Once upon a time, Hollywood’s movie industry ruled the world, with millions of film fans around the globe flocking to their local cinemas to watch the latest releases. Although that is still the case today, the traditional economics of the movie business has been turned on its head by the introduction of online streaming services. In fact, more than two-thirds (67 percent) of millennial consumers pay for between one and three online streaming services, with convenience and accessibility at the core of millennials’ decision-making.
Movie streaming services like Netflix are a staple investment for the 21st-century generation, giving them access to a vast library of movies to watch at home or on the go. Of course, there are certain limitations to Netflix. The biggest issue is its lack of new Hollywood blockbusters released on the platform. Typically, Netflix has the streaming rights to new releases two years after it has been screened in the cinema. This distribution window ensures the movie industry can maximize every last drop of profit from a film before it is released into the mainstream.
It’s, therefore, crucial for the Hollywood film industry to recognize that providing it can maintain its distribution windows, online streaming allows movie franchises to get under the noses of those who might not enjoy the cinema experience. As the movie business becomes ever more driven by franchises and brands, allowing these brands to gain mainstream appeal is something that the top studios are having to accept. Live or online streaming has helped to bring newcomers closer to other burgeoning industries, too. The popularity of Twitch, for example, has seen poker pros stream and discuss their online games, providing invaluable information for budding players. Twitch and YouTube have also proven to be the ideal platform for the emergence of the esports industry too, with the latter growing their base of streams by professional video gamers by a whopping 343 percent last year.
Why Cinemas Need to Focus on the Experience
Millennials are more passionate about experiences than any other generation. Though the big-screen experience remains an exciting prospect for film fans, the movie industry needs to work hard with cinemas to provide stimulating environments in which to watch the latest blockbusters. Independent cinemas, on the other hand, are enjoying a massive renaissance, with the ability to watch films in comfy sofas and get snacks and drinks brought to your table, creating a real home-away-from-home experience.
Nevertheless, the challenge for Hollywood is to decide whether its existing two-year distribution window is feasible in the years to come. Netflix has been creating television shows for some years now, enlisting the services of Hollywood stars such as Will Smith and Brad Pitt to make movies for their streaming platform. Although Netflix has not yet made a beeline for the blockbuster titles, reports suggest a new 90-day window may be implemented, allowing premium Netflix users to watch the latest films online just three months after it opens in cinemas. Although this could lead to a fall of 20 percent in cinema profits, it’s hard to ignore consumer choice.
Parallels can be drawn between the movie business and the music industry, which has seen the latter evolve with the advent of subscription streaming. As music fans enjoy switching between tracks and creating their streaming playlists, a lot of this is sure to happen in the movie industry as well. Purist producers will argue that movies are made to be seen in the cinema, but if that’s not what the consumers want, the industry either has to comply or perish.