Open The Floodgates: Greater Access To Content Will Raise Studio Profits

by Ben Weinberger, Nov 2, 2009, 3:00 PM

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Making movies is like product development.  Each new Adam Sandler comedy or zombie spookfest is essentially a new product  -- one that must be marketed to a target audience.

 

That audience either shows up or stays at home on opening weekend, and although many things have changed in the content business, this simple fact has not: Hits make money, while turkeys die a quick death at the box office.   

The big movie studios are all sitting on 80 or 100 years of library content.  Each of those libraries includes hundreds of hit films that have connected with audiences worldwide and are proven commodities in the marketplace.

Maximizing the value of library content is job one for studio heads, because it permits them to exploit proven market intelligence -- that is, whether or not people like this movie over that movie -- to further capitalize on a studio's initial production and marketing expenditure. 

In other words, content libraries are central to growth and profitability. And outside the library stand millions of people who love movies and television series,  most of whom have cell phones, iPods and laptops with them or nearby.  

So why can't I buy any movie I want through iTunes?  Why can't I order "Saving Private Ryan" through my xBox and watch it after I play "Call of Duty"?  Why can't I watch "Snakes on a Plane" when I'm on a plane? 

Well, maybe that last one's not such a good idea.  But you get my point.  Studios should be offering paid access to their libraries to users anytime, anywhere, and on any device. 

Why isn't this happening yet?  It's a simple question with a complex answer.  From my perspective, two interrelated issues are standing in the way: business, and technology.

I can speak to the technology part. Moving towards a truly multiplatform, "TV Everywhere"-type model raises real issues of rights and metadata management.  The good news?  The technology exists to address these concerns.

As for the business piece, studios are dipping their toes in the water: developing their own digital distribution channels while simultaneously waiting for other technologies to mature.  While consumers wait, the majors are effectively mothballing hundreds and hundreds of hugely profitable entertainment properties, and leaving literally billions of dollars on the table.  

Don't get me wrong: these are smart people, and they love making money.  But they also don't want to screw this up; they don't want to end up like the music business.

I understand the reasons for the delay, but as somebody who spends a lot of time drilled into complicated and minute technical matters, it's refreshing to step back and say, figure it out, guys!  People want this!  More to the point, they're willing to pay for it! 

 

If you'd like proof of that consumer demand, check out these recent survey results from The Diffusion Group.

 

So, all of that being said, I've decided to revise my earlier statement.  Open access to content libraries is central to studio growth and profitability.

 

It's time for media companies to open the floodgates and let their decades of premium content reach consumers in a way that is both profitable and multiplatform.  Movie-lovers and media company shareholders alike will thank them for it.

 

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0 comments on "Open The Floodgates: Greater Access To Content Will Raise Studio Profits".

1. Paula Lynn from Who Else Unlimited
   

   commented on: November 2, 2009 at 3:34 p.m.

   Redbox seems to have figured a portion of this dilema out without multiple channels of distribution. Also, there is still a disconnect of the desire for more content everywhere and the time to experience more content everywhere. How wonderful for the content owners and the content viewers can all be mixed and matched better.

2. Dan Roberts from Hearst Digital Media
   

   commented on: November 2, 2009 at 3:36 p.m.

   Amen, Ben!!

   The studios need to embrace the a la carte long-tail model that has made billions for Amazon and iTunes.

   Sure it will cost millions to bring it all online - but it will net billions!

   Two months ago, I would've paid $5 to see the classic Bass O'matic sketch from SNL - but it is nowhere to be had! Which means everyone loses.

   So much money just sitting there on the table...

3. Jonathan Mirow from BroadbandVideo, Inc.
   

   commented on: November 2, 2009 at 4:31 p.m.

   Wow - a survey saying that people will pay for premuim content by a company that provides a: "...flagship product (name deleted) (that) powers the digital media operations, publishing and analytics for today’s leading Hollywood studios, broadcasters, distributors and publishers..." No chance for skew or spin there, huh? Remember - this is the web, they wouldn't hit "publish" if it wasn't true.

4. Allen Maccannell from SenderOK
   

   commented on: November 3, 2009 at 3:01 a.m.

   This is so obvious that heads may have to roll before Hollywood comes to its senses (unless, as my last sentence below implies, they know exactly what they are doing). Pirates have already made 80 years of content readily available for free to much of the world's population (often translated into local languages). Not even the Germans were able to resist the fact that a pirate copy of Valkyrie was available to them for free online in the month after it opened in NYC but before it officially opened in Berlin (imagine a movie about 9-11 premiering in Berlin a month before being shown in NYC). That the studios themselves don't put everything online immediately and charge $4 per view via PayPal or via Western Union...simply doesn't make sense...unless (and this is the only rational explanation) the studios themselves are dumping their material on the international market for free as a way to firmly establish Hollywood as a brand.

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