Category Archives: Film & TV

Problems Facing the Film Industry

Red Curtain
Red Curtain by djnorway

There is a lot of gnashing of teeth about the future of the film industry given that “Between 2007 and 2011, pre-tax profits of the five studios controlled by large media conglomerates fell by around 40%”.

The business of film making (as opposed to TV) will change. The Internet has disrupted theatrical distribution, home video and home entertainment.

Hollywood has responded to the threat to their business model by pursuing tentpole releases. Big event movies that prop up the bottom line the way a pole props up a tent at the circus. That’s still a broken business model which sees the studios make fewer movies which each carry a greater share of the risk. $300 million USD to make and another $50-100 million to market. Now in the world on mega corporations those numbers are not significant.

The problem is that the large media conglomerates are too big. If they had a movie that cost $25 million to make and market, and it made $75 million that’s a great result. But it doesn’t mean a drop in the ocean for conglomerates that big.

In the long run I expect the film production business will be a big but not huge business. Mature competitive markets eventually generate zero abnormal profits. In the long run mature markets can be measured by return on equity (ROE pr ROCE). I don’t see something as bespoke as film production becoming that reliable. Television drama with it’s focus on reaching 100 episodes can produce a product range over 3 or 4 years.

Public ownership of movie production companies is not a good fit for the model. Smaller companies and smaller movies will always find a way to make money in a smaller market.

Interestingly, are there any publicly listed Art production companies? No, but that doesn’t stop artists from creating work, and the most successful of them making a very good living at it.

Channel Ten finally on Foxtel’s EPG

Channel Ten Australia has finally signed a deal to allow digital broadcast to Foxtel’s cable and satellite subscribers. Until now channels Ten and Seven has only been available on Foxtel cable as an analogue retransmission. This meant that Foxtel’s digital Electronic Program Guide did not list Ten’s or Seven’s schedule.

In the new media world not being in an EPG make you invisible. It doesn’t matter that I can scan while channel surfing, I rely on the description that pops up on screen or on the EPG. Until last year I would go online and look it up, but I finally got tired of that. So as a result my family watch precisely one (1) hour of channel Ten per week. We watch less channel 7.

What amazes me is that the management of these businesses obviously thought cutting a deal to be on Foxtel’s digital would not impact their ratings. Instead it allow the other Foxtel digital channels to capture eyeballs and forget about their programming. So the only way I discover their programming is to see their expensive advertising in other media.

My informal pub chat poll shows my household is not unusual. Foxtel subscribers love their remotes, their electronic program guides and their planners.  Media analysts counter that very few Australians watch Foxtel’s channels other than sport or movies. It doesn’t matter, enough of us have stopped watching Seven and Ten because it is not accessible.

Lesson: Do not get between your product and your customer.

Thankfully Ten is has now joined the party. Now seven needs to get over their C7 digital hissy fit and make their schedule available.

Disney offers free ABC TV

ABC network logoThe threat of internet TV downloads is met head on by Disney the owner of ABC network and Pixar. ABC will be offering their prime-time TV shows like Lost and Desparate Housewives for download via their MyABC portal at launching in May.

The Wall Street Journal has the story on the front page today.

DISNEY PLANS to make much of its most popular programming on ABC and other channels available free anytime on the Web. The move could speed changes in TV viewing and help revive the ad business.

The big news s they’re allowing these downloads for free. They will contain advertising and the ability to fast forward and rewind. The shows are already available for video iPod via iTunes, but ABC understands advertising business models, so they’re playing with their advertising to make an event of the launch. Should be interesting.

Great move, they’ve siezed the day and decided to grab the market before someone else eats their lunch.

It looks like Steve Jobs may be teaching them to unclench their grip.

28 Days Later

Last Friday, Nella and I saw 28 Days Later directed by Danny Boyle.

This is one of the scariest movies I have ever seen. I see it marketed as a horror movie but that is just plain wrong. Actually horror is correct if you use the pre-splatter film definition of the term. 28 Days Later invokes dread and fear for our heroes. I even considered covering my eyes at one spot. It is all done with suggestive editing. There is hardly any gore (but there is enough to set the scene).

This is the mother of zombie movies. It is also a top flight thriller. Basically a quick incubating and highly infectious virus called Rage is unleashed on humankind. 28 Days after initial exposure, London (and England) is a ghost town. Our hero awakes from a coma to discover empty streets and and super-fast rage-infected zombies. That’s all you need to know without spoiling it. Make sure you sit through the end credits or you’ll miss something important.

Nella and I talked about this movie afterwards for at least an hour. That is how much the movie affected us.

It looks like it was shot on Digital Video and that makes the film even grittier and creepy. It’s like watching video footage of the disaster.

Watch it even if you don’t like horror movies.

Film & TV category

Some of you know I’ve raised risk equity for feature films and independant production companies. Films and television are a passion of mine.

I’ve created the Film & TV category to write about Films and TV. The category probably won’t be too investment focused. I suspect I’ll comment on interesting trends or movies/TV I see.

Note I probably won’t write reviews. That is a skill I don’t really want to develop and there are better sites out there for reviews. Instead I’ll tell you why I reacted to the movie/show.