Technological Developments: Movie Industry

Introduction

Advances in technology are changing the way the movie industry is doing business. Today's movie consumers are looking for more convenient ways of viewing films without seating in a movie theatre. They are also seeking better quality and sharper images. To stay competitive and reduce the challenges associated with technological developments the industry must identify best practices and apply those practices to problems the organizations might face.

Best Practices in the Movie Industry to Leverage Technological Advancements

Best Practice 1: Forming Strategic Partnerships

On May 9, 2006 Warner Bros. Home Entertainment Group announced a groundbreaking agreement with Bit Torrent Inc. to leverage the company's peer-assisted delivery system for the electronic sales of motion picture and television content in the United States. With this announcement, Warner Bros. became the first major studio to provide legal video content via the BitTorrent publishing platform.

The Warner Bros. Home Entertainment Group was founded in 2005 to bring together all of the Warner Bros. Entertainment businesses involved in the digital delivery of entertainment content to consumers, including home video, online, wireless, games and anti-piracy and emerging technologies operations.

BitTorrent is home to the world's leading open-source file-sharing protocol by the same name, specifically created to overcome the obstacles of transferring large files over the Internet. Created in 2001, BitTorrent enables millions of users worldwide to publish, search and download popular digital content quickly, easily and securely.

The new BitTorrent Service will feature hundreds of Warner Bros. television shows and films for download with DVD. The technology behind BitTorrent is elegantly designed for the delivery of large files like TV programs and films. Warner Bros. Home Entertainment Group was established to provide innovative, next-generation distribution models and this relationship provides our company with a unique platform to reach a new set of movie fans. By combining Warner Bros.' popular video content with BitTorrent's proven delivery efficiency; consumers will have an unparalleled way to experience entertainment online. Source: Business Wire: May 9, 2006

Best Practice 2: Digital Distribution

Until about five years ago, the box office was the largest initial revenue for movies in the United States. Now movie studios are seeing a dramatic increase in DVD sales and electronic distributors are benefiting from the increased sales of theater-quality home entertainment systems (O'Mara, 2005). According to Datamonitor, "The home video market is the most important within the movies & entertainment sector, accounting for 44.6% of sector revenues in 2004" (Global Movies, 2005, p.8). The recent popularity of camera phones and iPods has grabbed the attention of the Hollywood studios. The movie industry is embracing digital distribution through a new technology called MovieBeam. This service includes a set-up box that costs around $200 dollars and arrives holding 100 films that customers can rent for between $2 and $4 dollars each (Taylor, 2006). A maximum of 10 new films can be downloaded through a digital signal each week. The films are transferable to an iPod or personal computer, which allows the customer to view the movie anywhere and at anytime.

Best Practice3: Digital Cameras

A leader in the movie industry use of technology is George Lucas. George Lucas has used his company, Lucas Films, to change the way movies are produced. As Ron Magid (2005) points out George Lucas has found a better way of producing "from the digital cameras that are replacing film cameras on movie sets, to the way movies are edited, to how special effects are created, to the sound one hears in theaters and at home, and even to the way movies are distributed to theaters, Lucas has led the way in adopting innovative technologies."

Challenges Faced In Movie Industry Due to Technological Advancements

Challenge 1: Lack of Security

Digitalization's main drawback is that it creates unlimited opportunities for unauthorized usage, enabling perfect copies to be made in less time, with little effort and lower costs. Digitization also allows content to be altered in ways that can seriously compromise a brand and violate performers' image rights. The rapid expansion of broadband internet access aggravates the problem as it makes transmission of content and file access faster and easier (DreamWorks SKG, 2005). "In November of 2004, the first lawsuits were issued against those alleged to have illegally shared copyrighted films via the Internet (Global Movies, 2005)." Corporations across the country and throughout the world have invested large amounts of money in security software to protect information and products.

Challenge 2: Busting Budgets

Technology has made filmmaking not only more expensive and time-consuming but also more difficult to manage. The people who create special effects consider themselves artists and their agenda is to get it right -- not make it cheaper. Amid the excitement, studios are beginning to realize that relying on special effects is financially risky. Such big-budget films tend to be bonanzas or busts. If a movie hits the jackpot, it can create a box-office hit that mints money on video and television for years to come. If not, it can burn a massive hole in a studio's finances. To keep drawing people to theaters, studios feel pressure to keep pushing computer-generated realism to new levels. In the past, filmmakers would often settle for the first special-effects sequence created, but now, filmmakers have multiple options and spend many nights holed up in editing suites perfecting sequences. The simultaneous rise of cosmetic effects, which can fix anything, has created even more opportunities for tinkering in post-production. Filming with new digital cameras creates a sharper, cleaner look, but one that shows up every blemish and wrinkle. A filmmaker can add weeks of work and about $250,000 getting rid of facial hair, a wig line, or bags under an actor's eyes. In a scene from "Harry Potter and the Goblet of Fire," in which the hero does battle with a dragon, ILM wasn't satisfied with the computer-generated fire. Rather than spending more long days fiddling with each spark, ILM hired a flame-thrower that it filmed on stage. Then it superimposed the footage onto the sequence.