Recently in Creative Efficiencies Category
For example, on the service end:
"Decades of experience, creativity, and growth have made film production and distribution one of the most economically important industries in the United States," notes the 2001 U.S. Department of Commerce Report on Runaway Production, "[u]nfortunately, our official statistics are woefully deficient." Current available data does not offer a precise picture of employment numbers for the full rage of professions involved in motion picture production or, for that matter, consistent measures of the industry's economic impact both regionally and nationally. Data available for production days and budgets is primarily collected by local film commissions and prone to irregularities and inaccuracies by default of naturally occurring idiosyncrasies in the measures and classifications used by those organizations.
In the absence of incentives or common effective measures, figures used are often volunteered by production companies and, therefore, in-auditable or even suspect. According to one film commissioner I spoke with, volunteered figures do not necessarily reflect actual monies spent in one's own region, especially when a production crosses state lines. In those cases, revenues accounted for in one state may be simultaneously accounted for in another state's revenue totals. Obtaining aggregate data at the national level is even more difficult.
In terms of overall economic model:
Outside the specificity of film production, we may have begun to
rectify our overall fiscal vagueness about the creative industries with
the recent adoption of the North American Industry Classification
System (NAICS) that replaces the U.S. Standard Industrial
Classification (SIC) system originally devised in the 1930s. The SIC
system, although periodically updated throughout the last century,
structured our economy on an obsolete industrially driven model. The
NAICS identifies hundreds of new, emerging, and advanced technology
industries, while reorganizing industry into more meaningful
sectors--especially in the service-producing segments of the economy.
Then in terms of advertising:
The growing price and waning influence of advertising expenditure
on mainstream television channels is a serious issue for many
advertisers today. Intolerance about wasted ad spending is mounting.
ROI is the today's advertising catch phrase. The linkage gap
between producers and consumers of non-subscription broadcast content
amounts to failure of means for assessing consumer preference with
suppliers and network television was chosen by thirty-two percent of
respondents as the worst medium for proving ROI, according to a study
by Advertising Age.
Advertising, long the main revenue source for much
of the media industry, is rapidly moving to the Internet, and shown by
the financial success of sites like Yahoo! and Google. This is part of
the trend in advertising from "mass" marketing to "measurable"
marketing. The interactivity of the Internet is driving the process of
fragmentation for broadcasters, but has the potential to provide
advertisers with information about the taste, preferences, and habits
of consuming audiences. So the Internet offers advertisers a valuable
advantage that mass media cannot provide.
Entertainment financials:
Many commentators have noted how inefficiently Hollywood does business. A studio will spend millions of dollars marketing a particular star in lieu of having its own brand only to toss that brand away at conclusion of a project. There is no question that media and entertainment are by nature risky. What I am suggesting is that there is a slow evolution towards efficiency measures in the media firm and entertainment firm business models. So for example, gaming firms reuse code from failed titles instead of starting from scratch with every title. Digital technology allows for greater fluidity and quantification in distribution, for example: In d-cinema the ticketing systems are integrated into the pre-show systems and concession stands, so business can see clearly what is working and what does not.
In the social consciousness:
Americans are generally oblivious to the economic benefit of media and entertainment. The industry is often viewed as glamorous when in fact it is also anything but that. So much of the discussion, in my view, is overly politicized by both the left and right: "Hollywood is destroying America!" or "Advertising is destroying art by commodifying it." What I aim to do is open up a space for discussion that looks at these matters in context.
As media and entertainment follow an R&D model, like oil exploration and pharmaceuticals; I thought the article below was interesting in light of my thoughts above about the increasing trend towards efficiencies in the creative industries.Fundamental to solving creative inefficiencies is understanding the nature of the creative process, in as much as it is developing models or solutions that make those processes profitable and capable of sustained duplication.
So the solution lies as much in developing models, as it does in understanding the limitations of those models...
FT.com / Columnists / Lunch with the FT - Lunch with the FT: Nassim Nicholas Taleb
“There is a lot more randomness in biotechnology and any form of medical discovery. The role of design is overestimated. Every time we plan on trying to find a drug we don’t because it closes our mind. How are we discovering drugs? From the side-effects of other drugs.” Researchers very often “change their story” when they discover something by accident to give the impression it was by design.
