Like farmers that have to survive a locust attack, 21st century piracy has been hard to police because past piracy protection initiatives had more in common with trying to protect your crops against a locust swarm with a fly swat. The effort is admirable but the results still end up in disaster. As the world we live in becomes affected by the conversion of analogue to digital, we are seeing many aspects of film and music being forced to change. Once, movies had to be shot on film, now new, less expensive formats in digital are beginning to rival 35 mm film, the threat is that film will be obsolete.
Peter Jackson, Steven Soderbergh and others endorsement of the new format at the Directors Guild comes with the disapproval of those who have a vested interest in film stock for their livelihood, but some forms of progress can't be stopped, and so it is with the online revolution which has made piracy a side effect of its arrival. What we do know is that it is now possible for film to profit in the digital era. Because of the digital era, film and music is being drawing into a new media landscape that is worth over a trillion a year which will give billions in revenue to film-makers, thus giving those in movies the ability to offset the losses cause by piracy.
The American film industry is one of the country's biggest exports (fast forward to 3 min 15 sec ), which impacts its many industries including tourism.
Every state in America that has been in a film is used as a marketing tool for commercials seen around the world, sometimes with recognisable actors, (examples: Visit America-below, New York, California 1, California 2).
The importance of American movies to the economy of the country goes way beyond film because film is the poster card for America as a whole. With the ground set, we can look at how movies in the digital age will be worth more to those in film who make the transition to a digital era beyond piracy. The global advertising industry is a trillion a year business. In times past, the only way for advertisers to get to the populations of the planet was through television stations. Now, the global advertising industry is waiting for systems like Google to reference videos and film so that when the web is more like TV on demand, they will be able to spend billions with the content makers that have the biggest audiences (see first 60 seconds). The digital revolution is rewiring the media landscape where both the advertising and film industry are looking to harness the financial potential of an international audience. Most of the money spent on advertising is spent outside of America but the USA is the critical mass starting point for the export of global marketing initiatives that use film and television. With the cultural image of America being "rainbow" due to the win of Barack Obama, the next 4 years in American film holds great promise for all sectors of the movie business as the digital era moves forward.
To date, the only industry that is positioning itself to be part of the $trillions in trade that come from the digital revolution is the mobile phone business.
For the film industry in America to harness the potential of the digital era it needs to see that different aspects of the film business occupy unique vantage points. Independent film makers and the straight to DVD sector have a position in the future of digital that cannot be duplicated by their major industry counterparts.In this first blog entry we are going to look at piracy solutions in three parts; 1 - short term, 2 - medium term and 3 - long term. The short term solutions to piracy are primarily based in measures that those in independent film can adopt to bring cash reserves into their companies because a strong financial base will be necessary to make the transition to a future where new technologies innovated by groups like Google will allow filmmakers the ability to harness $billions in advertising revenue. The technologies that will end how piracy impacts film and music makers are here but are at different stages of development. There are technologies and openings that we can use now to help us reduce the losses caused by piracy. Many things in this blog are actionable now and if you need help, use the contact details at the end of the blog. If you look at the story of George Lucas and the evolution of Industrial Light & Magic, you will see that many things were possible at the dawn of digital film effects that came with Star Wars in 1977 but the technology had not evolved to make real what was on the horizon. Now, anything that is in the imagination can be put on screen, so it is with digital distribution. A lot is possible now, what is on the horizon will channel $billions into the hands of filmmakers from the advertising community that want to use digital distribution technology as a means of getting adverts to the 2.8 billion people that are online.
Back in 1937, MGM made more money than all Hollywood studios combined. Being the most profitable studio is one thing, making more money than all studios put together is a lead that seems almost impossible to imagine. However, Mafia extortion rackets, the end of the studio system and the dawn of television made it impossible for the once dominate MGM to be part of the new post TV world. MGM did not make the transition to the new world of cinema even though it looked like it had the best chance to do so.
There are now literally thousands of opportunities for independent American film-makers to earn money throughout European that will give them the cash reserves to make a healthy transition to the oncoming online distribution era that will be supported by advertising. Many of these options are similar in nature to the opportunity that the artist formally known as Prince took in 2007 in the UK. (see video below).
Prince was able to side step the impact of low, almost non existent CD sales and piracy in the UK by licensing his album to a UK newspaper for $500,000 and cross promoting the successful giveaway with live events at London's O2 stadium. Because Prince did not have UK contractual tie ins to his American label, the UK promotion was possible. This type of short term opening that can generate $millions in returns are available for many American Indie film makers and major label music makers in Europe. By looking at the Prince news story we see that sometimes, knowing how nations function outside of America can be the difference between making $millions and having nothing.
