And the Academy Award for Best Picture goes to ...
If justice were served, James Cameron would have gotten Best Director for Avatar, since he has pushed the state of the art in CGI to make 3G a breakthrough, even while The Hurt Locker got Best Picture, for being a small indie film with a big character study. Avatar is a huge step forward towards a new trend in film making, Cinemé Sensation, where CGI and 3D create an experience which can only be truly enjoyed in large theaters. Even a relative dud like Wonderland draws in huge crowds.
We are seeing a rapid transformation of video under the impact of technology across time, space and depth:
- Depth: Cinemé Sensation, film as sensation not story
- Time: On demand, a coming revolution in television away from broadcast
- Space: The Internet allows viewing from new devices almost anywhere
The real 3D revolution is how technology will soon allow anything to be seen anywhere at anytime. The interesting question is where to invest.
I rushed out to see Wonderland, and although the story is slow, the acting disconnected and the action listless, the experience achieves a new sense of depth where it is difficult to tell what is real and what is artificial. I knew this was a step forward when Alice stepped into Underland (the real name) and dust came up around her feet.
Avatar and Wonderland represent depth coming to video. Our kids have been seeing this coming, with the latest console games approaching a striking realism. With the budgets for big pictures, the CGI of Pixar and the new 3G technology developed by James Cameron, we are rapidly approaching the moment when virtually any imaginable story and landscape can be realized with stunning realism and depth.
As with any new technology hitting Hollywood, the rush to amaze can get way ahead of the tenets of film-making. At least in Wonderland they improved the story, creating a plot and motion forward that was lacking from the source material. (Go read the original Alice - she just wanders around.) The woodiness probably comes from the incessant green screens needed as backdrops for CGI to later fill. How to have a relationship on screen with an imaginary cheshire cat? At times the whole film seemed to disappear into effect, until only the grin of the animator remained.
They key to the Cinema of Sensation is to make a great film, not just a great sensation.
Film is about story. Much has been made of how derivative the story was in Avatar, a remake of Ferngulley down to the glowing forest, the magic tree and the evil white people:
>Yet it had a story and a compelling set of characters. Compare that to George Lucas's three prequels to Star Wars, where George forgot all those tenets of film-making that he learned in Film School.
CGI killed the movie star:
This is part 1 of 7. The rest are here.
Investing in Cinemé Sensation is fraught with all the risks of investing in media properties. It is a hits business, and even the insiders get it wrong more than right. Right now every 3D flick will get an enthusiast audience, waiting for the next Avatar, but they will have to slog through a lot of Phantom Menaces to get there. Instead of creating compelling new stories, Hollywood is throwing old remakes at the unsuspecting audience. Even Spiderman, only eight years in the can, is being remade in 3D. As an investor, stay away. The audience can get tired of this very quickly, and go back to the Hurt Lockers.
Worse is that we should expect a huge flood of formulaic 3D movies. Consider this generic trailer:
Yet if the industry is up to the challenge, the content can improve to levels not yet imagined, where CGI can create landscapes and scenes not economic or even possible with traditional technology. In the development of the Cinema of Sensation, the first breakthrough might have been Titanic, but the innovation that amazed for what the art could become was The Matrix. Unfortunately the sequels squandered an impressive start.
In any event, 3D will bring in the viewers, and they pay a higher price. The rush to 3D makes studio stocks a buy at this time.
The last time we had such a flowering of innovation and pushing the envelope of a medium was right on the cusp of the breakup of the studio system and the rise of television. Back then theater audiences had a wide acceptance and indeed anticipation of seeing a cartoon with a film. We ultimately saw innovation in content that led to masterpieces like this, which I see as the ultimate cartoon:
What about catching the 3D sensations on TV? CES 2010 was all about 3DTV, but I think it premature. They very elements that make Wonderland work on the big screen will make it a bust on the boob tube. The weaknesses in story and character will loom large, and the 3D wonders will seem small. Television is a social medium, and hiding behind goofy glasses will rapidly diminish the enjoyment. You can read more of my impressions from CES in this companion piece on 3 Things to know about 3D. You should also check on the growing stories about how some people get headaches from wearing 3D glasses.
The Internet is causing a change in television that will overturn the current order.
The revolution will be televised. It will not just be on TV, it will be TV:
The broadcast medium is the massage, the way the business is done. Commercials come in pods, shows follow shows, programming is all about how to place the lineup within set time and counter-programming constraints. A whole industry of Mad Men has arisen over how to handle two issues: how to turn a show into a hit, and how to target ads to audience.
