Rates of change : digital distribution as a disruptive technology in the film industry

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The future of the music industry in an age of digital distribution

This is an invited public lecture. The talk will cover how the music industry has changed due to digital technologies. During the talk I will look at how the changing balance between live music, music licensing and recorded music. I will also discuss online music subscription services and whether they might be a future for music distribution in China and elsewhere in the world. It will also look at how music artists and composers are affected by this change.

The music industry in an age of digital distribution

In 1999 the global recorded music industry had experienced a period of growth that had lasted for almost a quarter of a century. Approximately one billion records were sold worldwide in 1974, and by the end of the century, the number of records sold was more than three times as high. At the end of the nineties, spirits among record label executives were high and few music industry executives at this time expected that a team of teenage Internet hackers, led by Shawn Fanning (at the time a student at Northeastern University in Boston) would ignite the turbulent process that eventually would undermine the foundations of the industry.

Digital dawn : a revolution in movie distribution?

How will the digital technology revolution impact the movie business? Hollywood developed a highly successful industrial system that has functioned well for almost a century in the sense that it enabled the Major film studios to largely control and dominate the industry. However, the new digital technology may now be propelling Hollywood toward the biggest technological transition since the creation of the studio system almost a century ago. For example, Major Hollywood studios are already beginning to provide video-on-demand (VOD) digital distribution of movies over the Internet. This article examines what is happening, and why. It sets out the background and the incipient changes already occurring. It makes an argument regarding the fundamental strategic dynamics, that acetate film was the key to the control of the Hollywood system, and speculates about how a shift away from acetate film to digital video may transform that system. The focus is on the impact on how the Major studios release and market their movies, and how new market and marketing opportunities for the low-budget independent filmmaking sector may arise.

Distribution Revolution: Conversations about the Digital Future of Film and Television

Distribution Revolution is a collection of interviews with leading film and TV professionals concerning the many ways that digital delivery systems are transforming the entertainment business. These interviews provide lively insider accounts from studio executives, distribution professionals, and creative talent of the tumultuous transformation of film and TV in the digital era. The first section features interviews with top executives at major Hollywood studios, providing a window into the big-picture concerns of media conglomerates with respect to changing business models, revenue streams, and audience behaviors. The second focuses on innovative enterprises that are providing path-breaking models for new modes of content creation, curation, and distribution—creatively meshing the strategies and practices of Hollywood and Silicon Valley. And the final section offers insights from creative talent whose professional practices, compensation, and everyday working conditions have been transformed over the past ten years. Taken together, these interviews demonstrate that virtually every aspect of the film and television businesses is being affected by the digital distribution revolution, a revolution that has likely just begun. Interviewees include: • Gary Newman, Chairman, 20th Century Fox Television • Kelly Summers, Former Vice President, Global Business Development and New Media Strategy, Walt Disney Studios • Thomas Gewecke, Chief Digital Officer and Executive Vice President, Strategy and Business Development, Warner Bros. Entertainment • Ted Sarandos, Chief Content Officer, Netflix • Felicia D. Henderson, Writer-Producer, Soul Food, Gossip Girl • Dick Wolf, Executive Producer and Creator, Law & Order

Analysing the effect of digital technology on channel strategy, power and disintermediation in the home video market : the demise of the video store?

The antecedents of channel power (e.g. El-Ansary and Stern, 1972) and the impact of channel structure ( e.g. Anderson and Narus,1984) on channel dynamics have long been important topics within the channel literature. In addition to the theoretical and methodological contributions, research in these areas has helped channel managers to understand how power is generated and used in coordinating distribution strategies in different contexts. The study presented in this paper builds upon these previous literatures, which are first briefly reviewed below.

