The Revolutionary Changes to the Film Industry as a Result of Convergence and
Digitalization
Bachelor Thesis
by
Michael Carrithers
Submitted in partial fulfilment
of the requirements for the degree of
Bachelor of Arts
In
Communication & Mass Media
State University of New York
Empire State College
December 9th, 2016
Reader: Todd Nesbitt
Acknowledgement
I would like to dedicate this page to the people that helped me with my thesis and supported
me throughout the whole time I was a student at The University of New York in Prague and
SUNY Empire State College. First of all, I would like to thank Dr. Todd Nesbitt, the Chair of
the department of Communication and Mass Media and my mentor. His valuable
recommendations and feedback were always very useful to me and motivated me in my
studies and further work on my thesis.
First of all, I would like to thank the Big Bang for creating our Universe. I would also like to
thank the people that gave me interviews for the thesis and others that took time off their busy
schedules to help me out. To the academics and authors that wrote and published the
information I used as sources in my thesis. And last, but not least, I would like to thank my
friends and my family. My mother Lenka and my father Robert are amazing people that
always support me throughout my life journey and I am immensely grateful for that.
1. Introduction
2. History of Film Until the Age of Convergence
2.1 Film and the First World War
2.2 Sound Film
2.3 Film and the Second World War
2.4 Film vs. Television
2.5 Leading to Convergence and Digitalization
3. Film Narration
3.1 Modernization of Film Narration
4. Convergence
4.1 Causes of Convergence
4.2 Technological Convergence
4.3 Digitalization of Film Technology
4.4 Digital Film
4.5 Digitalization of Cinemas
4.6 3D
4.7 Transformation of Film Viewing as a Result of Technological Convergence
4.8 Changes in User Behavior
5. Film Distribution
5.1 Digitalization of Distribution
5.2 Video-On-Demand
5.3 Film Piracy
6. Marketing in Film Distribution
6.1 Film Marketing
6.2 Market Research
6.3 Marketing Materials
6.4 Marketing Tools
6.5 Marketing Financing
6.6 Merchandising
7. Interviews
7.1 Filmmaker
7.2 Distributor
7.3 Film Fan
7.4 Analysis of Interviews
8. Conclusion
Abstract
The thesis is about the affect of convergence and digitalization on the film industry. It starts
with an overview of the film industry, going back to the invention of film. The digitalization
of film is a turning point in the film industry, the whole world and this thesis. Digitalization
changed the use of film technology and it affected the narration of film. Besides the
technological and visual style, the thesis takes a deeper look at the overall changes that have
taken place in recent decades. The focus is on economics of the industry. Furthermore, the
influence of the film industry on the new media, development of distribution and marketing
systems.
The revolutionary changes to the mass media as a result of convergence and digitalization
have resulted in the transformation of traditional methods of distribution of films to
audiences. Convergence and digitalization did not cause the film industry to decline or to
improve, it allowed the distribution of films to their audiences through a variety of different
channels and for the first time in about a 100 years it transformed the way films are
distributed. The research was conducted by reading academic journals and books written by
experts in the fields of concern. Also, a series of interviews with people connected to the film
industry led to the formation of the conclusion.
1. Introduction
Film was invented in the last decade of the 19th century. Cinematography as a whole is the
work of many inventors from Europe and the United States. The emergence of film
technology was possible thanks to photography and the technology created for the purpose of
taking photos quickly. These photos were then transferred to resilient material and fast
enough apparatuses for screening. The first of many inventors that contributed significantly to
the creation of film was an American photographer Eadweard Muybridge, who captured a
running horse in half a second segments. Shortly after Muybridge, brothers Lumière invented
the cinematograph, a motion picture film camera. After the success of the cinematograph of
brothers Lumière, film slowly spread throughout the world. (Bordwell & Thompson, 2003)
The creation of film led to the creation of a whole industry. What should we imagine under
the term "film industry"? Basically, it is all of the infrastructure, which is used for the
production of films. Film industry is not focused only on the production itself, but includes
many other activities related to the presentation of the finished film to the viewer. The main
aspects of the film industry are production, distribution and exhibition. Production includes
the actual production of the film, distribution is engaged in the sale of a finished film and
exhibition is about presenting the film to viewers through various distribution channels.
The film distribution sector is the connecting link between producers of films and their
audience. Distribution activity leads to viewing of the film by audiences. Today, the audience
does not stop engaging in the experience after seeing the film, but continues with a visit of
various websites about film, for example the International Movie Database. The audience can
evaluate and discuss movies with other film fans from around the world. If the film is
attractive for the audience, then its screening can lead to a viewing of another film with the
same actor or by the same director. That is why marketing is now more popular than ever in
5 the film industry. Film marketing is used to enhance the visibility of a film and to make the
audience want to see the given film. Convergence and digitalization changed the process of
distribution and the way of marketing a film.
Although convergence manifested much earlier, it became popular in connection with the
advent of network media. Technological convergence explains the process of the
transformation of the media. It does not assume that the new media will replace the old media.
Rather, it focuses on the fact that new and old media exist simultaneously and influence each
other. For example, with the arrival of the Internet, television did not disappear, but it did not
remain unchanged. Due to digitalization there is an opportunity to use technology that allows
the viewers to choose their own content. This is the first step towards individualization of
content.
The revolutionary changes to the mass media as a result of convergence and digitalization
have resulted in the transformation methods of distribution and marketing of films to
audiences. Have these changes brought advantages or disadvantages to the film industry? This
paper will attempt to explain the way convergence and digitalization transformed the film
industry, especially distribution and marketing. In addition, it will try to answer the question,
whether the changes were advantageous or disadvantageous.
6 2. History of Film Until the Age of Convergence
History of film until the age of convergence looks at the history of the film industry since the
beginning up to the age of convergence and digitalization. It starts by highlighting the
invention of film and what led to it. It presents the first important players in the sector and the
inventors of crucial apparatuses that shaped the film industry. The chapter focuses on the
development of film as we know it, the international expansion of film, how the two world
wars shaped the film industry, the invention of sound film and how it has changed the film
industry and other important elements of the industry leading to convergence and
digitalization.
The first public screening of moving images was held by Émile Reynaud in the year 1892. He
used mirrors and a magic lantern to project a short series of hand-made paintings on a screen.
Three years later, he replaced the paintings with photographs, but his Praxinoscope was too
impractical and did not catch on. A much greater contribution to film was the work of
Edison's assistant, W. K. L. Dickson, who decided to improve Jules Marey’s camera.
"Dickson sliced sheets of Eastman film into strips 1-inch-wide (roughly 35 millimeters),
spliced them end to end, and punched four holes on either side of each frame so that toothed
gears could pull the film through the camera and Kinetoscope. Dickson's early decisions
influenced the entire history of the cinema; 35mm film stock with four perforations per frame
has remained the norm." (Bordwell & Thompson, 2003, p. 17) Edison and Dickson began
using their device for filming twenty-second-long movies. Edison successfully rented the
machine for profit for two years, until it was replaced by more sophisticated devices used for
the projection of film on screen. Max and Emil Skladanowsky got close to the final form of
the projection system, but their bioscope was too cumbersome. (Bordwell & Thompson,
2003)
7 The Lumière brothers turned film into a profitable business with the construction of the
Cinématographe, a small camera using 35mm film and intermittent mechanism modeled on
the basis of a sewing machine. They shot their films at the speed of sixteen frames per second,
which is less than Edison’s Kinetoscope. This speed became the standard for the next 25
years. The first film produced by this technique was less than a minute Workers Leaving the
Factory and was presented in Paris on March 22, 1895. Within a few weeks of screening the
film became a sensation. Two years later, the invention of film was largely completed and
there were two basic techniques of exhibition, peepshow devices for individuals and a
projection system for a wider audience. (Bordwell & Thompson, 2003)
The early years of the twentieth century was a phase of the most dynamic development of
film form and style. The first films consisted of either a single shot or just a few shots. They
were mostly filmed in small studios with painted theater backdrops. The studios were often
glass-enclosed and roofed in a way so the author could affect lighting conditions. The editing
was not very evolved. With greater use of editing, trick sequences appeared. Goerges Méliès
is considered to be the greatest innovator and pioneer in trick sequences. He composed the
effects directly in the camera, because only a few laboratory manipulations were possible at
the time. Edwin S. Porter, one of the most important American filmmakers of this early
period, is also perceived as the creator of many innovations and the creator of editing as we
know it. He got into the position of a leading filmmaker and The Great Train Robbery is one
of the most popular films of the early twentieth century. (Bordwell & Thompson, 2003)
The leading film superpower in the early twentieth century was France. The companies
Gaumot and Pathé were filming, distributing and screening their own movies. Pathé opened
their own studios in Italy, Russia and the United States of America. The films were screened
worldwide and had great success. France lost its dominant position in the twenties after the
8 World War as a result of changes in the US market. Italian cinema went through an immense
expansion and started producing epic historical films that competed with French films.
