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Movies Entertainment

Can Streaming Companies Replace Hollywood Studios? (vanityfair.com) 138

"Movie-theater attendance is down to a 19-year low, with revenues hovering slightly above $10 billion," reports Vanity Fair, arguing that traditional studios should feel threatened by nimble streaming companies like Netflix and Amazon, which produced the film Manchester By The Sea -- nominated for six Oscars. An anonymous reader writes: Amazon CEO Jeff Bezos attended the Oscars, prompting host Jimmy Kimmel to joke that if the film won, "you can expect your Oscar to arrive in 2 to 5 business days, possibly stolen by a GrubHub delivery man." But it's a symbol of an inevitable disruption in Hollywood. "Studios now account for less than 10% of their parent companies' profits," writes Vanity Fair, adding "By 2020, according to some forecasts, that share will fall to around 5%... Some 70% of box office comes from abroad, which means that studios must traffic in the sort of blow-'em-up action films and comic-book thrillers that translate easily enough to Mandarin. Or in reboots and sequels that rely on existing intellectual property." Former Paramount CEO Barry Diller famously said "I don't know why anyone would want a movie company today. They don't make movies; they make hats and whistles."

The article makes the case that Hollywood, "in its over-reliance on franchises, has ceded the vast majority of the more stimulating content to premium networks and over-the-top services such as HBO and Showtime, and, increasingly, digital-native platforms such as Netflix and Amazon. These companies also have access to analytics tools that Hollywood could never fathom, and an allergy to its inefficiency."

The article argues that with A.I., CGI, big data and innovation, "Silicon Valley has already won," and that "it's only a matter of time -- perhaps a couple of years -- before movies will be streamed on social-media sites."
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Can Streaming Companies Replace Hollywood Studios?

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  • there's that DMCA thing, too.
  • by s.petry ( 762400 ) on Sunday February 26, 2017 @10:54PM (#53936171)

    Hollywood could have been utilizing these services for at least a decade, and probably helped push the technology along. They would rather have people visit a theater since their profits can be higher and media tightly controlled.

    I don't go to movies, and haven't for about a decade. The mandatory 15 minutes of commercials, price for the film, hassle of parking, insane price for drinks and a snack all add up to a big "no thanks" from me. If they streamed I'd probably pay for a movie now and then, but as is I wait for it to be on TV.

    • by amiga3D ( 567632 ) on Monday February 27, 2017 @12:05AM (#53936335)

      I can't believe what actors make for a picture. Millions of dollars for what often turns out to be a flop. Meryl Streep got paid 5 million for her role in Rick and the Flash which was a pretty mediocre film but managed to actually gross about 40 million against it's 20 million dollar budget. Meryl Streep was a quarter of that budget and by modern Hollywood standards that salary isn't all that outrageous. Actors in Hollywood's heyday worked a lot, lot harder and made a lot more movies than the elite Prima Donnas that grace the silver screen nowadays. Mega millions for films that are mega flops. They think streaming is the reason they're losing revenue? I'm sure it isn't helping but a lot of the stuff on TV today is better than the average studio movie. They're losing money because they suck.

      • by Anonymous Coward

        Plus so little is actually acting these days. Its all about post production.

      • by Anonymous Coward

        Meryl Streep was a quarter of that budget

        And probably the reason why anyone was tricked into watching the movie at all.
        Actors get paid a lot because they are the brand that sells the movie.

        • by amiga3D ( 567632 )

          I like Streep as an actress but I knew her acting as a Rocker was a stretch. She played it for all it was worth but the movie sucked. Yes, without Streep it would have been straight to video.

      • by rtb61 ( 674572 )

        Well, cheer up. Computing power and life like animation will kill Hollywood, dead. Animation studios will take over, which means, writers and graphic artists win and the current pseudo celebrity muppets will shrink in number back to stage work only. With animation engineering and virtual robotics (virtual actors), the amount of content to be produced and be auto translated will explode, coming from all over the world.

        • by mwvdlee ( 775178 )

          And with motion capture, actual acting talent matters more than physical appearance.

          • by amiga3D ( 567632 )

            Avatar was pretty good but it never looked like more than a cartoon to me.

