Is Hollywood *finally* ready for the digital revolution?

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hollywood digital

“What happens to musicians will happen to everyone.”
Bruce Sterling

Hollywood seems to be somewhat weathering the digital storm, for now. TV and the movie business have been impacted by digital disruption, but not as much and as quickly as it happened to the music business. Yet the world is becoming more digital and the entertainment world still seems ill-prepared.

In this article I want to explore the effects of disintermediation, data, popularity, channels, consumption and viewing habits. My objective is to point to where disruption is ripe to happen.


Whoever holds the customer relationship wins. This seems to be an invariable rule of business, even in the digital age. Not so much when it comes to entertainment, though: the studios rarely deal with their customers directly. The relationship is frequently delegated to movie theaters, retailers and digital stores like iTunes and Google Play. And not all of these companies seem to be exploiting all the marketing opportunities that are available.

TV channels have always had a direct relationship with their public, but only ever obtained fuzzy ratings data in exchange. Direct to consumer digital platforms like Hulu, Netflix or CBS All Access are shaking up the market quite rapidly, though.

Movie studios are lagging behind. The theaters hold the relationship with the end customer firmly, but do little to nurture it. If cinemas were more like Uber they would fight to the death in order to manage the customer directly. Yet the system is set up in such a way that exhibitors not only rely on the marketing dollars invested by the studios, but are also quick to disinvest from anything unsuccessful.

Why? A bit of background is needed: a movie is monetized by splitting it into theatrical rights, home video, video on demand, tv rights. And the list goes on to include the right to show the title on ships and airplanes and so on.

The exhibitors today split the revenue coming from the first theatrical rights and thus have no incentive to support a movie that will make money for the studio throughout its life with other rights.

The current model works great in a state of abundance. But with the constant contraction of theatrical attendance, it doesn’t look like this is the perfect way forward.

There is a worrying distance between the massive production investment in creating cinematic content, the global investment effort of the distributors and the meager marketing spend that happens at the theater level.

For the market to become healthier, more marketing investment should happen where the movies are shown and seen. This applies to theaters, but also to digital platforms like iTunes and Google Play.

And this brings us to one of the main issues that entertainment needs to solve from a marketing standpoint: clicks need to be directed to the entity that makes the final transaction possible. Why? Because it’s at this stage that data becomes more precious, allowing you to optimize your investment to get incremental returns. It’s the kind of efficiency that is making Uber, Facebook and Netflix grow. And it’s a type of efficiency that, right now, is inaccessible to the studios.


An advantage of holding the customer relationship is the ability to collect and exploit data. The best example comes from Netflix. Here content strategies are being crafted based on the data collected from the consumption of their over 100 million users.

The data richness of a digital platform stands in stark contrast with the poor amounts of good data generated by traditional entertainment.

In the TV world data has always been scarce, mostly based on small samples rather than wide coverage. Data on theatrical consumption is even more lacking, showing with high precision only dollar amounts, but ignoring most any other metric.

One aspect unifies all of the data collectors of the entertainment world: their data is inaccessible. Netflix guards their data, so do the traditional studios that will not make any more data available than the gross box office and maybe the number of screens of each release. A rare datasharing example in the cinema world is IMDB, which contributed to the Amazon x-ray functionality. Otherwise for movie “data” one must look in the unspecialized repositories such as Wikidata, social media, etc..

Detailed, relevant and openly accessible business data from the entertainment industry doesn’t really exist at the moment.

To make matters worse, until now, we’ve only worked with metadata around entertainment properties: cast & crew, viewership, box office, distribution, even recommendations. There are many more properties that can be captured if we analyze the features themselves.

How about entering inside the video files and looking at sound, color, contrast, music, dialogue, cuts, scenery, set design, effects? These could be crunched and reported to generate new dimensions and new correlations between titles.

These new connections can help consumers find more stuff they like, find new ways of enjoying their content and this can ultimately lead to more hours spent by users in front of their screens.

Echo Nest, before being acquired by Spotify, was executing this very game-plan, but applying it to music. No startup, as of yet, has finally tackled the problem of aggregating and generating data not just from the business side but also from the artistic side in the entertainment world.

Without proper data it’s very hard to innovate. You can follow hunches and gut feelings: but you don’t have a reliable base to judge the market, the product and the opportunity.


The entertainment industry used to be able – to a certain degree – to decide who would be a star and who would remain unknown. The unbundling of media and entertainment into the current social sphere, has limited this ability.

Today’s social media stars are popular because they’re really good at socializing, but this popularity does not necessarily translate to the screen. Not least of all because they are not necessarily talented actors. Fashion blogger Chiara Ferragni may have nearly 11 million followers on Instagram, but I’m not sure I want to see her in a movie.

Popularity still matters, as does talent. And there are some superstars, like The Rock, that still mix and match both. But they are islands in a sea of talentless social popularity.

If you look close enough, there’s another category that shows no talent whatsoever: major entertainment brands on social media. They mostly develop inept and dictatorial social channels that entice no one and alienate everyone.

The first issue is with their social branding. Most studios have such a diverse production that they can’t afford to have a distinctive voice or personality online.

And here comes the second issue. Not only are studios present on social media with their own brand, but they also develop specific social pages and channels around single properties. They do this in advance, hoping to create excitement around their release.

But there’s a problem. Social is an echo chamber: in order for a movie to become social it has to be seen. Social for Hollywood is a pre-launch play, but for their audience it’s a post-release game.

