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The digital revolution and shifting economic models

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Introducing the discussions, Gaetano Blandini (IT – General Direction of Cinema) focused on the peculiarities of the cinematographic industry in Europe, by underlining, on the one hand, its wealth linked to its cultural diversity and on the other hand, the deep both financial and technological changes to cope with.
In panel 1 two academics, Chris Brady (UK – Film Business Academy) and Alessandro Usai (IT – Bocconi University) confronted their analyses on the validity of the Long Tail theory for the cinema. And to conclude that the digital revolution was first changing the consumer’s behaviour and that a growing number of “niche” markets could exist and offer at very low cost programs which until now had problems to find their economic balance on the traditional markets.

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In panel 2, two producers Antonio Saura (ES – Zebra Producciones) and Riccardo Tozzi (IT - Cattleya) agreed to consider that if the digital technologies contributed to the added value in the release of the artworks they did not create this added value. According to them, cinema did not turn into a spiral of "low cost" production and the films made for theatrical release will be always increasingly expensive without counting the increase of marketing expenses for distribution. Production companies are now in an intermediate business model where traditional sources of film financing are increasingly insufficient to produce films (less money of the mainstream channels and distribution) not balanced yet by revenues coming from the new medias (VOD and DSL).

These new business models as analysed by Robert Pisano (USA - MPAA) are now evolving because of shifts in the consumer’s choices. Since 5 years “consumers have the possibility to decide how and when they want to watch a film” and there is a need for a more flexible media chronology and DRM. Theses changes are forcing majors and independents to try to seek different economic strategies like the simultaneous release on various supports. But all the experts of the panel agreed to say that films would always be made for theatres. According to Olivier Zegna Rata (FR – Canal Plus), the Pay TV channels will always need films and additional services (VOD and S.VOD) set up by companies are going up in power and should contribute in a more consequent way to the balance of the system while making it possible for two new complementary economic models to coexist: the television and the individual ways of consumption.

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