A Leading Global developer of state-of-the-art studio facilities for film and television Production

The value chain of the film and TV industry represents the various stages and processes involved in creating and delivering films and television content to audiences. It encompasses different activities that contribute to the overall value and success of the industry.

Technological change and development have been ongoing in the motion picture industry since its beginnings some 125 years ago. What further advancements of digitalization can be expected over the next decade and what are its implications for the industry’s value chain?

The findings imply challenges for traditional players in the motion picture value chain. Production technology becomes both simpler and more complex, leading to the threat of new entrants – from the more frequent use of smartphones as cameras, the emergence of full digital film sets and digital star avatars, as well as advancements in VR-based and interactive movies

New production studio developments need to overcome four key challenges

Absence of suitable infrastructure for high quality production

OUR SOLUTION: Assemble world-class infrastructure

Technological advancements in the Screen Production and Entertainment Industry, such as CGI, can create more dramatic effects and therefore draw more viewers. Some producers also try to use such technologies to reduce costs. However, this attempt is doubtful, as the generation of artificial realities requires high expertise and significant manpower. In fact, budgets for visual effects have increased between 10% and 50%. It is doubtful that these increased costs can be compensated by decreased costs of real set shootings. As a consequence, the predominant purpose of novel production technologies can be seen in enhancing the movie experience rather than cost-cutting.

Virtual effects are evolving, from James Cameron’s use of virtual monitors while shooting his movie “Avatar” released in 2009 to Disney’s use of LED walls as a set for “The Mandalorian”. Virtual Reality technology and its contribution to 100% digital film sets has challenged many aspects of filmmaking. Production design that has traditionally been limited to pre-production and production is now completing the process by adding finishing touches in post-production

Lack of support or “pull” factors for companies/productions

OUR SOLUTION: Optimize production cost & incentives

Filmmaking becomes more accessible and can provide new narratives deviating from mainstream storytelling.

Simplified production processes can have an impact on the production, distribution, and consumption stages of the value chain. Conventional film shooting is being challenged by realistic digital technology. Film production sees some shift from art and handicraft to IT expertise, which may simplify the production process, since large parts of the shooting can take place in studios. However, according to our Delphi study, industry experts did not think producing professional movies will be as easy as building websites is today. In contrast, novel technologies become more complex and require completely new capabilities

Limited access to high caliber talent along the value chain

OUR SOLUTION: Attract and retain human capital acrros the Value Chain Screen Production and Entertainment Industry

maat Studios forecast predict that complex movie sets will be digitally created for actors to perform in them live and without reduced post-production. Furthermore, maat Studio facilities support the new role of smartphones might partly replace traditional movie cameras. This challenges players in the production stage like camera manufacturers since the demand for their products declines. Additionally, technology that is easily accessible and simple to handle lowers the barriers of entry into the market. In particular, independent filmmakers can benefit from technological innovations in smartphones, such as 4K resolution, microphone mini-jacks, adjustable focus, and add-on lenses or filters.

The production process can not only benefit from the completely digital film set itself, but also the digitalization of the video camera. Digital cameras make immediate audio and video feedback possible. That way, directors can decide whether an additional or a re-shoot is necessary. This can, to some rather small extent, also save time and therefore costs. Moreover, shooting and editing could happen almost simultaneously with the digital format, making post-production faster and more efficient.

Low visibility of production studio development internationally

OUR SOLUTION: Accelerate studio awareness

Motion pictures are of cultural and economic importance and form the central core of the motion picture industry, which generated worldwide sales of more than US $100 billion in 2023. Before the COVID-19 lockdowns, the number of screens in cinemas worldwide was still growing, along with films being produced

Due to this economic relevance and the rapid changes in the industry, it has always been the subject of extensive economic research. One focus is on the investigation of factors influencing box office success, such as star power, director power, the production budget, theatrical release, and film.

Technological developments and the associated changes in consumer behaviour have a significant influence on the motion picture industry and its value chain. Several industries have shown major shifts in value configurations as a consequence of digitalization. 

The three traditional main streams in the motion picture value chain consist of production, distribution, and exhibition, which are then followed by the audience’s consumption.. A chain of connected companies and individuals partake in each step of the value chain. Producing a movie requires various suppliers and contributors, such as screenwriters, financers, equipment manufacturers, producers, and editors.. The distribution includes all activities to deliver movies, from film duplication to delivery to cinemas for exhibition. Theatrical exhibition is still the main stream of revenue for movie studios.

Each part of the value chain relies heavily on this network to progress a film project.

