How do you monetize the new Hollywood? I believe there are several answers to this daunting question (depending on IP, existing business models, etc.), but the foundation of where sustainable answers will evolve can be found in building models that are in favor of the audience.
What?! Give the audience power?!
For many who have worked a long time in the entertainment industry, this is an insane idea to wrap their heads around. This industry has spent the last 100 years telling the world what stories to consume and how to consume them. Audiences had no other choice but to accept our models if they wanted to be entertained.
Well, that is not the case anymore. Hollywood no longer owns the marketplace on storytelling and if audiences are not happy, they will go elsewhere for their entertainment (hello Facebook and Netflix!). As the media landscape has shifted – from passive to active – Hollywood is forced to make a paradigm shift in how to monetize by looking at what audiences want in terms of story, distribution and price point. By nurturing audiences and keeping them happy, they will keep coming back for more, bringing their friends with them. Successful entertainment business models will require that Hollywood let’s go of the illusion of entertainment control, and look towards serving up business models (content and pricing) that aims towards happy story consumers and thus business growth.
Netflix & their “Membership Happiness Business”
A great example of a company building and growing off of this ideology is Netflix. Netflix founder and CEO, Reed Hasting, proudly believes that to sustain their company growth, they need to continue to be a “membership happiness business”. This means that they are continuing to hold steady to their attractive $7.99/mo price while focusing business growth with original content and international marketing rather than asking their customers for more money. Netflix’ chief content officer Ted Sardanos claims they are “change(ing) the distribution model in favor of the consumers.” With this perspective guiding business growth, Netflix will continue to thrive and grow. They are already leaders in the evolving entertainment industry and will continue to be leaders if they stick with a business strategy guided by audience satisfaction.