From the invention of the very first movie camera, to the development of the latest in CGI, the film and television industry has been no stranger to adopting new technologies. However, this year boasts Hollywood’s worst summer box office in 10 years, and traditional television-watching is on the decline, which is frequently attributed to the rise of smartphones and digital streaming platforms—in the U.S., there are now more Netflix subscribers than there are cable. Tech, it seems, currently has an edge over traditional entertainment forms.
However, Hollywood is stepping up the competition. Disney, which owns superhero franchise giant Marvel Studios, bought a significant stake in streaming services company BAMTECH Media, and announced that it was removing all of its content from Netflix to launch its own streaming service in 2019. NBCUniversal and Snap Inc. have formed a joint venture to create Snapchat-focused original programming to target mobile-oriented generations. The film and television industry is increasingly relying on and even partnering with tech—especially big data—to remain competitive and make more strategic, forward-thinking deals.
With the advent of digital entertainment consumption, even content that was formerly region-specific has become much more easily accessed by people around the world. As a result, creators need to use big data to more accurately measure the popularity of movies and television shows in order to make the most strategic and cost-effective decisions when buying, selling, and creating content.
The first step is to aggregate consumer data across all platforms and services around the world. Samuel Stadler, vice president of marketing at Los Angeles-based data science company Parrot Analytics, says that, in today’s fragmented world of platforms and media services, traditional industry metrics are no longer accurate measurements of performance—and, therefore, no longer useful for negotiating deals and decision-making. “The key need we [Parrot Analytics] are addressing is the segmentation that’s occurring,” he states. “The industry needs a standardized way to assess the performance of content, in every country, across all platforms. There are so many new subscription video-on-demand services being launched world-wide, causing audiences to be fragmented right across the demographic spectrum.” Once creators can get an accurate gauge of how in-demand their content is, only then can they start planning more strategically.
Thanks to that increasing audience fragmentation, studios also need ways to quickly and efficiently keep track of all their internal data and content rights. According to Rob Delf, CEO of software-as-a-service (SaaS) rights management company Rightsline, most studios either had their own home-grown, need-based rights management systems, or simply used Excel spreadsheets to keep track of their contracts. However, with the globalization of content and increasing complexities of content rights, that format is no longer as viable.
Being able to pull up that information at any given moment is integral to closing deals in an increasingly fast-moving industry. Delf says that, recently, a common scenario is that a client will come to them with regional and platform-specific content inquiries. “Someone will call up and say, ‘Hey, I’m starting a new mobile-only subscription video-on-demand service in sub-Saharan Africa. What content can I put on it?’” shares Delf with a laugh. “They will call 10 different studios, and, whoever can get them a list first, they’re going to do that deal. It’s in [the studio’s] best interest to be on top of it.”
Entertainment is all about providing people with what they want (or didn’t realize they wanted) so they can be entertained. On that end, tech—and particularly big data—has become incredibly useful.
"We need a standardized way to assess the performance of content…audiences are being fragmented right across the demographic spectrum."
“From a big data perspective, that audience aggregation—that’s the holy grail for [studios],” Delf says. “We figure that a marketing spend at a large film studio for the year is probably $5 billion. Even just a 10 percent efficiency on that, to attract your fan base to actually go to the theater, has a huge impact.”
Taking into account all the various ways content is being consumed—as well as which content and in what country—allows companies to make smarter business decisions, says Stadler. Whether that’s buying or selling content, or knowing what demographic to market to, having data that shows who is interested in what, and where, can save a studio a lot of money.
“Let’s take a fictional comedy series that you wish to pitch into Amazon, let’s say for France,” posits Stadler. “Imagine if you had affinity data that shows the relationship between this comedy series and existing content in Amazon’s catalogue in France. What that means is, when subscribers have finished watching an existing Amazon show, they are more likely to move onto this comedy series instead of a competitor’s title. The value here is that this strengthens the seller’s negotiation position because their show will likely assist Amazon’s subscriber retention rates in the market.”
On the other hand, Stadler also says that having this sort of hard data can also bring in new viewers. For instance, if you had a streaming platform with an audience that skewed towards older men but wanted to bring in more women subscribers, then data can also suggest what content is currently being consumed by the desired demographic in the wider market. That knowledge can aid in making strategic decisions regarding what content to purchase that will most likely attract those viewers. “Prior to big data and serious technology investment, you couldn’t get to these sorts of answers. Everything was done by hunch,” Stadler shares.
The globalization and cross-platform nature of content has also allowed for a wider sample size when it comes to testing audience affinity for content.
“We used to do audience tests all the time—they just had to actually get an audience into the theater,” says Delf. “Now, there are apps out there that allow producers to do exactly that and on a much broader scale because they don’t actually have to get a theater and get people in it. That’s an interesting change that will democratize the creative process somewhat, in that they can get a much wider sample of feedback than what was possible before, and that’s all through app and mobile phone usage.”
Because Parrot Analytics also incorporates social media to determine popularity and engagement with content, they can also use that data to “course correct” if they notice audiences are becoming dissatisfied with a particular television storyline. “We can measure engagement with a story—usually we do this by sentiment analysis or character profiling, understanding what people are feeling towards a story arc,” Stadler explains. “From a Hollywood production perspective, and certainly with telenovelas, which have a very short production cycle time, it helps with course correction. If you can see that audiences are thinking that this series isn’t performing well, then you can fix it.”
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However, both Delf and Stadler warn that technology cannot replace true creativity. Although films have been made with computer-generated scripts, artificial intelligence (AI) and machine learning still have quite a ways to go before they can do what screenwriters do. “What I think these programs can do—because they have script-reference databases—they can figure out, structurally, that this [script] is similar to all these other ones that did tremendously well at the box office,” says Delf. “But at the end of the day, it’s a creative process. I think that AI and machine learning have to get about 100 times better, and then I’d put tons of stock in it.”
With a laugh, Stadler adds, “It’ll be a scary world when we’re watching some movie that’s being put together by a computer brain.”
Although it seems like tech companies are edging ahead of the entertainment game, Hollywood is embracing tech and putting up a challenge. However, the opportunities aren’t just limited to mobile and streaming services.
Delf shares that one of the things he and his company is investing in is blockchain technology, which provides a digital ledger, or a decentralized way of keeping track of transactions. “Given that there’s just more and more data going to different partners [and] because of all the different devices that can play media, there is this real desire and demand to increase the level of transparency in the process,” says Delf. Although blockchain was created for Bitcoin to use as an accounting method, the technology can also help clean up any confusion around the rights management process by tracking where the rights and content have gone.
“When we’re aggregating data from over 200 content producers and then pushing them onto video-on-demand services and platforms for the biggest cable companies in the U.S., and some internationally…mapping those [rights] to something that’s a little more permanent will allow us to eliminate some of those mistakes and the time-consuming processing that happens right now,” Delf adds.
For Stadler, one area of interest is using Parrot Analytics’ data for investment. “There was one study that was released that showed there was a very high correlation between our content demand data and Netflix’s closing stock prices,” he says. “It’s very interesting, and we’re certainly doing more work in this space on the portfolio average basis and on the indexed basis. How could investment—banks, portfolio managers—benefit from a data-driven view on the popularity of Hollywood content?”
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