In 1930, over 65% of the population went to the movies at least once a week. Despite the stock market crash of 1929 and the start of the Great Depression, 110 million people went to the movies that year to see now-classics like Hell’s Angels and All Quiet on the Western Front.

In the 80 or so years since the “Golden Age of Cinema” (1929-1945), much has changed. Now, viewers have dozens of options when it comes to how, when and where they watch movies ranging from streaming services such as Apple+ to cable video-on-demand. People can even watch movies on their phone while taking the train into work.

However, though streaming services such as Netflix have certainly changed viewing habits, that is far from the only way digital technology has disrupted the film industry. While movie-making equipment such as camera and editing tools, have become cheaper and more accessible, social media has completely changed the way movies and their stars are marketed. 

Monetization, Distribution & Consumption

Compounding these issues is the ongoing global pandemic which, amongst many other things, forced movie theaters to close or, at least, operate at greatly diminished capacity. Considering that as of 2019, movie studios derived almost half of their revenues from theatrical releases (46%), this created quite a predicament. 

The closing of theaters during the pandemic has forced movie studios to rethink their monetization and distribution strategies. Perhaps most strikingly, the pandemic prompted Warner Bros. to make its full 2021 film roster available on streaming service HBO Max the same day they open in theaters. 

Though Warner Bros. straight-to-streaming strategy is set to expire in 2022, it has forever changed movie distribution. Starting in 2022, Warner Bros. films will be released exclusively to Regal theaters for a truncated 45 day releases (pre-pandemic the average window was 90 days). Universal Pictures and Paramount Pictures have inked similar deals in the past year as well signalling the 45 day theatrical window is rapidly becoming the norm. 

That being said, handing over big budget studio releases straight to streaming services is not a viable option. Instead, what many experts think will happen is the film industry will develop an omnichannel strategy where a combination of ticket sales, paid video on demand (PVoD), ad-based models and digital models. While tent-pole films may stay in theaters for 45 days, others may have much shorter windows or not be released in theaters at all. 

Film Production

Digital technology not only transformed the way we see movies, but how they are made as well. 

Digital cameras have greatly reduced the cost and complexity of making films simply by eliminating film. Expensive, fragile and highly flammable, using required careful planning and a high level technical expertise. Digital, on the other hand, can be viewed and edited seconds after its recording making it a much more practical choice for filmmakers. 

In addition to democratizing filmmaking, digital technology has also lead to an explosion of innovation from CGI to 3D + 4k technology. It’s also helped merge production and post-production workflows. 

Traditionally, first principle photography took place first, followed by post-production then, if there’s a problem with the footage, reshoots. However, this model is starting to change.

Take The Mandalorian for instance. Instead of being filmed at multiple locations, it is produced in a specialized studio that allows the filmmakers to edit and add in special effects in real time as they film. As explained on the Industrial Light & Magic (ILM) website, “The Mandalorian performed in an immersive and massive 20’ high by 270-degree semicircular LED video wall and ceiling with a 75’-diameter performance space, where the practical set pieces were combined with digital extensions on the screens. Digital 3D environments created by ILM played back interactively on the LED walls, edited in real-time during the shoot, which allowed for pixel-accurate tracking and perspective-correct 3D imagery rendered at high resolution via systems powered by NVIDIA GPUs.”

As footage can be viewed and edited onsite plus filmmakers no longer have to worry about external factors such as weather, this style of filmmaking dramatically reduces the time it take to make movies as well as the risk. 

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Interactive Tech & AI

The transformation of the movie and TV industry is only just beginning. To ensure their continued survival, movies studios and other video content creators such as TV networks and streamers must continue to develop new monetization strategies that align with the realities of the digital consumers. 

For example, many content providers are experimenting with interactive storytelling, content that invites viewers to participate in the narrative - usually in a “choose your own adventure” sort of way. Over the past 3 years, Netflix has released a handful of such products such as Black Mirror: Bandersnatch and Unbreakable Kimmy Schmidt's Interactive Special. 

Other streamers such as Hulu have experimented with interactive ads that gamify advertisements. The only problem is that 80% of viewing takes place on a TV screen, which doesn’t lend itself well to interactive ads, yet.

Artificial Intelligence (AI) is also starting to play a role in filmmaking. Studios such as Netflix are starting to use AI-powered predictive analytics to help decide which movies to greenlight and automate the production of marketing content such as trailers. Whether AI will play a bigger role on the creative side of things is yet to be seen. However, there are numerous people out there developing algorithms to automate songwriting, scriptwriting and camera work. 

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