(Bordwell & Thompson, 2003)
Before the First World War American film companies focused on the domestic market and
exported their films only to a limited extent. They built several smaller cinemas with the
entrance fee of one nickel, so called Nickelodeons. They were highly profitable and their
owners became the founders of major film studios, such as Warner Bros., Universal,
Paramount, Fox and MGM. The efforts to dominate this fast-growing sector triggered
disputes about patents. These disputes stopped thanks to the merger of two major parties,
Edison and AM&B, and the emergence of Motion Picture Patents Company. Motion Picture
Patents Company limited the number of imported films and thereby created the conditions for
the emergence of American cinema. But France and Italy still dominated the US market until
the First World War. (Bordwell & Thompson, 2003)
2.1 Film and the First World War
The First World War had an enormous influence on the development of the film industry. It
changed the balance of power in the world of film. Some countries briefly reached the top, but
in general it weakened film production in Europe and enabled American production to
dominate world markets. After stabilizing the domestic market at the beginning of the 20’s,
US companies started to focus on exports and gradually started to dominate cinemas across
Europe. The First World War played a key role in this process. While the demand for films
was still great, the First World War cut off many countries from European films and this gap
was filled by films from the United States of America. Domestic production in Europe shrank
due to the war and allowed US companies to invest more resources into film, because the
filmmakers had considerable revenues from non-US markets as well. The movies produced in
9 Europe could not compete with such a huge production. (Bordwell & Thompson, 2003)
After the First World War United States gained a leading position in the film industry.
European and Asian cinema were at different stages of their development, but had one thing
in common. The necessity to handle the invasion of Hollywood movies. They did so through
imitating these films or creating avant-garde film movements. A number of countries
introduced import quotas to support domestic filmmakers. In the 20’s film ceased to be pure
entertainment and began be recognized as an art form thanks to experimental filmmakers.
First magazines with critics and analysis started to be produced, first art cinemas for minority
audiences started to open and the first conference dedicated to film was organized. (Bordwell
& Thompson, 2003)
2.2 Sound Film
In the first half of the 20’s film technology pioneers sought to add sound to movies. In 1923,
Lee DeForest first demonstrated his Phonofilm with sound recorded on a photographic strip
running alongside the images. This method was not adopted though. Another company
developing technology for audio recording was Western Electric. Its scientists managed to
synchronize the sound with the film, but large corporations were not in a hurry with the
introduction of sound to film. The breakthrough came after 1927 with the film The Jazz
Singer, which in addition to recorded musical numbers also had short dialogue. Warner Bros.
considered sound recording over the financing of live orchestras and the success of the film
also encouraged the company to do so. Warner Bros. was not a big company at the time and
movies with sound was the company’s pathway amongst the major studios. The five major
studios realized that films with sound are the future and they needed to implement a
standardized system because their cinemas were also showing films of other companies.
Western Electric offered valuable conditions and the major studios chose their system.
10 Several smaller companies still used their own systems, but around 1932 the majority of US
cinemas had Western Electric sound system. (Bordwell & Thompson, 2003)
The success of sound film made the filmmakers in Europe and Asia try to introduce new
technologies to capture sound. German engineers developed their own system and got into
legal disputes with US companies. The dispute was ended by an agreement in 1930 dividing
the distribution of audio systems between Germany and the United States, which lasted until
the outbreak of the Second World War. The Soviet Union also came up with its own
technology. But the theaters were not equipped well enough and the Great Depression slowed
down the process of sound for film. The transition to sound was completed in 1936. French
cinemas were prepared two years earlier and the cinema sound system in the UK was ready in
1933. Sound in films remarkably helped India, which during the 30’s built one of the largest
film markets in the world. (Bordwell & Thompson, 2003)
2.3 Film and the Second World War
The United States started filming pacifist films depicting the absurdity of war after the First
World War. This trend was dramatically overturned after the Japanese attack on Pearl Harbor.
After The Second World War the Germans were depicted as cold-blooded killers. The UK
film industry was greatly affected by war. During the time of the biggest German threat the
British government canceled the production of films and films were not even showed in
cinemas. When cinemas re-opened the attendance was enormous. In Germany the propaganda
minister Joseph Geobbels, a big movie fan, took over the censorship oversight of films and
checked each one personally. The escalating anti-Semitism caused the departure of many
talented filmmakers abroad. In the Soviet Union, film was already nationalized in late 20’s
and government oversight prevailed. In 1935, the only correct artistic direction was socialist
realism promoting communist ideologies. After the war, the Soviet government maintained its
11 authority over the film industry. (Bordwell & Thompson, 2003)
The United States amplified its dominant position in the world after the Second World War.
The economy prospered and people were willing to spend money for watching movies in
cinemas and Hollywood experienced its golden period. The attendance was never as high as
in the post-war period. During the war the United States was an ally of the Soviet Union, but
after the war both countries started to promote different values. The US government
announced in 1947 the start of an investigation of anti-American activities within the United
States. A number of filmmakers were left-wing oriented before the war and some were
temporarily arrested. Pressured by public opinion polls they were released, but they found
themselves on a blacklist and could not create freely. (Bordwell & Thompson, 2003)
2.4 Film vs. Television
In the 50’s every second household had a television, in the early sixties even nine out of ten.
The sixties marked an era in the film industry that brought big changes to the business. The
studio system was under a lot of pressure. The attendance in cinema theaters was alarmingly
low and television was gaining popularity. "In order to combat the threat newly introduced
television posed, film companies implemented a product differentiation strategy to stem the
staggering drop in attendance as television competed for the same audience for
entertainment." (Frank, 2015)
The profits of the film industry in this decade fell by 74%. The film studios made an
agreement with the television stations for higher fees for the broadcasting rights to their films,
but the revenues still fell. Many overpriced and unsuccessful films led the studios into large
debts. At the end of the sixties there was a 40% unemployment rate in Hollywood. Film
studios came up with many innovations during this time, for example widescreen and
12 surround sound. The percentage of color film significantly increased. Film studios realized
that half of the audience consists of young people between 16 and 24 years, which found the
films of the old generation of filmmakers unappealing. At the end of the decade, younger
filmmakers gave rise to the so-called "New Hollywood". (Bordwell & Thompson, 2003)
Easy Rider started a period that is called the "New Hollywood". The whole film culture
started to transform around the year 1976. Hollywood began to revive and started to gain
more power in America and Europe. In the eighties Hollywood became a globalphenomenon.
The era of "New Hollywood" started the transition for Hollywood to become a global
phenomenon. In addition to Easy Rider, there were many other influential films created in the
era. Films such as Midnight Cowboy, The Wild Bunch, Five Easy Pieces, or Harold and
Maude. (Biskind, 1998, p. 26)
2.5 Leading to Convergence and Digitalization
In the 80’s, Hollywood continued the trend set in the middle of the previous decade with the
films of Steven Spielberg and George Lucas. Some film executives feared that the expansion
of video players and recorders would cause an attendance drop, so they unsuccessfully tried to
legally prohibit their sale. After the arrival of video, the attendance did not drop and video
became a strong distribution channel. In 1987 the sale and rental of videotape cassettes made
up half of the revenues of large studios. (Bordwell & Thompson, 2003)
The American major studios moved under large conglomerates during the 80’s and 90’s.
These conglomerates used the synergies within its subsidiaries operating in other sectors of
the entertainment and media industries. The connection to the powerful conglomerates
allowed studios to survive many commercially unsuccessful films. The rising budgets were
forcing companies to a different kind of forms of co-financing costly projects. Rights to
13 movies were sold before filming or two studios shared costs and distribution rights. (Bordwell
& Thompson, 2003) Typical for the eighties and nineties film production is mainly the
production of film series, sequels and the remakes of older films or television programs.
