By Thomas Knapp, on January 11th, 2012
Sigh … here we go again.
Those of us old enough to remember the debut of the VRC also remember that In The Beginning, moviemakers tried to get a hundred bucks or so per tape. Thus was born the video rental industry, which they weren’t able to kill even by bringing the sell price down into the $20 range.
Now we’ve got streaming video — not just Netflix, but Amazon, et. al — and the boneheads still think they can find a way to force us to keep buying pieces of Kevlar at $19.99 a pop. They push the streaming license dates back further and further, they put up barriers to rental services getting the DVDs, etc.
They’ll keep doing this until it starts costing them money and market share — quite possibly when Netflix et. al say “screw you guys — we’re going into the content creation business ourselves in a big way.”
Then the polarity will reverse, and they’ll be bidding the price down to see who can get their blockbuster pictures on Netflix first, because the eyeballs tend to shift toward the newest stuff. With trailers for their upcoming releases attached, because the big screen will always put a certain number of asses in a certain number of seats and that’s still where they hope to make the nut.
I hope Netflix drives a hard bargain with them, too. “Sure, Mr. Sony guy, we’ll stream your little movie thingie, with your ads … if the price is right.”
When Netflix forked their business into separate streaming and DVD plans, we reassessed our watching habits, kept the streaming and dropped the DVD. If we absolutely, positively must have something that isn’t available on Netflix streaming yet, we hit a nearby Redbox or Blockbuster kiosk, or occasionally use iTunes. It’s quicker than waiting on the US Snail. I’m guessing Netflix drops physical media entirely in the next couple of years or so.
Buy a DVD? Only if it’s something we know we’ll watch over and over and we happen across it in the $5 bin. Otherwise, it’s just so … 2001.
By Simon Grey, on January 5th, 2012
You don’t have to shell out hundreds of dollars every year to watch your favorite shows. This year, consider canceling your cable and taking advantage of several free and low-cost entertainment services. The website Hulu, for instance, lets you watch a variety of hit shows for free such as Glee, The Office and Modern Family, plus movies and documentaries. Or for $7.99 a month, you can take advantage of Hulu Plus, which gives you access to all of the selections on regular Hulu, plus more shows and movies.
You can also watch many shows for free on the network’s website, or pay $7.99 for Netflix, which provides access to unlimited movies and TV episodes.
The reason why cable is so expensive is because ad revenue alone is insufficient to cover both production costs and distribution costs. Cable and satellite networks are expensive to build and maintain, and content creation can often be pricey. As such, cable providers have to charge customers in order to be profitable.
The problem internet-based entertainment services face is that they are causing a significant portion of data transfer (i.e. the amount of data transmitted across the various data networks) but aren’t paying for any of the network upkeep and maintenance. Essentially they are paying only for content creation and distribution rights. This, incidentally, is why Hulu+ and Netflix subscriptions are so cheap (that, and Hulu is pretty well-connected to the NBC and Fox family of networks).
More importantly, it is the data service providers who have to pay for the creation and upkeep of data networks, and these networks have data transfer limits known as bandwidth. Essentially, there are limits to how much data can be transferred across a network at any given time. As more and more people begin to use online video content providers, there will be even more at being transferred at any given time, pushing up against physical network limits.
Data service providers will then have two options when this inevitably happens: increase bandwidth or cap data transfers. Most data transfer providers have relatively tight margins, so upgrading a network is not particularly feasible, nor will it be particularly widespread. Thus, the more common choice will be to cap data. Data caps (whether in terms of bandwidth usage or total data downloaded) will significantly curtail entertainment options, and so whatever profitability online video sites may have now will be either significantly reduced or completely eliminated, unless they decide to raise their fees.
Quite simply, the internet is not yet ready to replace cable. The network is not sufficiently built up. More importantly, the producers and aggregators of online content are not paying for the distribution of their content, and those who distribute content (data service providers) don’t have much reason to upgrade their network.
Ultimately, there is a strong chance that the market for online videos will eventually come to resemble the subscription television market. The separation of content providers and content distributors provides a problematic incentive structure that won’t be easily remedies unless content aggregators/producers have a financial stake in distribution, and vice versa.
Note: one thing that complicates this discussion immensely is the role of IP. If there were no IP, there would be many more aggregators of videos, and their subscription costs, if any, would be minimal since it would be considerably easier to find advertisers for pre-existing content, thus leading to an easy method of third-party funding. On the other hand, the amount of original content would diminish, and would probably become more low-brow.
By Simon Grey, on June 1st, 2011
So John Nolte has a post at Big Hollywood that attempts to explain why DVD sales have declined.
