Show business, in many ways, has entered a vicious cycle set off by larger economic forces. Some 70 percent of box office comes from abroad,which means that studios must traffic in the sort of blow-’em-up action films and comic-book thrillers that translate easily enough to Mandarin. Or in reboots and sequels that rely on existing intellectual property. But even that formula has dried up. Chinese firms, including DalianWanda, are rabidly acquiring companies such as Legendary Entertainment,AMC, and Carmike Cinemas, a smaller theater chain, with an apparent goalof learning how Hollywood does what it does so China can do it better. As The Wall Street Journal reported last summer, more sequels bombed than did not. Fortune called it “a summer of big flops.” MGM’sBen-Hur, which was produced by Mark Burnett, cost $100 million and yet grossed only $11 million in its opening weekend.
But the real threat isnt China. Its Silicon Valley. Hollywood, in its over-reliance on franchises, has ceded the vast majority of the more stimulating content to premium networks and over-the-top services such as HBO and Showtime, and, increasingly, digital-native platforms such as Netflix and Amazon. These companies also have access to analytics tools that Hollywood could never fathom, and an allergy to its inefficiency.
These day all the major tech companies are competing viciously for the same thing: your attention. Four years after the debut of House of Cards, Netflix, which earned an astounding 54 Emmy nominations in 2016, is spending $6 billion a year on original content. Amazon isn’t far behind. Apple, Facebook, Twitter, and Snapchat are all experimenting with original content of their own. Microsoft owns one of the most profitable products in your living room, the Xbox, a gaming platform that is also a hub for TV, film, and social media.
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