What’s Wrong With The Movie Business?

Do you know the answer to this question?  Lots of people have their own ideas.  Some people think receipts are down because of an over-reliance on blockbusters.  If a Marvel superhero or Star Wars movie doesn’t meet expectation, that can doom a studio’s balance sheet.

Others think that there’s too much visual competition out there.   Netflix and Hulu and additional alternatives offer movies on demand and on the go.  Who needs to pay big bucks for a ticket and then wait in line for popcorn and a 97-ounce Coke, pay $15 for each, then wait another 15 minutes to watch ads on a big screen that you can see on screens of all sizes elsewhere?

In other movie business news, Disney announced this week that it will launch its own streaming service in late-2019. They’ll take their catalog off of Netflix and any other services and use it to promote the Disney one.  The titles also include Pixar films, all of the Star Wars movies, and Disney-produced television shows.  The company also said it would create content exclusively for the service. (See more below.)

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Will Disney succeed?  To a degree, because there will only be one place to get their visual entertainment.  Star Wars is its own brand.  The animated Disney films, from Cinderella and Snow White to The Lion King and Mulan are their own brands.  Plus, there are approximately 300 Disney retail stores around the world.  Disney owns the ABC television network and everything that is ESPN and a whole bunch o’ theme parks.  You can bet that they’ll use their assets, and mega-dollars, to promote their new service.

But the company must know that it won’t be easy to generate subscribers.  Netflix and Hulu and everyone else have two more years to further entrench their brands and services into the minds and hearts and phones of consumers.  While they’ll lose some content on their services, both will still offer catalogs of many other big studios, whether it’s Fox or Paramount or Warner Bros.  And both will still create their own original content.

Don’t forget Amazon, which, through its Prime service, also offers streaming of filmed and original content (plus music – which many of us forget).

And don’t forget Apple, which announced in August that it would spend $1 billion over the next year on original content, presumably for its Apple Music service and/or to replace/reload iTunes, which is losing to streaming in a big way.

Disney has a huge mountain to climb.  Like the overall film business, are they over-relying on too little to push too much?  Do you think consumers will care about a Disney-only platform?

Keep in mind, this would never work in music.  Sony and Universal tried PressPlay back in the early-2000s.  This service was missing a huge piece of music owned by the Warner Music Group.  And it missed the indie labels, which at times can account for 30+% recorded music market share.  The service failed.  Consumers don’t know, or really care, about the label homes for Katy Perry or Selena Gomez or the Foo Fighters or Palisades.  They just want the music.  In fact, if you go to Spotify right now and stream a song, it’s not exactly easy to determine what label owns (or distributes) a particular song on a particular playlist.

Granted, music can be as much a source of active participation as it can be passive.  When people stream a film or TV show, in general, the idea is that they’re watching it because the entire concept of filmed entertainment is the visual aspect.  I can’t paint a bedroom or drive a car while watching Empire Strikes Back.

Disney is smart.  They know what they’re doing.  They’ve run numbers and focus groups and done internal studies.  They are a public company that answers to shareholders as much as their Board of Directors.  One has to assume that this service is, from their perspective, a smart, calculated business move, not a move based upon pride and ego and love-of-Kool-Aid-that-makes-me-over-love-my-company.  We’ll see what happens.  What do you think?


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Professor David Philp is Assistant Professor Music & Entertainment Industries and Popular Music Studies at William Paterson University. He is the co-host of the only FREE advice college radio-based music & entertainment industry talk show in America, Music Biz 101 & More, which airs live most Wednesday nights and is available as a podcast HERE every night (days too).  Your favorite professor is also co-author (with Dr. Steve Marcone) of Managing Your Band – 6th Edition.  Reach him at PhilpD@wpunj.edu or find him on LinkedIn HERE.

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