Mission unreachable : how Jaman is shaping the future of on-line distribution

Perhaps the most innovative of all independent OLD ventures specialising in ROW content is Jaman. Founded in 2007 by IT entrepreneur Gaurav Dhillon, and based in San Mateo, California, Jaman is a quality specialist distributor of non-Hollywood films. As of late 2010, Jaman had 1.8 million registered users and attracts viewers from most countries in the world. 75% of all use is generated from outside the U.S. Jaman does very well in English speaking parts of the world, particularly current and former Commonwealth countries. The United Kingdom accounts for 29% of users, North America (U.S. and Canada) 26%, and India represents 23%. Jaman is sometimes referred to as ‘social cinema’: a website which brings together the critique and review of a cinephile website (the forums of Rue-morgue.com for cinefantastique movie fans for example) with the social interaction, community and functionality of a social media site (for example Facebook.com). Jaman could be considered a pioneer in this space; a first mover in wrapping commercial movie downloading in an interactive social experience.

On-line film distribution : Its history and global complexion

‘Nobody knows anything’, said William Goldman of studio filmmaking. The rule is ever more apt as we survey the radical changes that digital distribution, along with the digitisation of production and exhibition, is wreaking on global film circulation. Digital Disruption: Cinema Moves On-line helps to make sense of what has happened in the short but turbulent history of on-line distribution. It provides a realistic assessment of the genuine and not-so-promising methods that have been tried to address the disruptions that moving from ‘analogue dollars’ to ‘digital cents’ has provoked in the film industry. Paying close attention to how the Majors have dealt with the challenges – often unsuccessfully – it focuses as much attention on innovations and practices outside the mainstream. Throughout, it is alive to, and showcases, important entrepreneurial innovations such as Mubi, Jaman, Withoutabox and IMDb. Written by leading academic commentators that have followed the fortunes of world cinema closely and passionately, as well as experienced hands close to the fluctuating fortunes of the industry, Digital Disruption: Cinema Moves On-line is an indispensable guide to great changes in film and its audiences.

Connected Viewing: Selling, Streaming and Sharing Media in the Digital Era

As patterns of media use become more integrated with mobile technologies and multiple screens, a new mode of viewer engagement has emerged in the form of connected viewing, which allows for an array of new relationships between audiences and media texts in the digital space. This exciting new collection brings together twelve original essays that critically engage with the socially-networked, multi-platform, and cloud-based world of today, examining the connected viewing phenomenon across television, film, video games, and social media. The result is a wide-ranging analysis of shifting business models, policy matters, technological infrastructure, new forms of user engagement, and other key trends affecting screen media in the digital era. Connected Viewing contextualizes the dramatic transformations taking place across both media industries and national contexts, and offers students and scholars alike a diverse set of methods and perspectives for studying this critical moment in media culture.

Cord Cutting Anxiety Oversimplifies Distribution Revolution

Cord cutting refers to the act of cable and satellite consumers cancelling their subscriptions and opting instead for non-traditional distribution outlets, like streaming media platforms. The trend has been the subject of much debate in the trade press and a source of much concern for the industry. Yet many questions remain unanswered: Is it really a major trend? Does it save consumers money? Can viewers still find the content they love? How do we even “cut the cord” anyway?

Next Generation ‘Filmmaking’: New Markets, New Methods and New Business Models

Digital production and distribution technologies may create new opportunities for filmmaking in Australia. A culture of new approaches to filmmaking is emerging driven by ‘next generation filmmakers’ who are willing to consider new business models: from online web series to short films produced for mobile phones. At the same time cultural representation itself is transforming within an interactive, social media driven environment. Yet there is very little research into next generation filmmaking. The aim of this paper is to scope and discuss three key aspects of next generation filmmaking, namely: digital trends in film distribution and marketing; processes and strategies of ‘next generation’ filmmakers; and case studies of viable next generation business models and filmmaking practices. We conclude with a brief examination of the implications for media and cultural policy which suggests the future possibility of a rapprochement between creative industries discourse and cultural policy.

