The Global Transmedia Market
Entertainment content is undergoing a global transmedia revolution wherein story universes traverse multiple platforms in a unique variety of ways – providing users with engaging interactive participation through numerous entry points. This pervasive transmedia phenomenon will soon become the norm. Animation is a truly global industry as most nations now produce domestic content, pursue international co-productions and seek to leverage on the high ancillary potential. The internet & mobile media have combined to change how stories are expressed and consumed. Casual & social gaming is on the rise compared to online & console gaming, with over 25 billion downloads from the AppStore since inception. Boundaries are blurring as movies, TV shows, games, books & apps become increasingly immersive, interactive & non-linear.
Nevertheless, 2011 box office proved resilient, with more than $32.6 billion worldwide (up 3% from 2010). The majority of movie screens will soon be digital as the stereoscopic revolution continues – driven by growth in China and India, whose markets are expected to double by 2015. Russian and Latin American markets are likewise proving profitable, despite the high rates of piracy. The pace of international roll-outs continues to accelerate, with many “day & date” releases. Distribution windows continue to shrink as online digital delivery and other factors transform the industry. With advances in HDTV and responsive programming, broadcast television remains a dominant player in the midst of the transforming technological and territorial landscapes.
The North American Transmedia Market
There are over 40,000 movie screens in the U.S. – the majority of which are digital and the majority of those digital screens being stereoscopic. Despite the increased revenue from stereoscopic 3D films, the North American domestic box office gross dipped to $10.2 billion in 2011 (down from $10.6 billion in 2010 and the record-setting year of 2009). The greatest market share was held by PG-13-rated, live action, modern fiction, original screenplays, with PG-rated animated fantasies also making a strong showing. Characteristic of the past few years, established brands and sequels dominated the theatrical landscape – led by the final “Harry Potter” installment. Of the top ten grossing films in North America for 2011, five were VFX-driven titles and three were animated hits: the latter led by “Kung Fu Panda 2″.
The flattening of the North America movie market has led distributors to seek revenue opportunities in China, India, Russia and Latin America with a combination of traditional releases, co-productions and “local content initiatives”. Independent producers now find themselves competing against studios for financing as the global economic crisis has motivated distributors to share risks & rewards with private equity investors.
The evolving digital & transmedia revolutions continue to be a mixed bag for North American content creators. Independent producers seek to take advantage of the range of opportunities provided, while established studios struggle to maintain or enlarge existing profit pies. Although “freemium” business models are on the rise, effective monetization of the new technologies is still emerging.
The Chinese Transmedia Market
With over 1.3 billion people, China is currently the world’s third-largest global box-office market behind the U.S. & Japan, the world’s second-largest stereoscopic 3D market behind the U.S., and has the world’s fastest-growing stereoscopic and animation markets. China is also the fastest-growing country in the global IMAX business, and has the world’s largest online gaming and mobile markets (with over 1 billion mobile phones & smart devices in use). Most young Chinese viewers prefer online entertainment, gaming & foreign bootleg DVDs to domestic films & TV, and the theatrical & broadcast audience is aging.
Nevertheless, Chinese box office revenue grew to $2.1 billion USD in 2011, with much of that coming from stereoscopic 3D titles. Nearly 600 feature films were produced in China in 2011, generating just over half of total revenues. Zhang Yimou’s “The Flowers of War” had the biggest production budget ever for a Chinese film at $94 million USD, and was China’s 4th-highest-grossing feature film in 2011 (trailing “Transformers 3″, “Kung Fu Panda 2″, and “Pirates of the Caribbean 4″). There are now more than 9,300 movie screens in China compared with 6,200 in 2010: a rate of eight new screens per day.
The Chinese government continues to open its market, with 14 stereoscopic & IMAX films added to the current foreign quota of 20, and profit share to foreign film distributors doubled from 13% to 25%. Numerous film fund, co-production & studio announcements (including the arrival of DreamWorks) have followed suit. Challenges facing producers in China include credible revenue reporting and ongoing problems with content piracy.
