For the longest time, the film industry had a high level of control over consumers. The movies it made weren’t the only things that brought it profit; Hollywood itself was immortalized and featured in countless vacation photos, with celebrity sidewalk stars running down the Walk of Fame on Sunset Blvd. Its forms of advertisement have always been changing, but its power never saw a decline — at least until a few years ago.

Something came along recently which gave power to consumers like never before. This new player took the power away from the established film industry in general. That something was online streaming.

This disruption forced Hollywood to more or less play the game of online streaming in ways they wouldn’t have had to worry about otherwise. The approach to advertisements had to adapt on a different level because moviegoers stopped going to theaters as often, and video consumers spent more time in front of their personal computer screens to get the same kind of content and entertainment. Currently, the industry is in the middle of this change. Thus far, Hollywood has struggled to determine what will be most effective with consumers.

Traditional Movie Advertising

It’s vital to understand that the mindset behind traditional advertising has not changed. For instance, advertisements work to appeal to the target audience’s emotions. There are two kinds of emotive advertising: those based on empathy and those based on creativity. You see this throughout Hollywood major motion picture advertisements throughout history, no matter which era you examine.

However, the context in which audiences find ads and learn about feature films is different. While people have changed how they watch content, they remain as passionate as ever. A lot has changed in the past few years, largely due to disruptive innovations in content distribution.

This isn’t to say that TV is completely dead. People are learning about movies during commercial breaks, albeit at a reduced rate. Television still has a strong place in general advertising. Marketers who extend their reach to television adverts continue to see greater levels of success than those who do not. While television marketing is still important, its place has much less advertising power than before.

The Streaming Disruption

The last few years have seen rapid growth due to the increased prevalence of streaming, and this is largely due to advancements in affordable high-speed internet for consumers. While dial-up internet marked the introduction of the internet to millions of Americans, it couldn’t deliver quality video content to consumers in a timely fashion. The widespread transition from dial-up to high-speed internet throughout the 2000s saw a rise in new forms of video content distribution.

Today, high-quality video content is widely available on a plethora of platforms, and movie companies have taken notice. Movies are actually being sold to Netflix because the potential for revenue is greater on a streaming service than it is in the box office. Streaming has completely disrupted Hollywood, and it’s had to adapt.

Hollywood still spends an enormous amount on their advertising and marketing. In fact, marketing expenditures far exceed production budgets, but they are highly inefficient due to the newly niched nature of movie consumption and the relevance of digital advertisements. Thus the film industry is trying to figure out how they can reach their audiences best. But they are struggling to do so.

This is in no small part thanks to industry influencers like Netflix and Hulu. Streaming services like these are technically good for the industry because moviemakers and production companies are still being paid, as opposed to what would happen if movie consumers only used illegal streams to watch their media. Still, Hollywood may never be the same after the streaming expansion, proving that nothing gold can stay. 

Where We Are Now

Of course, this doesn’t mean Hollywood has halted production or that their marketing doesn’t work. For instance, “Black Panther” had one of the most successful marketing campaigns we’d seen in the past few years. What it does mean, however, is that the nature of that advertising is different.

Currently, major motion pictures have multi-million dollar commercial advertising budgets. Most recently, “Shazam!” was estimated to have a commercial ad budget of $21.66 million, and their studio spent the most in Hollywood from January until now. But how well do commercials work?

Well, maybe not as good as they’re getting credit for. Right now, digital ads — those watched on YouTube, heard on Spotify, and seen on social media networks — are only 14% of ad budgets in Hollywood, but they account for 46% of revenue. If commercial ads aren’t working due to the niche nature of the modern film industry, then it is time for Hollywood to change its methods.

And thus advertising in the film industry is in an important transition stage. While advertisers themselves still try to play on the same basic level of human emotion, the platforms on which they are distributed and the organization of viewers in the markets must be different if they are seeking financial success. The next few years will be very interesting as to where movie marketing goes and what will happen to Hollywood financially due to these changes.

Do you think Hollywood should spend more on digital advertising? How will streaming shape the future of film? Let us know your opinion in the comments below!