If studios are not worth following (because they are too diverse and lack personality) how should we get our entertainment updates in the future? Through the people that make entertainment possible: actors, directors, musicians, set designers.

And that’s where the third and final issue arises. Talents change studios all the time. They have conflicting views on social and PR. And are – as all human beings – generally inconsistent.
This is what makes them worth following for us fans, and what makes them a nightmare for the studios to tap.


In the early days of digital, everyone was rushing to occupy what was considered prime real estate: buying (often for a premium) their domain name and creating websites. You needed a digital destination.

Times have changed and today it would be arrogant to expect your audience to come to your own destination. Social channels are the destination right now. So this is where the entertainment industry went.

In the early days they started blasting the same content everywhere. Then they refined the strategy so that now if you really want to know everything about your favorite movie release you need to track it at least on Facebook, Twitter, YouTube and Instagram at the same time. Nobody in real life does that.

Sometimes there are still destinations created for single titles, but they don’t even contain all the information that is dispersed between Facebook, Twitter, Instagram and the like.

Wouldn’t it be useful to have one single destination where you can find everything (I mean EVERYTHING!) related to a title or a franchise?

The digital role of the movie studio is changing again. From creator of destinations, to developer of channels to content provider for smart interfaces.

Think about your most recent Google searches related to entertainment: did you click through to any website, or did you use the power of Google to instantly get the answers you needed?
And did those answers come from the studios?

Not really, they’re from Wikipedia, Imdb and a few other regional sites that are contributing much of what makes it possible to query the world of cinema. This opportunity to become more digitally integrated with the lives of the audience is still dangling in front of the movie studios, unplucked. If the studios began publishing rich destinations that aggregate all the information that they spread on various channels they could create a place where users are compelled to go and look. If they also started to publish open data connected to these destinations they could influence how Google sees their content.


190 countries enjoy the convenience and ease of use of Netflix. Amazon is following suit with Amazon Prime Video. Facebook, YouTube, and Apple have shown interest in getting a slice of the same pie.

Yet the studios are still offering their digital wares in a less than friendly manner. Gone are the times where everything was on Netflix. Rights owners are now weary of the power of the big N. But they’ve failed to offer their movies in a similarly convenient way.

Movies Anywhere is a great step forward. This arrangement really puts consumers first and will allow them to enjoy the content they bought on one platform, on all and any system they access. For instance if I buy a movie on my Android phone using Play Store, I will be able to see it also from my iPad through the iTunes Store.

Not boxing consumers in is a good step. But here we’re still talking about buying title by title, something we’re becoming less and less prone to do, as we’re often offerend a single title for more than what we pay for a monthly subscription that includes thousands of titles.

How about an affordable, easy to use and rich movie catalogue online available within the pricing of Netflix? Disney seems to be at work on just that, with an offering for cord cutting ESPN viewers on one side, and another for movie and series buffs on the other.

Other studios should jump on board or roll out their own systems. In the future most of us will have more than one SVOD service on our tablets and TVs. But not an infinite amount. I would roughly calculate that there is space for 2 to 5 mainstream subscriber video services.

The SVOD platforms will also become interesting for more niche offering such as vertical “netflixes” for car content, sports, travel, cooking and so on. These platforms will buy content at cheaper prices and probably undercut the pricing of mainstream services. But the time to establish those offerings is now, as our devices and our attention and our willingness to add new icons to our devices is already growing scarce.


The final aspect that awaits innovation is the act of consuming content. We’ve seen our media become immaterial, our connections go wireless, but the act of consuming content has seen little change since the digital revolution started.

Amazon for instance has created a new “layer” called x-ray where you can pause a feature and get info on the cast, crew, trivia and skip to the next scenes. Netflix now features a button that allows you to skip the intro and credits, maximizing your entertainment minutes. But you’re still watching a show on a screen.

VR offers an avenue of future opportunity to create content that is more immersive. Everyone has toyed with the idea of creating interactive features, the last to try being Netflix with their kids offering.

The real innovation in viewing, though, remains behind the scenes: better compression means that your show will cost you less precious data. Some cinemas are starting to allow and reluctantly encourage the use of mobile devices during viewing, in the hopes of luring fast thumbed teenagers to go back to the dark theatre. But all in all there is not much to innovate in the act of viewing.

Because viewing is still about the story. We all want to be focused, enthralled, immersed in the mix of images and sound that resonates inside of us in the form of human emotions. Who cares if that happens on a mobile connection, in a darkened theater or in our cozy living room?

The plots may be told in different formats and mediums, but what we are looking for are still stories.

The opportunity here is simply to continue to incrementally innovate, by keeping with the tradition. In this sense TV is producing some great examples. Game of Thrones has catapulted the fantasy genre to a whole new level. Star Trek Discovery has taken the most formulaic of scripted television and created something completely fresh and thoroughly enjoyable. Without the need to reinvent the wheel.


Technology can bring us closer to content. It can show connections and provide data that helps in creating better features. Technology changes the production and the distribution game and the way entertainment is being monetized. There is much more to be learned from the music business. Many of the steps that the entertainment business is not taking today, will be taken by new entrants tomorrow, and we will see yet more disruption.

No studio is safe.

The space is wide open for new players and new paradigms. But rest assured: the act of viewing may be augmented by new technology, but it will remain a focused, conscious act of immersing in a storyline.

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