How to Stay Profitable in the Age of Streaming

By de Chalendar, Guillaume | Screen International, December 9, 2016 | Go to article overview

How to Stay Profitable in the Age of Streaming


de Chalendar, Guillaume, Screen International


Now, perhaps more than ever, is a great time for movies and television.

The demand for quality entertainment has never been higher and viewers can watch what they want, when they want to, with literally the touch of a button. Producers have more options, too; with streaming services distributing original content, they no longer have to rely on the big studios to green-light a project.

But can they still make money? Moviemaking has always been expensive and risky. With the emergence of competitive technologies and powerful new players like Netflix and Amazon, the marketplace is even more volatile and challenging.

The filmed entertainment industry is in the midst of a major transition, similar to that experienced in the music business 15 years ago. The big disrupter is streaming video, and the leader of the revolution is Netflix. In addition to being a major buyer of content from Hollywood, Netflix is increasingly producing its own programs. Along with competitors like Amazon and Hulu, Netflix has the clout to set terms with producers, in the same way that Wal-Mart holds sway over its clothing and grocery suppliers.

As the industry shifts, feature films packed with high-caliber casts and produced by major studios will continue to thrive, drawing audiences into newly revamped cinemas. Going to the movies has become an experience similar to attending a concert. Big-budget movies still see record profits. Star Wars Episode VII: The Force Awakens brought in the most box office revenue in 2015 worldwide, even though it was released in December. As of June 2016, the movie had generated nearly $2.1bn in worldwide ticket sales.

The small screen

The television landscape is changing, too.

Television budgets are significantly bigger and some of Hollywood's most talented players are producing content for television. A genre that was once looked down upon is now very attractive for the creatives in the industry. Since producers can get orders for a series or mini-series of six or more episodes, they have space to describe characters in more depth and ultimately tell a better story. Television is most certainly no longer the poor cousin of the feature film.

On the other end of the spectrum, there is still a market for artfully-made independent films. Most of these films are financed by wealthy individuals and sometimes by government agencies willing to take equity stakes. However, movies that cost $20-$60m to produce will have a hard time competing, largely because gauging demand for a mid-budget production has become more challenging. …

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