Blu-Ray sales have cannibalized some DVD sales, as has the rise of RedBox, Netflix, and Hulu. But Nolte posits that this is not enough to explain the decline. He argues that the reason for the decline in sales is because Hollywood makes crappy product. This reason seems shallow and highly limited. For one, Hollywood has always made crappy product. It used to be referred to as “b-movies.” Of course, Hollywood has turned pretentious as of late, so b-movies no longer exist, at least nominally.
Additionally, alternative media has had an impact of DVD sales. Google has pushed YouTube as a platform for feature length movies, which undoubtedly reduces the demand for movies in the theater or on DVD. People’s viewing time is limited, so if they watch things on YouTube, they won’t be able to watch other stuff.
Finally, Nolte fails to account for pirating. This isn’t a major oversight on his part, seeing as how there is not much data on the effect of pirating on DVD sales. Still, the popularity of torrent sharing sites would suggest that people are still watching a decent amount of movies, only now they are not paying for them.
Nolte is right in saying that Hollywood faces a revenue problem, but the issue isn’t necessarily a lack of quality films. It may simply be that Hollywood hasn’t figured out an effective business model for the age of the internet.
By B.P.T., on July 27th, 2008
When many people think of the arts and the economy, they would expect a pretty fairly coordinated response between a strong economy and strength in arts programs and, conversely, a struggling economy and weakened arts. It makes sense since funding for the arts is often the first to go in tight economic times, the wallet gets squeezed when the price of gas and food are steadily increasing and donations tend to head toward food banks and other social service organizations. However, the correlation between a pained economy and theater attendance is not so clear-cut.
Many organizations, of course, will feel the painful impact of the slumping economy. Touring companies may cut back on the number of stops. Tourist-based destinations may have fewer travelers. Nonprofits may have state and local funding cuts from municipalities. In Washington, D.C., the Helen Hayes Awards reported a decline of 1.9% in overall theater attendance, a decrease of nearly 37,000 attendees from a year ago. This makes the fifth year in a row attendance is down in D.C. area venues. Helen Hayes, the CEO and President of the organization who conducted the study, said, “In an uncertain economy, art is often among the first things to be eliminated from discretionary spending.”
In the academic theater realm, the University of Mississippi in Oxford has reported low attendance woes as well. The faculty believes a lack of funding for advertising is one of the most pressing issues. With a lack of money to get the word out, a self-perpetuating cycle is created. Since much of the program’s funding comes from ticket sales, poor attendance makes the situation worse, particularly when word of mouth is an important component. Free ads in local newspapers are the primary means of getting the message out. Students and faculty are exploring alternative methods of generating buzz, including enhancing publicity and increasing attendance among certain student groups, such as sororities and fraternities.
Other Factors
However, even with the expected economic pains affecting theater ticket sales, other factors are often at play as well. The Orlando Fringe Festival, a 12-day event held each May, reported a slight decline in ticket sales. The festival offers a variety of venues for a wide range of live performances and is attended by over 20,000 audience members. The 2008 festival did have a decline of ticket sales by about 7.5% over the 2007 numbers; however, the festival itself blames the lower sales on the lower number of venues and shows available this year rather than directly on fewer overall ticket sales.
In New York City, the theater hub of the U.S., Broadway itself has experienced a dip in sales, albeit relatively slight. The Broadway League has released its annual end of season numbers, which run from May of 2007 to May 2008; 12.27 million attendees saw shows, compared to 12.3 last year – a decrease of only .2%. In Broadway’s case, the Broadway League attributes the measly drop not to a shrinking economy but to a 19-day stagehand strike that occurred last fall.
In fact, tourism officials in New York City expect the wounded economy to potentially bolster theater and tourism in the Big Apple. Why? In the first quarter of 2008, the number of visitors to New York was up by a million people compared to 2007, with an attending $700 million more in money spent. According to a CBS News report, George Fertitta, head of the NYC tourism office, said, “Faced with an expensive euro and tighter budgets, Americans who might usually choose a trip to Europe are more likely to take a shorter trip to New York.”
Theater attendance is also highly influenced by local forces. In Bloomington, Illinois, the Bloomington Arts Center has seen a boom in attendance. The Bloomington Center for the Performing Arts (BCPA) has recently undergone a $15 million renovation; as a result, live performances in a variety of genres are available nearly all week long. Furthermore, the center has created a partnership with local schools, resulting in over 10,000 student attendees this year.