          • by rtb61 ( 674572 )

            I gather the concept of virtual robotics eludes you. Virtual robotics is about creating a virtual environment in which the robotic logic functionality is tested outside of the need to actually assess and interpret a real environment. The animated robot has accurate exact knowledge of it's virtual environment and can interact to with it based upon pre-defined rules. It is also useful for advancing robot logic without being bound by the need to assess and interpret real environments in real time. The initial

      • Streep is an exception (and good for her if she can still pull in that kind of money.) Most actors don't pull in anything like that amount of money, and even those that are able to pull in six digits or, occasionally, seven, digits per movie do so usually knowing they have a shelf life, and that Hollywood will discard them when they get into their 30s. At that point, many know they'll be difficult to hire in any other professions, as they just devoted much of their lives to a single profession, and have no

        • I've never been a fan of the "shelf-life" mentality with regard to professional compensation. In fact, I think it's total bullshit. No one is guaranteed income/royalties for life. If you age-out of your chosen profession...to be clear, the profession you chose...then you go and do something else. You go back to school, retrain, do whatever you need to do to continue being a production member of society. Or you can retire if you're able to and that's what you want.

          It's likely that no job is guaranteed. You c

        • by Rakarra ( 112805 )

          20 million, incidentally, is dirt cheap for a modern movie (to put it into perspective, the pilot episode of the 2000 TV series Dark Angel cost that much)

          Actually, less than $5 million is dirt cheap -- very very few movies are now financed at $20 million. This article is a few years old, so maybe financing has changed, but the money now is in blockbusters, and you can get financing if your movie is extremely cheap -- as in under two million dollars.

          Why David Lynch and John Waters can't get movies made anymore. [flavorwire.com]

      • by mwvdlee ( 775178 )

        Without Meryl Streep, the movie would have probably been pretty much the same, would have cost 15 million and would have grossed roughly zero million dollars.

      • by AmiMoJo ( 196126 )

        Actor's pay has nothing to do with how hard they work. It's about how much money they bring in for the movie. If having their name on gets people to watch it, instead of it ending up as a limited release and then straight to $10 DVD movie then it's worth paying them a few million.

        Same with athletes. Clubs pay a lot for players not because they work really hard, but because they generate lots of revenue.

        • Same with athletes. Clubs pay a lot for players not because they work really hard, but because they generate lots of revenue.

          It's different there. With professional athletes, what generates revenue for a club is easier to correlate with quantifiable performance. More wins means more butts in the home field's seats. A player not generating value [wikipedia.org] gets relegated to a developmental league.

      • They're losing money because they suck.

        For anything that isn't a Marvel or Star Wars movie, yeah. Write a mediocre script, shoot the first draft, cut a check for $100 million to a chinese digital effects company, slap a franchise name on it and collect a billion dollars.

      • by Rakarra ( 112805 )

        Meryl Streep was a quarter of that budget

        That's because that was a somewhat small budget for a film these days. Though it was coming surprisingly close to the "mid-range budget" movie that doesn't really exist anymore. The huge blockbuster and the very small independent film have pretty much taken over.

    • You can't sit for 2 hours without needing to drink/eat something?
      • by s.petry ( 762400 )
        Yes, that is exactly the point I was making. It is physically impossible for anyone to sit for 2 hours without food or drink... Sheesh. I hope you recognize sarcasm.
        • It was a poor attempt at sarcasm, since your point was that you never go to the movies for a variety of reasons. Or did I totally miss the sarcasm and you actually go to the movies all the time?
  • Lets See (Score:5, Insightful)

    by Anonymous Coward on Sunday February 26, 2017 @10:59PM (#53936183)

    Picture, better at home
    Sound, better at home
    Food, better at home
    Seating, better at home
    Rest of Audience behavior, more controllable at home

    Other than a lock on new releases the theatres have nothing. Producers would make more money with a secure direct to home pay per view service.

    • by amiga3D ( 567632 )

      You're kidding I know. The only valid comment was the one about audience behavior. Well, food maybe although I like theater popcorn. I go to the theater strictly to see blockbuster movies on a giant screen and with immersive sound. It's an expensive treat but some movies just Must be seen on the big screen.