What Prince did was followed by Lenny Kravitz and Paul Mc Cartney among others but the issue goes way beyond cross promotional tie ins with newspapers.
Back in October 1999, New Line Cinema's Lord of The Rings started principle photography when the web was in its infancy but Sir Ian Mc Keller (Gandalf) was able to use the Internet to speak to millions of Lord of The Rings to fans using early blog systems while the film was in production, making the movie one of the first blockbuster blog successes on the planet.
We are now 10 years on from what Lord of The Rings did as a blog. With a book that had sold over 100 million copies, fans seeing footage and out takes online fuelled the appetite of those who wanted to see the book turn into a motion picture.
If we go back to 1980, Fame was an entertainment phenomenon that lasted for years. Debbie Allen and many others became globally recognisable stars.
We are now thirty years after Fame and the ecology of mass media has changed. Beyonce Knowles is one of the most famous singers on the planet with over 1 million friends on My Space and with videos on You Tube getting over 29 millions views. In the coming years media systems like My Space will have taken on Open Social applications which means that a individual will be able to manage an online database of billions of people. For those in the entertainment industry, the type of image control that will be possible with open social systems, augmented with some personal applications makes P.R Management a desktop concern.
Debbie Allen was once as famous as Beyonce outside of America when the FAME explosion went global. As you can see from the interview, the part in Fame evolved by chance. If the web was available thirty years ago Debbie Allen's Dance Academy could have been international but the technology to manage direct contact with millions of people around the globe did not exist in 1982. Back in the 1940s, like Debbie Allen, The Nicolas Brothers were famous and where admired in Russia, just like Paul Robeson in the 1940s and 1950s but the Russian public had no way of continuing an interest after seeing them in Stormy Weather. When Lord of The Rings started using the internet back in 1990, we see that anyone who has a platform of celebrity can use that status to propel a project further with direct contact to millions of people. Like Prince, many in music and film can use the web to talk to millions of fans if they have a viable starting point to leverage or cross promote with an existing profile. Technology now gives Blacks in America a way to manage the export of their image and persona globally but the initiatives that will underpin this export of image will look like the Fame or Prince success. With deals paid for by non America partners, the success of the 1940s and 1950s will be echoed in the 21st century because whether we look at Josephine Baker, The Nicolas Brothers, Paul Robeson or Quincy Jones, who found success in a segregated America impossible to attain, the acceptance of good Black art has always been bought outside of America if a method of access was possible. Once artists had to tour Europe to sell themselves, now the web and carefully structured initiatives can export Black art to the world without media in its present form being the restraining factor.
Film makers from the successful independent sector in America can now make money from a number of Prince style openings in Europe and cross promote these initiatives with a web data fan base game plan. As movie fans are contacted directly, movie makers, directors and actors, without the need for television stations as intermediary can contact people who will be long term fans of an artist. Will Smith is the only Black actor in recent history to have a blockbuster career that migrated from music to television to movies in a seamless transition. Very few people get that opportunity. Debbie Allen, a generation before the Fresh Prince had a similar platform with Fame but the vehicles after the TV show were not as high profile. New open social web systems are the next generation of the Internet and they can be enhanced in ways that were impossible to think about even 24 months ago.
We are now at a place in our war against movie piracy where the price of the most up to date online systems has dropped from $1M to $12,000, which is insane. (Fast forward to 55 minutes and listen for 2 minutes to Guy Kawasaki, former head of marketing at Apple Computers). Some technology services that once cost large amounts of money are now available free which puts those in film in a very interesting world.
Overcoming piracy is a multi faceted issue in the online age. If you spend $200 million on making your blockbuster movie before marketing it, and the reviews are bad, people either don't go to the theatre or wait till the film is on television forgetting the DVD. The major studios started to experience the online influence on their big box office releases in 1988 when Harry Knowles would release negative reviews through reports he got from a legion of spies that saw test screenings. The public simply saw the film marketing as propaganda. (Report 1/below, Report 2, Report 3).
Harry Knowles harnesses the insight of 1000s of people who are on the inside of the film making process around the world who give him feedback on test screening, send photos from closed sets and movie scripts. In contrast to Harry Knowles, new technology enables film makers to receive information on news stories that could become films. Will Smith's Pursuit of Happyness came as a result of him seeing a news story that touched a nation. Will was the first to present a film adaptation proposal to Chris Gardener. In the clip below we see how, over an eight year period (1997-2005), Will Smith has charmed his way to success through America TV, and in the clip below that we see his Indian charm offensive.
