From virtual reality filmmaking to live broadcasting, we expect some significant changes and disruptions to the film industry in 2016. Below is a breakdown of the trends and factors that will affect filmmakers and the wider industry.
1. Fewer blockbuster film productions
Hollywood studios in the past 2 years have announced a reduction in film productions for 2016. With over 650 films produced and released theatrically in 2015, content saturation contributed to a string of Box Office failures where the market was essentially oversupplied and people had too much choice. Sequels and quality issues also degraded Box Office revenues for some studios. Despite a 7.4% rise in turnout at the Box Office in 2015 compared to 2014, overall, the Box Office remains in decline while theater averages are also down, and audiences have an abundance of choice.
2. China’s rise to dominance
By next year China is predicted to overtake the US Box Office making it the most important market for filmmakers in the world. What that means is more co-productions with China and films incorporating international stories. This will likely mean outsourcing more US production jobs to China for the next several years.
3. Virtual reality filmmaking
VR is getting a lot of hype just like 3D did when it first came out. Virtual reality filmmaking and 360 viewing are definitely on the cards for 2016 but expect it to take several years before this trend becomes firmly established. Google Cardboard is already giving people a virtual reality experience on select apps while Samsung’s Virtual Reality headset established a benchmark at the end of last year giving users an immersion with their existing Galaxy range of phones.
It took several years for HD filmmaking to appear in the home, and it will be the same for Virtual Reality as the industry adjusts for a new era of content along with 4k native technology, which currently faces hurdles including bandwidth limitations for a majority of consumers that won’t be able to see films streamed at that resolution. The costs of producing a 4K workflow are also currently high but this is set to fall within 2 years as computing speeds increase and manufacturers bring 4K to the forefront.
4. Mobile filmmaking
With more users heading towards mobile first, mobile filmmaking formats will become increasingly mainstream in 2016, carried by VOD subscribers that want to see films on mobile. This also means that mobile phones as opposed to traditional cameras will become more important in the filmmaker toolkit, especially with the upcoming iPhone 7 that is rumored to include a 4k HD camera. Mobile filmmaking is about to explode and expect manufacturers to release more mobile phones with higher quality cameras and apps to help filmmakers produce content on the move.
5. Live broadcasting
Last year apps like Periscope and Meerkat changed the game for live streaming, bringing it into the home for the first time on mobile. Facebook and Youtube at the end of 2015 ramped up their live offering to existing users further accelerating this trend. Facebook Live is set to change the way people communicate through video, and this will have a big impact on advertising dollars spent on live broadcasting. In short, billions more dollars will go into live streaming content over the next few years as platforms offer live video and filmmakers will have to factor in this trend for the marketing of their films.
6. Online education expansion
The expansion of specialized online courses in film and entertainment will create more market disruption for traditional universities which will have to diversify their course offerings to cater to online only students.
7. VOD production and subscription surge
Amazon and Netflix are ramping up production to improve their offering to subscribers in 2016, taking on traditional Cable TV, which will lead to an industry-wide shift towards VOD content production from feature films to documentaries while platform subscriptions are predicted to surge. With Netflix, Amazon, HBO and other players pushing ahead to acquire more of the market, film production will permanently move into VOD first territory, at the expense of major film studios, theatrical distributors and producers.
8. Acceleration of Cable TV subscription decline
Since 2013 Cable TV subscriptions have been declining across the board and 2016 is expected to be an exceptionally bad year for Cable TV with steep subscriber losses. A majority of Disney Channels suffered steep declines in subscribers in the past 12 months, especially ESPN, which also announced up to 300 job cuts at the end of 2015.
VOD has effectively made Cable TV subscriptions look expensive. As there is an abundance of content choice, Cable TV providers will have to lower prices to avoid subscriber losses which will inevitably mean less content being produced and more layoffs in relation to traditional Cable programming.
9. TV movies going mainstream online
The traditional ‘TV movie’ format is being reinvented for VOD audiences and TV movies will eventually replace some of the blockbusters that would have played at the cinema. Could we envisage a $200m straight to VOD production in the coming years being produced by Netflix or Amazon? We’ve already seen Aamazon spend over $150m on a TV series and should Netflix manage to acquire a large chunk of US Cable TV audiences in the years to come, then the online TV movie format is destined for the mainstream.