The video world is changing a great deal. This is reflected in the experiences of the Hollywood studios. Not only are their film making divisions losing money, those with traditional broadcast networks are taking huge hits, having to write the values down as Wall Street realizes they are worthless properties.
Streaming, for the most part, was a failure for these entities. Only Disney is holding its own, and it has to invest tens of billions. The field is dominated by YouTube and Netflix. This has seriously damaged the profits of these legacy companies.
While many point to a number of factors, the overwhelming one is technology.
In this article we are going to focus upon the next trend that is going to stick the nail in the coffin of these companies. At the same time, we are going to see a radical transition in the video world.
Web 3.0 And The Changing Nature Of Video
The first wave of disruption came in the form of distribution. When the Internet rolled around, people were free to distribute content as they saw fit. The challenge here, and the benefit of the movie studios, the content created, especially video, was substandard.
Over the last couple decades, this changed. Some of the channels on YouTube are of sufficient quality to warrent 10-15 minutes of one's time. When we look at the distribution of eyeballs, this adds up.
That said, we are still in a produce ones, have many view. In other words, the video is the same for everyone. While this was (and still is) the norm, that could be changing. Here is where entities such as Hollywood are doomed.
Technology is, once again, at the forefront of this. We are seeing the capabilities of generative AI growing by the month. Video is still lagging but it is only a matter of time before the progress curve for images is replicated.
Basically, not only has the cost to distribute plummeted but so is the creation. This results in less money going around, spread over more competitors. Profits are contracted causing the dilemma for the major players.
It is disruption at its finest.
The moat on content creation is the final straw.
Invisible Universe
There is a company that was started in 2020 that is emphasizes what is taking place.
The struggles of Pixar are well chronicled. Again, the moat the company had was eradicated. Invisible Universe is taking it one step further.
One can make the case that Hollywood studios are tone deaf. This is a fatal flaw as this company is showing.
Due to the power of generative AI, video production is being turned on its head. Instead of creating something and distributing it to the masses, after testing audience responses, the viewers are included in the process.
By using highly iterative content development process and continuously engaging with its fan base and quickly turning new content. The viewers of the content have a hand in the storyline along with the characters. It is essentially a hive mind for video creation.
This is, naturally, a less risky proposition due to the fact that we are looking at a built in market before the video is even released.
Another change is the distribution channel. This company goes through the traditional social media platforms. Here is where the industry is seeing a shift. Just like news, people are moving away from the traditional channels to find what they seek. entertainment is no different.
This means the company is really a marketing firm. It seeks to build franchises and then use that as the profit center. The idea is that the money is leaving video as the barriers are broken down.
Here is where we see technology demonetizing things.
Web 3.0: A New Business Model
Of course, the exception I take with this is the traditional social media focus. While it makes sense, this overlooks the monetization factor.
Web 3.0 could ultimately offer this.
Tokenization is a powerful tool when constructed properly. This firm, due to its intention of building its own ecosystem, could simply tokenize. This means the value of the entire property could be captured as the network effects take place.
Pushing the content on social media could be done for brand awareness. However, the business model could be altered.
The other factor in this could be the eventual spreading of Web 3.0. If the next generation of the Internet starts to emerge, the power of traditional social media companies is likely to wane. They are no different than major Hollywood studios. A few decades back, few would have foreseen their demise. Heck, even today, many still deny it.
Eventually, we are going to see video that is generated by individuals and shared out. This means that even the model of Invisible Universe could be short lived. Again, this is how advancing technology works.
At the core of that evolution will be tokenization. Here is where platforms become even more important. When networks are abundant, it is the eyeballs that matter. Where is the attention.
Being tied to something much bigger is crucial. This means a platform having as much tied to it as possible. That way the built in population is there ready to be served.
They seek what they need. If it is not there, they will go elsewhere. It is really that simple. The platforms that excel are not going to be providing one specialized application. Instead, it is going to be the everything idea.
Web 3.0 platforms can offer this. It only requires the development.