"There is no more striking evidence of the impoverishment of our popular culture than the
endless wave of TV-shows-made-for-movies." (Monaco, 2009, p. 393)
In the 90’s the importance of non-US markets increased. The image of a successful film was
distinguished by the success at the US box office, but usually the income that got movies
above their goal was from abroad. The key to success for expensive movies is in the first few
weeks after the premiere. Marketing strategists turned movies into worldwide events and the
viewer got prepared for a specific launch date. Marketing costs were often as high as half of
the total cost of the movie. It became important to deploy a movie in as many cinemas
simultaneously as possible, throughout the world. This was done to avoid the consequences of
negative criticism and it was an effective weapon against film piracy. This system generated
global films that gain up to a third of its revenues on the first weekend. These films dominated
the box offices worldwide and local films could not compete with them. (Bordwell &
Thompson, 2003)
With the arrival of digitalization and the beginning of technological convergence the trend of
sequels and comic book adaptations succeeded. Television production was on the rise thanks
to rich cable stations that could work with big budgets and movie actors. The Internet has
given rise to influential communities and created an illegal distribution network where people
share films for free. Film narration got modernized. Convergence and digitalization reshaped
the way films are produced and marketed to the audience.
14 3. Film Narration
Narration is the way a story is told to the audience. It is the basic method by which we
understand the world and human behavior. Because stories surround us and shape our lives, as
viewers we expect films to have a quality narrative procedure. To understand the story, the
audience must understand the relationships between individual events. Narration is usually
based on a certain situation that is followed by a series of related events and results in a new
situation. This chapter focuses on the way narration is transforming over time and presents the
shaping and evolution of narrative techniques.
3.1 Modernization of Film narration
Due to digitalization and the change of film aesthetics, film narration is also changing. Even
though in many contemporary films we can identify the narrative procedures that are
"traditional", the narrative storytelling role changes significantly. The story is losing its
dominant position. With the development of computer technology, special effects get
increasingly important in film and the viewer starts shifting its attention from the characters
and the story towards action and image. Contemporary cinema content does not identify with
the characters as much as it used to and rather follows the plot of the film. What is left is the
pleasure of watching the images. A certain tension was apparent between the narrative and
visual aspect of the filmmaking already in the classical period of cinema. But it has never
been as visible as it is in contemporary cinema. "If, ultimately, the spectacular aspect has
always been viewed as subordinate to and in a sense subject to the control of a repressive
narrative logic, this is precisely because spectacle is, in many respects, the antithesis of
narrative." (Darley, 2000, p.104) Spectacle consists of images whose main purpose is to
impress and stimulate the eye.
15 In connection with the role of narrative in the context of digital cinema it is important to
mention fragmentation. "Despite their diversity all these forms share, it is argued, an
invitation to their audiences to engage with the visual or kinaesthetic stimulation of these
spectacles, and to be fascinated by their technical ingenuity, by entertainment technology
itself as spectacle. The classic realist codes (character motivation and psychological depth,
logical causality and narrative complexity), if present at all, function merely as devices to link
together these dynamic sequences." (Lister, 2003, p. 150) The film narration is split into
visually stunning special effects scenes and scenes with elements of classic narration.
Thus, while in the previous period filmmakers made their films special with new stories, now
their efforts are concentrated on how stories are processed. What is increasingly more
important is the form, not the content. In contemporary cinema, the parallel story lines are as
important as the traditional linear narrative. The narratives of many lines are a partial
symptom of postmodern film. The narrative strategy is rather based on several parallel lines
than one-line linear narration. The reason for the popularity of this scheme is often cited the
influence of computer games. In contemporary film, video game elements are penetrating
filmmaking. (Bordwell & Thompson, 2003)
In connection with these complicated narrative techniques, we can talk about the attraction of
the form and the manner of storytelling that adds to the pleasure of the story itself. This is
associated with a distanced attitude of the audience towards the film. This distance is another
characteristic of postmodern narrative techniques. In an effort to avoid the viewer forgetting
his position of a spectator, some modern filmmakers show their principles of construction
directly in the film. One of the strategies used for this purpose is a discontinuous narrative
style. An example of this practice is the film Memento by Christopher Nolan, which works
16 with unchronological way of storytelling and presents individual events disorderly. (Bordwell
& Thompson, 2003)
One of the general characteristics of contemporary postmodern culture that is strongly
exhibited in the digitalized visual sphere is surface play, or gliding on the surface. Surface
play films do not produce their own distinctive model. They are just films that are visually
attractive, but lack deepness and narrative quality. Many of the artistic products of the media
sphere function mainly on the base of external interest. What matters is their form, not
content. Surface play is emerging as a result of the involvement of digital technology in film
production. The aesthetics in contemporary films are created by expressive visuals, film
music, editing, sound and special effects. The emphasis on form is also evident in emerging
forms of processing a film story. The complexity of processing a formal narration along with
genre obscurity complicates the viewers understanding of what is actually the story. The
viewer generally ceases to identify with the characters and follow the plot of the film, instead
he or she enjoys the pleasure of watching moving images. In postmodern cinema the surface
appears to be interesting enough, both in terms of aesthetics as well as in terms of narrative
processing. (Darley, 2000)
17 4. Convergence
The fourth chapter presents the phenomenon of convergence. Convergence refers to the
concept that leads to unity. Technology is engaged in creating, implementing and improving
processes used in the production of services. The economics of the film industry are reflected
in the involvement of technological change in the process of film production. A large part of
technological change is aimed at increasing efficiency and reducing the cost of film
production. Digitalization is the converting of analog material to a digital form, it is a
technical revolution that affected the whole film industry. Thanks to the development of
digital technologies film is in countless relationships with other media. The idea of this
chapter is to present film convergence and to explain how it changed the film industry,
moreover how it affected the users and their behavior. Digitalization is so closely connected
to convergence; it is a part of it. The focus is on digitalization of film itself, but then it moves
to digitalization of cinemas and the invention of 3D. The positive and negative effects of
digitalization and the most important issues concerning this, for example film piracy.
The general meaning of the word convergence is moving toward union and is reflected in
many ways. "The process of convergence leads to a services sector that is more fragmented,
competitive, flexible and international in its outlook." (Iosifidis, 2011, p. 170) Convergence
usually takes place simultaneously at several levels, it is a process that reflects the
technological, economic and organizational transformation. Henry Jenkins characterizes
convergence as follows "By convergence, I mean the flow of content across multiple media
platforms, the cooperation between multiple media industries, and the migratory behavior of
media audiences who will go almost anywhere in search of the kinds of entertainment
experiences they want. Convergence is a word that manages to describe technological,
industrial, cultural, and social changes depending on who’s speaking and what they think they
18 are talking about. In the world of media convergence, every important story gets told, every
brand gets sold, and every consumer gets courted across multiple media platforms." (Jenkins,
2008, p.3)
Convergence refers to the process, not just the endpoint. The processes that connect media are
fundamentally significant in shaping the new media environment. Convergence is not just a
technological change. It also reflects the relationship between existing technologies,
industries, markets, genres and audiences. Convergence can be directed from above by the
corporations, but on the other side it can be directed also directly by the users. Jenkins
believes that convergence is an assembly of relationships between different media
technologies and not a fully integrated system. Convergence is not just a branding strategy,
but reflects the transformation of balance of power in the media environment. (Jenkins, 2004)
4.1 Causes of Convergence
Convergence is happening for several reasons. "Users find in convergence an opportunity to
enjoy the benefits of many devices in one, saving on both space and ownership costs."
(Iosifidis, 2011, p. 171) Currently, any user can choose from a variety of information from
different sources and in different forms. The internet allowed the creation of unconventional
media because they focus on a very specific audience. For example, direct broadcasts through
an internet channel. Users interested in a certain topic can watch worldwide live streams on
the internet and fulfill their wants and needs. Each user has the possibility to find the
information that really interests her or him. This creates many groups of people with a focus
on specific information that the mainstream media does not offer. (Kolodzy, 2006, p. 15)
"The inexorable globalization of information and communication technologies, together with
the tendencies towards commercialization and liberalization are additional driving forces for
19 convergence." (Iosifidis, 2011, p. 171) Media industries and the information and
communication technologies are developing at such a speed that it contributed to the
appearance of globalization. Globalization results in the escalation of convergence on a
worldwide scale. Important developments in the field of technology, such as growth in the
processing power of a computer or optical fibre multiwavelength transmission also have a big
impact on enabling convergence.