      • I go to the theater strictly to see blockbuster movies on a giant screen and with immersive sound. It's an expensive treat but some movies just Must be seen on the big screen.

        You just don't have a good enough A/V system at your house.

        • Not everybody is the AV nerd who made it good. We know, we know. You were really good at operating that 16mm projector. But while you were finessing the operation of the equipment, the rest of us were enjoying the movie. Do some research about aesthetic distance as your homework assignment.

        • You're right, I don't. It's not really worth spending the money for it when I can go to the theater. Considering I might go to 4 movies or so a year, so it'd probably be at least 5 years before it paid for itself.

          I'm with the GP on this one. I'll go see the big blockbuster on the big screen. No complaint. But I'm not going to spend $25 to go watch a cute rom-com on the big screen. I don't really gain anything from seeing it in the theater versus watching it on the TV or on my iPad.

          • I don't really gain anything from seeing it in the theater versus watching it on the TV or on my iPad.

            That's mostly true, but not entirely. Most films don't really benefit on having the larger screen, or 3D, or rumbling seats, or spraying your face with water or whatever they do. But that doesn't mean there's no benefit to the theatre setting.

            Further up in the discussion whoever57 said "You just don't have a good enough A/V system at your house." Most people don't. I know I don't. Either the viewing angle's off, or there's too much light, or the sound mix isn't great, or whatever. On top of all that, s

          • But I'm not going to spend $25 to go watch a cute rom-com on the big screen. I don't really gain anything from seeing it in the theater versus watching it on the TV or on my iPad.

            But your wife/girlfriend would.
            If you had one.

        • 'cause the listening space wouldn't factor in at all...

        • by Rakarra ( 112805 )

          I go to the theater strictly to see blockbuster movies on a giant screen and with immersive sound. It's an expensive treat but some movies just Must be seen on the big screen.

          You just don't have a good enough A/V system at your house.

          Unless you're really sinking tens of thousands of dollars into your home setup, that system isn't going to be anywhere as good as a -good- theater.
          Watching Hacksaw Ridge in the theater with incredible, perfectly calibrated sound made me feel like I had PTSD.

      • The secret to theater popcorn at home is a kettle popper (even the cheap $40 one by Nostalgia Electronics) and 4oz Pop Weaver "Naks Paks". This crap called "Flavacol" seasoning is the main reason theatre popcorn tastes so good. The weaver packs have the popcorn, oil, and seasoning all ready to go. You can get them on ebay in lots of 6 (versus buying the whole case).

    • Better picture maybe, but actually having better sound at home that at any decent cinema is damn difficult. Maybe you are rich and can afford a sound-proof room with big-ass speaker and amps, but most people can't.
    • by mwvdlee ( 775178 )

      Yeah, but how will you get your 30 minutes of advertising and anti-piracy messages?

    • Picture, better at home

      Picture is a fucking smartphone screen. A laptop is considered a reason to host a Superbowl party for today's generation.

      Sound, better at home

      Free earbuds are now considered audiophile-grade hardware, color me surprised.

      Food, better at home

      Of course it is. A bag of cheetos and a jar of nutella is an amazing "foodie" experience, when you're high as a kite.

      Seating, better at home

      Translation: My preferred movie experience is in my underwear.

      Rest of Audience behavior, more controllable at home

      Since introvert is the new fashionable thing, the only acceptable audience is none.

      Other than a lock on new releases the theatres have nothing. Producers would make more money with a secure direct to home pay per view service.

      Catering to demands is always the name of the g

      • by Rakarra ( 112805 )

        Since introvert is the new fashionable thing, the only acceptable audience is none.

        It's not introversion. But your theater audience can certainly foster a feeling of misanthropy.

    • Wife not talking to me during the movie because of pressure from the rest of the theater audience: Priceless.
    • You must have extremely shitty cinemas where you live. Around here, the standard is ridiculously high, picture and sound quality is spot on, people are generally very well-behaved and the seats are amazing (electric reclining leather armchairs!). I'll grant you that snacks and drinks are horribly overpriced, though.

