It's Oscar night! Does it bother you? If you are me and / or the statistically average observer, the answer is a lot less than before. The number of viewers last year reached a historic low. Where is Hollywood, which no longer dominates cultural dialogue as it used to?
Oh, at first glance, things are fine – last year US box office reached nearly $ 12 billion, the highest ever. But look a little deeper and the numbers are disturbing. Most of this profit comes from higher ticket prices. The total number of movie tickets sold in the US has dropped more than 10% over the last 20 years, despite population growth.
"Netflix" They say, yes, yes, and more than you think. "Hollywood is now irrelevant," says no less than the former Hollywood mogul Barry Diller, who is now chairman of the IAC. "Netflix won this game." Streaming is the future, despite the studios' attempt to promote "cloud lockers" for movie ownership, one of which (UltraViolet) was closed last year, while others like Disney's Movies Anywhere (Disclaimer / Disclosure: I did a few years ago did some side work for MA on my day job.) I did not exactly conquer the landscape.
In fact, perhaps the most discerning industry analyst, Matthew Ball Earlier The head of Amazon Studios' strategy argues that Netflix has gone so far in Hollywood that its real competitor is another and surprising entity: Fortnite the most threatening competitor of Netflix. Matthew Ball (@ballmatthew) December 6, 2018
He unpacks this in a fascinating piece that is then surpassed by his four parts and immersed in "Netflix misunderstandings" that were composed last summer and since then for Every armchair had to be read by an analyst worldwide. Some highlights:
This cash loss only exists because Netflix is financing the coming year's content with this year's revenue. Netflix could have decided to stabilize its offer for 2018 at the 2017 level … and if the company had done so, it would have generated $ 700 million in cash and not lost $ 2 billion.
[…] At a time when most technology companies need to be bullied To admit that they are also media companies, Netflix's technical identity is often overlooked. It's also a technology and product company like Google, Apple or Amazon.
[…] Hastings knows that if Netflix fails to reach about 250MM subscribers, its business will default. Its expenses depend on the achievement of this scale. Even at the bottom, Netflix would have gained more dominance than the media business has ever seen.
[…] The company announces that in 2018 a total of 700 original series (or 14) will be released each week) and offer more than 1,000 by the end of the year. This raises the question of what exactly an "original" is. Understanding this difference is critical to any attempt to compare SVOD services
We conclude that Netflix's (and to a lesser extent Amazon Prime's) transformation of the visual media industry has just begun. The effects of the first quake are still moving through Hollywood, but in the coming years we can expect ever greater quakes.
The salvation is that the rest of the world will become more prosperous and spend more on Hollywood … although the studios only draw about 25% of their gross revenue, compared to 50% in their homeland. Nevertheless, 25% of a large number is still very large and China is huge. Two of the world's top 15 films last year made essentially all of their money in China. It is likely that The Wandering Earth, which has raised $ 557 million in just two weeks, will make more money in China this year than is suspected in the US 2019 # 1 Avengers: Endgame . ( Infinity War earned $ 679 million domestically.)
Where does Hollywood leave then? Slowly disturbed by technical superiors in the form of Netflix and Amazon Prime at home and caught up in the race for the losses. However, it's not that Netflix does not have a robust international strategy. Hollywood's studios will not go anywhere in the near future, but with the exception of Disney, they soon have to get used to being medium-sized players rather than the kings of the world they once were.