4.2 Technological Convergence
Technological convergence has two sides, a technical side and a functional side. "The
technical side refers to the ability of any infrastructure to transport any type of data, whereas
the functional side relates to consumers’ ability to integrate in a seamless way the functions of
computation, entertainment and integrate voice in a unique device capable of carrying out
multiple tasks." (Iosifidis, 2011, p. 172-173) Technological convergence in most cases refers
to the service-integrating services, meaning that a phone can work as a medium to watch
movies or that cable networks offer Internet services. Technology has abolished the barriers
between different communications media. (Iosifidis, 2011)
Since the development of the Internet as a daily medium a lot has changed and the idea of
using one device that will be used for all forms of communication became a reality, to a
certain extent. The Internet allowed originally different media to mix. Technological
convergence has led to the emergence of multimedia technologies, thanks to the change of
working practices and development of new ways of providing information. The Internet
breaks all boundaries and enables faster and broader ways to collect and exchange
information. The rise of the Internet accelerated the fragmentation of audiences. Users are
looking for different information in different systems at a different time of the day and use
different devices for the purpose. (Kolodzy, 2006, p. 15)
20 In technological convergence the devices that originally had separate functions merge into
one device. Cell phones are no longer used only for calls and text messages, but also for
taking photos, videos, making sound records and searching the internet. Computers can be
used to watch TV content, listen to the radio, etc. Although many functions are combined into
one device, people do not restrict themselves to the use of only one device. On the contrary,
individuals often use multiple devices simultaneously.
4.3 Digitalization of Film Technology
Clear links between film production and its technological background can be traced back to
the beginnings of cinema. It was necessary to develop a basic technological background
before the first films could be produced. The postmodernist film period witnessed the greatest
technological progress. The involvement of digital technology in film production drew the
attention of filmmakers towards new possibilities for the use of special visual effects,
questioned the identity of the current movie and resulted in a major breakthrough in cinema.
Digital cinema could be seen as a return to the early cinematic practices, where cinema was
an attraction.
The pre-cinematic period was characterized by hand painting and images presented through
devices that create the illusion of movement. In the twentieth century these manual techniques
left the film. When film came into the digital age, these techniques became an unremarkable
part of the process of film making once again. The images created with animation programs
are mixed with camera recorded images and the traditional form of film begins to transform
under the influence animation. (Manovich, 2002)
The development of information technology in the second half of the twentieth century has
21 brought many changes and it has essentially changed the audiovisual media. "Digitalization
enables formerly distinct services, like voice data, video and audio, to be delivered over the
same network, to share resources and to interact with each other." (Iosifidis, 2011, p. 170)
This is the essence of convergence. Tony Feldman provides five key positive points of
digitalization: Digital information is manipulable, digital information is networkable, digital
information is dense, digital information is compressible and digital information is impartial.
(Feldman, 1997, p. 3) With the emergence of modern media, digitalization has eased and
improved the way we store information. The analogue material was stored on VHS tapes,
which have less capacity than digital video that can be stored on DVD’s, CD’s, USB drives,
etc. These digital devices allow the users to store larger amounts of data on a physically
smaller device than analogue data storing is capable of. It is also possible to transfer digital
content without physical support, sending data through email or sharing it online.
Computer technology is used increasingly primarily because it is the easiest, even though it
lacks depth. Digitalization opens up new possibilities of naturalism in one of the most over
stylized forms of visual textuality in contemporary culture. (Darley, 2000) Image composition
is key when it comes to a moving picture. In the modern days there is a popular technique in
which the layering of several separate images are generated within a single frame of film.
This technique was used mainly in the animated film during the 20th century. The situation
has changed dramatically after digital technology enabled easy stacking of a number of
images of different natures in a single shot. A classic example of this is the shooting in front
of a blue or a green screen in which the background for the filmed footage is done entirely in
post-production. Using this technique, it is possible to create a new virtual three-dimensional
space. Film frames are manually edited or updated with the new computer-generated elements
in the post-production phase. Perspective and camera movement do not change. It is also
22 possible to apply the method of shooting the virtual space based on automatic camera motion.
The sequence of this kind is no longer based on the recorded movie image, but is composed of
many different images and their combination creates a three-dimensional space that is entirely
computer animated. (Bordwell & Thompson, 2003) Digital cinema can be considered as a
hybrid created by combining elements of animated and feature films. The current digital film
is composed of live action material, painting, image processing, compositing and 2D and 3D
computer animation. (Manovich, 2002)
4.4 Digital film
The digitalization of film meant numerous advantages and cost savings for the distributors. A
lot of the filming equipment got cheaper and so did distribution to cinemas. Experts in the
field did not think that classic film would survive for long, because in the digital age a film
could be produced using computer animation and there would be no need for real actors. The
transition from analogue to digital is similar to the transition from black and white to color.
The new form does not kill the old, but it brings a multitude of new possibilities. (Thompson
& Bordwell, 2003)
Digital technology has fundamentally changed the nature of film. Feature films maintained a
status representational media for a long time. The filmmakers worked with unaltered image
records of real events. In digital cinema, the unaltered image record becomes only one of
several image layers and often works only as a raw material for further use. Cinematic realism
was replaced and became just one option among many. Instead of realism there is hyperreality, a "reality" that is more real than the physical reality. Everything seems bigger than it
really is. It is not realism, but hyperrealism, which introduces us to the imaginary film world.
(Manovich, 2002)
23 Digitalization of film introduced films that are like spectacles. Spectacle refers to the period
of the beginning of cinema when it was an attraction and the emphasis was on exotic
fascination and the illusive power of moving images. Nowadays again, the dominance of the
visual aspects of the film turns to contemporary cinema. Digital technology allows you to
create a hyper-real spectacle, which serves primarily to entertain the audience. The modern
viewer is no longer motivated to watch the film through his or her identification with the main
character, but because of the pleasure of watching the actual moving image. "The spectacle
offers a range of pleasures associated with the enjoyment of ‘larger than life’ representations,
more luminous or intense than daily reality." (King, 2000, p. 4) This succeeded precisely
thanks to the connection of computer generated and video recorded images.
Thanks to the introduction of new technologies, cinema became more globalized and
consumers have more choice - movie theaters, online subscription, cable television, etc. The
developments in production and distribution created a complete digital convergence of film.
Most movies today are filmed digitally, projected digitally and distributed digitally. Despite
all the gloomy scenarios of people from the film industry, video and Internet did not diminish
cinemas. Movie platforms through which the film gets to the viewer are much more diverse
than ever before and studios must acknowledge it. The viewer is satisfied, because he or she
can choose exactly what he or she is in search for. The viewer also has a chance to see films
that would not be screened in the cinema due to lack of interest. Film in the 21st century still
remains a global industry and the industry is not in decline.
4.5 Digitalization of cinemas
Digitalization began to dominate the whole audiovisual industry. Digitalization is compared
to the invention of sound film in the late 20’s and 30’s of the 20th century. Both changes
began in the technological innovation of theaters and their onset unfolded during an economic
24 crisis. The new technology is in the United States of America since 2002, when the seven
major Hollywood studios established the Digital Cinema Initiative standard, which defines the
precise conditions for quality distribution of digital cinematographic films. In 2005, there was
the first Digital Cinema Initiative specification, which specifies procedures and technologies
for digital cinema as the equivalent of conventional 35 mm projection. The entire
digitalization process is carried out according to this document, which is regularly updated.