Very few Black or White people are in the position to socially engineer themselves into becoming a Will Smith or Oprah Winfrey through media. Without fame, being able to leverage the potential of the web has happened to avery few thus far. Without Hollywood, a documentary film maker was able to get the interest of 50 million people online while he was creating a documentary by showing the development of his documentary over a period of many months. At the end of the process, 1 million DVDs were sold. A UK based multi media project was able to contact one million people via the web and with insight, due to working with people online, create a set of educational resources that fed into how the UK government would shape teaching reforms. In China, an online management systems gave a small group of people the ability to manage the activity of 250 million games subscribers (fast forward video to 15:15 min - 18:15 min).
Movie makers have a host of genres they want to cover; Biographies, Romantic Comedies, Drama, Historical Epics, Action Adventure, Sci Fi and we can go on. If the future of the online world brings in many creatives, then those with the biggest audiences are going to be the ones that make the most of the financial openings that come with advertising options. If online advertisers pay content makers in proportion to how many viewers they get, then audience ratings using the web, as a precise measure medium will only pay those who can bring in the numbers. Where as television pays based on the reach of a station, the web pays pro rata. As seen with You Tube, Beyonce has a regular 29 million viewers looking at her videos,which in the coming online era means a lot of money.
Spike Lee's Miracle of St Anne has an international audience but its initial target groups may be seen as African Americans, Italians, Italian Americans and Germans. The cross promotional potential of a Beyonce type figure with an online film release makes sense if key players in a movie already have mechanisms that show that they have high online ratings activities. Using the openings in Europe, movie makers can use a percentage of the revue generated from Prince style cross promotional activities to build international on and off line audiences. The Tom Cruise World War II story Valkyrie has international potential because of the box office status of Tom. Any A List Actor that gave away their movie online is bound to work because of who they already are, it is when outsiders to the mainstream start generating huge audiences globally that the potential of online distribution will be seen for what it is. As seen in the Harry Knowles reports above, the public want truthful information, not spin. Everyone knows what it is like going into a video store and reading the pitch on the DVD box that promises a great evening in only to find out that the film is the worst thing since a bad remake of a b-movie. We are moving towards an era where films can be successful in their own right as long as the films are good or in line with what an audience will take an interest in.
In the 4 minutes video below, screen writer Phil Robinson talks about how technology has always forced the film industry to change and how writers have had to fight for pay when technology changes film.
In the 2 minute video below, screen writer Marc Norman makes the distinction between film and television writers fighting for money.
With a look at both Marc Norman's and Phil Robinson's statements we need to put online developments into a financial context because the 2007 writers strike and the 22 week strike that took place in 1988 are completely different. As film and movie studios have to start accounting for more online reviews like Harry Knowles which give the audience a true assessment of a movie or television show, marketing in the way that we have known it (under the engineering consent model) becomes less effective. Advertising spin simply wont work.
In a spoof movie pitch (below), Vince Vaugh and Ben Stiller act as studio execs trying to convince Mr Lord of The Rings, Peter Jackson into making a number of stupid sequels to the trilogy.
The concept of executive control is based on the idea that corporate bureaucracy knows best, but as Harry Knowles showed us, it does not, however audience responses can also be inaccurate to mass market support. The TV show Jericho was cancelled because ratings were low. 800,000 fans started a huge SAVE JERICHO TV CAMPAIGN, that resulted in the the first TV station u-turn in 25 years. The cast of the show were appreciative but the show was still cancelled after a second series becasue there was not a big enough audience for a third. Jericho may have a DVD market or an online delivery window but there are not enough viewers to give the show TV time.
The web now has a number of pre-emptive approaches that can be used to facilitate finding an audience for an idea. Like the documentary maker that got 50 million people to follow him online with 1 million people buying a DVD, we see a clear model. The Oxford education system also gives us another template for smaller audience figures, the Chinese system for the management of 250 million people shows us what can happen and how technology can be used to manage a really popular idea.
The real advantage that independent film makers have in contrast to their major studio counterparts is leverage. My Big Fat Greek Wedding cost $5 million and went on to make $280 million and was one of the most profitable movies of all time. Transferring the idea to the small screen as a TV show did not work. The thing is, the movie made money on the $5 million which is the type of budget indie films have spent on them. Beyonce is able to make films for mainstream Hollywood releases and so her asking price as an actor is based on her box office potential. As seen in the two writers' videos above and the two videos below, where actors gave vocal support to the strike, the financial ramifications of profits from the web is what is being fought for. If writers fighting for money is an issue, then it makes sense that major movie studios will not support any technology or use of technology that makes a writer a key part of how the internet is used to develop an audience. Alfre Woodard said, “we are seeing an attempt aimed industry wide at all of our unions …......... you will never make the internet non union.” The only way that the use of the web will become common place as a promotional tool using all of the aspects of promotion that are available is when we see more Prince type campaigns that are individually instigated for specific films. With independent film initiatives leading the way, major studio initiatives will follow.
