Did you watch the Oscars? Did you care about the Oscars? Statistically, if you’re American, you cared 25% less than 10-15 years ago. US movie theaters sold..<\/b>
Did you watch the Oscars? Did you care about the Oscars? Statistically, if you\u2019re American, you cared 25% less than 10-15 years ago. US movie theaters sold 5.5 tickets per capita to the American public in 2002 , a number which has since declined to 4.1 in 2016. The overall box office looks healthy, thanks to ticket price inflation, but behind the headline numbers, Hollywood is not what was.
Of course this doesn\u2019t mean it\u2019s doomed; but it\u2019s now a truism, or even an understatement, to say that the movie and television industry has been \u2014 and will be further \u2014 irrevocably transformed by technology, right down to the fundamental business models. An excellent way to track this transformation is to follow the estimable Matthew Ball , Head of Strategy at Amazon Studios, who has a real knack for tweeting out eye-opening charts such as:
and
The Economist , echoing Ball, published a recent special report about the entertainment industry, headed \u201cWinner takes all.\u201d Put briefly: so much for Chris Anderson\u2019s infamous Long Tail theory, which is deader than a dodo. Instead,
The numbers are remarkable. Disney made last year\u2019s five biggest box-office hits, and pulled in 20% of all worldwide film revenue last year with a mere 14 films. There is so much scripted television out there that if you sat at home and watched a new series, in its entirety, every day of the year, you would still miss out on roughly 100 shows.
And of course this applies to books and music, too. The book industry has lamented the \u201c death of the midlist \u201d for many years (which, as something of a midlist novelist myself, I watched with vaguely bitter fascination\u2026) during which it too became a winner-takes-all hit-driven industry. Spotify reported in 2014 that 20% of the songs in its catalog had never been played, ever, by anyone. If a long tail falls in a forest, and nobody hears it\u2026
All that without even getting into such factors as the rise of e-sports
and the simultaneous decline of televised sports
and, of course, the smartphone revolution that has completely upended decades of screen habits
\u2026but let\u2019s not get into all that right now. Let\u2019s just talk about the increasingly winner-take-all nature of the entertainment biz. Does that remind you of anything? 90% of attempts are failures, but a few are such megahits that they justify the entire industry, everyone\u2019s full of hot air and bluster, and doesn\u2019t dare offend anyone because you never know who might craft the might megahit \u2026 oh, that\u2019s right! It\u2019s just like Silicon Valley.
The similarities really are striking. VCs \u2190\u2192 studios. CEOs \u2190\u2192 directors. Board members \u2190\u2192 producers. A general Pollyannaish ecosystem-wide optimism because there\u2019s no upside in being a pessimist, as the overwhelming majority of failures are ultimately simply absorbed into the winners to be spun out again as new attempts?
\u2026Well, that makes sense for the Valley. Startup costs keep diminishing, so it\u2019s perfectly OK for 90% of startups to fail \u2014 there\u2019s some risk of Series A and Series B overfunding, but that\u2019s manageable, and even if\/when mid-size companies \u201c vaporize ,\u201d the Amazon \/ Apple \/ Facebook \/ Google \/ Microsoft behemoths just keep going from strength to strength. Meanwhile, while the smartphone megaboom may soon be over, the market for technology in general is just going to keep increasing, in both dollar and population terms. So the Valley encourages an ever-growing profusion of startups; if anything, most Valley luminaries think there aren\u2019t enough of them.
But Hollywood? Hmmm. Its megacorporations are, with the possible exception, not remotely as secure as the tech industry\u2019s Stacks. Movie marketing and production costs are soaring, not shrinking, as are TV production costs. And while the global market keeps growing, the US box office is stagnating in terms of dollars and shrinking in terms of tickets, which in turn incentivizes Hollywood to make movies that play especially well internationally, eg superhero and animated franchises.
Can Hollywood too encourage ever more \u201cstartups\u201d \u2014 new movies, new series, new events \u2014 or will there come a reckoning after which it is forced to be far more selective about what\u2019s produced? Would the Valley still be the Valley if it kept getting more expensive to launch a startup, rather than less, and if firms were strongly encouraged to look to the Chinese and German markets from Day 1, because America was basically zero-sum? Obviously not. Would the fundamental business model of the Silicon Valley ecosystem even work, really, in such circumstances? Maybe \u2026 maybe not. To my mind, that\u2019s the experiment Hollywood is currently conducting. Do they know what they\u2019re doing? We\u2019ll find out!<\/p>\n