Submission to House Standing Committee on Infrastructure and Communications inquiry into IT Pricing

The strategies of price discrimination engaged in by a number of international publishers, coupled with a lack of competition and restrictions on the ability of consumers to engage in arbitrage, is likely to undermine the legitimacy of copyright law in Australia. By increasing prices beyond a reasonable and fair level, these strategies also undermine the goal of copyright law to enhance access to cultural goods. Enhancing access – and therefore lowering prices – is crucial to enhancing Australia's innovative capacity and the ability of Australians to experience, learn, act, and grow through cultural works. We recommend that the committee investigates the following options: 1. Repeal parallel importation restrictions; 2. Fundamentally reconsider the operation of anti-circumvention law in the context of digital distribution models; 3. Prohibit and render unenforceable contractual restrictions on parallel importation; 4. Introduce a right of digital resale in Australia.

GO423 - the second Game On / brIGDA Independant Game Symposium

GO423 was initiated in 2012 as part of a community effort to ensure the vitality of the Queensland Games Sector. In common with other industrialised nations, the game industry in Australia is a reasonably significant contributor to Gross National Product (GNP). Games are played in 92% of Australian homes and the average adult player has been playing them for at least twelve years with 26% playing for more than thirty years (Brand, 2011). Like the games and interactive entertainment industries in other countries, the Australian industry has its roots in the small team model of the 1980s. So, for example, Beam Software, which was established in Melbourne in 1980, was started by two people and Krome Studios was started in 1999 by three. Both these companies grew to employing over 100 people in their heydays (considered large by Antipodean standards), not by producing their own intellectual property (IP) but by content generation for off shore parent companies. Thus our bigger companies grew on a model of service provision and tended not to generate their own IP (Darchen, 2012). There are some no-table exceptions where IP has originated locally and been ac-quired by international companies but in the case of some of the works of which we are most proud, the Australian company took on the role of “Night Elf” – a convenience due to affordances of the time zone which allowed our companies to work while the parent companies slept in a different time zone. In the post GFC climate, the strong Australian dollar and the vulnerability of such service provision means that job security is virtually non-existent with employees invariably being on short-term contracts. These issues are exacerbated by the decline of middle-ground games (those which fall between the triple-A titles and the smaller games often produced for a casual audience). The response to this state of affairs has been the change in the Australian games industry to new recognition of its identity as a wider cultural sector and the rise (or return) of an increasing number of small independent game development companies. ’In-dies’ consist of small teams, often making games for mobile and casual platforms, that depend on producing at least one if not two games a year and who often explore more radical definitions of games as designed cultural objects. The need for innovation and creativity in the Australian context is seen as a vital aspect of the current changing scene where we see the emphasis on the large studio production model give way to an emerging cultural sector model where small independent teams are engaged in shorter design and production schedules driven by digital distribution. In terms of Quality of Life (QoL) this new digital distribution brings with it the danger of 'digital isolation' - a studio can work from home and deliver from home. Community events thus become increasingly important. The GO423 Symposium is a response to these perceived needs and the event is based on the understanding that our new small creative teams depend on the local community of practice in no small way. GO423 thus offers local industry participants the opportunity to talk to each other about their work, to talk to potential new members about their work and to show off their work in a small intimate situation, encouraging both feedback and support.

The game of clones and the Australia tax : divergent views about copyright business models and the willingness of Australian consumers to infringe

