On February 29, 2016, media executive, attorney, lecturer, entrepreneur, and author, Jeff Ulin, shared his thoughts about the future of film and television consumption and the current trends influencing the media industry with the members of the Media Management Association.
Ulin has had more than 25 years of experience in the media business, including four years as senior vice president of business affairs and general counsel at Paramount and Universal Home Entertainment as well as 10 years as head of worldwide distribution at Lucasfilm. In addition, he has taught at the University of California, Berkeley, and authored The Business of Media Distribution, now in its second edition.
Ulin discussed three current trends that are impacting the theatrical market today. He argued that major blockbuster films are increasingly accounting for a significant portion of box office revenue, up from 24 percent in 2014 to 34 percent in 2016. This gain leaves little opportunity for low-budget films to earn a piece of the pie and, Ulin suggests, that we might begin to see the introduction of dynamic pricing. This pricing strategy, which is a form of price discrimination, means that movie theaters could charge consumers different price tiers based on such factors as seat quality and movie talent.
Ulin noted that there is pressure to collapse the delivery “windows,” including the theatrical window. The “windowing” model has been profitable for decades and allows each of the platforms in the distribution chain to have its own window of exploitation to generate revenue. But the windows are starting to shrink and sometimes even disappear, as over-the-top (OTT) services, such as Netflix and Amazon, are releasing original films, skipping over a theatrical release.
Finally, Ulin pointed out that OTT services have also become a threat to acquisition of new content by becoming the biggest buyers.
Ulin acknowledged the old “long-tail” model, one that has infinite shelf life for content and can generate revenue for years. But today, a “wide-tail” model is emerging, one that has infinite shelf space with endless content options. He argued that the combination of these two economic phenomena could create a persistent video-on-demand world, which would undermine the value of windows and decrease optimization.
To sum up, Ulin argued that today “it’s all about content,” and Hollywood is facing three main related challenges: competition from online challengers like OTT services, a race to acquire content, and increased prices to buy that content. According to Ulin, a crucial step to address these issues is the urgent need to establish a multi-platform ratings system because “we don’t know what is watched, where, and by whom.”
