China Daily Global Edition (USA)
Hollywood box office runs into turbulent jet ‘stream’
Hooray for Hollywood could become Goodbye to Hollywood, at least as it pertains to current movie-viewing trends.
Box office returns in North America in August, usually a top month for movie-going, slumped almost 35 percent compared with the same month in 2016, the worst summer for the industry in more than two decades.
And Tinseltown can’t necessarily rely on China, because once-booming growth there tumbled to 2.4 percent in 2016, coming off a year (2015) that saw box-office receipts rise almost 50 percent.
What’s the reason for the summer slide?
Well there were a few big budget flops, but if you get down to it, it probably can be summed up in one word: streaming (and maybe one too many virtual-signaling Oscaracceptance speeches).
A PwC report estimates that by the end of 2017, movies streamed over the internet will make up 43 percent of US film industry revenue, surpassing the box office’s share.
In the music industry, streaming will exceed music purchased through physical formats, such as CDs, by $1.5 billion in 2017, another PWC report said.
There are so many streaming services (including numerous free movie ones) available to mobile-obsessed consumers that many people are probably questioning why they should sit in a theater when they can watch a movie, not to mention a TV series, news and live sports, on their phones or tablets.
Many of these streaming services, such as Amazon Prime, Netflix, Hulu and PlayStation Vue, are affordable and pose a major threat not only to the box office but already have hammered the once-invincible cable TV industry, which pretty much had operated as local monopolies.
The US cable companies have been forced to slash prices as more consumers use their wireless providers and devices to stream. The streaming services benefit from an a la carte approach — pay for what you watch.
Streaming sites also produce their own content such as TV series and original movies.
Netflix plans to spend $6 billion on content this year. HBO, once ubiquitous with cable TV, now has its own streaming service, HBO Go. Deep-pocketed tech companies like Amazon also make their own shows.
A 2016 study by PwC, Streaming the Future, said that 55 percent of entertainment and media CEOs and 52percent of communications CEOs say a significant competitor from the tech sector will emerge.
The technological revolution through electronic devices has allowed anyone with an internet connection to potentially be a star (see Facebook, Twitter, Instagram and Snapchat). Many celebrities, at least fleeting ones, have emerged in viral videos, a byproduct of the democratization of media.
China has heartily embraced streaming, livestreaming in particular.
The number of Chinese watching live streams reached 344 million in 2016, nearly half of China’s 731 million internet users, according to Credit Suisse. Popular apps and websites include Alibaba’s Youku Tudou, Baidu’s iQiyi, YY, Momo, Panda TV, Huajiao, Douyu TV, Kankan and Inke.
“China is leading the world in livestreaming — where individuals broadcast themselves singing, chatting or even eating,” wrote Goldman Sachs analyst Fan Liu, in a note to clients Aug 31, as the Wall Street firm initiated coverage on YY and Momo shares with buy ratings.
Movie theater chains have responded to the challenge. There are 4-D theaters that create a visceral movie experience, with physical effects such as rain, wind and vibrations. Then there are wide-screen IMAX theaters and others that offer fullcourse meals and cocktails, such as the Alamo Drafthouse chain, a 21st century version of dinner theater.
Theaters haven’t been challenged only recently. Previous competition came in the form of DVDs (not to mention illegal pirating of new releases streamed online). A common putdown of a movie a decade or so ago was that it “went straight to DVD”, meaning it never got a cinema screening.
The streaming trend doesn’t mean there won’t be any more movie stars, because the demand for “content” is greater than ever, but they probably all won’t be coming out of Central Casting or watched at the multiplex.