The M&E industry is extremely complex due to the number of vendors, and unique skills required to release content. There is no longer a difference in quality between theatrical releases and television programming anymore, due to the rise in streaming services and the budgets they are green-lighting for production. Cable networks and streaming companies are producing content that rivals “Blockbusters,” small production companies are working on massive movie projects, and music studios are creating film scores. Meanwhile, all of these specialized sectors are collaborating with one another on complex digital content. There’s an unfathomable amount of IP moving around the world between stakeholders in the M&E ecosystem.
In a traditional M&E environment there are dozens of departments, and hundreds of people from around the world working on a single project. This includes everything from back office operations and the production team, to makeup and stunt coordination. Independent of these internal departments, a movie studio could be working with external Special FX or Animation studios as well. In addition, during the production of a film/series, marketing and advertising companies may be brought in to collaborate on collateral materials or complete the movie trailer. While all this is going on, the legal team is working to ensure all of this IP being generated is protected to maximize returns.
For example, Avengers: Endgame by Marvel, included 29 different Special FX companies credited for working on the film, and 59 miscellaneous outside companies credited, including companies like Dolby that specializes in audio, Helicopter Film Services for aerial shots, Skywalker Sound for post production sound services, and IMAX for formatting distribution. These are all external vendors, and do not include internal employees that worked on the film at the parent company.
As additional M&E companies enter the market and create more content, this ecosystem will continue to expand and see greater globalization. There is no shortage in digital content consumption, as consumers want more to binge, whether it is short format to watch on the go, or traditional feature films and series to enjoy at home or the theater. The need to produce more IP, with faster turn around times will only continue to grow.
M&E is a fast-paced industry, where edits and pitches are occurring every second, as complex digital content moves around the world. Legacy technology and architecture needed for securing and collaborating on this complex digital content and IP has not been evolving and innovating at the same speed.
Different business units within a company are operating in a silo or vacuum, making it difficult to efficiently collaborate when units must work together. Content ends up in multiple systems - increasing costs, and decreasing efficiency - in addition to making the company more susceptible to IP leaking prior to its commercial release.
From executives and marketing personnel working with office documents and Illustrator files, to special FX working in 4K and animation generating 3D models, everyone is working towards one goal - get the content to market as quickly as possible so that you can generate the largest return. As more collaborations are required to release content the sheer size and scope of the M&E ecosystem is presenting numerous challenges. Although editing suites are moving to the cloud, there are still significant challenges to incorporate all the other key roles involved in releasing content commercially. Virtual production technology is gaining traction as volume's are being used more and more in studio content.
Every year M&E companies are spending hundreds of millions of dollars to license and create content. The quality of projects, and amount of shows being produced appears to be limitless. With streaming services in fierce competition with each other it doesn't look like budgets are slowing down anytime soon.
Recent projects have taken productions to a new level:
Halo - $10m per episode
The Crown - $13m per episode
Game of Thrones - $15m per episode
See - $15m per episode
The Mandalorian - $15m per episode
The Pacific - $20m per episode
House of the Dragon - $20m per episode
Stranger Things - $30m per episode
Lord of the Rings - $58m per episode
Back in 2009, The Walt Disney company acquired Marvel Studios for 4 billion dollars. A driving factor behind this decision was due to the massive amount of IP that Marvel owned. Hundreds of characters and stories provided Disney with endless revenue generating opportunities.
“Disney hoped to put Marvel's 5,000 characters to work on its television channels and in video games, theme parks and movies……The tie-up unites two companies with similar business models – they both take characters which capture the popular imagination and promote them vigorously around the world on every possible media platform.”
Three years later, Disney would end up buying Lucasfilm, the IP owner of the popular space fantasy brand Star Wars, for the same reason. With an abundance of IP, Disney no longer needed to rely on third party platforms to release their content. They now had the ability and library to create their own streaming service, Disney+. Disney also had the opportunity to promote and capitalize on their IP portfolio outside of just film and television, by partnering with companies to produce and license coinciding products. LEGO and Disney have a strategic partnership in which LEGO produces all the sets for Disney IP.
M&E companies creating and owning IP factors into almost every business decision as it is a core fundamental of their corporate strategy. Streaming companies like Netflix, Hulu and Amazon are now all creating their own shows in order to own, distribute and monetize their IP as they see fit. In addition, as more streaming services launch and the landscape becomes more competitive M&E companies believe that creating their own content and having a substantial IP portfolio provides them a competitive advantage. The industry is certainly transitioning from a third party distribution outlet licensing content to a complete media company churning out content at a high volume and rate of speed, in order to help control their own destiny.
As the Media & Entertainment industry continues to spend billions of dollars on content the need to protect their investment during the production phase and prior to commercialization is absolutely critical. When content is pirated, or released in a way that it was not intended - the financial implications for this leaked IP can be devastating.
“The whole business model today has exacerbated the insider threat, because there’s a lot more insiders,” says Stephen Cobb, senior security researcher at ESET, a global IT security firm. “If you sit down in a movie theater at the end and watch the thousands of people involved in that movie, most of them don’t actually work at Paramount, or Sony, or whoever’s name is on the picture… You’ve got a lot of people having access to property which is very valuable.”
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