With the breaking off of their relationship with Tom Cruise, Paramount, and Hollywood as a whole have confirmed what many of us that follow the business have known for a while: It will never be business as usual with Hollywood again.
Here is a list of six things that the recent ending of the business relationship between Cruise and Paramount underscores:
1. Fragmentation of the marketplace
This is one of the largest factors. People no longer consume media in any one way. This change has been going on for a while, but Hollywood has been slow to respond; although not as slow as the music industry. REUTERS/Mario Anzuoni
2. Unworkable business model
With the fragmentation of the market has come the uncovering of the soft underbelly of the movie industry's business model: They don't have one! Other than spending money at will, there has been very little checks and balances on the creative types in Hollywood in the past. That is starting to change.
3. Video on Demand
With the growing desire of consumers to partake in media when and where they want, it has triggered the fast, growing demand for downloadable video from the Internet. This is creating all sorts of problems for the movie studios and their retail partners concerning sales of DVDs.
4. People prefer to watch TV at home
Another big change in the marketplace is that the majority of people prefer to watch TV or media at home. Hollywood tries to say this isn't true when their occasional blockbuster hit performs well; but overall the trend is to watch TV at home.
5. Focusing on activism rather than entertaining
This is one of the realities that Hollywood is stubbornly beginning to change in. If the general public wants to be depressed, they can always turn on the evening news or read some news site on the Internet. People want to be entertained first when watching movies. I believe activists movies will not do well at all anymore. Consumers want to watch a movie to be able to escape the real world for awhile, not be always reminded of the problems in it. Entertainment must rule again.
6. It's becoming an interactive world
With the digital world we now live in, interactivity is an expected part of the way we are learning to live. Younger people have known nothing but this as a way of life. What this means is that it is increasingly harder for a lot of people to just sit and watch media without having something to interact with in it. This will change a lot of the ways we consume our media and how it is offered to us. For the most part there has only been a slow response by Hollywood on how to include this in their offerings.
These are some of the reasons why Paramount sent the message to the celebrities using Tom Cruise as an example. Not only will Hollywood be changing forever, but other than occasional exceptions - so will the stars.
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