  • by Anonymous Coward

    Like i.e. Netflix, that wanted to be a disruptor, and then went ahead and did the exact same fucked up international licensing, "sorry, even our own shows are unavailable in $yourcountry, 'cause we prefer money and licensed it to $local-media-mafia"...

    • With the difference that you can VPN around that bullshit, try that with a cinema.

      • by NotInHere ( 3654617 ) on Monday February 27, 2017 @12:19AM (#53936369)

        The local media corporations know this and have pressured netflix to ban VPN ip addresses. The stated goal for netflix is to offer their own portfolio globally unified, but maybe they'll drop that lie some time in the future. I mean its easy to say they were forced by the evil evil copyright holders to make VPN bans and DRM requirements, but suprisingly for their own "netflix original" media those same restrictions apply...

    • by xtal ( 49134 )

      That's why they're producing their own content.

      People don't care. They're sick of commercials and $200/mo cable bills.

      • People don't care. They're sick of commercials and $200/mo cable bills.

        Broadband Internet + Netflix + Hulu + HBO Now + Amazon Prime + CBS All Access + Sling (for ESPN) can add up fairly quickly as well, and Hulu and CBS All Access still show commercials to subscribers who don't pay the commercial-free surcharge.

        • by tmjva ( 226065 )

          Too bad Hulu can't seem to renegotiate lasting contracts. Good content disappears after a year or two, but the crap stays.

  • ...when the author has a primary financial stake in the outcome, or a strong political motivation to push that outcome.

    Not that it won't be true, but it is the very definition of bullshit. Right now, most of the prognosticators are predicting either Trump's ascension to eternal godhood, or his imminent crash into grim legend - same story there too, it's not a real prediction, but an attempt to shape the range of expected outcomes.

    Same story for hundreds of years of history too - look at any newspaper archi

    • Yeah I don't know what hubris the other people has infested. I for one must go, my horse carriage is waiting! The bookkeeping department of the steam engine manufacturing company I work at needs me, because I'm the only one who can use an abacus, and operate the telegraph.

  • Yes, Netflix will (Score:4, Insightful)

    by SuperKendall ( 25149 ) on Sunday February 26, 2017 @11:42PM (#53936267)

    Hollywood has become far too much a churn factory. Producing the same content endlessly...

    Netflix has really grabbed the reigns at producing a wide variety of content. Yes Netflix has Marvel stuff too, but even that is better than what Hollywood produces!

    The other reason Netflix will dominate is they are not afraid to make content available worldwide regardless of what audience it was produced for. The Netflix show 3% was targeted at the Brazilian audience but I really enjoyed the story and actors. No studio would have produced something like that and showed it in the U.S., at best they would have done a crappy American focused remake that watered down the point dramatically.

    • by swb ( 14022 )

      I think an advantage for Netflix is their ability to produce niche content.

      Studios have to aim for a broader appeal for any given film since they can produce and distribute fewer titles which usually have a higher budget and thus greater risk, and to hedge against risk they have gotten in the habit of re-doing what was popular before with the idea that it will be popular again. So they make a picture that's only of average quality to an average audience.

      By aiming at niche audiences, Netflix makes content t

      • by tlhIngan ( 30335 )

        I think an advantage for Netflix is their ability to produce niche content.

        Studios have to aim for a broader appeal for any given film since they can produce and distribute fewer titles which usually have a higher budget and thus greater risk, and to hedge against risk they have gotten in the habit of re-doing what was popular before with the idea that it will be popular again. So they make a picture that's only of average quality to an average audience.

        By aiming at niche audiences, Netflix makes content th

        • by swb ( 14022 )

          Netflix is also producing TV-style programming, which is different from Hollywood movies. The economics are different, the production values are different, etc.

          TV shows generally have lower production quality, but some Netflix originals I would say are near movie-quality, like House of Cards. It doesn't have the cheap TV feel that some of their series have, it's mostly on par with HBO's better efforts which I think are movie-quality.

          I don't see why you couldn't use the series format with careful scheduling to get movie quality for less money; make sure you can get maximum use out of existing sets, locations, costumes -- basically shoot extra footage.

