May 14, 2010

THE WRITE STUFF: WHAT IS THE INTRINSIC VALUE OF ENTERTAINMENT?

The producers of Bigelow's The Hurt Locker have started to sue BitTorrent users. And why, pray tell? Because, in the words of the production company Voltage Pictures – as reported by Der Spiegel here – it was the evil, Gauloise smoking damn teenagers who prevented the Academy Award winning movie's commercial success by downloading it and seeing it for free! Now they want to see money.

So lawyer up, internet people, or pay up, because these folks think that if you have downloaded it somewhere, you got to pay a damn load of money for that experience.

Now, they have the legal right to do that. The production company, I mean. They even have the moral right to do that. But, and here's something they – just as the music industry before them – do not understand, that is not the point.

The point is if it is good business to sue your potential customer. Or – as the case may be – your not-so-potential customer. Well, easy for me to say, isn't it? I don't have anything out there worth stealing, and what's more important, the stuff I do have out there hasn't cost a couple of millions to make.

Like I said, the music industry has done this for years. And it hasn't helped them. Not one damn bit. They will win the court cases, of that you can be sure, but all they really do is to piss potential customers off. And if you are somebody like German "artist" Bushido – one of the frontrunners of such practice – and then you get caught stealing your music yourself (from a French goth group, no less, thinking, eh, nobody has ever heard of them in Germany, I can steal their shit and make money off their creativity) and then lose your own coypright case, deservedly, I might add, you get a whole lot of snickering and "serves you motherfucker right" from the balcony.

One of the problems, though, if not the most important problem is the fact that there is no direct correlation between BitTorrent usage and the success and failure of a movie at the Box Office.

I'm sorry I have to say this, with the movie having won the Oscars and all, but their argumentation can be easily disproven. If they were right (and we don't even have to go into the clusterfuck that was their release schedule in the US and the fact that nobody else around the world gave a damn about an Iraq movie) then the argumentation has to be right in every case.

Enter Taken.

The Liam Neeson starrer can be easily compared to The Hurt Locker.

Wha?

Yeah, you heard me right. Just like Kathryn Bigelow's picture, Taken had been in release for months prior to its theatrical release in the United States at the end of January 2009. Fact is, the movie had been out on BitTorrent sites all over the world for months prior to its US release. Just like The Hurt Locker.

One made 145 million at the US box office.

The other made 16 million.

I wonder why. Yes, class, this is one of these moments where you can actually use a pars pro totem analysis. Every structural parameter of these two movies were exactly the same. Both had been out in Europe already. Both were out on DVD in Europe by the time they hit the US theatres. Both could have been potentially bittorrented the hell out of.

One made 145 million. The other made 16 million.

Why?

Because one was a movie that people actually wanted to pay to see.

And sorry, Miss Bigelow, that wasn't your movie.

We can argue the artistic merits of The Hurt Locker ad nauseum, we can argue that more people should have seen it, we can argue that it was an important movie, in terms of social and political commentary.

We can argue all of that.

And in the end it doesn't change a thing.

Because in the end, people simply didn't want to pay 10 or 12 dollars to watch a movie that dealt with the same issues they had been bombarded with for over 5 years on the nightly news. And it is the same reason Paul Greengrass' The Green Zone tanked as well, and that one starred Jason Bourne! Running! And fighting!

... in Iraq.... boom! Your death sentence is right there. That simple word. Iraq. Boom. Not even Jeremy Renner could defuse that motherfucker in time.

I know. I know. People in the industry think they are doing good movies, good stories, they may even think that movies like The Hurt Locker further public discourse and debate, and that is part of their duty to make those type of movies. And who am I to argue with that?

But don't think that people will necessarily line up to watch them.

It's disrespectful to the audience, the paying audience, to come into this game thinking that you are so wonderful, that your story is so life-changing, so important that people will want to spend their money on you.

Or, as I wrote in the foreword of an analysis in December 2007...

Let’s start with a caveat here.

What you are about to read you may not like, because a lot of it is going to challenge every notion, every traditional truth that the movie and TV industries are built upon.

What you are about to read is an analysis, impartial and unbiased and not coming from a source within the industry itself that would say whatever you will want to hear to get themselves a job, a better position or the good table at Thursday’s Cocaine Night at Morton’s.

Stop here if you feel properly insulted.

