Bigger Picture Research

The 'Winslet algorithm': a news MacGuffin

2009-11-10T07:09:41+00:00

Last week I had the pleasure of delivering a guest lecture to third year Media students at the University of Ulster. As a lapsed academic of no great repute this is not my usual sort of gig, but I was grateful for the invitation from Professor Máire Messenger Davies, a friend and former colleague who heads up the university’s Centre for Media Research (Máire is also co-author of Practical Research Methods for Media and Cultural Studies, essential reading for number phobic creative types).

The lecture addressed the use of research in public policy settings. The mantra of ‘evidence-based policy’ still holds sway in government circles, although the concept has been challenged and refined since the Modernising Government White Paper (1999) first pushed it up the administrative agenda. I wanted to help students understand why so much research is undertaken or commissioned in the Government’s name (and, by extension, ours), and to what ends.

By happy chance the topic had extra sizzle in the week when the Government’s chief scientific adviser on drugs was sacked by the Home Secretary over a policy dispute. Plus the lecture gave me a good excuse to trot out a much cherished, and oft repeated, quote by the poet A.E. Housman (‘Statistics…are like a lamppost to a drunk. They’re used more for support than illumination’).

Anyway, following the lecture I’m back in England no more than two days only to find, in the pages of The Sunday Times, an intriguing example of film policy research in action (‘Kate Winslet's wow factor is worth £60m to the British economy’). Disappointingly, the story just doesn’t stack up on closer inspection, although that hasn’t stopped its propagation by other news outlets (including the Guardian and The Daily Telegraph).

Allow me to explain.

The story in question concerns news that the UK Film Council has prepared ‘a briefing note’ quantifying Kate Winslet’s monetary value to the British economy (quotes here and that follow are taken from The Sunday Times article unless indicated otherwise).

It’s an intriguing idea, with obvious news value to a weekend broadsheet looking for star-tinged copy.

The story, as written, is simple enough: taking Kate Winslet as a test case, we’re told the UK Film Council calculated her economic worth using five variables:

The star’s salary (estimated by the UK Film Council to total £20 million from 1995 onwards)
‘Production investment effect’, which is the value of production activity attracted to the UK by the star’s profile (estimated at £34.4 million).
‘Box-office chain effect’, defined in the news report as ‘the element of a successful film that marketing firms credit directly to the actor’. No figure is given for this item.
Earnings from tourism associated with films featuring the actress (no figure is given).
The ‘general promotional effect’ for Britain (once again, no figure is given).

Result: Ms Winslet’s value as a ‘national treasure’ is estimated to be around £60 million.

In the lecture I made it clear that readers of such news reports should ask themselves who conducted the research in question and for what purpose. To this end we’re told the calculation was conducted ‘by economists funded by the government’ (i.e. the UK Film Council), and that the ‘formula’ will ‘be used by diplomats and businessmen promoting the British film industry abroad.’

Now maybe I’m being dim, or perhaps I’ve not been at this game long enough- but how does that work exactly? Kate Winslet is estimated to be worth £60 million to the UK economy (using a plausible but wholly artificial measure), and that information in some way helps to promote the British film industry abroad. I’m definitely missing something here.

Curiously, in place of more detailed exposition we're served up a quote from Jeremy Hunt, shadow culture secretary, who, we're told (in a startling flash of foresight), 'will make headlines at the end of this month when a group assembled by [him] recommends ways to rekindle the spirit of creative fever once known as cool Britannia'. 'I think [Kate Winslet] is an extraordinary actress', Hunt is quoted as saying. 'I loved her in Revolutionary Road, but also as a symbol of what Britain can offer the world.'

It would help, of course, if we could actually read the briefing note in question. At least that would establish the background and credibility of the calculation, and most likely describe the underlying assumptions that qualify data modelling of this sort. But there are no such details in the news report, and nothing on the UK Film Council web site (no press release, and certainly no briefing note). Which suggests this was most likely an internal exercise, carried out for tactical purposes or in response to a specific request, and therefore not one to bear too much weight in policy terms. Public bodies are unlikely to commission or undertake research that has demonstrable policy impact without publishing it for credibility sake.