I am particularly interested in how the emergent creative economy will influence Hollywood financials. One of the hypothetical parallels I have drawn in this blog is between movie making and the pharmaceutical business. The latter is a creative industry that continues to formulate and incorporate efficiency measures into R&D. There is no question creativity is and will always be risky, time consuming and expensive. How are these respective types of creativity/innovation similar or dissimilar? I suspect that media and entertainment will continue to evolve in respect to how efficiently they do business. Creative flukes that generate a conflagration of interest are certain, but what about measurable success for creative content considered more standard fair. What implications do these developments have for the nature of content? Here is an interesting article on the Euro RSCG study the "Bollywood Predictameter":
Do you watch a film 'coz a 'prosumer' said so?- The Times of India
Called the Bollywood Predictameter, it has written off movies like Don, Umrao Jaan andDhoom 2 as flops even before they have been released. The predictameter, which is actually a study based on marketing and advertising efforts of yet-to-be-released movies, claims that Munnabhai Lagey Raho will be a bigger hit than Kabhie Alvida Na Kehna. Not only that, it has already 'predicted' the BO fates of 18 A-list Bollywood movies to be released later this year!
The first link is the raw data from the BEA sorted by state and region alphabetically from 2000-2004. 2005 has not been released as yet. The links below that are then sorted by highest gross state or region decending for each respective year. It should be no surprise that California and New York and their respective regions rank highest for all years:
"Advertising is in turmoil because of new technology," says Dave Morgan, CEO of Litton Entertainment when I interviewed the leading independent distributor in February this year. More than fragmenting audiences new media allow viewers to bypass advertising altogether.
Excerpts from "Amazon Readies Launch of Ad-Free Video Download Service":
A year in the works, the e-tailer's digital-video-download service is set for a mid-August launch and will feature a subscription service and a la carte movies and TV shows. Yes, folks, that's more ad-free TV for sale.
The service, which is referred to as Amazon Digital Video -- or Amazon "DV" -- has evolved over the past year from a music-themed offering to a video-centric one, according to production-studio and TV-network executives briefed on the plans. The reason? Apple, these executives said, already commands such a large share of digital-music sales that Amazon felt it would be too difficult to break into the market.
Amazon's reputation for ease of use could help it capture the video-download market, much as iTunes did with its simplicity in the music market. If that happens, it's sure to speed up consumers' comfort level with paying for ad-free TV content -- at a time when networks are trying to launch their own ad-supported video-on-demand plays. ABC, for example, has offered online versions of its shows that allow the advertisers to ride along and has plans for a more sophisticated offering in October.
Revenue from licensed digital-music distribution doubled in 2005 to $653 million, according to PricewaterhouseCoopers, which estimates that by 2010, digital music will be a $20.7 billion market. In contrast, the firm said consumers spent only $1.1 billion on online movie-rental subscriptions and $1 million on digital-streaming movies in 2005. Digital-streaming services are expected to outpace online rentals, by 2010 generating $400 billion in annual spending while online rentals will be a $3.2 billion business.
Amazon owns IMDb.com, the database of Hollywood information, and has been trying to get into the content creation business. Its first foray is a promotional program called "Fishbowl," a series of Bill Maher-hosted interviews, sponsored by UPS and Cingular. Mr. Maher's guests include moviemakers, actors and authors -- all of whose products can be bought on Amazon.
New York Times published a piece today "Studios Shift to Digital Movies, but Not Without Resistance" by Scott Kirsner:
The product market for digital cinematography has established first entrants like Panavision and Thomson Grass Valley ( and Arriflex), but writes Scott Kirsner:
"[M]any new cameras are on the way, from established companies like the ARRI Group of Germany and a start-up, Red Digital Cinema."
Also cited:
“We’ve reached what may be looked at, five years from now, as a tipping point in the use of digital cameras,” said Curtis Clark, a cinematographer who is chairman of the American Society of Cinematographers’ technology committee."
Aside from technological advances in image quality vis-à-vis 35mm, I would add that digital acquisition is reaching critical mass as the gaming generation of below and above-the-line creators and technicians enter their "journeyman" or productive years. Unlike their predecessors, this generation does not have the residue of the long-standing infrastructural culture war between film and "video".
The cost savings of newer technology are often emphasized by OEM's, and certainly the viability of digital technologies arises primarily from the growing emphasis on solving the endemic vagueness and inefficiency in Hollywood financials. This trend is ultimately a result of the emerging Creative Economy. The engine of economic growth in the developed world is sustained creativity and the production of high-value intellectual property whether pharmaceuticals, video games, or movies.
In the shift to digital, infrastructure is often overlooked by commentators; while emphasis is frequently placed on the efficiency and aesthetics benefits of newer technologies. As the gaming generation matures, the industry will continue to develop a culture of technicians with dramatically different training cycles and models then its traditional and waning culture of apprenticeship. OEM's, however, are not in a rush to push out traditional acquisition technologies, unless they rely solely on digital for revenue streams. In fact, revenue streams inform the marketing strategies and angle of manufacturers when it comes to their positioning on newer digital technologies. Are they still making money from traditional technology? Then why disparage film. Are they a diversified? Then why not emphasize their choice. Common wisdom in business is that the most profitable years in a technological lifespan are the last years when there is less money invested R&D. Then, it's pure profit.
