The Moves Tech Giants Just Made That Should Terrify Hollywood

The Moves Tech Giants Just Made
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Blink and you missed it, but the already fuzzy line between media and tech just disappeared.

It happened at some point over the past seven days, a span of time over which a flurry of announcements came so fast and furious that you didn’t even realize the landscape had shifted under your feet. To wit:

  • Apple hired away from Sony Pictures Television a pair of executives to oversee its entertainment efforts;
  • Facebook made its first-ever long-form original-series orders;
  • Vice received a $450 million infusion from private-equity firm TPG to fuel its content efforts;
  • launched its first set of short-form original series from NBCUniversal and Viacom;
  • Snapchat added 10 more such series via a $100 million deal with Time Warner.

Silicon Valley’s premium-video ambitions are hardly a new phenomenon. But what we’ve seen in this last week is an acceleration too alarming not to call out.

The expansion of original programming coming from outside Hollywood should be a grave concern for an entertainment industry just beginning to see this intensification of competition — particularly among mobile-centric young consumers — for its core businesses, pay TV, and box office.

The past few years have been tough enough given the rise of Netflix, followed by Amazon Prime. Their global assault on the TV business is well under way; their attack on the theatrical film market is just getting started.

Now a second wave is starting to crest, and who knows: Maybe what Apple, Facebook and others are cooking up could eventually turn into a bigger wave than the tsunami Netflix and Amazon triggered.

Maybe the success of these first movers means there isn’t much viewing time up for grabs for this second generation of invaders. But the risk remains that there is more room for still more tech players to grab mindshare.

And it’s not just about the five companies cited above. Brace yourself for Vidcon, the annual showcase set for later this week in Anaheim, where Google’s YouTube will likely spotlight its own latest content efforts, not to mention others from Instagram to BuzzFeed.

There are still others that merit attention, like Twitter, which ramped up to 800-plus hours of live video in less than a year, and Spotify, which has barely scratched the surface of how it is programming video for its own massive base of paying subscribers.

It’s not like Hollywood is asleep at the wheel here; the conglomerates’ competitive response to Netflix and Amazon, Hulu, finally has an original series hit of its own to boast of in “Handmaid’s Tale” and a budding new skinny-bundle business. But as we saw last week with the layoffs at NBCUniversal’s new streaming-only comedy brand, Seeso, there’s going to be counter-punches to the tech onslaught that just don’t land.

Nor is Silicon Valley immune to failure on this front. Skeptics may not be panicking at the sheer volume of original content piling up in the tech world because we’ve already seen some big companies who thought they could take on Hollywood get humbled quickly. Think back to 2015, when Yahoo lost at least $42 million on several original series including “Community.” Microsoft shut down its Xbox Entertainment Studios the year before its own ambitious series plans even launched.

A few weeks ago, it seemed like Apple was headed down the same road. One unscripted series, “Planet of the Apps,” was unceremoniously dumped onto Apple Music last week and another, “Carpool Karaoke,” saw its launch delayed until August. It looked as if that special spirit of innovation Apple brings to everything it does wasn’t going to permeate its first original programming efforts.

But now that heavy hitters like Sony’s Zack Van Amburg and Jamie Erlicht are in place, Apple has to be taken very seriously. It’s not entirely clear yet how big the scope the company’s ambitions are in entertainment, but you don’t hire these guys unless you’re about to take a big step forward.

Same goes for Facebook, which has proceeded slowly on the video front without a clear strategic endpoint. While Ricky Van Veen’s intent to create original content was signaled to the marketplace earlier this year, the open-endedness of that intent made it negligible.

But now that as of last week, there are actual productions in place, including a canceled MTV series with Nicole Byer on the way, Facebook has to be watched closely. The power of its platform demands that respect, even if, as with Apple, the full extent of the vision Facebook is bringing to the table isn’t clear to anyone but itself at this point.

What Snapchat and are currently doing in tandem with established media companies with short-form content isn’t on the order of what Facebook or Apple are cooking up, but it’s significant in its own right considering the elusive younger demos congregating en masse on these platforms. The media-consumption habits of tomorrow are taking shape here; the likes of NBCUniversal and Viacom wouldn’t be collaborating here otherwise.

Which is why no one should be so quick as to reduce the media landscape to something as simple as a zero-sum game. When these massively scaled digital distributors deepen their commitment to content as they are doing, they provide a growing set of buyers to which Hollywood can sell or window its content. But take a breath to appreciate that all these things taken together represent the most alarming escalation of Silicon Valley’s investment in content than we’ve ever seen.

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  1. Dean Hawkey says:

    Good article, but missed another trend starting in the industry. Fan owned companies like Legion M Entertainment.

    Consumers actually own the company and tell you what they are interested in giving you an edge before you even go into production. They also spread interest about products through social networks. And they consume the products with pride of ownership.
    And if this sounds like it is a pump, it is.
    I am an investor myself and very excited about the opportunity. See how that works?

  2. Hugh Shipman says:

    It sounds like nothing more complicated than what…competition? It’s the very thing corporations say they love, but in reality, when it happens, they work to kill it in this neoliberal economy they themselves created. I’m all for seeing “entertainment” and new forms of media flourishing in places unexpected. It’s evolution–embrace it.

  3. It’s TOO complicated now. There’s no way for anyone to know all the content that is available and find things they want to see. It’s high time for a global aggregate content directory.

  4. Ian Williams says:

    Too many content choices, only so much time in day competing with dwindling attention spans. Content is about to get revalued and that direction is much much lower.

  5. Moose says:

    Clueless networks pushing agendas, especially the gay agenda, instead of focusing on solid family entertainment, and now it’s left with a cesspool of terrible shows with angry liberals like Alec Baldwin hosting cheap game shows (ABC is the new Gameshow Network) and ratings at the lowest point of TV history. You reap what you sow. You will not be missed.

  6. Jeff says:

    Hollywood has had decades to give viewers what they want, but didn’t, for whatever reasons. Netflix and Amazon turn aroud and say “here you go, enjoy!” and suddenly Hollywood is being “assaulted” and is “under attack.” The only thing under attack is studio executives’ and theater owners’ inflated opinion of their value to an industry that is absolutely going to leave them behind if they continue to ignore changing viewer habits in the digitial era. I wonder if horse-drawn carriage drivers complained about losing “the magical primacy of the horse-drawn carriage experience” when Henry Ford started cranking out Model-T’s.

  7. EK says:

    What a troglodyte! Of course this has been happening and technology is evolving at an accelerated pace. The benefits will outweigh the negatives as long as biz decision makers can keep up, adjust biz’s outdated models (and humans) and turn tech to the its advantage. Millennials et al have no patience for industrial panic and attempts to preserve the past. It’s blinkered panic such as is exemplified by this yarn that cause problems; forward thinking does not.

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