So, to recap the main points: we have an unpublished government 'formula' used by unnamed ‘diplomats and businessmen’ for unknown ends. I can't help feeling it's a situation with all the makings of a classic Hitchcock MacGuffin. And if I was to run my lecture again I’d gently remind the students to question everything they read in the papers (and blogs, for that matter).

UK feature film certification data, January to September 2009

2009-11-01T19:59:53+00:00

The level of UK feature production activity looks to be on the rise according to data published last week by the UK Film Council.

The number of interim certifications awarded by the Secretary of State, a rough-and-ready upstream indicator of future production levels, rose from 102 in the period January to September 2007, to 130 in the first nine months of 2009.

In 2009, 114 interim certificates were awarded to Schedule 1 films (those that have passed the UK Cultural Test to qualify for tax relief), and 16 co-productions received interim certificates.

The number of UK co-productions has declined in recent years (as noted previously), and though it may be premature to draw firm conclusions these data suggest the downward trend may have stabilised (for the time being at least). In 2007, 20 co-productions received interim certification between January and September, compared with 11 in 2008 and 16 in 2009 (a modest recovery, of sorts).

The briefing note (British film certification, Jan-Sept 2009) also includes final certification data for films shot in the previous three years, confirming the general pattern of activity described in last month’s UK production statistics for 2009.

British film certification, Jan-Sept 2009 can be found on the UK Film Council ‘statistics release calendar’ page, or downloaded as a PDF direct from here.

UK cinema admissions, September 2009

2009-10-24T16:28:17+01:00

Britain is suffering the longest period of recession since records began according to figures published yesterday by the ONS, which show the economy shrank by 0.4% between July and September. Tough times, indeed.

So it comes as heartening news that the cinema business, at least, is showing signs of continued resilience.

Admissions totalled 9,703,035 in September, according to the Cinema Advertising Association, bringing the year-to-date total to 128,744,651. This marks a rise of nearly 3% on the number of tickets sold in the same period last year.

The total for 2009 has now slipped just behind that of 2002, but remains higher than at any other time since. At this rate 2009 admissions should finish somewhere north of 172 million by close of the year.

Figure 1: UK cinema admissions, January to September 2002 to 2009

Source: CAA/Nielsen EDI

New study of Video on Demand in Europe

2009-10-19T21:07:47+01:00

After what feels like endless years of speculation it looks as if the long held out promise of Video on Demand (VoD) may finally be gaining some market traction (albeit still relatively modest in revenue terms), in part as a result of ‘day and date’ release experiments by certain of the major studios.

But don't take my word for it.

Here’s Variety scribe Diane Garrett writing recently in her splendid Consumed by Media blog:

‘To hedge their bets, more studios have decided to follow Warners lead and release pics simultaneously on DVD and VOD. Sony and Universal collapsed the VOD windows for “Angels & Demons,” “The Ugly Truth,” “The Taking of Pelham 1 2 3,” “Julie & Julia” and “Bruno.” Warners will do it on “Orphan,” “Four Christmases” and “Terminator: Salvation.”

If people are going to rent rather than buy, studios vastly prefer they view movies on VOD. It’s simple economics: Studios get a bigger cut of each VOD transaction than they do with disc rentals. The shorter the VOD window, the more enticing a rental prospect that delivery platform becomes.’

In support of this shift in the business model (shift is the correct term, as it's hardly revolutionary; a shuffle of the cards rather than a whole new deck), Susanne Ault, Garrett’s Variety stablemate, quotes Sean Carey of Sony Pictures Home Entertainment:

"It's much more beneficial if the consumer buys content (instead of) renting content. That being said, we do feel that, for some titles, moving the VOD date to the same day as sell-through can grow [the business]."

Against this backdrop, the European Audiovisual Observatory (in association with the French government Directortate for Media Development) last week published a timely study charting recent developments in the European VoD market ('Video on demand and catch-up TV in Europe').

Using criteria established by the European Audiovisual Media Services Directive to determine what constitutes a VoD service, the study identified a total of 696 services operated by 366 providers at the end of December 2008. The UK had the most services in Europe (145), followed by France (106) and Italy (93) (see Figure 1).

