New Media Journalism In The Industry

It is often stated that the Web has democratized journalism.  The more I think about it, the more I think: no it hasn’t.  Sure, the Web provides a ubiquitous platform to deliver content.  In that sense it has democratized journalism.  Though to a larger degree, the Web has just created more noise.  The argument that journalists are now competing with 28 million bloggers is blind.  I am a bit sick of hearing about the woes of the prehistoric newspaper industry.  Of the 37 blogs that I follow, 31 are published by professional news organizations.  The other six are published by by freelance journalists and marketers.  Every one of them is monetizing itself.  So, when I hear the argument that the Internet has democratized journalism, I think: wrong, it has just added more noise.

Journalism is an incredibly important profession.  The newspaper industry needs to wise up.  There is a great article in the June 2009 issue of Wired Magazine on monetization methods for publishers.  Below are two videos from a panel discussion held to address how film industry journalism is coping with new media.

“We need to stop thinking about the future of publishing and think instead about the future of reading.” – Clive Thompson, Wired Magazine

[Update: Newspaper Association of America quietly said the total revs were down 28.3 percent in Q1, with Alan D. Mutter noticing that sales dropped by more than $2.6 billion from the year before.  Meanwhile, as print ad sales slid by 29.7 percent to $5.9 billion, even online sales had their worst quarter yet, falling 13.4 percent to $696.3 million - detailed figures below. - paidContent.org]

 

Billy Gurley On Hollywood vs. Web

Bill Gurley of Benchmark Capital shares candid thoughts on where Hollywood meets the Web at AlwaysOn’s OnHollywood conference.

Slides from the OnHollywood conference presentation

Digging Deeper Into Theater Attendence

Contrary to what you may be hearing, movie theater attendance is not responsible for the box office’s strength.  Rather it is increasing ticket prices that account for record box office revenues.  Movie theater attendance is often falsely labeled as a reflection of the industry’s health.  As the LA Times’ Richard Verrier said in an article last Saturday, “theater admissions have generally remained flat, between 1.2 billion and 1.4 billion admissions annually since 1994.

So what is responsible for the box offices current strength?  The answer, ticket prices.  Because ticket prices are far cheaper than other forms of entertainment (click chart on left) they have a greater degree of price elasticity.  The MPAA pegged the average cost per ticket at $7.18 in 2008, up 19% over the past 5 years.  This statistic tells the true story of the box office’s health.  Movies are an elective expenditure, and in the midst of an economic recession ticket prices are still going up.

The chart below demonstrates the disparity between theater attendance and ticket sales.  The figures foreshadow a bullish future for the box office.  As we emerge from the economic recession, more disposable income will likely increase theater attendance while ticket prices continue to escalate.

Cutting The Cable

We are in the early stages of a shift from traditional television delivery to online television delivery.  Yet many like me suffer from an acute case of OCD regarding picture quality that prevents us from “cutting the cable”.  Trading a beautiful HD television picture with a highly compressed online video “HD” picture is not sufficient… for now.

The cable companies that control internet access (Comcast, Time Warner, etc.) know this.  The conflicting interests of web and television have caused U.S. cable providers to restrict bandwidth to prevent the change.  As a result, the United States currently ranks a pathetic 12th in broadband speed.  The fear is that offering broadband at 100Mbps will cannibalize their TV business and erode profits in their lucrative internet access business.  Unfortunately this fear is not only valid, it’s true.  But rather than ignoring change as the music industry did, cable companies should focus their efforts on building a more profitable online business model.

Ultimately, I believe the model will resemble that of the wireless providers.  Customers will pay for access on a usage basis, with unlimited plans available to satisfy the appetite of bandwidth hogs.  This is a fair and proven model.  Think of the parallels that television and internet have with landlines and cell phones.  Many Americans no longer have landlines because they have increased the minutes on their wireless plan, resulting in a net savings.  Though the overall pie will be smaller, this is a win-win scenario.  Cable companies will undergo further consolidation, but they will be able to profitably improve their offering to the consumer.

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See how your connection compares: test your speed here, then read this article.

Declining Film Pre-Sales & The Silver Lining

The global economic crisis has resulted in a sharp drop-off in sales of foreign-distribution rights.  Foreign pre-sales have historically been a reliable source of film funding, even during prior economic crises.  Today producers feel lucky to raise any money through foreign pre-sales. Even worse, the foreign pre-sales decline appears to be a secular trend, as countries like Japan continue to produce more of their own films. However, I believe the there is a silver lining.

The economic crisis has resulted in substantial losses of net worth.  Many investors bought in to the surefire buy-and-hold strategy that they were raised on.  The financial losses in the equity, bond and real estate markets have fundamentally changed this flawed perception.  Going forward investors will rely on diversification as the only free lunch and they will spread their money across new asset allocations.  I believe that film will be one of them.

Lower Production Costs, Increase Returns

So you have a good idea for a film… great, so does everyone.  The problem with most filmmakers raising equity financing is a complete lack of thought regarding how their film is going to make money.  Returns are the only thing that matter to the majority of investors.  Before you deliver your first pitch, be able to answer this question in a thoughtful, precise and convincing way.  Focus on distribution, marketing and keeping production costs low.  Investors care little of a film’s moral and cultural impact.  Your job is to convey how those aspects translate to profits on the bottom line.

I recently came upon a good guide for lowering production costs.  Eliminating/restricting some of these elements will help you keep costs low and mitigate downside risk.

1. Crowd scenes
2. Music
3. Too many characters
4. Multiple Locations
5. Exterior Shots
6. Dolly shots or tracking shots
7. CGI Effects
8. Music/Singing
9. Blue screen/green screen
10. Television and movie clips