After 2011, a new report by eMarketer states, the lines will have blurred so completely between online and TV viewing that the amount spent on web video advertising will jump in a major way, reports BusinessWeek.
You can see this everywhere you look, with new video sites opening practically hourly and report after report showing online viewing of television content rising steadily. And everyone is finding a different way to monetize the portals and services they create.
What amazes me is how much skin the movie studios have in this game and how inversely proportional that is to how much attention they seem to be paying to what’s going on. They actually have two fronts they need to be focusing on: 1) Marketing and 2) Distribution.
In terms of utilizing this shift in the media world for marketing efforts they’re actually doing pretty well. Back when ABC first launched their online player I saw Universal had jumped in and was running ads for the Aniston/Vaughn romcom The Break-Up. Studios have also been consistent advertisers on the MySpace pages for Fox TV programming. They even have gotten behind Google’s Video AdSense product, including trailers and more in the boxes publishers put on their sites. So credit where credit is due – they’re finding ways to advertise to the people who are watching things online instead of on TV. That’s great.
But when it comes to distribution they’re solidly stuck in the past. Instead of finding ways to innovate how they deliver their product – innovation that subsequently necessitates new thinking on monetization – they continue to try and prop up existing systems simply, it seems, because they don’t know what else to do. All the efforts, aside from a few token partnerships, are concentrated on theatrical distribution.
But let’s really look at what it means that media consumption is changing and how that can impact the movie industry. And let’s do so by looking at its closest analogue – TV.
Traditionally, a production house creates a show and is responsible for the costs associated with that production. A network then buys the show, paying the production company for the right to distribute that show. To recoup the costs of buying the show the network then sells ads within the programming. That model still exists, but now the distribution channel is the interweb and not the broadcast airwaves.
The variation upon that theme that’s appeared in the last year or two is the idea of paying directly for an ad-free version of the show that’s downloaded to a PC/portable device. The network that bought the show, though, is still the distributor and collects that payment.
The movie industry works similarly to the first model, but with theaters acting as distribution platform. And that’s what’s got me thinking about who needs to become the major player in the online distribution of feature films:
Theaters
That’s based on the success of television networks transferring their knowledge of distribution to new media. It’s not Warner Bros. Television that’s seeding the internet with their shows, but NBC. So, to extend that to the movie industry, AMC Theaters is the logical party to bring feature film distribution to the internet. If the exhibition industry really wants to save itself from declining revenues and audience numbers it should become the go-to resource for the consumer to find their online viewing.
The more I think about this the more it makes sense to me. All this is doing is taking, just like in TV, the existing knowledge of distribution and applying it to online executions. The difficult part would be getting theaters to put together the infrastructure, to say nothing of studios balking over concerns over piracy. But it seems to me that, with the lack of a unified outlook on online distribution it’s an option that all parties involved need to consider, keeping into account various monetization models. Is it ads? Is it pay-per-download? I don’t know, but it would be interesting to see somebody try something out.
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Studios are warning TV writers that a strike by them over contract negotiation impasses might only further the consumer viewing shift 
OK, maybe it’s just the fact that seventeen other things are frustrating me right now, but I feel like I’ve just gotten pushed over the edge.