Alfre Woodard speaks in support of writers
Stars on picket line in support of writers
Russian director Timur Bekmambetov, who was at the helm of Wanted starring Angelina Jolie and Morgan Freeman shot the films Night Watch and Day Watch in his native country for a total of $6M. When overheads are low, fighting the impact of piracy becomes easier because with a number of Prince style game plans, making profits is based on the amount of platforms that can be used to generate money.
Five years ago my involvement in anti piracy was focused around the idea of encryption codes on CDs and DVDs. Encryption is great but that is not a wholistic approach. In 2001 ABC Nightline did a segment on piracy which shows us that almost a decade on, the methods used to combat piracy have not kept pace with a youth culture that wants movies for free. Encryption without a means of compensating for losses makes little sense. In the 1980s you had to be a hardend criminal to be a movie pirate,now anyone can be one. If we look at traditional distribution through theatres and DVDs we can see why download distribution offers such promise (fast forward 2:30-6:30).
Today we are on the cusp of a digital revoloution that puts movies on demand into a new landscape where the global advertising industry that represents $trillions in sales is looking for video on demand to become assisted by technology so that they can spend $billions in advertising (listen to first minute).
The studio era of Hollywood existed when 75% of the public would go to see a movie three times a week, Between 1924 and 1936 other studios saw what MGM was putting out but they could not match the calibre of film in a market that was dominated by word of mouth. We may not have a dominate player in film like an MGM but every film that is released, whether as a straight to DVD product or as a download supported by advertising will generate as much viewers as the film is good. Piracy won't be the issues in coming years, a films ability to generate an audience will be.
In the last five years, many UK based record labels and distribution companies went bankrupt because they were not big enough to finance the losses sustained by piracy. As a consequence of record labels going into liquidation, their CD/DVD manufactures also suffered loss. Back in 1997, the UK government put £100 million/$200 million into the development of UK film releases, the failure rate was high. Because the ideas were not created by talented people, the money was squandered seeing no return.
To offset piracy, many music acts are going live but every artist and band does not become a stadium filler, in fact that is a club of the few. The music industry over the last twenty years has built its industry on music that does not translate to live performance (samples) and is finding it hard to redefine itself. Artists like Aimee Mann, DMX and MC Lyte feel aggrieved by the way they have been treated by major record labels, whilst Jay Z, Madonna and U2 get multi million deals from non record based music entities that record labels can't afford to match. In tinsel town we see Tom Cruise getting dropped from his film deal with Paramount in 2006 and Dave Chappelle (below) talking about how Hollywood has had a negative affect on both Martin Lawrence and himself.
Problems with the entertainment industry have been here for generations. We can look at screen writers, actors, singers and rappers and hear the same story again and again. Technology has come to a place where creatives can develop systems to manage their own audience interaction and be in control of their creative output. Remembering that after the success of Jaws (1975) and Close Encounters (1977), Steven Spielberg's 1941 was a box office failure in 1979 because the audience refused to go and see the picture. After the failure of 1941, Steven kept to ideas he knew would work. What the internet won't become is a licence to sell anything but it will be a platform that can be used by those who know how to target audiences without the worries associated with lack of distribution.
Dan Glickman, head of the MPPA stated that piracy will never be beaten, but the job of those in the industry is to stay ahead of it (fast forward to 2 mins).
In this changing world of film and music, piracy will not be an issue as ways of monetizing online distribution become more efficient. The issue to focus on between now and then are listed below and this is how I can help, so contact me at derekworldwide@yahoo.com
With the information in this blog you will be able to see that there are options that will help those in film offset piracy as we move into anew world for film distribution
1 - Consulting for Europe's 400 million population, helping American film makers get third party funding from European investors,
2 - Anti piracy software on DVDs and CDs,
3 - Licensing DVDs/film titles to European print media titles (like Prince),
4 - Advice on creation of productions for European licensing,
5 - Updates on financial openings in Europe for American producers,
6 - Using web technologies to build audiences for film releases in,
7 - Developing partnerships with third party sponsors who can can promote films to a demographic,
8 - Partnerships options with third party affiliates who will sell your straight to DVD releases to groups that you could not find with existing press, web and radio advertising.
If you need any help with what you have read, contact me any time,
Derek James
Network 2.8 Media
derekworldwide@yahoo.com
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