Digital Cinema Initiative standards thus offers the viewer image quality comparable with a
projection of 35 mm copies and is responsible for the expansion of 3D films. Digitalization
has also led to increasingly sophisticated forms of illegal downloading of movies and has
caused grave decline in sales to the Hollywood studios. Digitalization of films led to the
biggest threat to the film industry - Internet piracy. (Thompson & Bordwell, 2003)
4.6 3D
At the beginning of the 21st century, together with the price boom of large widescreen LCD
TV’s and the expanding sector of home entertainment a statistical drop in cinema attendance
happened. Cinema multiplexes started looking for new ways to lure viewers back to theaters
and seek an added value that a film on the big screen can offer. As a result, the technology of
modern 3D projection was developed and used with the first IMAX cinema. The perfect
illusion of three dimensions is achieved by using the polarization of light. The film is
projected on the silver screen with a pair of powerful projectors, each of which reflects a
different filmstrip shot for the left and the right eye. The resulting effect is achieved after the
use of the polarized glasses, which connect both of the light streams and they merge to create
the effect of a three-dimensional image. (Mendiburu, 2012)
25 With the digitalization of cinemas, a large number of theaters were equipped with digital
projectors and other systems that enable 3D display without the need of having to use two
projectors. RealD 3D technology uses a single projector with a polarizing filter that skips
back and forth between images for each eye. To achieve the spatial effect it is necessary to
use the polarizing glasses. Although this system is inferior to IMAX 3D cinema projection,
the resulting effect nevertheless remains satisfactory for the viewer. Other available 3D
imaging systems include Master Image, Xpand and Dolby 3D. (Mendiburu, 2012)
4.7 Transformation of Film Viewing a result of technological convergence
Audiovisual content in the modern day is not focused only on television screens, but shifts to
screens of computers, laptops, tablets and smart phones. The viewer is no longer bound to a
fixed program. Movies or TV programs can be viewed on any device connected to the
internet. This means that the viewer can freely choose the place where he or she will watch
chosen content. The traditional form of watching films at home can also now be moved to any
place where the user can connect to the internet. The traditional model of communication,
where the user only listens and watches a specific content is gradually transforming. Today,
the user selects and chooses what he or she is interested in. The new media provides a
sufficient degree of freedom of choice. One part of the audience continues to use the classic
linear television; however, the second part of the audience prefers service upon request.
4.8 Changes in user behavior
The company Millward Brown, which specializes in media and communications, conducted a
series of consumer behavior studies. One of the studies was the comparative study called
AdReaction that maps which screens people use most and how much time they spend in front
of them daily. In addition, the company's experts have also examined a phenomenon called
26 multiscreening, which is the monitoring of multiple screens simultaneously. They have come
up with three types of multiscreening based on the purpose of use by the user. The first one is
meshing, when the user watches a program on the TV screen and uses another device to view
content connected to the original program on the TV screen. Another type is stacking, that is
when the user watches two contents which are not related. The third type is shifting, which
refers to the use of different screens for related purposes. For example, when the viewer starts
watching a video on Youtube via computer and later keeps on watching it on the phone.
(Millward Brown, n.d.)
27 5. Film Distribution
The film distribution sector is the connecting link between creators of films and their
audience. Distribution activity leads to the consumption of film by audiences. If the film is
attractive for the viewers it can then lead to the viewing of another film thanks to the same
actor or the same director. Digitalization and convergence had an immense impact on film
distribution. Film distribution did not change for many decades, until the age of convergence.
The digitalization of film distribution led to the creation of video-on-demand, which is a
system that allows its users to select and watch a film of their choice without a prescribed
television program.
The main characters of film distribution are sales agents, film distributors and festivals
organizers. Sales agents buy and sell films to international distributors and other relevant
clients who provide DVD, Blu-ray, video-on-demand or television markets. They build an
extensive network in the international market and use it to negotiate the financing of
production, presale rights to films and sell the rights to distribute films. Distributors receive
licenses for films either directly from the producers or from sales agents. They have the right
to promote the film and distribute it in particular territories. A territory may be a country or a
group of countries. There are more than 90 territories on the global film market. (Kerrigan,
2010) The rights to the film are sold separately for theatrical release and other platforms such
as video-on-demand, DVD, Blu-ray or television.
The Motion Picture Association of America has processed the data from global cinema box
offices. The data from 2015 shows that the global box office made 28.3 billion dollars, while
the US and Canadian market made 11.1 billion dollars. (Motion Picture Association of
America, n. d.) While the home entertainment spending in the US alone topped 18 billion
28 dollars. (DEG, 2016) Charles C. Moul uses older data like this to support the fact that having
the possibility of creating certain products tied to a specific movie title is much more
profitable than the financial potential of a film that is made only for cinema distribution.
People spend more money and time watching movies at home on the TV or on the screens of
their laptops than they do watching movies in cinemas. Despite this, it is necessary to
emphasize the irreplaceable role of the screenings of films in cinemas which allows the
opening of other distribution channels, such as a successful launch on Blu-Ray, DVD, Netflix
or on cable TV. (Moul, 2005)
Film is one of the leading export industries in the US. Nearly half of the revenues flowing into
the film industry are from abroad. American film producers have learned to make movies that
will satisfy the widest possible audience and these movies dominate the whole world. Large
US companies create a barrier for the entry of smaller companies into the market. The success
of Hollywood films is possible thanks to the insignificant success of non-English spoken
films outside of their place of origin. The other reason for the dominance of the Hollywood
studios is their approach to film from an industrial point of view. European filmmakers
believe that the industrial practices of film sacrifice the artistic values of the film. The clash of
art and economics can be seen as one of the causes of the failure of films that are not from
Hollywood. (Kerrigan, 2010, p. 35) Today, the major Hollywood studios and other
distributors have to get used to new forms of distribution and must think about changing the
distribution system due to convergence and digitalization and their role among producers of
films and audiences.
5.1 Digitalization of Distribution
Previously, the distribution of films was divided into cinema distribution, video distribution
and television distribution. Today, there is cinema, video-on-demand, broadcasting,
29 streaming, downloading, cable TV, satellite, Internet, DVD, Blu-ray. Digitalization helped to
simplify and improve the picture and sound in all of these distribution channels. It also affects
the entire process of creating films. Digitalization caused significant decline in distribution
costs. The transition to digital projection began in the United States in 2002, when the studios
tried to regulate the digitalization process, which involved replacing classic film projectors
with new digital projectors. (Thompson & Bordwell, 2003) Digitalization also allowed the
expansion of alternative cinema content, such as live broadcasts of theater performances.
The internet became a special distribution channel. With the arrival of these technologies
Internet piracy posed a threat to film producers, distributors and protectors of copyrights.
Piracy harms not only the right holders and the companies involved in its distribution, but also
the film itself. Internet pirates focus primarily on movies that have a big audience interest.
They distort the market, because they offer the films for free. Sharing of movies through the
Internet poses a threat to film distributors, but it also damages new opportunities. Legal
distribution of films through video-on-demand could suppress Internet piracy. More about
film piracy in chapter 5.3.
5.2 Video-On-Demand
Convergence and digitalization led to the creation of video-on-demand services. The United
States has the most developed Internet distribution of films and television series. Some of
these companies expanded or are expanding to other global markets starting with Europe.
Europe is the second biggest video-on-demand market. The market is still relatively young,
dynamic and evolving. The video-on-demand service in the US can be counted in hundreds,
each has a different structure and offers different content, has various sizes of user base and
revenue. A number of key players with a strong position in the market have been recognized
30 by now. The most popular company is Netflix, which unquestionably dominates the sector.
(Frost & Sullivan, 2015)
Experiments with video-on-demand services date back to the early 90’s of the 20th century.
The Digital Audio Video Council was created in the United States in 1994, which brought
together more than 200 commercial and academic groups in order to design the architecture,
specifications and protocols of the newly emerging video-on-demand systems. (Eleftheriadis,
1996) Wider distribution of video-on-demand services started after 2000, when the number of
subscribers for digital cable television started significantly rising.
The actual expansion of distribution of movies over the Internet did not happen until about
2005. In 2007, the American mail order video rental company Netflix launched its video-ondemand services. Film and television studios began to take a greater interest in this market,
which made it more interesting for the end user. "There is no more central issue in media and
communications studies today than the proposition that we are in the middle of a rapid
process of change that is seeing established or ‘old’ media being challenged for primacy in
audiences’ and users’ attention by new modes and types of production, dissemination and
display." (Cunningham, Silver, & McDonnell, 2010, p. 119)
Currently, Internet distribution of films is the fastest growing segment in the area of home
video. A variety of video-on-demand services around the world are rapidly gaining popularity
throughout the world. Television companies, movie studios, independent producers and other
players of the film industry are trying to get into this very dynamic and still very young field.
Strategy, distribution and marketing of films is rapidly changing and there is no general guide
to success.
