Entertainment:
A Changing Industry
Movie Production
But how can we say that the industry is changing? It appears that movie production has been fairly consistent. It's easy to think based off of the graphic below and similar statistics that the entertainment industry is stable.
Movie Theaters
Ticket prices are rising while sales are falling.
But how are consumers actually viewing those new movies? Ticket sales for movie theaters in the US have been significantly decreasing over time while the price of a ticket has been significantly increasing. This should be a red flag for traditional production companies because their movies are reaching much fewer people than they were before. Prior to streaming services, you had to go to the movie theater to see new content. Now, with platforms like Netflix creating original content that is just shown on their streaming services, new content is viewable more easily. Content is also bundled together so there are many more options available.
Streaming Gains Popularity
Streaming vs. Traditional Television
Younger generations are not watching television and are instead switching to streaming shows. As production companies that make money off of television advertisements based on number of viewers, this is also a huge red flag because the number of viewers is steadily decreasing.
There is also a steady increase in Netflix subscribes. This is occurring in conjunction with the last points about fewer and fewer people watching traditional television and going out to movie theaters. Netflix and other streaming services have created a new distribution platform for almost all media types. Not only is this platform less expensive than traditional cable, it is easier on viewers as well. There are more options because shows are bundled, shows can be watched on the customer's timetable, and the use of "big data" allows streaming services to anticipate what a customer will enjoy watching because of previous behaviors. The changes to the distribution channels have opened up many more areas of change in the industry. Production companies need to re-evaluate their old business models because the entire industry is currently going through a foundational change.
- Concepts from Smith & Telang
Revenue
One particularly interesting note is that revenue has stayed constant for traditional television over time despite the decreasing number of viewers. It is unclear why from the data but one possible reason is that advertisers also perceive this change in viewership as temporary instead of treating it as a new and more convenient distribution channel.
The internet is changing the way customers want to view content.
There must be a shift in the business model of production companies if they hope to remain competitive.
Images: Canva.com
Inspiration: Streaming, Sharing, Stealing: Big Data and the Future of Entertainment by Michael D. Smith and Rahul Telang
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