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OTT Video Threatens Hollywood's Summer BlockbustersNearly two out of every three respondents are going to see fewer movies this summer, because of the quality of TV shows that are now available to them. A survey conducted by US research firm Miner & Co. Studio found that an increasing number of original first-run shows are now offered in the summer months, threatening the success of the traditional summer blockbuster from Hollywood. According to the study, 72% of respondents would choose TV over movies; 73% felt that TV stars influence their content selection as much, if not more, than movie stars; and 67% felt that TV shows now have better writers and directors than movies. In the past, big-budget summer blockbusters were highly anticipated releases, with audiences lining up outside movie theaters to get early tickets. Conversely, TV networks would avoid launching new shows till September, believing that the weather would draw people outdoors, on vacations and generally away from their TV sets. However, the emergence of OTT video and multiscreen, on-demand services from pay-TV operators has changed consumption habits. Consumers can now take their video with them on holidays or view them when convenient, even if they are spending time outdoors. This has driven a shift in the structuring of TV seasons, where the traditional fall and spring line-ups are being adapted into shorter seasons launched at multiple times around the year, with more first-run content. And the summer is no longer a no-go zone. Consequently Hollywood is reaching out to international audiences more purposefully, but this is having an effect on its creative content. Previously it was TV shows that had to be more family friendly and movies that could have more sex, violence and be more edgy overall. But streaming services are not required to follow broadcast guidelines, and in a world with VoD, the concept of a "Safe Harbor/Watershed" time (before which content had to be suitable for all members of a family) no longer applies. So now it's TV content that is edgier and allows producers more creative freedom. And that quality is being recognized. Seventy-six percent of respondents in the Miner & Co. survey believe that there are more good TV series now than there were before streaming was an option, and 80% felt that the quality of writing, acting, production, and directing in these shows was good or very good. This could have significant implications for the video ecosystem. Hollywood movies have always sat at the head of the video value chain, with big budget starrers being the cherry on the top. The big six movie studios have always had the most negotiating power and have often held up deployment of new digital distribution technologies. Now it seems the power is shifting. TV shows are becoming the new summer blockbuster, except they are available all through the year, on-demand and wherever you want to watch them. As Teddy Zee, former executive at major studios Columbia Pictures and Paramount Pictures Corp. said, "It's new competition, new distribution and new technology. We've all seen what happened with the music business. Hollywood needs to learn its lesson." He felt that Hollywood had spent decades building up a strong position focused on the theatrical release, and was trying too hard to protect it instead of changing. He pointed out that even though digital technology is reducing production costs, movie studios are just spending more money on even bigger special effects and stars. OTT providers meanwhile, are producing 250 hours of TV programs for the same cost as one big-budget movie that doesn't even last two hours. (See Hollywood Losing the Digital Plot, Says Former Studio Executive) But what about those special effects and big-budget visuals you can only enjoy in a theater? Zee and others argue that Virtual Reality (VR) offers a better experience than a theater can. Essentially a headset can recreate a theater in your living room, allowing for an equally immersive experience without having to go anywhere. A new generation of consumers may well agree with him. But while its true box office revenues have not been rising consistently, they haven't exactly caved in either. This is true even for domestic revenues, which were $11.3 billion for 2015 according to movie data provider The Numbers . That's substantially lower than the peak of $12.8 billion in 2003, but fairly consistent with revenues over the past 20 years which have have fluctuated between approximately $10.5 billion and $11.5 billion. However, if we delve a little deeper into the estimates it's clear ticket sales have been falling quite steadily. In 2002 nearly 1.6 billion tickets were sold, but in 2015 that figure was just over 1.3 billion. That's a sizable difference of well over 200 million tickets. The reason it's not showing up in the top-line revenue figure is because the average ticket price rose from $5.81 to $8.43 over the same period. So Hollywood is able to command price increases, but not without affecting ticket sales. While movies are eventually released via other channels, including TV, the movie theater has always been the most important, high-profile and highest-priced distribution channel. It's also been the cornerstone of the studio's market strength. If that foundation is indeed being threatened, the studios could be in serious trouble. — Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation |
Contentious issues that are likely to fuel lawsuits and angry blogs in the coming year.
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On-the-Air Thursdays Digital Audio
ARCHIVED | December 7, 2017, 12pm EST
Orange has been one of the leading proponents of SDN and NFV. In this Telco Transformation radio show, Orange's John Isch provides some perspective on his company's NFV/SDN journey.
Special Huawei Video
Huawei Network Transformation Seminar The adoption of virtualization technology and cloud architectures by telecom network operators is now well underway but there is still a long way to go before the transition to an era of Network Functions Cloudification (NFC) is complete. |
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