31 An active approach to the field by the creators and distributors is crucial. Those who
penetrated the complex sector of online digital distribution earlier are better placed and it is
starting to pay off. The sales in the sector of home video are growing and a significant
contributor to this is video-on-demand distribution. The revenues from the sale of video
content over the internet between 2012 and 2013 increased by 39%, revenues from the rental
of Internet video content has increased by 40% and revenues from video-on-demand
subscription services increased by 31%, while revenues from the sales of Blu-ray discs
increased by only 2% and revenues from DVD sales declined by 14%. Total income from the
sale of digital video content has increased from 5.1 billion dollars in 2012 to 6.5 billion
dollars in 2013, which represents an increase of about 27%. (Tribbey, 2014)
It is obvious that the video-on-demand sector of distribution now is extremely remarkable.
Although the revenues from online digital distribution are inferior to the income from other
segments, it is very likely that in a few years’ time, video-on-demand will be a substantial and
possibly the main source of income for film studios and distributors. The expected future
development of devices and users connected to the Internet and the average time spent
watching videos online by users of the Internet shows that video-on-demand has a bright
future ahead. Research by ABI Research reports that the volume of video viewing on mobile
devices will more than double by 2019. The total time spent watching online videos by a
single user in 2013 worldwide was 12.7 hours per month and in 2019 it should be more than
21 hours per month. (ABI Research, 2014) There is a strong representation of video content
provided free of charge or supported by advertising in this research, but it still indicates the
potential of the sector. A study on the importance of mobile devices in the future shows that
in 2020, mobile data traffic will reach 30.6 exabytes per month. In 2015, 55% of the world’s
mobile traffic data was video, while in 2020, video should make up 75% of the world’s
mobile traffic data. (Cisco, 2016)
32 It can therefore be concluded that the fields of video-on-demand and mobile Internet video is
expected to have a strong increase in all directions in the next years. Even studies that
specifically focus on developments of the video-on-demand market confirm this upward
trend. Research by Research and Markets reports that users are now accustomed to watch ondemand content on their computers and mobile devices just as they are accustomed to visiting
the cinema or watching television. Video-on-demand services have found their way into
households because they are comfortable and the video quality is better than before. "The
VOD market is expected to grow from $25.30 billion in 2014 to $61.40 billion in 2019, at a
CAGR of 19.4% during the forecast period." (Research and Markets, 2015)
5.3 Internet and film piracy
Film piracy expresses any unauthorized use of cinematographic work. The global expansion
of the Internet network elevated the enthusiasm of unlimited opportunities for promoting
individual human creativity. On the other hand, the distribution companies are losing millions
daily. Film piracy negatively affects the development of the film industry and reduces returns
on investment in the production and distribution of films. It contributed significantly to the
demise of most video rental stores, which used to be very popular. Film piracy also reduces
the number of jobs generated by film distributors, which are due to the forced reductions of its
work teams. The controlling distribution policy has experienced several shocks caused by
modern innovations. Since the arrival of VHS technology in the 80’s of the 20th century the
viewer sort of became independent and did not have to depend on the current cinema
offerings or on television station programs. The second half of the 90’s, a further qualitative
shift followed with the arrival of DVD’s with advanced audiovisual qualities. (Thompson &
Bordwell, 2003) With the new millennium there was the arrival of a third generation optical
disc called Blu-ray, which together with high definition imaging techniques, transformed
33 living rooms into a true home theater.
The Internet caused the biggest disruption of the distribution chain. At the time of
transforming analog film into digital film, freely distributed information outstretched the
problem of copyright protection. Any user who has an Internet connection can virtually
download any film. Given the fact that a significant part of the population would have to be
criminalized, there seems to be no effective defense against Internet piracy and all existing
restrictive strategies of distribution companies have failed. (Thompson & Bordwell, 2003)
The first step to fix this must be the widespread spreading of televisions that enable video-ondemand, which would allow the viewer to freely choose any audiovisual content available on
the Internet and watch it on their television screen. The recipe for success is simple - modern
technology must also be user-convenient and easy to reach out to masses of people.
34 6. Marketing in Film Distribution
Marketing is a separate entity in the process of film distribution, where marketing principles
are applied to the area of film. Film marketing represents the activities that are performed
throughout the supply chain in order to bring the film to an audience. Marketing research,
strategy, materials, tools, financing, etc. Film marketing used to have a minimal function in
the film industry, today it is at the forefront in the film industry. The main purpose of
marketing in film distribution is to create public interest in the film. In the age of
convergence, marketing has to adapt to the new ways audiences absorb media content.
6.1 Film Marketing
Film marketing has its own specifics compared to other mainstream products and services, but
it is still based on the traditional theories, which modified during the age of convergence and
after digitalization. The film is the final product. The price is the price of a movie ticket or the
price of a DVD, Blu-ray, video-on-demand, etc. The distribution channels are cinemas, videoon-demand, DVD’s, Blu-ray’s, television broadcasting or other distribution channels.
Communication involves marketing activities to promote the movie to the audience. This
whole mix is created to meet the needs of the viewer. It is necessary to segment the audience
for a particular film, focus on the target group and target the group in marketing
communications. The purpose of this communication is to maximize the number of viewers of
the film and expand profit potential. (Kerrigan, 2010)
The marketing costs are rising and the competitiveness for the audience has increased. Film
producers and investors want to understand how the film will be promoted and at what price.
(Marich, 2005) In order to better understand this issue, it is necessary to know the film
industry, to know what cultural role films have and how audiences experience film.
Marketing in the film industry focuses mainly on cinema distribution, because cinema is a
35 place that establishes the value of a film. The value is then transmitted to video-on-demand,
DVD, Blu-ray and television. Cinema distribution is increasingly shortening and film
marketing specialists have very little time to engage and attract viewers to the cinema. Each
film released in cinemas is a new product that has to be explained and promoted to the
audience. (Marich, 2005)
There are several elements that affect the viewers’ decision whether to see a film or not. The
first element is the star of the movie. The star could be the main actor, the director, the
producer or perhaps another member of the staff. The star of the film is seen as a factor that
determines the economic performance of the film in cinemas. For many viewers this is a
decisive factor when choosing which movie they want to see. In cases where the producer
wants the script of the film to shine, a star could be harmful. In this case it is better to use less
familiar faces. The star system is another big advantage of Hollywood. Only few non-US
actors are world famous and even they mostly appear in US films. (Kerrigan, 2010, p. 82-85)
The second element is the script or genre. Genre identification is essential for the correct
positioning of the film on the market and targeting the right audience. The genre is generally
classified on the basis of scripts through which the story is told. (Kerrigan, 2010, p. 92-95)
The third element is age classification. This element is very important, although it is often
overlooked. Age classification prevents the entrance to a cinema to younger viewers and
gives a signal to the viewers what kind of film they can expect. (Kerrigan, 2010, p. 96-97)
The fourth element is release strategy. Most films are distributed through so-called windows
system. In this system, the films are first distributed in cinemas and after a contractually
agreed time they are released on DVD and Blu-ray. After another period of time they are
made available for pay per view systems and then classic TV. Thanks to digitalization, there
are also other distribution models, such as an exclusive film distribution through the Internet.
36 The strategy that is chosen for the film has a big impact on sales. The number of cinemas in
which the film will be released depends on the budget of the film and advertising. There are
schedules that determine when the film will be shown in cinemas. Films with bigger budgets
have more interesting dates. Previously, there was a specific time of the year for specific
types of films, art house films were released in the spring and blockbusters in summertime.
Today, the schedules of cinemas are overcrowded and distributors have a difficult time to find
the perfect release date for a film. (Kerrigan, 2010, p. 98-100)
6.2 Market research
Market research plays an important role in developing and positioning the product, entering
new markets and understanding the competition. Researches are held during the entire process
of film production and marketing process. Distribution companies collect data about the
performance of their films in different markets at different times. This data can be combined
with external databases and create a source of information that may be useful in predicting the
financial success of a new film. (Kerrigan, 2010, p. 42-45)
There are seven types of research done in the movie business. Each of these researches are
conducted at a different stage of the development of a film. First research is called concept
testing, it takes place at an early stage and tests film ideas, film titles and casting for films in
development. The second research type is positioning studies, these studies analyze a finished
script and are used to create the initial marketing strategies. The third research is focus group
tests, these tests are conducted with small groups of people in order to see their reactions and
views on the film or on the promotional materials. The fourth research is test screenings,
which are screening of nearly finished films for an audience and are done before the release of
a film. Tracking research is the fifth research that is done, it assesses the awareness of viewers
of films based on weekly surveys before the film is put in cinemas, their aim is to predict
37 sales at the box office. The sixth research is advertising testing, which is testing of advertising
materials before they are released. Exit surveys is the last research; it collects direct
information from the audience after watching the film in the cinema. All of these seven
researches are getting less popular, because of Internet testing. Using the Internet can reach a
specific audience. The users can directly participate in the development of a film and its
advertising campaigns, which can help understanding their interests and cultural preferences.
