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As I read all of the reports (see below) on the death of, er, layoffs at Buzzfeed and what it means for the future of journalism and Media (capital M), I can’t help but feel that these problems are the canary in the coal-mine for film. Why?
As the Columbia Journalism Review summarizes so well, most people are blaming Facebook for these problems, “But if the giant social network is partly to blame, it is mostly because editors at BuzzFeed (and many other places) yoked themselves so tightly to Facebook’s wagon…” And as any business school professor will teach you - if your business model depends on the business model of someone else, you are in danger when you no longer fit their business model anymore.
For Buzzfeed and similar publishers, they felt they had to lean-in (pun intended) to Facebook because there was no other choice - it’s where most of the eyeballs go, and with them, most of the ad dollars. But then you lose the direct connection to both your advertisers and your viewers. Ok, fine, you think - we’re building our brand, getting our content seen, and can leverage it later. But that didn’t work out so well.
In a sense, these publishers were making “original content” for Facebook, and once Facebook realized original content from its users (for free, no less) was more valuable, it didn’t need the content these publishers were providing. But the publishers can’t get the eyeballs or advertisers directly, and there’s no one really waiting in the wings to replace Facebook, so they’re screwed. Unless you are a niche publication (like The Information) that has built a small but loyal audience, and you know who they are, and they pay you to keep in touch (via subscription).
Likewise, every distributor (and aggregator) has been going to Netflix because they have the eyeballs and the money (not via ads here). But Netflix realized it could make its own original content and cut out these publishers, and that’s what they’ve been doing. So now everyone races to license their content to Amazon. In fact, when I speak with distributors, they pretty much admit it’s the only revenue source they can count on right now. But Amazon has also been slowly moving towards making their own content meaning you are also soon to be screwed (they’re also making their own products and brands, so you are in the same boat if you happen to be selling anything else, btw). They been scaling back Amazon Prime Video Direct already, and don’t count on that being the end of their purge.
But to make matters worse, like publishers, most film distributors and “content-holders” (and even producers for that matter), haven’t built up their brands or their connection to their audience. So, few people will subscribe to them directly, and the revenue from AVOD won’t ever be able to replace what they made from their now-disappeared or soon-to-disappear partners.
Unless you are that rare brand - Criterion (or filmmaker - Gary Hustwit) who has built their own brand and direct-to-consumer relationship, you are fucked. Or maybe you’re that lucky 1% of producers/filmmakers/studios who make stuff that is good enough to be “must have,” meaning you are A24, or Shonda Rhimes or one of about, oh, twelve other folks out there and you’ll be just fine. But that’s a small group of smart, creative people.
The rest of us are left hoping that as Netflix, Amazon, Disney and WarnerMedia move away from needing what we make, that maybe someone will fill the void and that becomes an opportunity. Right now, that looks like Apple to some people, but ask a few publishers what that feels like. Some say it’s the broadcasters, but we know what content they like to buy already. And some say it’s services like Pluto.tv, but I’m betting those will be “pennies replacing dollars” deals.
I’d like to say that you’re only screwed as a distributor/publisher. As a creative/filmmaker/producer, you can just work directly with Netflix or Amazon and be fine.. But then I hear stories of how slow Netflix is to pay, and how banks are starting to deny loans to cover that gap given how much debt Netflix and their partners owe them already. And then I look at the reality TV and HSN type shows Amazon is launching. And then I just stop thinking about this stuff before my head explodes.
Of course, canaries in coal mines die a long time before the rest of us. I mean, Amazon and Netflix spent tens of millions at Sundance this year. Things are looking good. And let’s face it, they are the only games in town, so we gotta be there.
But as Warren Buffet says - it’s not ‘til the tide goes out that you discover who is swimming naked. And the time to think about these changes is before the tide goes out.
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