Technological developments in the 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. The entire process lasted a day and cost ILM around $50,000 (Marr, M. & Kelly, K., 2006).

Challenge 3: Digital Distribution

The advanced technology of broadband internet connection enables the consumer to download a feature-length film while maintaining a high-quality picture. This causes competition between movie and home entertainment theatres. To continue to competed movie studios must cut cost to be more profitable. They also need to improve the movie going experience (Dicarlo, 2005). While the internet is responsible for the world-wide exchange of information and products, it has removed the human interaction from the transaction. When a consumer purchases a CD from a music store, there are interactions with employees that decrease the chances of property being stolen. The internet, however, gives consumers and distributors a certain level of anonymity and can create an environment for the illegal distribution or purchasing of the product.

Best Practice in Other Industry to Leverage Technological Advancements

Best Practice # 1: Security

Secure Computing Corporation, the experts in securing connections between people, applications, and networks, and Net Clarity, a leading provider of vulnerability management products and services, recently announced the deployment of a joint solution for proactive network security at Seamen’s Bank in Cape Cod, Mass. The combination of Secure Computing’s SnapGear unified threat management appliance and NetClarity’s Auditor Enterprise vulnerability management appliance enables the bank to detect, deter, defend and defeat hackers, viruses, worms, spyware and malicious insiders.

The banking industry only requires Seamen’s to audit its network once a year which they felt was not often enough as hardware and software could pick up common vulnerabilities and exposures (CVE) at any time. Seamen’s Bank felt the responsibility to their customers and took a proactive approach to securing the bank’s main office and four branches. The NetClarity and Secure Computing bundle augments the current network security strategy at Seamen’s Bank to enable real-time protection of all assets on their LAN, which is paramount to protecting information about its’ account holders (Business Wire, 2006).

Best Practice 2: Distribution

The music industry has also been impacted by the way technology has changed the distribution of products. The popularity of iPods and the Internet has made music easily accessible to consumers. Instead of spending $14 on a CD, consumers can select their favorite songs from the artist and download the music at a lower price (usually $1 per song). This technology has increased the globalization of the music industry. The music industry also reduced the amount of stolen goods by forcing download services, such as Napster and iTunes, to pay licensing fees. A more recent development in the protection of music copy rights is the Perform Act Debate. The U.S. Senate Judiciary Committee has been listening to arguments from both sides about “legislation that would require satellite, cable and Internet broadcasters to pay royalties…and to pay at fair-market-value rates” (Butler, 2006, p.1). As Internet technology increases the accessibility of movies, legislation and licensing fees can insure the legal distribution of the product.

Best Practice 3: The Ecosystem

Michael Gallis and Associates are working with city planners to develop plans that address the interdependence of a community and the ecosystem. Peggy Ann Brown (2006) discusses how “not to just protect the environment, but to weave it into the fabric of a community.” She goes on to discuss the importance of not having the eco-systems surrounding a community collapse. Technology they are currently employee to support the efforts of this integration is GIS, satellite imagery, and three-dimension mapping.

Application of Best Practices to Address Challenges

The identified best practice adopted by the banking industry can be used by the movie industry prior to distribution of its entire original content wide the web. In this regard networking associations should be made with companies that are aware of security concerns and address them appropriately. Companies that provide the information technology should also be aware of the legal issues surrounding protection of IP rights and respect them. The recent tie-up between Warner Bros. Entertainment and BitTorrent has already made steps in addressing this concern. “BitTorrent has ensured the creation of a legal partnership that respects the value of the intellectual property. BitTorrent continues to work with the Motion Picture Association of America (MPAA) to remove copyright infringing content from its search results and is working with studios to replace that content, to provide a secure, legal venue for consumers (Business Wire, 2006).”

The application of George Lucas’s improved three-dimensional filming can support the efforts of saving our ecosystems. Through the use of this best practice three-dimension technology, combined with efforts of Michael Gallis and I.N. Vogiatzakis humans could better understand the impact on our planet. With the use of this technology could reduce trips to sensitive environments and still allow for the appreciation of these special places. With the cost of this type of eco-friendly trips reduced, the experience of these important places would be available to a larger population. This in combination with non-invasive robotic equipment could increase the search for medical solutions from animals and plants deep in natural forests. 

Conclusion

The movie industry has a unique opportunity to profit from technological developments. By doing generic benchmarks of companies that have been successful in leveraging technology, the industry can effectively solve problems that the same advanced technology creates. Applying best practices of other companies can allow organizations to maintain a competitive advantage. Technology will allow the movie industry to become more global and increase the opportunity of profitability.