New Technology Counters the Studio Stranglehold on Movie Making

We wrote recently about the impact of new technology on how we can watch movies in the near future.  Our contention is that creating a true ‘big screen’ experience, as good as or better than a movie theater, is now finally becoming a reality in our own homes with the new 4K displays plummeting in price.

But while most of us understandably focus primarily on how and where we watch movies, there is a similar but less obvious revolution underway in how movies are made and distributed.

It is interesting to reflect for a minute on how our movie watching and video entertainment has changed over the last few decades, then consider the as yet incomplete implications of that not just for how we watch movies in the future (that was the topic of the previous article) but also for how video entertainment in general is made and distributed.

A few decades ago, there was only one way to see a movie – in a theater (and don’t forget that only a few decades before that, there was no such thing as television at all – the only form of video/visual entertainment was either live theater or movie theater presentations).

Furthermore, the chances are that there were only one or two theaters within a convenient distance of where we lived and worked, and they probably had only one screen each.  Although theaters tried to juggle their content by having things like Sunday night double-feature reruns, children’s movies on Saturday afternoons, and so on, for prime screening times, there was only one available movie per theater, with only one screening time every three or so hours, and not many theaters to choose from.

The Rise of the Studio System

This system was enshrined in place for at least fifty years, and was reflected by the industry that created the movies.  There was only the potential for a limited number of movies to commercially succeed each year, because there was a limited number of movie theaters, screens, and screening times available.

So there became a massive concentration of power in what has been termed the ‘studio system’, as represented by the people and companies who had access to get movies into theaters and onto their screens.  Theaters would commonly have exclusive deals with studios, and the studios in turn created exclusive contracts with actors and directors, and so a very artificial ‘cult of personality’ was deliberately created so as to enhance the perceived appeal and therefore success of the limited number of movies that were made.

The movie industry became incredibly incestuous and also totally isolated/insulated from change or challenge.

An entire sycophantic supportive (and in part parasitic) industry grew up around it, and popular culture came to adore stars and view them not only as rare beauties but also as thought and style leaders.  Such perceptions were – and are – probably undeserved, but suited the purpose of all involved.  In particular, people would spend good money to see a movie not so much due to what the movie was, but rather because of who appeared in it.

The risk to the studio and the theaters was reduced accordingly, and while stars were paid very generously, that added to their special status and increased their box-office appeal, while quietly behind the scenes, the stars were tightly tied via contractual obligations to their studio masters.

At a time when the world was rejecting its royal families, it was simultaneously replacing them with movie stars as people to fawn and obsess over.

The World Starts to Change, But Not the Studios

Eventually, movies started to enjoy broader distribution channels, but this change was a long and slow time in coming.  When movies started to be rescreened on television, there was initially a long delay between a movie’s theatrical release and its eventual tv appearance; besides which, television quality back then was – by today’s standards – laughably bad (although, in truth, at the time it seemed miraculous and it took a long time for people to truly perceive its poor quality).

Home video started to appear in the late 1970s – initially with very expensive video players, and very expensive content.  You could pay $100 or more for a copy of a movie, and in the early 1980s, $100 was much more a cost than it is today.

The late 1970s also saw the development of multi-screen theaters, a development which transformed the economic model for owning and operating a movie theater.  Prior to that, movie theaters were decreasing in number and some pundits predicted their extinction; but now there are more screens per head of population than at any previous time, and the movie theater business has returned to profitability.

Television as a distribution medium continued to evolve.  More channels of programming appeared, and television programming became 24/7.  Cable added tens and then hundreds of new outlets for programming of all types, and also weakened the grip on distribution and audience access formerly enjoyed by the big three networks.  Satellite distribution added still more outlets for programming, and the market changed from too much potential content and not enough outlets to now having too many outlets and a great hunger for content – but with no budget for expensive production.

Television quality also improved, making it more appealing and involving, and increasingly well suited for ‘big screen’ type entertainment.

An interesting development  was making movies – by the major studios, even, as well as new organizations such as HBO – that were never intended for theatrical release.  Straight to television or straight to video movies became more common.  The movies that did go the theatrical release route were appearing much sooner on television and cable and video, to the point that studios now get more than half their income from most movies via non-theatrical distribution.

All these various developments weakened the former strangle-hold the movie studios had on movie making and movie distribution, but even though the game had changed, most players instinctively attempted to preserve the previous set of rules.

In particular, there were two aspects of movie making where the studio system still dominated.  The first was (is) the financing side of movie making.  As a partial response to the proliferation of lower budget television programming, movies became more expensive and more spectacular, and so cost more and more money to make and then to promote and distribute.

The second aspect was the deification of movie stars was even further affirmed.  You could probably never see the people designated as ‘the best actors’ appearing in television programs, you had to watch a movie for this special honor.  Although the cost of actors was ever-growing, it suited the traditional studios’ purposes more than ever, as a competitive response to new sources of movie-type entertainment, to continue to promote big name super-stars.

Meanwhile, technology continued to quietly change the rules of the game.  In particular, there have been two enormous changes that are only now starting to be recognized by the studios.

The Two Changes That Will End the Studio Stranglehold on Movie Making

The first change is that distribution channels have continued to multiply.  We started off with only a limited number of theaters, each with one screen, and they were semi-monolithically aligned with the movie studios.  We then had limited television distribution, we then had greater television distribution, we then had multi-screen theaters that were not so tied to specific studios, we then had cable and satellite, and we then had video – both for sale and for rental.