European Arts
Across the pond, theater attendance is mixed as well. In London, a wave of reality TV shows has generated a flurry of interest in live theater. The concept of choosing the next musical theater star through a televised competition has created a large interest in seeing the final staged product. Shows such as Andrew Lloyd Weber’s productions of Grease and Joseph and the Amazing Technicolor Dreamcoat have drawn in television viewers from the living room to the theater, with musical theater attendance up a startling 10%.
On the flip side, the Vienna Opera has had its own troubles. Not affected by the euro or other economic forces per se, the Opera has had to contend with a force all its own – soccer. The Euro 2008 soccer matches were held in Vienna at the same time as the famed opera house staged a Verdi production; the opera believes its fans were avoiding the stampedes of crowds in the city and have taken steps to avoid future conflicts.
While an economy in recession may have a direct impact on some arts organizations, it is clear that many will not suffer deeply. Local forces and other outside factors play into the way a theater and its audiences respond to economic changes. Both in the U.S. and Europe, pop culture, local facilities, venue changes and publicity factor into ticket sales; it is not just a tightening wallet.
By B.P.T., on July 10th, 2008
It’s undisputed that the nonprofit arts industry has a large fiscal impact on the nation’s economy. According to Americans for the Arts, a nonprofit organization dedicated to advancing the arts in America, the arts and culture industry generates over $166 billion in “economic activity.” This activity includes both spending by arts organizations and event-related spending by audiences.
What is not so clear, however, is the reverse; how does the state of the economy impact the fiscal health of the arts organizations? While there are many arts organizations around the country that are for-profit enterprises, the vast majority of regional theaters, operas, symphonies, museums, dance companies, fine arts organizations and more are designated 501(c)(3). This is an IRS status that relieves the organization of most federal income taxes and generally offers tax deductions for qualified donations as well. These not for profit groups depend heavily on donations and grant monies from individuals and other entities including municipalities like state arts programs, city arts programs, community foundations, private foundations, etc.; but many arts organizations also depend heavily on private donations to stay afloat as well. How these nonprofits are faring in today’s shaky economic times is, for now, a mixed bag.
Economic downturns often have long-term effects as well as immediate pain. The lack of funding resulting from a slowdown can take years to recover. Many nonprofits and the organizations dedicated to advancing philanthropy are taking steps to help organizations brace and prepare for the potential pain that may follow an ever-softening economy. MassNonprofit.org, an organization that shares news and information on nonprofits in Massachusetts, has recently published an article especially geared to arts and social service organizations to help them respond to a potential recession. The article includes pointers such as how to handle donor relations, contingency plans and revenue.
“Keep ‘Em Comin’!”
Marc Solomon, the interim chairman of the Palm Beach Opera board of directors, recently submitted a plea via the Palm Beach Daily News to supporters requesting they not let the slumping economy deter them from making donations. Attempting to head the problem off at the pass, he points out the need to step forward in support despite tough financial times.
Alex Aldrich, the Vermont Arts Council head, says in the Rutland Herald, “The severity of this economic downturn may prove particularly challenging for the nonprofits. We’re low on the discretionary spending totem pole.” The Northeast Florida Jazz Association has revamped its approach to sponsorship based on economic realities – the title sponsorship has gone up for auction on Ebay! According to Muriel McCoy, president of NEFJA, “This year, because of the economic downturn in the economy, getting sponsorships for the festival in the traditional manner is not working.” A press release by NEFJA says, “McCoy attributes the slumping economy and limited business resources as the primary catalyst for NEFJA’s innovative approach to raising funds for the festival.”
Amid the cautionary tales, however, are several bright spots. Surprisingly, foundation monies represent one of the more stable sources of income for nonprofits. Foundations include community foundations, corporate foundations and family foundations. The Foundation Center, whose mission is “to strengthen the nonprofit sector by advancing knowledge about U.S. philanthropy,” released the May 2008 Foundation Growth and Giving Estimates: Current Outlook report which is reporting a 10% gain in foundation giving in 2007, following on the heels of a 7.1% gain from 2006. Additionally, the report says over half of the nation’s 72,000 foundations expect additional increases in giving in 2008.
A Parable for Proper Planning
The biggest reason for this stability in giving is a direct result of proper planning by foundations. Sara Engelhardt, president of the Foundation Center, says, “Foundations — especially the larger, endowed grantmakers — often engage in long-range planning to ensure that they can maintain relatively stable levels of support for their grantees regardless of periodic dips in their assets.” This type of forward thinking helps arts organizations weather the storm during economic periods of downturn or instability which may affect individual donations.