More than half these services were delivered via the internet (57%), 30% by Internet Protocol television (IPTV) across a DSL network, 7% on cable services, 4% by digital terrestrial television (DTT) and less than 3% by satellite. According to the press release, the study does not ‘take account of services distributed on mobile telephones […] websites devoted solely to the provision of information, trailers or adult programmes. Nor does it consider the channels set up by commercial undertakings in the context of video sharing sites such as YouTube or Dailymotion.’

Figure 1: Number of on-demand audiovisual media services in Europe by country of reception and type of network (December 2008)

Source: European Audiovisual Observatory

The press release concludes with the finding that on-demand services are provided by a variety of different players, including broadcasters, film companies, satellite and cable operators, alongside relative newcomers to content distribution in the form of telecoms operators and hardware manufacturers (of games consoles, mobile telephones and other multimedia devices).

Although the press release doesn’t go into detail, the study also looks at the prevailing VoD business models and surveys the commercial landscape within which these developments are occurring. A full content list and purchase details can be found here.

UK feature film production, January to September 2009

2009-10-16T16:47:56+01:00

The UK Film Council has just released the latest UK feature film production data, offering a mixed bag of positives and negatives in these straitened times.

During the first nine months of the year, the total spent on feature production in the UK stood at £857.2 million, an increase of 67% on the total UK spend for the same period last year (£512.3 million), and 15% up on the first nine months of 2007 (£742.8 million).

In fact, as the UK Film Council briefing note (1) points out, 2009 witnessed the ‘best first nine months since 2003’ (see Figure 1).

Figure 1: UK film production, Jan-Sept 2003 to Jan-Sept 2009

Source: UK Film Council

As usual the increase in UK spend was driven by inward investment feature production, which accounted for 80% of the total UK spend between January and September 2009. That’s the highest proportion since before 2003 (when accurate records began- see Figure 2), reflecting the effect of the weak Pound and the UK’s generous tax incentives in attracting big-budget studio films to shoot here.

Figure 2: % of total UK spend by production type, Jan-Sept 2003 to Jan-Sept 2009

Source: UK Film Council

The number of inward investment features also rose (to 28, from 22 in 2008). 2009 titles include Clash of the Titans, Get Him to the Greek, Gulliver’s Travels, Harry Potter and the Deathly Hallows Part I, Inception, London Boulevard, Never Let Me Go, The Chronicles of Narnia: Voyage of the Dawn Treader, Untitled Robin Hood Adventure and Your Highness. The average budget of an inward investment feature stood at £52.8 million in the first nine months of 2009, compared with £30.7 million in 2008 and £31.2 million in 2007 (figures for 2008 and 2007 are for the full year).

The number of UK domestic productions shot in the first nine months of 2009 (62) remained at much the same level as in the previous year (61), but the value of UK spend on domestic features fell from £182.8 million in 2008 to £154.2 million this year.

The briefing paper notes that average and median budgets of UK domestic features have fallen over the last six years, reflecting ‘market and financing pressures to make films at lower budget levels than a few years ago’. In 2003 the average domestic feature budget stood at £5.6 million, compared with £3.1 million in 2009. The median domestic feature budget (the calculation of which is not skewed by extreme values at either end of the budget scale) has fallen from £2.9 million in 2003 to £1.4 million in 2009.

The outlook for co-productions is altogether gloomier. Only eight co-pros started shooting between January and September 2009, compared with 18 during the same period in 2008, and 23 in 2007. This decline in activity is matched by a fall in the value of UK spend on co-productions, which stood at a mere £16.6 million in 2009 as against £45.8 million in 2008 and £54.7 million in 2007.

'The one ongoing concern', UK Film Council’s CEO John Woodward reflects in the press release, 'is in relation to the continued drop in UK independent co-productions. This is largely a function of the one flaw in the otherwise excellent film tax credit which disincentivises UK participation in co-productions by focusing tax relief only on production spend made on the ground in the UK.'

In this context it is worth noting that Ed Vaizey, Shadow Arts minister, told delegates at this week's Screen International Film Summit that the tax credit system would be safe under the Conservatives, and that he remains open-minded about changes to assist co-productions. Let's hope so.

(1) The briefing note (available to download as a PDF here) contains a description of the data collection methods and definitions employed by UK Film Council production tracking.

