The pending bankruptcy of MGM studios seems strange at a time when mega blockbuster films continue to defy the “old media industry” trend and bring in vast sums of money.
What happened to the studio that owns James Bond, pending feature
The Hobbit, and The Pink Panther?
It got caught up in a downdraft created by being too closely reliant on revenue from the old forms of distribution, and not restructuring properly to focus on ownership of content in a world of fast changing technology.
Content is king right?
Almost…the ability to monetize content is king. MGM owns tons of content including a library of 4,100 motion pictures and 10,600 television episodes. But MGM made a critical mistake when projecting forward looking revenues: it relied too heavily on projections of DVD sales. Even in the early 2000s the writing was on the wall for the future of physical media. Did MGM execs use the internet back then? Did they go to NAB or the Streaming Media conference to see what the future looked like? Revenue from MGM’s operations, which were financed based on projected DVD sales, have not been able to feed the other hungry maw: the gaping mouth of creditors. So up for sale it goes.
Lions Can’t Survive on Plastics
What is the lesson in this? Keep an eye out for the future. You don’t need to consume industry buzzwords all day long to notice clear and obvious trends. Even back in 2000 it was clear that consumers weren’t going to buy an entire library of 4,100 movies – but wouldn’t it be nice if they could access it digitally? Wouldn’t that be where technology would innovate so that the demand would be met with a supply? So wouldn’t it be smart to organize your company based on rights alone and be ready for a major change in distribution formats and its associated revenue? James Bond would have done well to investigate further.