The Multi-Billion Dollar Industry Still Cloaked In Mystery

Published on: September 16, 2013

Filled Under: All Things Hollywood, Blog, Entertainment, Worth Reading and Watching

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In the first six months of 2013, Americans are estimated to have spent roughly $3 billion dollars on home entertainment (defined as paid digital delivery of films and other programming content through cable, online distribution platforms and wireless) – an increase of 24% from the first half of 2012. The Motion Picture Association of America identifies 95 individual home content distributors although even that number is likely a significant undercount given the rapid proliferation of services outside the United States and the difficulty of accounting for pirated content – a practice that continues to flourish despite numerous governmental and industry-led crackdowns.

One of the most fascinating realities about this rapid rise of electronic content consumption is an unusual paradox: while it would seem that content creators and distributors ought to have more access to consumer data than has ever previously existed, the situation turns out to be significantly more complex. Consider that in the pre-digital era, measuring consumer behavior basically came in only two flavors: Nielson ratings (that is, statistical projections) and box office receipts. Today, instead of relying on projections and ticket sales, it should be relatively easy to determine exactly what a consumer watches, how many times they watch, whether they exhibit particular consumption patterns (e.g., turning off a film midway through), in addition to countless other metrics. Nevertheless, the age of real-time data has yet to emerge and new confusions abound.

In large part due to the proliferation of novel distribution platforms as well as individualized confidentiality agreements (sometimes on production by production basis), aggregating viewership data remains execeeingly difficult and in some cases impossible. A particular film, therefore, may be reported as languishing when in reality it’s cult Internet phenomenon. As with all technological conunundra, the development of more accurate measurement systems will eventually take hold either through the negotiation of uniform agreements between content creators and distributors or by looking to new methods of observation and tracking such as the frequency of “mentions” across leading social networks like Twitter.

As noted earlier, digital distribution had always been predicted to become the ultimate source of reliable data. Ironically, it has actually increased the number of variables by magnitudes. One thing is certain: There’s A LOT of money to be made by anyone who can begin effectively unraveling the unforseen complexities of this 100% organic marketplace.

[“Hollywood Wants Numbers On The Digital Box Office,”] The New York TImes, 9/15/2013]

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