Big data is breaking apart the entertainment industry and the big winners are the outfits that own the data. And right now that means Amazon , Netflix and Google said Michael Smith, author of Streaming, Sharing, Stealing. According to Smith, a Professor Information Systems and Marketing at Carnegie Mellon University’s Heinz College, Netflix forever changed how episodic programming is produced by using big data to greenlight its hit series House of Cards. Without seeing a pilot, Netflix made a $100 million commitment for two full seasons upfront as its technology advantage allowed it to reduce customer risks and marketing costs. ‘The upfronts and pilot season are already decreasing in importance. If you own the customer and customer data then you simply don’t need them anymore,’ said Smith. Likewise, Smith said Nielsen and Arbitron ratings will become far less important now that big data is enabling companies to actually see what people are watching and not just a sample size. He said the old guard uses the ratings companies to count viewers, rivals like Amazon and YouTube are accessing audience behavior across ‘a massive global arsenal of available content.’ Meanwhile, Smith explained that self-distribution has become a game-changer for artists seeking a deep connection to their fans, not to mention a way to cut out the middleman. J.K. Rowling, for example, retains digital rights to her Harry Potter books which she sells through Pottermore.com, while Louis C.K. offered a new standup special for only $5 on his site, grossing $1 million in its first 12 days and netting $750,000 in profit. ‘You don’t have to be J.K. Rowling or Louis C.K. to have a direct relationship with the consumer. You can do that on a small level as well,’ said Smith. Of course, the downside of this new digital explosion is piracy. And that is why anti-piracy strategies will continue to be a money-maker, according to Smith.
Subscribe to TheStreetTV on YouTube:
For more content from TheStreet visit:
Check out all our videos:
Follow TheStreet on Twitter:
Like TheStreet on Facebook:
Follow TheStreet on LinkedIn:
Follow TheStreet on Google+:
source