 

Changing demand-supply conditions

Keeping up with what people want

What’s popular today might not be tomorrow, as people’s tastes in entertainment constantly change.. 

Being on top of content choices, selections and trends from across the world is becoming more and more critical – not only for content curators but also for the larger, extended supply-chain players

Evolving business models

Finding the right approach

Digital platforms have turned the entertainment business upside down and revolutionized the entertainment business models across the value-chain.

The technological advancements in cloud computing are enabling B2B players in production, post, distribution to expand into new markets and/ or into adjacent upstream or downstream areas of specialisations. These shifts have introduced additional complexities in traditional supply-chain formations.

The shift towards globalization also means dealing with diverse legal, cultural, and regulatory frameworks, which can complicate partnerships and distribution strategies dramatically

Choosing the right Partners

Collaboration matters

Collaboration is intrinsic to the entertainment supply-chain, and selecting the right partners is crucial. 

Working with players in different countries can result in bottlenecks, delays, and increased costs.

Partnering with companies engaged in unethical practices or embroiled in scandals can severely tarnish a brand’s reputation.

Selecting reputable and experienced partners can prevent such setbacks.

Navigating different markets

Dealing with unique cultures and rules

Film and entertainment industry professionals face a myriad of challenges when venturing into foreign markets.

Production companies encounter a diverse range of hurdles, from overcoming language barriers and navigating complex legal and regulatory compliances to conducting location scouting, recruiting skilled crew and talent, securing equipment rentals, and carefully considering aspects of political stability and security.

Distribution companies face their own unique set of obstacles, including adeptly handling cultural sensitivities, combating piracy, coordinating meticulous release schedules, managing public relations, securing optimal screen availabilities, and strategically responding to social and political factors that influence the market.

Negotiating licensing restrictions and agreements, ensuring top-notch content localization, complying with stringent copyright laws, managing the intricacies of technical infrastructure and streaming quality, and addressing various complexities inherent to content licensing.

Tackling these multifaceted challenges requires the astute decision-making process of all stakeholders involved in the production and consumption of content on a global scale.

The motion picture value chain is becoming increasingly complex

It´s due to new entrants and more technical intermediaries

Leading to greater tensions between the artistic and the technological dimensions of the motion picture sector

As shown in the image that illustrates this chapter, advancements in digital technology have the potential to greatly impact the traditional motion picture value chain

Technological Screen and Motion Picture Production leaps, such as those from silent to sound films, from black and white to colour films, or from 2D to 3D films, can be seen as radical innovations and have attracted movie goers to the cinemas. Similarly, home cinema technology has also advanced in a fast manner, competing with movie theatres.

Faster internet connections allow for streaming high-resolution movies and therefore challenge the traditional cinema distribution and also the TV industry. Streaming video services, such as Amazon Prime, Disney Plus, or Netflix, disrupt the motion picture value chain by offering consumers on-demand movies and eradicating the serial periodicity in the premiere of content.

Such technological change has accelerated in recent years with ongoing digitalization. How will digitalization further change the film industry?

While foresight studies in general and technological forecasting in particular are common in many industries, they are rare in the film industry.

Mr. Stathis Basios
CEO  G.M.P. Studios / maat Studios

A founder, Chief Executive and Board Director of several successful companies covering a large spectrum in the following activities: Asset management, strategic planning & restructuring, of large-scale projects. Project management, project financing & development, international contracting, Socio economic projects grants, financials tasks, merger & acquisitions in the areas of Arts & Entertainment Motion Pictures Studios, Film Production, Finance, Energy, with vast experience and specific strengths in analysis and concept development as well as consulting, fund raising equity and debt for corporate placement, strategic affiliations with the key ability of implementing our projects & proposals through experienced management teams. Exploring opportunities in locations, which are able to best benefit from our strengths of conceptual development and our astute scaling and positioning of the projects for specific marketplaces.

Mr. Santiago Jiménez Barrull
Founder and Executive Chairman

Mr Santiago Jiménez Barrull is the Chairman of maatGroup, the holding company of one of the most innovative and fast growing independent privately owned Structured Corporate Finance Services Group (est. 1999) established around maatGroup with corporate presence in Europe, UAE, Africa and Asia. Mr Jiménez´s leadership and business experience accumulated both in Public and Private Sector marked a change in the pioneering the development of Internet in Europe; Corporate Strategy of Professional Services offering into the Structured Corporate Services (Multilateral Agencies, Investment Funds, Private Equities, Development Funds,...); Real Estate, Property Development, Housing, Energy, Transport Infrastructures, Agriculture and Trading industry in Africa and LATAM and Research & Development into the Circular Economy; ICT industry and Finance