Montage: Studionomics subverted; streamed performances at the cinema; UNESCO film study

2009-10-15T01:00:00+01:00

Last month I wrote a piece about data-driven guesswork (aka studionomics) endemic in the film business. The team behind MarqueeStars.com, which served as an example in the post, has since responded in kind with an article outlining their philosophy and intentions (‘Wolves in the Number Cruncher’s Hen House’).

Actually it’s more like a declaration of independence; far from being in thrall to studionomics, it turns out Marquee Stars is there to subvert it.

Tao Jonez (for 'tis their pseudonym) writes of the entertainment business evolving ‘along increasingly dysfunctional lines’:

‘Studio bosses and distribution execs have developed an unconscious addiction for the data wranglers and trend spotters in ways that stifle creativity … much of it unnecessary and, frankly, not sufficiently supported by the data … at least not to the extent that their numerical parameters are enforced.’

Siding with filmmakers rather than the suits, Marquee Stars strikes a blow against ‘numeric oppression’, providing a service ‘for the victims of the number addicts’:

‘We do it fairly and honestly; we do it using corroborated data; but we do it as a skeptical double-check on the mind-numbing pronouncements we hear from studio bureaucrats, territorial film buyers and foreign sales agents.’

All of which I find very refreshing and really rather admirable. It just goes to show you shouldn’t judge a web site by its animated avatar.

Onto research of another kind, with news that Professor Martin Barker of Aberystwyth University has teamed up with Picturehouse Cinemas to study alternative content streamed in cinemas (ballet, plays, opera etc.).

The research (‘Steamed Performances’) serves an academic and commercial purpose, and was prompted after Professor Barker attended a streamed performance of Phèdre, with Helen Mirren, during which he 'noticed some unusual things’:

‘Some people appeared to dress up for the cinema as though they were going to the theatre. Many people didn’t know whether or not to clap. It made [Prof. Barker] wonder about the senses in which the performance was ‘live’ and how this affected people’s enjoyment and participation.’

From a commercial point of view the research presents an opportunity to examine audience demand for such events, and to discover what makes this type of programming special. Streamed performances are becoming increasingly common; the number of such events rose from 31 in 2007 to 67 in 2008 according to Screen Digest data reproduced in the UK Film Council’s Statistical Yearbook 2009 (see Chapter 10).

Just as significantly, audience numbers can be impressive. Earlier this year the National Theatre launched NT Live, with the aforementioned performance of Phèdre, which was streamed in 73 venues across the UK to an audience of 14,000. More recently, a performance of All’s Well that Ends Well was attended by 11,000 people in the UK alone (these figures are taken from the NT Live web site).

The fieldwork is currently underway and Professor Barker is aiming for over 1,000 survey responses from streamed performance audience members. If you’ve been to a performance and fancy sharing your experience you can complete the questionnaire online here (a Welsh language version is also available here). Best of all, the research team promises to publish the results on the Steamed Performances web site. And if they can get Helen Mirren to read the report out live, I'll be first in the queue at the cinema.

Speaking of academic research publications, Nikki Finke, the doyenne of film biz bloggers, posted recently about a report issued by the UNESCO Institute for Statistics (UIS) and the Institut de la statistique du Québec (available here as a PDF download).

The UIS report is a measured and generally well written survey of film statistics based on data obtained from 101 countries for the years 2005-2006 (well written with the exception of one unfortunate mixed metaphor: ‘Digital film production has given birth to a two-edged sword.’ Youch!).

The accompanying press release, and Nikki Finke’s coverage, leads with the finding that Nigeria’s film industry is the world’s second most prolific producer of feature films after India. But hang on a mo: the 872 Nigerian productions counted in 2005 were shot in ‘video format’. As the report authors go on to point out, ‘the robust position of Nigeria film production is due to the fact that the films are shot in digital video format in two or three weeks on small budgets’. Which is hardly a strong basis upon which to compare national production levels across developing and developed countries, a point noted in a number of the comments left on Finke’s blog.

In fairness the report authors are assiduous in qualifying their description of these data, and in turn pose some thoughtful questions about African production practices:

‘Are we seeing here a sustainable trend [towards the video format], and if so, what are its implications? Will there be a positive influence on film production in Africa in general, and in particular in other countries in West Africa, where it is practically non-existent?’

