Experts and insiders from across the entertainment industry predict companies will continue to shift their focus to streaming services, whether as a producer of content or a streaming service or both.
“There is so much creativity and innovation taking place right now,” said Colleen Bell, executive director of the California Film Commission, based in Hollywood. “The variety of different mechanisms that are available to people in order to consume content provides different formats for production.”
On Dec. 2, New York-based data and market measurement firm Nielsen Co. reported that “cord cutters,” meaning those homes who do not subscribe to traditional cable or satellite services, account for 41% of all U.S. TV households, and more than 81% of U.S. homes had at least one TV-connected device. The company also calculated that consumers had more than 200 streaming service options at the midway point of 2021 with more likely to come online, and these services accounted for 28% of total TV usage just in October.
Despite this explosion of supply and demand, metrics for success among streaming content providers haven’t yet been standardized in the way theatrical and traditional linear television have (through box office and ratings numbers, respectively).
Roger Batchelder, head of strategic client advisory at Century City-based Creative Artists Agency, said that even with companies like Netflix changing their practices to be more transparent about their viewership numbers, as the streaming giant did in November, figuring out a consistent measurement will take time.
“We have not yet aligned on what the new metrics of success are,” Batchelder said. “When a show really helps drive subscribers, increased engagement, increased retention — all of the things that they value now — that’s what we’re figuring out now.”
Nevertheless, even those broad numbers are already translating to more productions, which for Los Angeles means more jobs for local talent and technicians, and even more soundstage usage.
In October, Zach Sokoloff, vice president of Culver City-based real estate firm Hackman Capital Partners, told the Business Journal Hackman’s production spaces were posting occupancy rates of approximately 95%.
Bell cited California’s Senate Bill 144, signed in July, as a salve to this problem, thanks to the $150 million of a total of $330 million in tax credits the bill allocated per year for the construction of soundstages to incentivize companies like Hackman to prioritize production-related projects.
Also on the horizon as an investment for individuals in the entertainment industry are cryptocurrencies; nonfungible tokens; and the metaverse, an online virtual environment that serves as a platform for conventional personal computing, augmented reality and virtual reality devices (not to be confused with tech conglomerate Meta Platforms Inc., formerly known as Facebook Inc.).
“They’re going to be another area that people in any area of entertainment are going to become more and more interested in,” said Roger Green, partner and head of Motion Picture for WME, a subsidiary of Endeavor Group Holdings Inc. “For those that are interested, there’s going to be a lot of interesting things happening in the next 24 months within the NFT and metaverse space.”
Meanwhile, even if much of the world has decided to stop worrying about the coronavirus and its growing number of variants, the consensus among individuals that spoke to the Business Journal for this article was that the industry has been proactive in implementing protocols that will protect workers while keeping them working.
“When entertainment production was completely shut down due to the pandemic in March 2020, almost immediately entertainment industry stakeholders all came together in a very collaborative and collective spirit,” said Bell. “That was a moment to talk about the variety of different expectations and needs on both sides, and thankfully they came to an agreement.
“Moving forward, the infrastructure support necessary for production continues to improve,” she said. “I think that this is a positive and exciting moment for the entertainment industry.”