But we now have streaming, too.  We now have internet streamed video, adding literally thousands more channels of content distribution.  Roku alone has over 1,000 public channels and also an unknown number of additional private channels (see our recent article about Roku and its private channels).

Indeed, it seems that Roku users are now installing more private channels than public channels on their players.  Creating a private channel is a relatively easy and inexpensive thing that ordinary people can do (and adding a public channel is only slightly more complex).

It isn’t just Roku; there are many other internet streaming service gateways out there now, meaning that essentially anyone can now start distributing almost any content to just about anyone else – and everyone else – and anywhere/everywhere, too, and with few technological or financial barriers.

Keep in mind also the increasingly theatrical experience that can be enjoyed via high quality internet video streams, and the net result is that the distribution process as between a movie maker and a movie watcher is now wide open.

Now for the next change.  The cost of making good ‘theatrical quality’ video has been falling.  This seems counter-intuitive, because the cost of making a ‘blockbuster’ big studio extravaganza seems to be ever-rising, higher and higher.

But the cost of making a ‘B list’ movie has been falling.  There is no longer any need to buy or hire extraordinarily expensive camera equipment along with all the dollies, booms, lighting, and other apparatus and paraphernalia.  You can make a high quality movie with little more than a compact camcorder these days (here’s a Sony 4K camcorder that will sell on the street for under $2000, indeed, there have been ‘proof of concept’ movies filmed with lower quality HD camcorders and which have been shown to have perfectly good high quality imagery.  Add a Steadicam mount – which with the now tiny and featherweight digital cameras it supports has become simple, easy and affordable – and you’ve a low-cost professional rig that will get you through most of your filming.  Image stabilization has gone a long way to removing the need to have dollies moving on rails.  Use a simple dolly for some shots, and instead of an outrageously expensive set-up for aerial or crane shots, a remote-controlled micro-helicopter (here’s one that costs only $1200 – including camera!) can give you similar or identical results, and you’ve got a 99% solution at 1% (or less) the cost of what the big studios are still paying.

You also no longer need high-end very expensive editing facilities.  You can use your home computer and buy editing software costing less than $100 (Corel Video Studio Pro X6 is under $40 on Amazon and supports 4K video as well as HD and other formats) to create and edit a high quality, high-resolution, professional grade movie.

Skip also the mega-millions of dollars for special effects.  While some of the ultra-high end stuff is still expensive, many of what have now become more modest effects have become very easy to create.  These costs too are plunging down to ordinary and affordable, and instead of requiring room sized super-computers, can run on your home computer.  The Corel software mentioned above already includes some special effect generating capabilities.  Add an extra $10 to upgrade from Corel Video Studio Pro X6 to Corel Video Studio Ultimate X6 for more, and if you’re wanting really big budget results, maybe add their MotionStudio 3D software as well (about $80 extra).

It is also relevant to note that the lead times for all these stages of the production and post-production processing have collapsed, allowing a movie to go from concept to completion much more quickly.  And one more cost saving – digital shooting to hard drives or memory cards have saved the not insignificant cost of movie film, too.

Lastly, skip the tens of millions of dollars that you’d otherwise pay to movie stars and big name directors.  If you have a look at the career path and background of both stars and directors, you’ll see that a lot of the time, they burst into the market without years of experience or training or anything at all rather than apparently luck.  On the other hand, Hollywood is littered with spectacularly failed movies with the biggest budgets and biggest name directors and stars.

Much as Hollywood wishes there was, there is no guarantee between the stars and directors they choose, and the success of a movie.  We’re not saying that skill and experience don’t help, but it seems that the best directors and actors are either ‘born’ with much of their ability naturally present, and just need technical honing of their rough edges, or else are wholly artificial creations by the studios, often with no underlying guarantee of consistent quality output at all.

We’re seeing the first fruits of this already.  In addition to the HBO type movie making companies that make movies first for the cable market, we’re now seeing video streaming services such as both Netflix and Hulu start creating content intended for their streaming services, bypassing the theaters and the cable companies.

Netflix in particular has chosen some high-profile series (Lilyhammer and House of Cards) as well as doing some interesting experimentation, reviving defunct television series (such as Arrested Development) and experimenting with other types of programming too (here’s a list of much of what they have done so far and what is currently in development).

Amazon’s Under-the-Radar Moves Hint at the Future

Perhaps the most ‘under the radar’ action at present is coming from Amazon.  They have a division, Amazon Studios, that is seeking to sponsor and support new ‘Indie’ moviemakers and their movies.  This has not yet had much impact on the industry as a whole, but few would choose to bet against any Amazon backed ‘disruptive’ venture – the company is one big disruptor.

Amazon is adding an interesting new component to the movie-making mix.  They are getting feedback from the public at every step of the way.  This may allow for a much more focused approach to making successful movies, based on what people like, rather than based on the illusory appeal of stars.

Amazon has already marginalized the book publishers who for a long time held an analogous role as the ‘gate keepers’ in the book industry – all book sales and all book writing had to go through the publishers (instead of studios) and were sold through bookstores (instead of movie theaters).  Now anyone can publish a book, and can distribute it online.  Not only can they do this, but they can do it quickly, in mere minutes (publishing a book through the traditional process can take 18 months) and much more profitably, keeping sometimes 50% or more of the proceeds of their sales (traditionally published authors get as little as 5% of book selling prices).

Will we see a similar future with movie making?  Will you and I be able to make studio quality movies for thousands instead of millions of dollars?  And, after having made the movie, will we be able to then get it to the public quickly, conveniently, and profitably?

The answers to all these questions (except the last one!) are already clear, and affirmative.  As for the profit part, that is up to us and the quality of our creations.