Given that 99% of the 4,871 cinemas reported in Nigeria are ‘video theatres’, the shift to video also has implications for the exhibition sector.

The report also addresses rates of co-production activity in different countries, the nationality of distribution companies, cinema admissions by country of origin, rates of digital production and the language in which films are made.

However, the main story does not emerge from the data, but from the context of their collection. The UIS report confirms what anyone who has ever tried to source international film data already knows: there are some dirty great holes in the data record, particularly across the developing world. Still, it’s good to see UNESCO making the effort.

Adventures in Robin Hoodland

2009-10-11T15:01:16+01:00

Earlier this month EM Media published its annual review of Economic Achievements 2008/09.

If you’re not already acquainted with it, EM Media is the Regional Screen Agency for the East Midlands, the Government Office Region encompassing the counties of Derbyshire, Leicestershire, Lincolnshire, Northamptonshire, Rutland and Nottinghamshire, Robin Hood’s haunt of legend.

The review provides a fascinating snapshot of regional investment and returns, with evidence that the East Midlands derived clear benefit from the UK’s first sector-specific Venture Capital Loan Fund, the East Midlands Media Investments Fund (EMMI for short). Between 2006 and 2008 the Fund enabled EM Media to invest £6 million of European Regional Development Fund (ERDF) money in what it calls ‘the film and digital content sector’ (which includes TV and interactive media).

ERDF money is intended to stimulate economic development and regeneration in Europe’s least prosperous regions; which, if you think about it, is a macro-scale redistribution of wealth paralleling Robin Hood’s MO of taking from the rich and giving to the poor. Or, as the European Commission puts it with customary panache, ‘correcting imbalances between [Europe’s] regions.’

So, £6 million of European money went into EMMI and was invested across 65 projects, including 46 film investments. In addition, these projects attracted £33.2 million of leveraged funding (£19 million from private sources, and £14 million of other public finance).

The result is a portfolio of projects valued in 2008 at £3 million, with ongoing earning potential to help support future investments (the portfolio includes acclaimed features like This is England and Control). I note that Nicholas Winding Refn’s film Bronson, which received £250,000 from the Fund, has recently opened to strong reviews in the US, achieving 70.4% positive critical notices according to Movie Review Intelligence. And while we’re on the subject, The Damned United, funded in part by Screen Yorkshire and a recipient of in-kind support from EM Media, has had excellent reviews stateside- 80.1% positive- since opening last week in NY and LA. Top that off with An Education’s exceptional critical reception (92.2% positive reviews), and it’s been a good week for UK domestic features over the pond.

Back to EMMI and, according to EM Media, 41 permanent and 563 temporary jobs are also directly attributable to the Fund between 2006 and 2008, along with less directly measurable (but arguably no less important) assistance for 262 companies in the region. Taking all these factors together, EM Media has valued the Fund’s economic benefit to the region at around £70 million- a notable achievement worthy of an Alan-a-Dale ballad.

EMMI is not the only funding strand managed by EM Media. The agency also invests RIFE lottery and grant-in-aid money in film projects and organisations on behalf of the UK Film Council, along with funds from the East Midlands Development Agency and other sources.

The upshot is that in 2008/09, EM Media invested in a total of eight feature films and one feature documentary, including local girl Samantha Morton’s directorial debut The Unloved. Three externally produced features also filmed in the region, which means that nearly one in five (18%) UK domestic features were made in the East Midlands in the course of the year. Not bad considering it has no permanent studio infrastructure.

The region saw a 6% increase in film shooting days (which have risen from fewer than 25 in 2003 to around 300 in 2008) and film and TV production in the region created employment for nearly 900 freelance crew. EM Media calculates these productions brought inward investment to the value of £16 million to the region in that year alone.

The question remains whether these levels of investment and success are sustainable given the completion of EMMI’s three year term, the squeeze on public finances that is likely to see a fall in RIFE money and uncertainties over regional development funding under a future Conservative administration. We’ll doubtless find out in next year’s review, and those that follow.

Anyway, to end here's my favourite Robin Hood-themed story, which issues from the early 1990s and concerns a young couple planning their wedding.

