Looking down Sunset Boulevard: Hollywood’s Future in a Technological World By Ameya Shiva W’19 ENG’19

By Ameya Shiva W’19 ENG’19

Though films have been in existence since the invention of the camera, Hollywood today is in a state of rapid change unlike any it has experienced since the dawn of motion-pictures. The film production industry has hit a pivotal juncture, where consumers now not only demand increasingly engaging and innovative content, but also seek it through mediums that stretch the very limits of what is a traditional movie. In this digital era, where content can be consumed through television, internet streaming, and a variety of other platforms, the movie theater as a basic entertainment source has significantly lowered in value. Over the past decade, ticket volumes have declined on-balance, and box office revenues, adjusted for inflation, have actually declined from their high-water mark in the early 2000s.

These signs of contraction certainly worry the film industry. Hollywood’s response to the changing landscape has been to gamble more on each movie, reducing the number being produced and trying to ensure that each one becomes a blockbuster hit. This approach has lead to soaring film budgets, with advanced special effects, among other new technological developments, pressuring directors to utilize cutting-edge production techniques to keep audiences interested. Since each film becomes more important to the profitability of a studio, the resources spent on marketing have shot up as well. Since 1980, the average spending on marketing a studio-released movie domestically has increased by more than three times, adjusted, to over $40 million for mid-sized films. With marketing now approaching nearly half of the overall spending on any given film, and rivaling the production budget, studios are looking for more predictable ways to mitigate the risk of releasing a box-office flop. So far in 2016, 18 of the top 25 highest-grossing films have been sequels or heavily borrow elements from existing films or stories. These productions try to attract audiences more through flashy sets and special effects than with engaging scripts and storylines, a sign of confusion in an industry desperately searching for future growth prospects.

Of course, declining interest in going to the theaters to see a newly-released movie does not reflect that people no longer watch movies.  Instead, television and internet streaming have simply eaten up a noticeable chunk of the viewership market. With more than 80 million subscribers, Netflix has amassed a robust base to which it can disseminate content directly to people’s couches. Online streaming platforms such as Netflix and Amazon Prime have also transitioned into the role of content creators, and judging by the critical and financial success of original series’ such as Narcos and Transparent, such a trend is becoming mainstream. These new forms of content blend the simplicity of television and its recurring episode model with the glitz of feature films. On an hourly basis, they are a significantly cheaper-to-produce source of entertainment than movies and even cable television, although budgets for the biggest hits have also risen, resulting in shows with scenes just as spectacular as in any movie. Yet, even spending tens of millions of dollars per season on House of Cards has proven to be more economical than the still larger sums being poured into full-length movies.

Whether Hollywood as we know it today can respond successfully to this rapidly evolving consumer and competitive landscape is a major question. But as is often the case, looking into the current challenges the film industry is wrestling with gives some insight into possible solutions. The industry has been shaken by the spread of the internet and technological advances that have created a more immersive experience, where the customer has much more control over their content. Looking forward, the film industry must embrace technology in innovative ways if it seeks to compete better and stay financially viable.

Augmented reality (AR) technology represents a major development Hollywood can embrace to move towards redefining the very meaning of a motion-picture. It could be used to create a much more immersive movie experience; characters would appear around the audience, and the viewer would have the ability to choose where to focus, rather than in films today, where the director, via the single screen, has tight control over what the we see. Such features would shift movies from simply being a source of entertaining content to a more holistic experience. With ventures such as Magic Leap, a startup pioneering the most sophisticated AR experiences, gaining significant traction (and as a result, financial backing), studios stand to gain if they open up to this growing trend. More achievable in the immediate future would be 360-degree movie screens, which would lay the foundation for future VR/AR advancements.

Another way to better engage consumers with films would be to make the industry more transparent and accessible to outsiders. The internet has been an important enabler of democracy. As barriers to usage are low, people of all classes and backgrounds are able to connect with the world and disseminate content widely. The film industry, by contrast, has been tightly controlled by studios and large production companies. But in recent years, crowd-sourcing has enabled the creation of a new branch of movies by transforming the hiring and decision-making processes in the industry. For example, Amazon Studios, the company’s eponymous production wing, lets aspiring screenwriters post scripts on its website, which it then chooses to buy and produce. Rather than immediately beginning production, however, Amazon develops the scripts into trial videos, which it then shares with customers, who can review and give feedback on the content. In this way, Amazon is able to crowd-source the creative process and ensure that the final product succeeds with consumers. This approach highlights the power of engaging consumers in the entertainment sphere and developing targeted content.

While Hollywood witnesses a slow but noticeable dip in traditional movie ticket sales, it must reflect on the rise of strong competitors and take measures to respond to the changing customer-driven landscape. By focusing more on audience interaction, studios may be able to draw in viewers not only for interesting content, but for a special experience. With consumers already being overwhelmed by a plethora of entertainment options, film studios must act quickly if they wish to stabilize their currently precarious hold over the attention of audiences around the world. While the future is unknown, Hollywood must certainly focus on more than bright lights and stars if it hopes to shine once more.