(Marich, 2005)
6.3 Marketing materials
Marketing materials changed dramatically thanks to convergence and digitalization. They
vary according to the country in which the movie is distributed. Among the marketing
materials are some of the traditional resources like posters and some of the more modern
forms of marketing materials like trailers and merchandising. Their form depends on the film
type, target audience and budget. The purpose of these materials is to get the audience to
watch the film and generate additional income. There are materials which are intended for
B2B communication and that are targeted for B2C communication. (Kerrigan, 2010, p. 123124)
A poster should tell the viewer what is the atmosphere of a film and at the same time it should
be as simple as possible. There are number of contractual requirements on how a movie poster
should look like. It is typical that well-known actors have an agreement on how large must
their name on a poster be in comparison with the names of the other actors. Quotations from
film critics in the form of sentences or phrases from their movie reviews are often used.
(Marich, 2005, p. 18-21)
A trailer is a crucial part of marketing materials. Usually an external agency that prepares
several proposals is hired. However, some studios have set up their own marketing
38 departments, which are engaged in the production of creative materials, including trailers.
Before the trailer there is sometimes distributed a teaser, which is published months before
the film opens in cinemas. Its aim is to create awareness about the film and its length is
usually 90 to 120 seconds. The length of a classic trailer is 120-150 seconds. Trailers are
usually freely available and represent samples of films with a clear aim to lure viewers to go
see the whole movie in a cinema. (Marich, 2005, p. 18-21)
6.4 Marketing tools
Advertising seems to be more essential in the age of convergence and is considered to be an
essential element of marketing strategy. Usually an advertising campaign starts four weeks
before the film's release. Its intensity increases one week before the film opens in cinemas.
However, online campaigns start much earlier. (Kerrigan, 2010, p. 148) A classic medium for
cinema advertising is television. Radio, print and outdoor advertising is also widely used.
Internet is a specific medium, where there are used such tools as banners, pop-up ads, videos
and many others. (Marich, 2005, p. 180) Personal webpages for movies, where the viewers
can find information, participate in contests and interactively participate in advertising
campaigns are widely popular and useful. Another popular instrument today are social
networks.
Each film has its own publicist. The publicist organizes interviews with reporters during the
production and prepares materials that are a part of the press kit. A press kit contains a
description of the film, the story, the genre, information about the production, cast,
biographies of key people, film articles, photos and videos. Digitalization has brought down
the cost of distributing these press kits. Journalists can freely download the press kit from the
Internet or use a password to download it from the distributor. (Marich, 2005, p. 131-134)
Film critics widely affect moviegoers. Good criticism can have a powerful impact on the
39 economic performance of the film. The viewers seek critics’ reviews to reduce the risk that
the film will disappoint them. The influence of critics is lower when the film has a high
production budget, wide release strategy and a high level of promotion. (Kerrigan, 2010, p.
113-114)
Word of mouth is closely connected with film critics. Some experts believe that word of
mouth is the crucial factor for the success of a film. The control of word of mouth is almost
impossible, as well as its measurability. Nowadays the online word of mouth is also very
important, the Internet connects a community of fans of films that evaluate films and affect
the audience. (Kerrigan, 2010, p. 115-118)
Film festivals and fairs are major events in the film market. They are a meeting place for
producers, sales agents and distributors. Film festivals are more oriented on the less
commercial films and may represent an alternative form of distribution for films that are not
supported by a big studio. (Kerrigan, 2010, p. 164) Among the most famous and most
important film festivals in the world today are Venice International Film Festival, Cannes
International Film Festival, Berlin International Film Festival, Sundance Film Festival,
American Film Market and the Toronto International Film Festival.
6.5 Marketing Financing
Film distributors put more funds into advertising after digitalization than ever before. The
marketing of a typical European film is about 10-25% of the total budget. In the United States
it is up to half of the total budget. Distributors are therefore trying to find other companies
that would help with the financing. They started co-operating with companies that provide
goods to customers. The products are associated with the film, and it supports the sales. This
form of advertising is called tie-in promotion. (Marich, 2005, p. 81) The product is connected
to the film in order to attract a similar audience.
40 Another type of financing is product placement. Products of a company are placed in the film
for a compensation in the form money, promotion of the film in its advertising campaigns or
the company’s products for free. When Charlie Chaplin was selling a candy called "Little
Tramp," it was one of the first cases of product placement. This type of cooperation is now
very widespread and a popular financing tool of marketing. Most often this type of
cooperation involves fast food chains, soft drink makers, car manufacturers, electronics
retailers, etc. The key to this collaboration is that the target group of the film is the same
target audience as the one of the product. (Marich, 2005, p. 194)
6.6 Merchandising
The term merchandising depicts the whole range of active sale procedures, which is carried
out by the manufacturer or the owner of the copyright. It is a set of activities directed
especially towards the supply chain to ensure that the right goods are located at the right place
at the right time and the right price. Paco Underhill describes merchandising as a way to
achieve that the products do not remain unnoticed and will be interesting enough for the
customer to purchase. The essence of merchandising is to ensure that the goods have been
exposed in such a manner that people are interested in it. Sales promotion also involves the
sale of advertising and souvenir objects that carry the trademark of the main product and
whose existence serves to increase profits and to promote the movie. This specific activity is
referred to as a licensed marketing. (Underhill, 1999)
The emergence of radio, television and cinematography contributed significantly to further
develop merchandising. However, the biggest development in the area of merchandising took
place in the 80’s of the 20th century. George Lucas created Star Wars and influenced the
culture of an entire generation. In negotiations with the studio 20th Century Fox, Lucas
waived his fee in exchange for 40% of box office earnings and all merchandising rights. This
41 move of George Lucas paid off when the Star Wars brand became a globally recognized
phenomenon and shops were filled with goods bearing replicas and faces of the film
characters. (Squire, 2016)
7. Interviews
This chapter is consisted of 3 separate interviews conducted with people closely connected to
the film industry. The first interview is with a filmmaker, someone who worked on the set for
most of his life and had to get used to the continuously developing technology. The second
interview is with a producer that looks for practicality and has a different approach to the film
industry than a filmmaker or a fan. The third and last interview is conducted with a film fan,
someone who loves movies so much that he spends most of his free time watching and
analysing movies. All three individuals present their personal experiences and opinions on the
topic of evolution of the film industry, with focus on convergence and digitalization.
7.1 Filmmaker
Glenn Andreiev is a self taught filmmaker from New York. He worked on a cult classic called
Street Trash and made several first feature films, including Vampire’s Embrace and Mad
Wolf.
The Question: Have the revolutionary changes to the film industry as a result of convergence
and digitalization been advantageous or disadvantageous?
The Answer: I have been making films since the 1970's, starting with silent 8mm, moving up
to a 16mm feature, and working today in digital video. In high school, I made films in the
style of German expressionism, Hitchcock and 40's film noir. I had ideas about working with
the mechanics and language of film. My best friend in high school, Gunther, was somewhat
42 religious and made films that questioned the commercialization of Christmas, or keeping
one's head being the child of divorce. The 8mm/Super8mm medium was meant to film home
movies. We, along with a number of others, were filming our ideas. For a high schooler, the
Super 8mm cameras were limited, but the film was expensive to buy and develop. Editing
also cost money. We valued precious Kodachrome and Extachrome, and wanted to make
every frame count. In my large high school, I was one of three student-filmmakers.
Today, of course, your $100 BestBuy phone records- and edits high quality video and sound.
The people wanting to film their ideas are out there, and in much larger numbers. Everybody
can video their ideas, even if it is a video of just the film-maker talking right into the camera.