Riding high in the charts at that time was Bryan Adams’s theme tune to Robin Hood: Prince of Thieves, and being impetuous romantics of unsound mind the couple request the track to accompany the bride up the aisle.

The big day arrives, but, alas, all does not go to plan due to a misunderstanding on the part of the befuddled organist. Instead of Bryan Adams's ‘(Everything I Do) I Do It For You’, the bride is forced to proceed up the aisle, past wide-eyed friends and family, to the strains of Dick James’s theme tune to The Adventures of Robin Hood (‘Robin Hood, Robin Hood, riding through the glen…’).

Needless to say, there was not a dry eye in the house.

The future of home entertainment

2009-10-06T20:38:32+01:00

The future of home entertainment has come under renewed speculation recently, with a flurry of conference reports and trade press coverage replete with hard data. Commentators point out we’re in a long period of transition as consumers move from transactions involving packaged media (DVD and Blu-ray) to the consumption of unboxed, digital product across a variety of platforms.

This is far from a straightforward transition because those punters with broadband connected devices in the home generally want video content on demand and for free.

Under prevailing business models this puts pressure on release windows and revenues, a pressure emanating from technological and social change rather than business imperative. 'We're in an accelerated period where technology and the consumer is outpacing the studios' current business model,' Mike Kelley, a partner at PricewaterhouseCoopers, told Alex Dobuzinskis writing for Reuters.

The attraction of unboxed content for studios is plain enough: Dobuzinskis cites higher margins and ‘the ability to collect and use information about customers’. The sticking point is one of scale: revenues from online video are projected to hit a $753 million in the North American market by 2013, according to figures quoted by Dobuzinskis. But that’s still only equivalent in size to 5% of the US DVD market circa 2008.

Truth is, there’s burgeoning demand for online video content but consumers are hitting the ‘free’ stuff in massive numbers rather than opting for paid-for product. David Mercer of Strategy Analytics, writing recently in DVD Intelligence, provides evidence of the popularity of ‘free’ online content services. The US-based Hulu.com, second only to YouTube in the free download sector, hosted 373 million streams in April 2009 according to Nielsen data. That compares with 260 million units of TV shows, movies and other video content sold worldwide for digital download in 2008, according to Strategy Analytics’s own data.

More recent data published in World Screen reveal the scale of YouTube’s dominance, with a staggering 10 billion video viewings in August alone according comScore data. From the same source: more than 161 million viewers watched an average of 157 videos per viewer during the month of August, and 82% of US Internet users watched online video last month, with the average viewer watching 9.7 hours online. The words voracious and appetite spring to mind.

But as Mercer goes on to make clear in DVD Intelligence, ‘successful business models for online video have still not been defined. Content owners and distributors are still experimenting with the appropriate mix of paid-for and advertising models.’ Consumer demand for ‘free’ content would seem to favour an advertising-based model, but this has yet to deliver significant enough revenues to satisfy most rights holders.

Jason Kramer, of research outfit Interpret, told delegates at last month’s Digital Media Pipeline conference in Los Angeles (laid on by the Entertainment Merchants Association) that nearly half (49%) of US consumers watched at least an hour a week of online video in the first quarter of 2009, compared with 32% who said the same during the first three months of 2008- further evidence that online video’s star is rising. But as previously noted, the majority of this viewing activity is directed at ad-supported free streaming sites (YouTube, Hulu etc.). ‘The studios are not really set up for ad-supported models,’ concludes Kramer. ‘There needs to be a new model’.

The experimentation David Mercer mentions is highly tentative at this stage. Put simply, the biggest players are fearful of cannibalising their existing business. Take the example of Warner Bros., who last month became the first major studio to release films on VoD before DVD with the home entertainment premiere of Observe and Report and Ghosts of Girlfriends Past via cable-operator Comcast, days before the titles were released as packaged media. This small but significant step was taken in an effort to ‘boost revenue on VoD (for which the studio gets a bigger cut of rental revenue than with DVD) without hurting DVD sales’, according to a piece in Video Business.

