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Bret Kinsella's avatar

Hey David, this is a great idea to put forward. I have studied these dynamics a lot throughout my career.

In most industries power tends to migrate toward distribution over time. Closer to the customer means stronger bonds and more channel power. This typical trend can be mitigated if the supplier has a monopoly or de facto unique value assigned to its product by customers (or in the case of the entertainment industry if you get a consent degree imposed on theater chains to limit their ability to wield distribution channel power).

As channel power in suppliers wanes you often see distributors consolidate and increase their power. Distribution then looks for new sources of supply to improve margins and serve their customers. The reduced cost and barriers to content production along with strong centralized distribution for digital content is one cocktail that Hollywood is going to have a hard time keeping down. That is a key reason why the blockbusters and franchises dominate today and "thinking movies" struggle to get even a look by the studios. Scale in terms of demand for a unique product (particularly for overseas markets) is the last card Hollywood has to play.

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David Armano's avatar

Fantastic points Brett. Distribution models indeed are at the core of this struggle. YouTube and TikTok and even the streaming networks are all examples of distribution channels that have evolved based on how people want to consume content.

But there really is something unique about TikTok, that takes what YouTube started and essentially weaponizes it. Or maybe it’s more the short form video format combined with powerful algorithms. It’s crushes time and attention like no other medium. Which means there’s less of it for all other forms of entertainment.

That said, Barbie had a pretty good weekend. 🙂

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Adam Kallish's avatar

Good post. “Content” and “attention” can lead to greater engagement, but much of the content is predictable, derivative and you only engage once.

Hollywood is not a monolith of studios but an ecosystem of different corporate owners with different economic models. They do not know collectively how to respond to YouTube, TikTok and many other types of individual influencer content. I agree this content is taking some of our attention but being titillated is different than being committed. Studios produce multi show content we are willing to pay for.

But there are crossovers. The Rock is a successful actor and also a social media influencer who monetizes his brand and fans.

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