Has the movie industry successfully adapted to the new reality of digital technologies?

Companies need to create a new model that will work for both streaming services and movie theaters

Sharel Omer 09:2116.08.21

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Covid-19 (coronavirus) has clearly made a big impact on society and changed the way many industries work. Although the shift from offline to online was evident prior to the pandemic hit, it did expedite the shift far quicker. The movie industry has been affected with the release of streaming services such as Netflix, Amazon Prime, Disney+, and more. Not long ago, many thought that movies were one of the few remaining proven ways to attract new audiences and retain existing ones. However, with the release of innovative digital technologies, many believe that streaming services will replace movie theater releases. Finally, it seems as if this long-held fear and expectation has arrived with Covid-19 accelerating the process.

Should the industry blame the pandemic?

Affogata’s artificial-intelligence software gathered direct and indirect conversations around Covid-19 and the movie industry. Many mentioned how the number of tickets sold for a movie release will be much lower during these times, and think the film industry shouldn’t expect to generate the same revenues as before the pandemic.

Sharel Omer of Affogata. Photo: Affogata

However, there are also reasonable concerns that do not blame the pandemic alone:

1. The film industry is having a hard time accepting the fact that movies are not interesting enough anymore, and are only replicating other movies or are remakes of successful blockbusters of the past.

2. The film industry doesn’t have high budgets anymore to make movies as good as they once were.

Disney vs. Scarlett Johansson

With the recent impact of the pandemic and the changes in audience preferences, the film industry is trying to understand how to adapt to the “new normal.” It is clear that changes create instability and chaos, and this is exactly what this shift from offline to online is creating. The problem with the film industry and two-sided platforms such as streaming services is that companies need to give value and satisfy both audiences’ needs. In this case, industry moguls such as Disney are trying to satisfy artists’ and viewers’ needs, while also creating stable profit through a few revenue streams.

This is not something new. A few years ago, Taylor Swift had a similar feud with Spotify because she wanted a different strategy when releasing her 1989 album, and Spotify disagreed. Moreover, the artist and the record label complained about low royalty fees and who would retain control of her music. Once Spotify refused, she removed her music from the platform. Spotify had to control the situation to prevent a snowball effect with other artists, and created more flexible policies for content creators.

Similarly, Scarlet Johansson sues Disney because of an apparent breach of contract by releasing the latest movie Black Widow on Disney+ at the same time as movie theaters. Johansson complained about how this decreased her pay due to increasing royalties on the tickets sold in theaters.

Just like with Spotify, streaming services such as Disney+ will probably have to react the same way and create deals where movies will only be released in theaters first, or actors will receive a different revenue model from those offered by streaming services.

As to accusations of whether the actress’s reduced salary was based on sexism and misogyny,

Affogata, gathered all positive and negative mentions around the feud, noting a high surge in conversations around specific keywords such as “sexism” and “misogyny.” We saw two different peaks on August 4 and August 7 in the Hollywood area. They were based on certain Tweets from influential accounts that accused Disney and the film industry of a“gendered character attack” against Johansson.

Twitter users appeared to have mixed reactions. Half agreed that there is some type of sexism prevalent in the way female actresses are paid in Hollywood, while others disagreed. The conversation reached its peak once Gabrielle Cateris, president of the Screen Actors Guild, released a statement condemning Disney’s response, calling it a “tired tactic of gender shaming and bullying.” Our platform found very influential mentions which will probably create a domino effect and will push Disney and other film companies to rethink their strategy of adjusting to the new normal.