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February 25 at 8:30am

The Major Media Companies Will Drop Their Studios & Specialized Divisions Soon

By Ted Hope

The recent article on Hollywood in The Economist is a MUST read.  Stop what you were planning to do for the next ten minutes, read this post and then read the article.  You must. MCN pointed to it with the blurb: “Between 2007 and 2011, pre-tax profits of the five studios controlled by large media conglomerates fell by around 40%”.  That hooked me.  I read, and then I wept.

I don’t see how anyone can read that and NOT come to the conclusion that all the publicly-traded companies will divest their movie studio assets within the year.  Maybe they will; maybe they won’t, but you know the business ain’t through changin’ yet. Sure the prudent specialized divisions may run at a profit, but if there is not the big movie complement justifying the whole ancillary chain, will there be the logic that allows them to feed at the same trough?

Some of the takeaways of this clear, precise, and well argued article that I tweeted out include:

  • The share of Americans who attend a cinema at least once a month declined from 30% in 2000 to 10% in 2011.
  • By 2015 Americans will have 861 million internet-connected devices, up from 560m in 2012, averaging 2.7 devices each .
  • Box-office revenues outside America are growing two and a half times as fast as they are domestically.
  • People watch the same amount of movies that they did a few years ago, they’re just spending $6B less a year to do it.

So where does this leave us?  

  1. Young filmmakers interesting in quality character-driven tales should go into TV.  
  2. If the studios & their heaps of cash get out of the tentpole business, who is going to take their place?
  3. The business model is broken.  Who is doing something to fix it?  Why is this not an industry level discussion?
  4. Now would be a good time to launch a micro-budget global transmedia development/production/distro company.

What else?  Save us from ten years of crap content hell with your good ideas.

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