Tivo started the change, with time-shifting of shows. A baby step until Cablevision won its case to put a network DVR layer between the shows and the viewers. Other than live events, viewers prefer to control the time of watching. The power of the Season Pass to seamlessly record all versions of a show needs to be experienced.
The change is accelerating with over-the-top TV (OTT), the moniker for Internet-connected TVs and blu-ray players. Now the TV can bypass broadcast and access the vast library of content (legal and illegal) going online.
This can play havoc with the windows and various roll-out schedules of studios to release content. Recently Warner negotiated with Netflix and Redbox (the $1 a day DVD kiosk) to give a 28 day window between DVD release and rental. Disney in particular has been very careful with its evergreen titles, those movies that appeal to kids and can roll out Mickey fresh every 7 years to a new generation of lovable rug rats. Yet expect these attempts by the studios to manage their library to come against resistance. The Internet will try to find a way around any blockage. Consider this cartoon from SNL:
Yet the revolution is not to be denied. The major change on-demand will have on TV is to change how programming and advertising are done. How to promote a new show when you can't simply have the audience stay on the same channel when one show ends and the new one starts? How to get them to watch ads when they can flip away once the title ends? These questions have not been answered.
For investors the revolution will create opportunities to invest in the marketing-media complex, that vast enterprise between broadcast TV and ad agencies that is well over a $60B business today. For disclosure, I have investments in Aggregate Knowledge, which supplies a realtime ad engine to ad agencies; in Verismo, which has an over-the-top TV box, and Widevine, the leading DRM supplier to CE devices to enable OTT TV. This is an area to watch.
The Internet Everywhere
The Internet is not a new medium. This has confused investors over the past decade. Gobs of time and money have gone into new studios and web video outlets like Veoh, which had the help of Michael Eisner, and recently went under, or BitTorrent, with has flopped back and forth trying to turn itself into a new video service. Occasionally a breakout happens, like the Fred Channel over on YouTube or LonelyGirl15. What makes these work is they follow the tenets of storytelling in short form. Does this make for a new medium, a place for new forms of content to emerge, the home of short-form video?
It should give you pause to consider that the first breakout, the group behind LonelyGirl15, has switched from becoming a web video production house to an enabler for web distribution.
Radio is a medium, where the distribution and device are entwined. Television is a medium, ditto. We have all heard how Film started as theater with a camera, and TV as radio with pictures, until the unique characteristics of the medium were learned and exploited.
The Internet in a sense is an anti-medium, where the distribution and device are now divorced. The Internet can distribute anything, and does: education, information, short-form vids, TV, stolen movies, and porn of such depravity and awfulness it boggles.
Cable started as mere distribution. For those on their high horses about piracy in the Internet, just reflect on how cable started: taking over-the-air broadcast for free and re-distributing it to the edges of broadcast coverage. Cable took off when networks began to realize they could create new programming to compete with the broadcasters. HBO, MTV and ESPN led the revolution back then.
In this same sense as the Internet, cable did not create a new medium, but vastly expanded the distribution of video to an old medium, TV. This expansion led to innovation, such as MTV and the Music Video. Again, get off your high-horse and think of how something given for free let MTV create a franchise for pay. Even early on the creativity of music videos sparkled:
SImilarly the Internet is going to expand video, especially to new venues. How to create growth in entertainment? Movies are trying via high-priced tickets for 3D, but it does not appear to effect overall viewing time in theaters. Television has ever more channels and a growing library of on-demand movies, yet this has barely budged the needle on TV viewing. Instead, viewing is going to other times and places: PCs, mobile devices, out-of-home venues.
Rather than thinking of the Internet as a new medium, think of the PC as one. It enables short-from videos, has spawned YouTube, and seems to love music videos. It thrives on social media. It is solving the problem of promoting new shows on on-demand TV: use social networks! It is smashing the economics of advertising, and may turn the TV industry from ad-supported to paid-for.
Now fast forward to mobile TV, and tablet TV. A new slate of social media, a new set of venues, and expand TV viewing across time and space.
I will add more specificity in this post to these areas as the develop.
Let me just leave you with this: the vast expansion of video into the library can enable new delights. It can also enable this video, which I saw in a post entitled This is What You See Right Before You Die. With all respect to the artist, Eduard Kihl, who really is a fine singer, it looks like a cyborg has taken over a singer on Russian TV, as if the machine is now inside its human avatar, trying to be Frank Sinatra. Instead of man bites dog, we have avatar bites man. Is this the future bequeathed by James Cameron?Liner notes: In Russian, this song is entitled "I am very glad, because I am finally returning back home." Catchy. The lyrics were so odd the singer decided to vocalize. He now wants everyone on the Internet to add their own lyrics, and sing it all together. Cute.