Understandably the studios wish to protect the DVD cash cow (and it’s hormone injected successor Blu-ray), or at least delay its demise until something lucrative enough is found to replace it. So the key question remains to what extent is unboxed content (whether free or paid-for) cannibalising legitimate packaged media transactions? It’s hard to say for certain on the basis of publicly available research, but Mercer reports findings from a survey of 3,500 people in the US and Europe that throws some light on the subject.

The research reveals that regular DVD users tend to be more active users of online video than the wider population of broadband internet users. For example, the number of broadband users claiming to download movies over the internet on a regular basis is relatively small (15% of the total) but the proportion of DVD users downloading movies is nearly twice the population average.

‘We can’t draw the conclusion that usage of DVDs will inevitably fall directly as a result of the growing number of alternative sources of video content,’ writes Mercer. ‘[But] we would expect that DVD usage will come under increasing pressure as the quality of online video and the range of available content continue to improve’.

As rights holders naturally wish to maximise their returns across revenue streams, what are the likely future prospects of paid-for unboxed content? Apple’s iTunes service demonstrates a market exists for pay-as-you-go movies and TV shows, but – once again- revenues remain small in comparison with the overall packaged media market.

During a Spotlight Presentation at the Digital Media Pipeline conference, Arash Amel of Screen Digest put Apple’s iTunes share of web-based VoD at 52% of the market, followed by Xbox Live on 31%. Screen Digest values the global web-based VoD market at $500 million in 2009, rising to $2 billion in 2013 (to put this in some perspective, DEG valued the US – not the global- home entertainment market, including VoD, at $9.73 billion in 2009, the lion share of which is down to DVD).

A quick digression, while we’re on the subject of iTunes. Scott Kirsner, writing this week in Variety, points out that Gary Hustwit’s 'Helvetica’ has generated a six-figure sum from its showing on iTunes (priced at $9.99 per download). Impressive stuff for a documentary about typography, but, as Kirsner laments, it remains an uncommon case: ‘The indie download business is still having problems gaining traction. The power of the Internet was supposed to level the playing field on which independent filmmakers and studios compete for audiences. So what happened?’. Check out the article, and Kirsner’s follow up on the Cinematech blog (An update on the State of Indie Film Online), for further analysis and case studies.

Returning to the Screen Digest data, Xbox Live’s market share is noteworthy because games consoles with online capabilities are well placed to bring VoD content onto TV screens in the home, arguably posing a bigger challenge to packaged media than PC-based viewing alone. Jennifer Netherby, writing in Video Business, reports the Xbox 360 console is happily ensconced in 16 million US households (the Playstation 3 is in 8 million and Nintendo Wii is in 20 million homes), ‘making gaming consoles the leading internet-connected device already hooked up to TVs’.

In closing, here’s one final angle to consider: what’s in store for the size of the home entertainment market as a whole (as opposed to the relative market shares of VoD and DVD)?

'I don't think that studios are looking at online to save the home entertainment business,' Stephen Prough, founder of Salem Partners, told Alex Dobuzinskis. '[B]ut I think they want to avoid what happened to the music business and try to come up with alternative modes of distribution before physical media goes away.'

The Internet’s influence on film audiences (and studio executives)

2009-09-30T13:36:09+01:00

In the last couple of days the trade press has reported a study produced by Stradella Road, a marketing company founded earlier this year by Gordon Paddison, former Head of New Media and Integrated Marketing at New Line Cinema.

Among other things, Paddison worked on the campaign for The Lord of the Rings trilogy, establishing a link with Peter Jackson’s Wingnut Films which led in February 2009 to the signing of a multi-year deal to deliver digital brand strategy on all Wingnut entertainment products.

The study looks at the influence the Internet has over film audiences, a subject of obvious interest to Stradella Road in its efforts to build a client base. As Paddison noted at the time the deal was struck with Wingnut Films, ‘Social media has revolutionized the way consumers connect with each other and include brands in their life and Stradella Road is the place for clients looking to leverage and evolve with the medium.’ Anything that demonstrates the growing influence of new media is obvious grist to the mill.

That’s not meant in any way to undermine the research; but awareness of who’s behind the study, and whose interests are being served by its propagation, is instructive. Thus you may like to know the study was sponsored by AOL, Facebook, Fandango, Google, Microsoft, MovieTickets.com and Yahoo.