    • But it's Netflix's ability to produce content pretty much entirely subsidized by their shiny disc rental service?

  • by Anonymous Coward

    There was some really good movies, and then there were the steaming pile remakes - like Ghostbusters, Batman vs Superman - I wouldn't be interested in watching that on a streaming service. The reason why streaming is "winning" at the moment is they're making stuff that people actually want to watch - that's new / original. If Hollywood learns this lesson, people will go back to the cinemas. What goes around comes around - many years ago when the VCR was first introduced, people said it was the death of the

    • We recently rented the new Ghostbusters from Redbox. It was funny! Not in any way highbrow... but it was Ghostbusters, for goodness sake!

      • by Rakarra ( 112805 )

        Eh. Ghostbuster's problem is that it was nowhere near as funny or as SCARY as the original. It was another bland Paul Feige movie with the same bland jokes he puts into the rest of his movies.

    • by AvitarX ( 172628 )

      I really expected digital distribution to lead to a lot more variety at cinemas, but it seems to have actually lead to quicker churn as the new blockbuster is able to be shown in six theaters for the first two weeks, displacing more films than it would have under normal situations.

      I suppose I should have predicted this after the long-tail was shown to not really play out on the internet as a whole.

      I still think there's money to be made for an innovative theater chain that really looks at what's available an

  • Apples and Oranges (Score:5, Insightful)

    by Tablizer ( 95088 ) on Monday February 27, 2017 @12:01AM (#53936317) Journal

    It seems 2 different things to me. The content producers and the content distributors are different groups with different specialties. The top producers and physical studios can rent themselves out to Netflix if the deal is right, for example. Neither is stapled to each other.

    The fact that Netflix and Amazon have produced a hit or two doesn't mean they will take over most content production. If they find a nice niche, competitors will copy that niche.

    • It seems 2 different things to me. The content producers and the content distributors are different groups with different specialties. The top producers and physical studios can rent themselves out to Netflix if the deal is right, for example. Neither is stapled to each other.

      Most of the top producers today are the physical studios, and the publisher/distributor. That's what this question is about; can new media companies like Netflix and Amazon achieve dominance over the entrenched megacorporations which make the majority of the top-grossing movies today? And of course, the answer is yes. The people who actually do the technical things rarely work directly for the studio on an ongoing hourly basis; companies which make movies which are entirely CG aside, most of the employees a

      • by Required Snark ( 1702878 ) on Monday February 27, 2017 @01:39AM (#53936565)
        Actually, no. You are confusing film production with a termite colony. It's not a bunch of workers spontaneously organizing and somehow making a complex structure. If your assertion worked then it would also be possible for a bunch of construction workers to just gather at a proposed building site and make a skyscraper. No one would ever suggest that could happen, but somehow there is a misconception that film making is not the equivalent of any other large scale industrial activity.

        Film production succeeds or fails on organization. Long before a single stagehand, visual effects person, costume designer, art director, etc, etc is hired, there are accounts, lawyers and producers laying the groundwork. Everything has a schedule and a budget and a org-chart for top layer of administration. That's why films can change directors, starts and scripts. The organization that supports all these roles is already running.

        You are also confusing distrabution with production. The economic model of production and distribution has changed a lot over the last hundred years or so. Until the late 1940's the studios were vertical monopolies. The studios made the films and owned the movie theaters. If you went to see a Warner or a Fox Studio film you had to go to a Warner or Fox owned movie theater. These monopolies were broken by the Department of Justice, which is why movie theater chains show films by any studio.

        There have been continuous change since the 1950's, because of broadcast television and the growth (and now death) of suburban malls. Multiplex theaters, wide screen 70mm film, THX/Dolby sound, and 3D are all a part of the change.

        Silicon Valley produces no content. Period. They don't make video games or TV or film. They may hire others to do these kind of things, but they are not the authors. When Amazon or Netflicks has original content, they are mostly taking over the function of finance and distribution which have historically been infrastructure supplied by the studios. All the rest is done by the existing film and TV production organizations. Silicon Valley is just another finance and distribution venue that supports the existing industry. In some ways it's like non-US production houses who employ Hollywood to make products intended for a non-US market. Hollywood remains Hollywood through all of this.