Yet another beacon to arts organization and a reason for continued hope and confidence is the National Endowment for the Arts. The NEA, a governmental agency, is the largest funder of the arts in the U.S. each year. While funding has not yet resumed the peak funding level of $176 million back in 1992, the funding appropriates for 2008 were $144 million, a $20 million increase over 2007. And for 2009, the House Appropriations Interior subcommittee has, as of June 16, set 2009 funding for $160 million.
Arts organizations are, like other nonprofits, particularly sensitive to fluctuations in the economy, especially those that hinder the average citizen’s discretionary income like increases in taxes, a widely fluctuating stock market, gasoline that costs over $4 per gallon and widespread housing problems. However, at least so far, the pinch is not too tight for many arts groups. Those that rely most heavily on individual donations will likely feel the pinch first while those whose primary source of funding comes from a bigger machine, such as foundation grants and governmental entities, will likely weather the economic storm better.
By Lee Jamieson, on July 7th, 2008
This year marks four decades of freedom of speech in England’s theaters. Only 40 years ago, all plays were censored by the state for any “profanity or impropriety of language, indecency of dress, dance or gesture; offensive personalities or representations of living persons or anything calculated to produce riot or breach of the peace.” In 1968, Member of Parliament Michael Foot overturned this outdated system and introduced a new Theatres Act which abolished the Lord Chamberlain’s power to censor and ban plays (the office had been in operation since 1843).
In 1968, theater found itself at the forefront of the period’s huge social and cultural upheavals. Playwrights had become ungagged, and theater suddenly rekindled its relationship with politics, culture and society. In other words, theater rediscovered its active ingredient and became a “spokesperson” for the growing counterculture movement.
We should not forget that this move was no accident – rather, it was the result of a rapidly changing society that demanded a reconsideration of the relationship between the individual and the state.
The sexual liberation movement (both heterosexual and homosexual) demanded that the body be liberated from state control, hence the feminist maxim: “The personal is political.” Through protesting and the more promiscuous sexual practices of the British and American people, the physical presence of the body as a social and sexual weapon was brought to bear upon the political sphere.
Unsurprisingly then, naked bodies immediately appeared on stage after the new bill was passed. Infamously, the musical Hair (1968) and Oh! Calcutta! (1969) both depicted full-frontal nudity – an act which had become highly politicized.
State Intervention
Today, it seems almost incredulous that state intervention has shaped many of England’s modern classics. Would Samuel Beckett have taken his bleak existentialism in other directions? Was Joan Littlewood’s political voice curtailed in any way?
One of the last plays to be censored was Harold Pinter’s Landscape which was originally scheduled for production at the Aldwych Theatre in the months preceding the introduction of the new Theatres Act. Reading Landscape today highlights the absurdity of the situation – it is a gentle, melancholic play and contains no politically subversive material. Yet, the Lord Chamberlain’s office objected to the words “fuck all” and “bugger,” which read quite naturally in their original context.
“As I believe you know, I am willing to cut the phrase ‘fuck all’ but I see no good reason to change the word bugger,” wrote Pinter to Sir George Farmer, the then chairman of the Royal Shakespeare Society. “How childish the whole thing is, and what a pity one word is now between us and public performance.”
Eventually, Pinter’s play was recorded for BBC radio instead – an area over which the Lord Chamberlain had no jurisdiction. It was ludicrous that a play deemed too offensive for a small theater audience could be broadcast uncut over the radio to a mass audience.
Should We Be Celebrating?
Although there is no formal theater censorship in England, slanderous, blasphemous and racially aggravated productions can still be closed down. In the UK, the ongoing fight to protect freedom of speech now has to face growing pressures from the religious right.
Famously, the evangelical Christian right have dogged worldwide tours of Jerry Springer: The Opera since it opened. These attacks against the freedom of speech in theater have been highly organized. When the BBC decided to screen Jerry Springer: The Opera, an organization called Christian Voice led street protests, and the Christian Institute unsuccessfully attempted to prosecute the BBC.
Can small, cash-strapped theaters in the UK really be expected to confront these large (and in some cases wealthy) organizations committed to restricting freedom of expression? In 2004, the Birmingham Rep closed their production of the controversial Sikh play Behzti after the theater was subjected to violent attacks on opening night from the Sikh community.
The pre-1968 campaign for freedom of speech was united by a single cause: the abolition of the Lord Chamberlain’s office. Today, a single focus for the campaign is near impossible to identify – it is a clandestine mixture of political lobby groups and religious fundamentalists. The fight is far from over, and Britain’s theater scene is in dire need for support to help fight these growing movements.
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