But social media encourages video-makers to record their friends, and even strangers- in
secrecy. The viral video of let's say, an argument erupting in a McDonalds, has created a
wave of video journalists who don't care if their "star" is going to be hurt with a published
video. They only care about being a YouTube superstar today. It is not so much ideas, but
filming ourselves and each other. Look at the building that blew up in the lower east Side by
St. Marks Place. As the fire department dug for bodies, people were taking video selfies of
themselves outside the disaster scene. That probably would not have happened in the Super
8mm days.
7.2 Producer
Jakub Dohnálek is the co-creator of a production company called WeAre Productions, which
is based in Prague, Czech Republic. Jakub produces and shoots music clips, commercials and
short films.
The Question: Have the revolutionary changes to the film industry as a result of convergence
43 and digitalization been advantageous or disadvantageous?
The Answer: The contribution of digitalization to the film industry is indisputable, for two
reasons. The film is now much more accessible to viewers. Not only because of a higher
number of cinemas and better quality of projection and sound, but also thanks to the
expansion of other forms/ways to watch movies. The most interesting one is called VOD –
Video-On-Demand, through which viewers can watch movies not only as it is offered by the
TV channel and the actual television dramaturgy, but also through special services like
Netflix, HBO Go and others. These services offer a wide a variety of films, (from their own or
even a different production) which the viewers can watch whenever they want. These services
are now both technically and financially accessible, so the audience can receive the content
more easily and with less of a delay.
Another beneficial phenomenon of digitalization is the very fact that people can start working
in film production with fewer resources and create videos with a comparable quality to the
"classic" film production. These videos can also be easily distributed through a variety of
channels, such as Vimeo, YouTube and others. All in all, digitalization has been extremely
helpful for distributors and the whole film industry.
7.3 Film Fan
Jakub Janoš is a film student and a self-proclaimed movie critic. In his free time, he writes
film reviews and praises himself in seeing more than 3500 movies.
The Question: Have the revolutionary changes to the film industry as a result of convergence
and digitalization been advantageous or disadvantageous?
44 The Answer: Well, probably the most resolute thing for me as a spectator is that movies with
the currently existing digital capabilities care more about the show rather than the story. The
current film is an audio-visual experience with stunning effects, but as mentioned, it is often
at the expense of the story. This goes hand in hand with quantity over quality. I would like to
highlight the pop-cultural impulses that get into films through various quotations from other,
mainly B-movies, commercials, etc. In my opinion, this reduces the quality of the final
product and it all strangely coincides in a weird mish mash of originality. The originality is to
be searched for in the form, rather than anything else.
I understand that digital film is the medium of the future and I see the undeniable benefits and
possibilities of mixing live shots with animation and the creation of "hyper reality". It is now
possible to carry out impossible shots, however ironic that might sound. And as for myself, I
must say that in the current overly technical and dehumanized dynamic times, I would just
appreciate a bit of old-school filmmaking and I'm grateful for the people that are still loyal to
this form.
In the older days’, cinema was the core of cultural outgoings, now the phrase "let's go to the
movies" is replaced by laying on the couch. Today’s viewer just pays for Netflix or HBO and
he or she can simply watch anything anywhere. Even old films from Hitchcock or Tarkovsky.
Watching movies becomes less and less of a cultural experience. I gently and melancholically
look back at the time when distribution was not so comically easy as it is today. I do not
condemn the possibility that everyone can be a filmmaker today. It is generally more
convenient and accessible, like nearly anything today. I just wonder if this won’t harm the
film industry and film in general. As a viewer I fear that the overwhelming quantity of poor
45 material will escalate with the increasing production.
7.4 Analysis of Interviews
It is obvious that Glenn Andreiev prefers the analog era over the digital era. He believes that
filmmakers were more creative before the digitalization of technology. In his opinion,
digitalization has been negative for the film industry and for society as a whole. The
filmmaker puts emphasis on the fact that before the age of convergence, people with cameras
were creatively filming their own ideas, but now they just film their friends and strangers in
secrecy.
The view on the matter is substantially different when it comes to filmmakers and producers.
Filmmakers usually care about the artistic value of the film, while producers appreciate the
facilitation of distribution channels and accessibility of films. Jakub Dohnálek, as a producer,
focuses on the positive aspects of digitalization. He uses the same argument as Glenn
Andreiev, but puts a different spin on it. The filmmaker thinks that everybody can create
videos nowadays and it is harmful to the film industry, but the producer believes that it is a
positive.
The filmmaker and the producer disagree, the film fan is somewhere in the middle, inclining
slightly towards the opinions of the filmmaker. Jakub Janoš appreciates certain aspects of
digitalization, but at the same time he thinks that digitalization had a negative impact on the
film industry. Film used to be a cultural outgoing, but in the age of convergence it lost its
magic. Nowadays, the quantity of produced films overwhelms the quality.
46 8. Conclusion
The revolutionary changes to the mass media as a result of convergence and digitalization
have resulted in the transformation methods of distribution and marketing of films to
audiences. Have these changes brought advantages or disadvantages to the film industry?
Convergence is one of the most visible indicators of the transformation of the film industry.
Many technological devices serve multiple purposes, for example a mobile phone can be a
recorder, camera, or could be used to browse the Internet. Several functions and devices are
converged into one. At the same time while the world is in the age of convergence, it is in the
age of divergence - the opposite phenomenon of convergence. Mass audience is declining and
the audience is fragmenting, thanks to the expanding number of channels. Convergence and
digitalization did not cause the film industry to decline or to improve, it allowed the
distribution of films to their audiences through a variety of different channels and for the first
time in about a 100 years it transformed the way films are distributed.
Film is continuously developing and the film production, distribution, marketing and
projection is changing. It may seem that the traditional system of distribution in the film
industry is facing its demise. The digital revolution has radically expanded distribution
channels, but also made it easier to access the film medium. Distribution was previously
concentrated in the hands of a limited group of people led by transnational companies. Big
movie studios will have to adapt to the new conditions, which will be a big challenge, but not
a challenge that they should not overcome. Hollywood production continues to dominate the
global film market, the technological progress and greater availability of film did not lead to a
wider diversity of films. The Internet offers potential for growth in their activities without the
need to neglect cinema distribution. Cinema distribution has withstood many technological
changes and has not yet lost its privileged position.
47 Convergence and digitalization is a revolutionary change in the terms of distribution of films.
There will still be the same way of distributing films to cinemas, but now there are so many
more choices and opportunities for new companies to use streaming and video-on-demand.
With every revolution there are people who fail, companies that go out of business, but then
the entrepreneurs enter the picture and create new companies and new ideas to replace the old
ideas. The marketing of films has to always adapt to new ideas and changes. The one thing
constant for all creativity is change. New forms of art and film and mediums will emerge and
it is exciting and inspiring. It is a time for filmmakers to recreate themselves with the new
forms of convergence and digitalization.
Online film distribution is still not perceived as a fully developed part of the distribution
process, but only as a phase of the process. However, the development of video-on-demand
platforms is influencing the market and the distribution process. The classic distribution
model is no longer the only distribution model. At the same time, the day-and-date release
should be expanding. Day-and-date release satisfies those who prefer an experience in the
cinema, even those who watch the same film rather at home. A few films are starting to be
released only through video-on-demand services and do not get released in the cinema at all.
These changes are likely to affect the form of the filmmaking process itself, the boundaries
between formats and the emergence of various projects with a higher degree of audience
involvement.
The next big step might be virtual reality, where games, film, internet and TV come together.
The people will decide by voting how a film ends or how a character behaves in a film, game
or a TV show. People will have the ability to change and interact with films. The film or
48 episodes could have many different endings or parts. It will go further than the IMAX
experience in experiencing combinations of virtual reality and film.
Digitalization and convergence has had a huge international influence on culture and society.
It has had its positive and negative effects. The positive is that people now have more control
over their viewing of films and other content, but a lot of people find themselves lost with so
many choices. The negative is that the downloading of films has taken profit from the
artists. It used to be exciting when a new film came out, but now it all seems lost. Anyone
can make a video or take photos with their phone or cheap video camera and upload it on the
Internet. As a result, there is a lot of garbage being created, but this is the information
revolution and there is too much information out there. In the industrial revolution, at the
beginning of last century, there were a lot of negative things and a lot of casualties until the
true positive improvements became a part of our society and I believe the same will be true
for this present information/technology revolution.
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