Revolutionising Media Tech by Vitali Kivmann

General news
June 2, 2023

The media and film production world has been long dominated by legacy studios and established players. However in more recent years, startup media and film companies are proving that there is greater potential for success when innovation is prioritised. Our General Partner Vitali Kivmann explains in more details the factors contributing towards this shift in the industry.

The way in which media is shaped today is completely interconnected to technology, to the point where they are now completely synonymous with one another. Mediatech is all one of the same, encompassing everything from Metaverse and the new immersive VR experiences people will be soon indulging in, to Tiktok and the micro-bitesize nature of video content that many generations spend more time consuming than any other format. By recognising how technology has changed consumer behaviour, and leveraging new technologies with innovative business models, many companies have transitioned from startups to major players in very little time at all.

An obvious example would, of course, be Netflix - arguably the leaders of capitalising on new technology with the birth of widespread video-on-demand streaming. In just 13 years, Netflix revenue has grown from $1B USD to above $30B USD. Capturing a huge amount of the market in such a short period of time thanks to their subscription model, meant that Netflix could swiftly transition from a media distribution and exhibition company, to a production company also, funding original content in the form of movies, documentaries and television series.

The adoption of new technology in the form of streaming has simply been emulated at mass since Netflix’s success by all of the major movie studios, including Paramount and Disney, and TV studios such as Peacock and Lionsgate (in the US) to name just a few. In most populous countries, there are now local streaming services available, with more than 50 streaming services worldwide, with more than 1 million registered subscribers, not including sports streaming services.

Regarding the innovation of business models within the industry, look no further than A24 - a production studio with an almost cult-like following. Starting as a distribution company, purchasing completed movies only, they’ve gone on to become a revered production studio thanks to their unique production approach. Allowing directors the rare luxury of complete creative control, but limiting production budgets to $5M USD and marketing budgets to near zero, they’ve brought to the world some of the most original movies of the 2010s and 2020s including Midsommar, Ex Machina, Uncut Gems and The Lighthouse, and of course, Academy Award winning movies such as Moonlight and Everything Everywhere All At Once. This approach has allowed the studio to develop a name for itself, with many people now simply excited to see ‘the next A24 movie’, and now thanks to their popularity, they even sell merch. Given that A24 was established in 2011, their rise to success versus the traditional studios has been unprecedented.

A significant innovation in the industry is the use of in-platform advertising. Many locally focussed streaming services still include commercial ad breaks, to generate additional revenue. However this disruptive approach is unfavourable, specifically to the experience of the viewers, who simply do not get the full video-on-demand service they can get elsewhere. Germany based production company Transfermedia has developed new technologies allowing for a smart way to generate advertising revenue, without interrupting the viewing experience.

Thanks to Transfermedia’s platform Jay, the option to purchase items that appear in movies and TV shows will soon be universally available with the click of a button, offering a unique opportunity for viewers, and eliminating the disruptive approach of traditional live television advertising.

These models, combining the adoption of technology and fresh approaches to consumer behaviour, are allowing startups to thrive like never before, in an historically seemingly impenetrable industry. Startups like Netflix, A24 and Transfermedia, are showing that true innovation will fuel growth in media and film, further than ever before.