i3 - July/August 2016 - 43

By Gary Arlen

Business

E N T E RTA I N M E N T M AT T E RS

Rearranging the Global Film and Video Map

he excitement about the Netflix global expansion,
unveiled at CES 2016, revealed worldwide ambitions
essential in the evolving digital video market. Netflix's
approach represents one move in the global game of
production and distribution for the digital era. The global
entertainment opportunity poses language and cultural challenges,

Robert Daly/Getty Images

many of which technology can resolve.
Nonetheless, since the maneuvers
involve giant companies and the deals can
reshape traditions the global entertainment evolution will face legal skirmishes
about copyrights, distribution contracts
and even censorship.
Whatever the barriers, the global
entertainment imperative is accelerating.
Within weeks of Netflix announcing that
it would expand into 130 more countries
(bringing its total footprint to nearly 200
nations), Chinese conglomerate Dalian
Wanda Group paid $3.5 billion to buy
Legendary Entertainment, the studio that
brought us Jurassic World, Unbroken,
and The Dark Knight films, as well as the
recent Warcraft and The Great Wall.
It was the first major Chinese investment
in Hollywood and may enable the company
to claim that the studio's productions
(which include video games and YouTube
content via its Legendary Digital Networks)
are Chinese-owned. That structure could
sidestep China's restrictive quota on the
importation of foreign content.
The Wanda Group already has a stake in
the worldwide theatrical business, including
the largest chain in China and AMC Entertainment in the U.S. plus a pending deal to
buy Carmike Cinemas. It also owns one of
China's largest film distribution companies.

Digital distribution has already ransacked the scheduled release sequences
and compressed the timing. Movies often
now open globally on the same day, rather
than months later in foreign markets. The
shortened DVD and pay TV windows of
the past are now squeezed in ways that
frustrate studios' monetization formulae.
The global deals confirm a distribution
trend that has been apparent for years.
In particular, the growth of Asia/Pacific
media audiences has been dramatic, driving
producers to find a way into that market. In
2015, the movie box office revenues in Asia
represented 37 percent of the $38.3 billion
of global theatrical receipts, according to the
Motion Picture Association of America. For
the first time movie theaters in Asia/Pacific
sold more tickets (worth $14.1 billion) than
did U.S. theaters ($11.1 billion).
That dominance is likely to flow to
home digital distribution if and when

China permits more programming - an
issue that Netflix, among others, has
acknowledged in its reticence to jump
fully into China.
And Asian media companies also are
producing for the world much as the
BBC and many other European studios
have been doing for decades. Independent
companies such as Metan Global Entertainment, a California producer of movies
and shows for TV, online and social media,
produces entirely for the Chinese market
from its Beijing and Shanghai offices. But
it has its eye on the global diaspora of Chinese expats around the world who can tune
into the programming online.
Similarly ZEE TV, one of India's largest
television operations, has set up distribution ventures which make its programming available to more than a half-billion
viewers in 138 countries. In an unusual
scheduling tactic, some ZEE programs
are shown simultaneously in all markets.
That means an evening primetime show
in Mumbai or Kolkata appears just before
noon in New York. That's convenient for
shared two-screen viewership if friends/
family want to have a trans-oceanic conversation as they watch.
It's all part of the global remix.
■

The Next Wave of Globalizing Media
Internet distribution is implicit in many
of the ventures, but there are countless
other facets in the worldwide digital rearrangement. For example, the popularity
of computer-generated imagery especially
for actors, makes it economically attractive to create dialog that doesn't have to be
subtitled for different languages.
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