You will notice an overwhelming majority of traditional movie production companies were founded back a few decades ago and rarely any in recent years. The question here is not whether innovation has stalled in this industry sector or not but rather the reasoning behind the shift in content consumer’s viewership attitude and behaviors.
A few weeks ago, I had my first glimpse of the movie trailer based on the popular app-franchise, Angry Birds. Some might laugh at their initiative in venturing into this sector due to their relatively thin financials (compare to movie studios like Sony Pictures Entertainment and companies alike). Not only are movies costly to produce but they are either a home-run or foul-out venture per historical data.
Let’s take Disney for example. Their whole movie franchise was built upon the success of Mickey Mouse and then they started to derive/upsell to consumers via different avenues like parks and consumer products. As of last year, these two sectors make up more than 30% of their annual revenue. This approach still works nowadays (look at Frozen!). However, the coming of the Angry Birds will truly test this business model. Rovio, the creator game studio of Angry Birds basically create a product that really resonates and sticks to users and hopefully, in this process, draw them to watch the movie.
The Angry Birds Movie => Stickiness via other avenues (most likely apps nowadays) not movie-related and hopefully
Traditional Movie Studio => Stickiness via movie then draw consumers to spend in other avenues like products, theme parks, and games.
Just a few days ago, Nintendo also announced they are in the process of creating a movie so it gave me a notion to write about the shift in movie creation. The “Angry Birds Movie” business model offers numerous benefits, less risk (low upfront investment in apps as oppose to millions and millions of dollars upfront to make a movie) and ease to market as consumers can already relate to the characters in the game app. But ultimately, the office box # release will tell if this kind of business model will work. Stay tuned.
“The most successful franchises are built around characters that people fall in love with and the narrative that surrounds their lives.”
Intersection notepad 