



Internet-only film businesses, have really declared war on Television. Netflix have invested 100 million usd in the remake of the British series, 'House of cards' with Kevin Spacey, as you'll probably know. 

A 26 episode series that's not on Television.

Rather too, than asking people to wait week-by-week for each episode, it was all released at the same time to subscribers. Viewers could then schedule it as required, as it suited them - something which kills the rigidness of TV schedules.

Indeed they produced 6 trailers. Each one targeting the particular demographic of the Netflix subscriber. So female subscribers got the weepy trailer, young males the fight scenes - another thing you can't do on traditional TV.

Online content is also not beholden to advertisers...rather, is driven by subscriptions and subscribers on fixed monthly rates.

Consequently programme viewership fluctuations, is not the issue anymore for online broadcasters - another gaping hole in the way TV works and is funded. Netflix, with nearly 30 million subscribers, just needs to keep attracting those subscribers to stay or join the service, nothing more. Whereas, TV stations have to keep reaching out to audiences, to get them to watch, to generate Ads, when we know, through second screen viewing, their audiences are shrinking. No, Collapsing.

Netflix has already commissioned another feature, a horror called 'Hemlock Grove' and because they're not advertising dependent, they need to simply feature on quality broadcasting

But online broadcasters will force change too. Voice control is the future too, for Netflix rather than "gesture control" being considered by other online broadcasters (like the Xbox function). So you simply "call out" your movie and up it comes and online will eventually create too many features that will just force TV stations to close because they simply haven't the technology to match.

Online broadcasting is affecting traditional movie-making too and not just TV.

Profits in the traditional movie business are down. Between 2004-2011, the big 5 studios profits were down -40%. Time Warner for example, in generating 12 billion usd in 2012 from film, generated 14 billion usd from TV/Online. And that balance is quickly shifting away from traditional movie-making towards content making that has subscribers attached such as cable/online.

Fees to cable/subscriber channels are estimated to be in the US, about 32 billion usd a year and growing +7% annually. And it's this steady income that content makers want to chase, rather than traditional TV dependent on advertising swings and thereby, focused on shows being popular (or not). Cinema revenue for film is equally volatile with "hits" and "misses". Content makers want broadcasters with steady income.

Film Theatre/Cinema attendance is not a growth business with too many distractions, such as Netflix, at home on multiple devices. 

DVD/Blue Ray sales are obviously down too, about -46% in the past 6 years. DVD Pirating in Russia and China has become an issue too nevermind general illegal downloads. Actor and Director salaries are being cut, as are the number of projects. 

It is the likes of Netflix that has been the lifeline for Hollywood, with big talent like Spacey/Hoffman/Jeff Daniels moving away from movies into online content. 

Equally too, Netflix and Amazon's Love film are competing for broadcast rights against traditional broadcasters and have the cash war chests, to win. It's estimated that Netflix spent 5 billion usd in 2012 acquiring content.

In terms of 'connected devices' such as smartphones, games consoles, laptops, ipads and so on, Americans own 2.6 of them in each household. So the "theatrical window" of holding back online movie release is now becoming defunct to allow movies access this online market. 'Arbitrage' with Richard Gere, was released everywhere at once and understood to have made 3 times the money because it had a massive global audience at once.

But movie makers don't like it (because they'll lose the cinema premium) and theatre owners don't like it either.

So digital programme/content provision is winning time and time again meaning traditional movie makers will switch (as will talent) into creating online content. It also means traditional TV stations are getting more and more stuffed.

They're being outbid for content; they're losing audiences; they're losing money (180m+ euro a year in Ireland for RTE) every year; their content is poor; and their model has a doubtful future. 

Even their anchor product - news - is being covered better and quicker (much quicker) by national newspapers online.

This game is over.