Still with me? Good. Then let’s start with the most important question that the industry has to face, but has tried to avoid in the past years, with PR campaigns, lawsuits and… pretty much by putting their heads into the sand, hoping – like the European cotton mill producer in the 19th century – that the world will not turn. And the question is this:

What is the intrinsic value of entertainment?

Obviously, one could look through the spreadsheets of your normal movie production, evaluate the cost of the finished product, include the PR and marketing costs and the distribution and then say: this movie X or this TV show Y has the value of Z million dollars.

That would be the MBA way of doing an analysis, and it’s the way it’s always been done, and it’s a way that finds itself reflected in the quarterly earnings reports.  It focuses on the real, tax-deductable production cost value and needs to extrapolate from that point onward, in the way tangible products are measured, like e.g. cars, clothes, shoes, kitchen utensils etc.

However, entertainment in itself is an intangible product. While its traditional delivery systems like TV stations, cable networks, video, DVDs and even the newer delivery systems like cell phones or ipTV are a quantifiable structures, the content itself isn’t.

Or, to put it more precisely… it isn’t in the eyes of the individual consumer. And this is where the analysis needs to start. Not with production costs, delivery system and their advantages/disadvantages, but with the individual consumer. And the question needed to be asked becomes:

What is the intrinsic value of entertainment… to the individual consumer?

The answer is zero. And since that is a hard thing to swallow for somebody within the industry, let me repeat this one more time…

 The intrinsic value of entertainment to the individual consumer is… Zero. Null. Zilch. Nothing. Nada.

We can debate for a while the different reasons that made entertainment without a value in and of itself, and one could argue with quite some success that it is the result of torrenting and pirating, and that it’s those evil bastards out there who are destroying the industry and that it’s immoral and… and… yes, yes, those are all arguments we’ve heard before, but those are all  primarily moral arguments. We’re not here to talk morals, we are here to talk business.

And, what is more important, all those arguments stem from the previously mentioned MBA type analysis: we, the studios, have come up with a product that cost us the amount X and, consequently, we are assigning this product the value Y.

And with the complete control over all channels of distribution, that was a workable business model.

With torrents, with P2P, with widening broadband access, a fundamental parameter has changed, and in order to not only survive but thrive in this new environment, one has to accept a fundamental fact.

The old system is dead, not just broken, and it will never come back to the same structural integrity that has served it throughout the past 70+ years, because in the new business environment, it is the consumer who has increasingly the power to assign a value to the entertainment product itself. And those consumers that do possess this power more often than not are assigning the value Zero = Y.

Again, we could argue ad nauseam as to why exactly more and more consumers don’t consider the product put out there to be a valuable thing in and of itself.

One could argue that it has something to do with the quality of the entertainment product that has been dreadfully lacking in the past 15-20 years .

One could argue that studios have coddled up too much to acting stars and are paying them too much money without a proper analysis of the potential ROI, despite the fact that a proper analysis of the most profitable movies and TV shows of the past 50 years would show that none of them were propelled to success by star power.

One could even argue that – by attempting to build brands out of celebrities instead of products – the industry has devalued itself slowly, for the “real” Brangelina is now coming to every consumer’s doorsteps and/or TV set on a daily basis…

…free of charge, and with a much more interesting “script” than any of the movies they are starring in.

Explaining these different facets fully and thoroughly would make for an interesting book or a scientific thesis, but all of them have contributed to the dilemma that stares down the industry in the years and decades to come. 

And all of them are unfixable.

Thus the first rule of time management and efficiency applies: if you cannot fix the system in order to gain more efficient results, abandon the system.

What’s needed is a paradigm shift, and this is what this document will provide, on a relatively small level, designed for the production and distribution of a serial drama show, but which can be adapted and used for other types of entertainment product in later stages.

The thoughts and conclusions provided here are taking into account different business models that produced other product and placed it successfully into the marketplace.

For our purposes, we will have to start at the one place that has been too often forgotten in the development of entertainment product in the past, primarily because it is a product that tries to have an artistic “vision” and is made mostly by people who very often don’t think about who in the end should pay for this product: the consumer.

And this is where we will start. Not with a script. Not even with a concept. Not with a producer, not with actors, studio heads or whoever else thinking they are important. In all the thoughts, all the deliberations, all the different bits of analysis that are about to follow.

We will start with the consumer.

For the consumer is all that matters.