CNBC posted an article this week that stepped, one by one, through the supposed core functions of a movie studio to showed the ways they are being disrupted. Allow me to paraphrase...
- FINANCE: co-financing deals are in abundance and companies like Netflix and Amazon are diving headfirst into the original content game (see the upcoming David Fincher/Kevin Spacey original series 'House of Cards'). In simplest terms, anyone can write a check.
- PRODUCTION: Digital technology has made production less expensive than ever. You no longer need a movie studio to get your hands on a camera.
- DISTRIBUTION: As home video turns into 1's and 0's, distribution is being democratized in a big way. With the right deals in place, a new player can distribute a film into almost every American home for virtually no cost (via Cable and Broadband VOD providers and game consoles). Furthermore, audiences are becoming more willing to consume their content on smaller, more personal screens. There may be no substitute for theatrical but even companies like Tugg are starting to emerge with models that diffuse exhibitor risk by letting audiences demand and organize screenings for the film gets booked.
- MARKETING: This arguably the strongest and only remaining true core competency that the studios retain. Thus far, social media and digital marketing has not replaced the 8-9 figure ad spends that studios are using to launch tent poles... but if marketing is the only differentiation, will we see these behemoths spend each other into the ground trying to explain what John Carter and Battleship are actually about?
As the music labels struggle to reinvent themselves as artists no longer need them to make records or connect with their fans, the movie studios have a major challenge ahead. How can they harness the technology that is tearing down the walls they have build to run more efficiently and do what they are supposed to be good at... creating, distributing and marketing great entertainment? Lest they go the way of the labels, the magazines, the dinosaurs.
Full article here