Anyway, the research, appearing in a report entitled ‘Moviegoers 2010’, was conducted by Nielsen NRG and involved a survey of 1,547 moderate-to-heavy moviegoers over an eight day period in July 2009, plus phone and online interviews with 2,305 others during the same month. Methodological details are sketchy, and as I haven’t seen a copy of the report I can’t offer any further background on the questions posed, the survey format or the sample.

Nonetheless, thanks to online sources not (yet) buried behind paywalls, we can glean details of the principal findings. For Marc Graser, writing in Variety, the study’s main message is that ‘if marketing mavens want to reach younger moviegoers when promoting their films, they need to embrace social networks or risk being ignored.’

Teens and ‘twentysomethings’, the demographic that so preoccupies studio executives, are, according to the research, ‘especially focused on being able to customize entertainment and are quick to share their opinions with others digitally’.

Graser reports the study’s estimate that 94% of all US moviegoers are now online, and 71% of moviegoers surveyed have profiles on social networking sites. But in broad brush terms, as the study shows and common sense dictates, use and influence are highly dependent on age:

Those aged 13-17 are ‘all about sharing information and group thinking’, and social media are crucial to this (67% socialise with friends online).
Those aged 18-29 ‘are digital natives that have grown up with technology’ who search online for movie information and share their thoughts via social networks (58% socialise with friends online).
Those in their 30s are ‘time-constrained, with parenthood dominating their decisions’. They ‘spend the highest number of hours online and rep[ort] the highest use of technology (Internet, broadband access, DVR ownership and cell phone).’
Meanwhile those in their 40s tend to favour traditional media ‘like magazines and newspapers’, and moviegoing is ‘dominated by special family occasions and influenced by teens’. Those in their 50s ‘avoid crowds, prefer matinees’ and ‘skip ads because they think there are too many commercials on TV.’

Covering the story for The Hollywood Reporter, Paul Bond reports additional data revealing that ‘73% of moviegoers -- those who attend movies at least twice a year -- first gain awareness of releases from TV commercials, followed by 70% from in-theater trailers. Word-of-mouth follows at 46%, and the Internet, at 44%, has passed such traditional methods as billboards and newspaper advertising.’

Bond notes the fact that ‘TV commercials remain such an effective way of spreading the word is good news for TV execs, especially given that 52% of moviegoers use DVRs. That's roughly 20 percentage points higher than the general population.’

But it’s the evolving nature of online behaviour that primarily interests Stradella Road. According to Bond, the study shows that ‘once they learn of a movie they'd like more information about, 93% go to the Internet, with 62% seeking an online film review.’ (I'm not clear which group we're talking about here- the figure seems too high for all ages).

Yet it’s not so much the Internet that influences audiences- the crucial role is played by those members of the peer group who choose to share their opinions online: 40% of respondents said ‘that negative reviews from typical moviegoers will keep them from seeing a movie, while only 28% say that a bad review from a critic will cause them to steer clear.’ (And as a further snub to professional critics, Marc Graser reports the finding that 84% of moviegoers say ‘When they make up their mind to see a movie, it doesn't matter what the critics say about it’).

I’ll leave the closing words to Paddison, as quoted by Daniel Frankel in The Wrap:

‘We talk all the time about how much the market is changing, but somehow, we stop short of dealing with the magnitude of that change. Perhaps it’s because we don’t know our market as well as we should.’

Enter Stradella Road, stage right.

>>>UPDATE 1 OCTOBER 2009>>>

Ben Fritz, covering the story for the LA Times, includes a chart and data table from Stradella Road providing additional detail about the study findings.

UK cinema admissions, August 2009

2009-09-24T19:22:51+01:00

The August tally is in, courtesy of the Cinema Advertising Association, and ticket sales in 2009 remain up on the same period last year but the margin is narrowing.

August saw 15,542,650 admissions, which falls well short of 2008's haul of 20,039,500 in the same month thanks to the runaway success of Mamma Mia! and The Dark Knight. The late summer period this year was always going to pale in comparison.

But such was the strength of the opening half of the year that the total for 2009 (119,041,616) remains 4% above 2008, and a squeak higher than the most recent record high in 2002.

Table 1: UK cinema admissions, January to August 2002 to 2009

Source: CAA/ Nielsen EDI