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Cannes 2023 – Marché du Film

Industry Report: Market Trends

“Everything Changing All at Once,” according to the Nostradamus report


CANNES 2023: The paper was presented at the special ImpACT x Cannes NEXT session, emphasising the impact of AI technologies and the ongoing transformation resulting from the pandemic

“Everything Changing All at Once,” according to the Nostradamus report
Johanna Koljonen during the unveiling of the Nostradamus report

The screen industries, encompassing both film and television, have undergone a seismic digital transformation in recent years. In the insightful 2023 Nostradamus report, titled “Everything Changing All at Once”, the author, media analyst Johanna Koljonen, presents a comprehensive analysis of the industry's future. The paper was unveiled at ImpACT x Cannes NEXT, part of Cannes’ Marché du Film. The full report, which can be found here, highlights the trends and trajectories that will shape the industry in the next three to five years, emphasising the challenges and opportunities arising from artificial intelligence (AI) technologies and the ongoing transformation resulting from the pandemic. Here, we look at the focus of each of its chapters.

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“The Future Context” tackles the digital revolution, driven by digital distribution, streaming platforms and increased digitisation in film production. This has fundamentally reshaped the screen industries' business models and behaviours. While streaming platforms provided a temporary cushion through debt-funded growth, the industry is now experiencing a market crunch. Streamers and commissioners are reducing productions and investments, revealing the full consequences of digital transformation. Furthermore, the integration of AI technologies and the transformation arising from the pandemic pose both democratisation and job-displacement risks, impacting the industry's sustainability.

“AI-powered Filmmaking Engines”: AI presents an immense amount of potential for the film industry. By automating routine tasks, AI enables filmmakers to focus on experimentation and creativity. Advances in natural language processing empower various aspects of filmmakers’ jobs. AI offers efficiencies of scale, streamlined processes and expanded creative possibilities, revolutionising the industry's landscape.

“Disciplining the Drama Market”: The report sheds light on the decline in TV drama commissioning and the pressures faced in the world of feature-film production. Industry consolidation will likely result in fewer major streamers, commissions and production companies, raising concerns about content becoming more conservative and less innovative. Additionally, the migration of talent from film to TV raises questions about the future of feature-film commissioning, prompting the industry to explore new avenues for sustaining quality content.

“Targeted Advertising Enters the Home”: The sustainability of advertising-supported streaming services, such as AVoD (advertising-supported video on demand), is becoming a hot topic for discussion. With the rise of digital systems and smart TVs, new possibilities for advertising and data collection are emerging. Control over targeting-related data is becoming crucial as companies compete for advertising real estate and consumer insights. Ad-funded content will continue playing a significant role in the ecosystem, particularly with the integration of e-commerce into television.

“Why We Don’t Understand Cinemas”: The film industry has overused cinemas in the past decade, relying heavily on theatrical distribution as the primary survival plan. However, theatrical exhibition and film production are distinct businesses with different needs. The industry must explore alternative business models that embrace the changing landscape while leveraging the potential of cinemas. Embracing alternative distribution channels can provide a broader reach while maintaining the unique experience that cinemas offer.

“Underserved and Unconvinced Youth”: Attracting young audiences poses a significant challenge for the film industry. Studies show that young people's favourite celebrities are not necessarily film stars, indicating a lack of resonance between the industry and the younger demographic. Some commissioners are cutting investment in young audiences, perceiving them as less profitable. To address this issue, the industry must prioritise diversity, relevant content, and improved working conditions to attract young and diverse creators. Embracing new storytelling techniques and engaging with platforms like YouTube and Kickstarter can tap into the thinking of the younger generation, fostering inclusivity and innovation.

“New Paths for Everyone”: The technological revolution has opened up some remarkable opportunities for independent production. Small creative collectives and individuals can now create content without relying solely on traditional gatekeepers. Platforms like YouTube and Kickstarter have shaped the perspectives of younger generations, offering alternative funding and distribution channels. The film industry must engage with and understand these platforms, collaborating with emerging talents to foster a vibrant and diverse creative landscape.

“The Filmmaking Business, Reborn”: The business of filmmaking is undergoing a profound transformation, becoming increasingly detached from the traditional model centred on cinemas. As the industry evolves, relying solely on box-office numbers as a measure of success is no longer sufficient. Surviving production companies must diversify their output and explore different revenue streams. Understanding the audience and where they focus their attention becomes paramount, as monetising every piece of content becomes a necessity. The concept of being "platform-harmonic" emphasises the importance of choosing the right platform for each project, adapting to changing audience behaviours, and embracing innovative distribution methods.

“The Work of Sustainability”: While the quantity of traditional theatrical films and TV dramas may decrease in the future, the technology of filmmaking allows for an increase in overall audiovisual storytelling. Talented storytellers and filmmakers will have more opportunities, although this may come with a risk of an influx of low-quality content. It is essential to consider the direction in which the industry is headed and who will benefit from these changes. To ensure a vibrant and prosperous future, the industry must embrace sustainability in both environmental and economic terms. Addressing the challenges posed by climate change is crucial, with efforts focused on reducing the carbon footprint of productions and adopting eco-friendly practices. Economic stability and the threat of AI automation eliminating middle-class jobs require careful consideration, with the aim being to minimise socio-political implications and unemployment.

Koljonen concluded by emphasising the importance of making progress in the fields of diversity, equality, inclusion, health and safety, and greener production. Effective communication with young audiences is crucial for the industry's sustainability. The transformation can lead to either heartbreak and irrelevance, or a joyful and sustainable industry. Creating joy and meaning is essential, and despite the challenges, it is possible to achieve a sustainable and meaningful film industry.

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