  • Future movies won't stream. Future movies will be that you download a script, several actors, default personality files and camera angle list as a single file.

    Then the computer will just render the movie as you want.

    Don't like the default Hugh Jackman as Wolverine? Fine. Replace the actor with Matt Damon and watch the movie your way.

  • For a big movie with complex effects?
    To make a really big US movie you need to get your actors and script to a low cost "Canada" to really enjoy the tax issues.
    Then move the product back to the US to have more expensive US staff work on the project with really expensive US private sector super computers.
    The script is easy to find. Actors exist in every state in the US with great talent and skills.
    The super computers are still too expensive per frame per artist in the USA.
    The ability to transport an
  • It's about making good movies. Which Hollywood has been incapable of for decades. I stopped watching Hollywood movies in 2006. I'd had enough.
  • Jeremy Clarkson famously ended his Top Gear BBC career by punching a staff member. Amazon snapped him up and The Grand Tour Replaced it.And because the they aren't held down by craptastic rules about empowerment, cultimultcheralism, and being politically correct have created an even better show to watch.

    So Yes, Hollyweird has to restructure and re purpose because they are going to lose a lot of eyes because it makes more sense to spend less and get more.

  • Got a suggestion... (Score:5, Interesting)

    by bferrell ( 253291 ) on Monday February 27, 2017 @01:28AM (#53936527) Homepage Journal

    Follow the money.

    Many, many moons ago studios owned the theaters and there were enforced anti-trust actions. A few years back I started wondering who owned what and found something interesting. Large amusement companies own the theater chains. They also hold large stakes in the studios and many production companies.

    Ya know how we sometimes stories about how a musical group get's a million dollar contract for 2 albums and all the production costs are billed by the record company against the contract... And all the companies and services being paid are subsidiaries of the record company?

    It seems to work the same way in movies. Except they got smart enough to not do it directly and the big amusement companies collect at every step of the way.

  • Disney just reported net income last quarter of $2.88 billion on revenues of $15.24 billion...

    CEO Robert Iger: "Driven by the phenomenal success of Star Wars, we delivered the highest quarterly earnings in the history of our company"

  • Movies at $6 to $8 are something you can do every friday.

    At $12! for non-3d, non imax- just ordinary screen and still pay $8 for popcorn and $5 for a drink, I pass.

  • Just like the music industry did for so many years (and still tries re piracy): the film industry is clinging to the old distribution model that served them for decades - trying their best to ignore the reality of the Internet. There is no reason for region-codes, other than to piss off your potential audience. Fewer and fewer people want to go sit in a theater full of ill-behaved idiots, when the quality of home devices is just as good.

    They could try to get ahead of the curve, and lead their audience into

  • Movie making used to be a craft. Now it's a franchise run by accountants trying to generate a return instead of generating a good movie.

    That's why the DMCA is required. People can see the movies are crap for free, but once a theater has your money they don't care if you enjoy it.

  • And I hope it happens sooner, rather than later. Hollywood "studios" are basically VC outfits these days, with little to no interest in entertainment or quality. That's why they keep shitting out remakes and sequels and casting celebs who can't fucking act.

    -jcr

  • "Movie-theater attendance is down to a 19-year low, with revenues hovering slightly above $10 billion," There is a simple problem...you pay your so called talent WAY TOO MUCH, the price of tickets is WAY TOO HIGH, the price of concessions is WAY TOO HIGH. For your typical family of 4 to go see a movie, not counting gas to get there and back, it's EASILY over 100.00 PER MOVIE. Not to mention, I for one am fed up with the lazy ass attitude of hollyWEIRD agencies/movie production companies making nothing mo
    • Dude its that expensive every place you go movie,sporting events music concerts it costs over 100.00 no matter what you do.Now it seem its OK to force people to watch a half hour of ads before a move starts to me that false adverting. Saying the movie starts at 8 when it really starts at 8:30 is a lie but our lawmakers are too busy playing party politics or have someone else buying their tickets or getting in for free to care or even notice what is being done to the American public. IMO the prices and cost
  • Theater movies... Not even once!

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