Oscar Noms for Streamers Make History, and AI Can Cement Their Place in Tinseltown
This year's Academy Awards mark a new chapter in media history. Streaming video services produced three of the eight nominees for Best Picture at this year's Academy Awards: Netflix's Mank and The Trial of the Chicago 7 and Amazon's The Sound of Metal. Never before have traditional major motion picture studios faced such competition for the top honor in American film.
Streaming services have earned major Oscars before. In 2017, Casey Affleck won best actor for the Amazon film Manchester by the Sea. But this year is different. Netflix picked up a whopping 35 nominations, giving it the most of any production company for the second year running. Amazon secured 11 other nominations. Apple TV+ and Disney+ earned nominations for the first time, too.
Streaming companies are vying for far more than bragging rights when it comes to Oscar wins. Every award is a leg up in the competition for subscribers. Original films are more than creative output when ROI competing for awards. They're also valuable portfolio assets that deliver long-term results.
Streaming platforms that count a bevy of Oscar-winning and nominated films in their stable will attract new viewers and retain existing subscribers that want access to the cream of the Hollywood crop. Larger audiences and less churn translate into more revenue, which in turn means more capital to produce more Oscar-worthy films, fueling a virtuous cycle.
How then should streaming providers value their titles? In the past, content valuations were straightforward: box office sales minus production and promotional costs yielded about 90% of the revenue a film could produce. But the industry has changed. The success of streamers at the Oscars reminds us that, while great content wins, determining which content resonates with audiences requires deep knowledge of audience behavioral patterns and sophisticated revenue projections.
That knowledge comes from data. Since viewers and subscribers generate the data that describes their viewing habits, streamers are in a unique position to leverage audience analytics to determine the genres, actors, release windows, devices, regionality, and other factors most likely to turn a profit. In other words, they can create not only great content, but can also forecast which content will make the biggest splash in specific territories.
How then to best leverage data? The answer is technology that can parse and analyze massive amounts of logins, purchases, searches, views and other signals that reveal consumer behavior from multiple sources – and algorithms sophisticated enough to predict what that means on a title-by-title basis. Good data management and analytics is a start, and artificial intelligence (AI) can scale analysis and insight.
Data coupled with AI can also provide streaming services with significant clout in contract negotiations. A moviemaker may quote a price for a streamer seeking the latest thriller starring a popular actor, for instance. The streaming service, through its data, already knows whether thrillers are particularly popular among subscribers, if the actor generates significant views and in what regions to show the film. That allows the streaming company to assign a value to the film before negotiations even begin.
Streamers were producing content at a breakneck pace before 2020. Netflix, for example, produced more than 370 original films and series episodes in 2019, a rate that matches or surpasses the output of major studios. That trend was expected to continue. The coronavirus pandemic tilted the playing field even more towards online viewing, however.
Streaming subscriptions skyrocketed amid lockdowns. Original titles found larger audiences during the pandemic as cinemas across the country closed their doors. Even when theaters eventually open to full capacity, viewers will expect that they'll have the option of streaming a new release.
Understanding this shift, studios likely won't stop giving streaming services access to their films. Streaming providers give studios a wider audience. But the traditional Hollywood studios face a dilemma. The more their content appears on Amazon, Netflix and others, the more data those streamers acquire to help them develop content that challenges the same Hollywood studios.
While 2021 may or may not be the year that a streaming service comes out on top in the Best Picture category, it's a matter of when, not if, the Netflix's and Amazons of the world take over the red carpet. The real winners will be those that top the list for Best Use of Data.
[Editor's note: This is a contributed article from Symphony MediaAI. Streaming Media accepts vendor bylines based solely on their value to our readers.]
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