Cinema and television have lost their touch : How the 2.0 broadcasters are shaking the markets

The Cannes Film Festival is over ! You’ve probably seen the many articles reminding us of the numerous questions raised by the new Internet broadcasters about cinema and television : rights, media chronology, legislation … New players coming in, a market going more and more global, changing consumption patterns …

The new media war opposes the traditional ones (Cinema, TV) to Internet platforms (OTT services, social networks …), the “on demand” VS live, and of course general contents VS niche contents.

The question is how can everyone cohabit by preserving the economy of a leading cultural sector ?

POPCORN TIME

Let’s start with the giant Netflix . Just because the SVOD platform was competing for the first time in Cannes with two films in the official selection (The Meyerowitz Stories by Noah Baumbach and Okja by Bong Joon-ho). The main problem is about chronology. In France for example, this system has been governing the relations between the 7th Art and the other broadcasting modes, and this for 30 more than years. You, amazing producers of video content, are the first affected by this French institution getting older without softening. But the problem is more global than that !

QUICK REMINDER: SINCE THE 1980s THIS LEGISLATION HAS BEEN INTRODUCED TO PROTECT THE CINEMA INDUSTRY

  • In the 80’s, videocassettes (VHS) are freaky!

➡ People have to wait one year before watching Blade Runner or E.T the extra-terrestrial at home

  • A few years later the television bares fangs

➡ The birth of HBO in 1997, and “bundles” of pay TV

  • 2009 marks the end of the peaceful agreement between cinema — television and video

➡ Before, each they had their own specialization while respecting others’. Now all the actors go over the edges

  • 2017: VOD / SVOD platforms running the world ?

Netflix deeply annoyed the French National Federation of Cinemas (FNCF), accusing the American giant of killing theatres. The platform presented solutions of ephemeral releases to the cinema industry so French users wouldn’t find themselves seeing films three years after the rest of the planet. But unfortunately, that was not enough! The Cannes Film Festival will therefore change its rules in 2018. The organizers said in a press release that “Any film wishing to compete in Cannes will have to make a commitment to be distributed in French cinemas beforehand”. The content director at Netflix — Ted Sarandos — shot back by highlighting that viewers are changing, so the distribution, and it would be clever that the festivals evolve on the same wavelength.

But that’s not all … Martin Scorsese believes in the disruptive model brought by VOD / SVOD platforms. So the director, who is no longer to introduce, decided to do an all-in at Netflix with the production and distribution of his next film “The Irishman”. Scorsese had already expressed doubts about the performance of the current system in producing, receiving and promoting his works. And if such a prestigious director recognizes that the traditional system is not always adapted, it means everyone is affected (including the most bankable).

The platform invested 5 billion in the creation of video contents in 2016 ! It is a real cash machine attracting more and more directors. Because the reduction of distribution costs and intermediaries is considerable … Indeed, no need to go through all the steps imposed by the old cinema system. Not releasing the film in theaters anymore, focus its promotion on a single channel (or at least reducing the multi-channel advertising expenses), etc. A French political supervisor said “Netflix has become the fixing point of a financing system for the cultural exception that is about to collapse”. 😐

Summing up : the overall trend is to reduce intermediaries between the creative company of video content, its consumers and distribution. The chronology of the media is no longer adapted to our contemporary era. Although initially set up to protect cinematographic works, when a VOD platform fully funds the film, it should be able to bypass the 36-month rule. Releasing a film in theaters, then in DVDs, and finally on VOD platforms, is no longer in line with the consumers’ needs. Indeed, they want instantaneity, without being hands tied by the media chronology.

GAFAN* (& TWITTER) JOIN THE GAME

*Google — Amazon — Facebook — Apple — Netflix

Yes, the war of video content is bursting everywhere, so there is no reason the biggest Internet companies would not have their share of the pie 😉 !

That’s how Facebook started the offensive by negotiating with Major League Baseball. Why ? Just to start the live broadcast during the next season (which has already started). A major key advantage to retain even more its users on their platform. What is more social than a sport event simultaneously watched by millions of people ? Yeah right ? Facebook also began using its live feature to broadcast Mexican football matches. 46 to be exact. The advantage of a live on Social Network: they have a worldwide audience and it can go viral in a snap. (BTW : if you want to feel the power of Facebook, check out our article on Facebook Audience Insights HERE , to know better about your audience on Facebook (and your competitors’ 😉 ).

Zuckerberg will therefore launch live broadcasting of sports such as baseball, soccer, ping-pong (some are already presented to the general public), and many more.

Inevitably, Twitter did not want to stay behind and fought back with an agreement with the NFL (National Football League). The $10 million deal allowed the platform to broadcast 10 live games. The agreement lasted one year before Amazon overtook Twitter. The deal: getting rights to broadcast 10 Thursdays evening games. Unlike Twitter, users will have to be a member of Amazon Prime to access live broadcast. This will surely have the benefit of improving the quality of the live stream, greatly criticized by the Twittosphere.

Social networks are trying to disrupt the television market. With a potential audience of more than 1.2 billion (number of Facebook accounts in early 2017), they can definitely compete with the biggest US networks in the market of free tv !

The free and generalist market opposes the one for premium and paid content. OTT services have caused a tsunami within subscriptions to cable and satellite TV services (cord cutting).

But let’s all chill out : in the 2.0 era, there is room for everyone !

Baseball Facebook social media

 

NICHE FOREVER !

From mass media, we moved on precision media. Niche platforms are also becoming increasingly sharpened and specialized in their fields. Pay television is falling drastically (in six years it has decreased of 80/90 % in American households). The disintermediation and Internet distribution allows to cut prices for users. Bundles are not welcome anymore, people wants to pay for channels/contents they actually watch. OTT now attracts more people with 65 million subscribers.

Well, we do not teach you anything since you are the first concerned 🙂

You can however learn more about the growing phenomenon of niches contents in a great article you can find there.

At OKAST, we are convinced the more expert you are, the more your VOD / SVOD platforms will bring enthusiasts clients committed to your video contents (yes read more in our blog) !

Television and cinema should evolve to adapt themselves to our technological world, not in 3 years, but right NOW. Viewers obviously want to see general and uniting contents, but are also seeking diversified and rare contents. Even if it distorts purists, it is normal that every technological vicissitude brings its batch of advantages and disadvantages. But you know, a little change never killed nobody 🙂 !

 

 

We are waiting for your kind messages hello@okast.tv 🎈

With love,

The OKAST Team .

Perrine Boënnec OKAST Flamefy transmedia VOD SVOD