It is often said that Australia is a world leader in rates of copyright infringement for entertainment goods. In 2012, the hit television show, Game of Thrones, was the most downloaded television show over bitorrent, and estimates suggest that Australians accounted for a plurality of nearly 10% of the 3-4 million downloads each week. The season finale of 2013 was downloaded over a million times within 24 hours of its release, and again Australians were the largest block of illicit downloaders over BitTorrent, despite our relatively small population. This trend has led the former US Ambassador to Australia to implore Australians to stop 'stealing' digital content, and rightsholders to push for increasing sanctions on copyright infringers. The Australian Government is looking to respond by requiring Internet Service Providers to issue warnings and potentially punish consumers who are alleged by industry groups to have infringed copyright. This is the logical next step in deterring infringement, given that the operators of infringing networks (like The Pirate Bay, for example) are out of regulatory reach. This steady ratcheting up of the strength of copyright, however, comes at a significant cost to user privacy and autonomy, and while the decentralisation of enforcement reduces costs, it also reduces the due process safeguards provided by the judicial process. This article presents qualitative evidence that substantiates a common intuition: one of the major reasons that Australians seek out illicit downloads of content like Game of Thrones in such numbers is that it is more difficult to access legitimately in Australia. The geographically segmented way in which copyright is exploited at an international level has given rise to a ‘tyranny of digital distance’, where Australians have less access to copyright goods than consumers in other countries. Compared to consumers in the US and the EU, Australians pay more for digital goods, have less choice in distribution channels, are exposed to substantial delays in access, and are sometimes denied access completely. In this article we focus our analysis on premium film and television offerings, like Game of Thrones, and through semi-structured interviews, explore how choices in distribution impact on the willingness of Australian consumers to seek out infringing copies of copyright material. Game of Thrones provides an excellent case study through which to frame this analysis: it is both one of the least legally accessible television offerings and one of the most downloaded through filesharing networks of recent times. Our analysis shows that at the same time as rightsholder groups, particularly in the film and television industries, are lobbying for stronger laws to counter illicit distribution, the business practices of their member organisations are counter-productively increasing incentives for consumers to infringe. The lack of accessibility and high prices of copyright goods in Australia leads to substantial economic waste. The unmet consumer demand means that Australian consumers are harmed by lower access to information and entertainment goods than consumers in other jurisdictions. The higher rates of infringement that fulfils some of this unmet demand increases enforcement costs for copyright owners and imposes burdens either on our judicial system or on private entities – like ISPs – who may be tasked with enforcing the rights of third parties. Most worryingly, the lack of convenient and cheap legitimate digital distribution channels risks undermining public support for copyright law. Our research shows that consumers blame rightsholders for failing to meet market demand, and this encourages a social norm that infringing copyright, while illegal, is not morally wrongful. The implications are as simple as they are profound: Australia should not take steps to increase the strength of copyright law at this time. The interests of the public and those of rightsholders align better when there is effective competition in distribution channels and consumers can legitimately get access to content. While foreign rightsholders are seeking enhanced protection for their interests, increasing enforcement is likely to increase their ability to engage in lucrative geographical price-discrimination, particularly for premium content. This is only likely to increase the degree to which Australian consumers feel that their interests are not being met and, consequently, to further undermine the legitimacy of copyright law. If consumers are to respect copyright law, increasing sanctions for infringement without enhancing access and competition in legitimate distribution channels could be dangerously counter-productive. We suggest that rightsholders’ best strategy for addressing infringement in Australia at this time is to ensure that Australians can access copyright goods in a timely, affordable, convenient, and fair lawful manner.

The new supply chains : the Multichannel Networks

Digital innovation is transforming the media and entertainment industries. The professionalization of YouTube’s platform is paradigmatic of that change. The 100 original channel initiative launched in late 2011 was designed to transform YouTube’s brand through production of a high volume of quality premium video content that would more deeply engage its audience base and in the process attract big advertisers. An unanticipated by-product has been the rapid growth of a wave of aspiring next-generation digital media companies from within the YouTube ecosystem. Fuelled by early venture capital some have ambitious goals to become global media corporations in the online video space. A number of larger MCNs (Multi-Channel Networks) - BigFrame, Machinima, Fullscreen, AwesomenessTV, Maker Studios , Revision3 and DanceOn - have attracted interest from media incumbents like Warner Brothers, DreamWorks, Discovery, Bertlesmann, Comcast and AMC, and two larger MCNs Alloy and Break Media have merged. This indicates that a shakeout is underway in these new online supply chains, after rapid initial growth. The higher profile MCNs seek to rapidly develop scale economies in online distribution and facilitate audience growth for their member channels, helping channels optimize monetization, develop sustainable business models and to facilitate producer-collaboration within a growing online community of like-minded content creators. Some MCNs already attract far larger online audiences than any national TV network. The speed with which these developments have occurred is reminiscent of the 1910s, when Hollywood studios first emerged and within only a few years replaced the incumbent film studios as the dominant force within the film industry.