Digital Evolution of the Hollywood Entertainment Industry
In the ever-evolving media landscape, digital transformation has emerged as a crucial factor for survival and growth. This multi-faceted goal, with differing objectives for various industries, is particularly relevant for traditional Hollywood studios, which have long dominated the entertainment industry.
Rather than viewing digital transformation as a threat, leaders in charge of digital transformation should view it as a vision to turn technology into transformation. This shift in perspective is essential for leveraging digital technologies to reinforce the business mission and generate value for the company permanently.
Traditional businesses like Hollywood studios have countered digital transformation threats by adopting multiple strategic approaches. These include embracing technology for enhanced experiences, strategic mergers, acquisitions, and restructuring, leveraging digital marketing, social media, and SEO, and data-driven consumer insights and platform innovation.
One such example is Disney's investment in advanced networking infrastructure and technologies like augmented reality (AR) to create immersive, interactive experiences integrated with their traditional entertainment properties. Disney’s Star Wars: Galaxy’s Edge attraction uses HPE Aruba’s high-speed, low-latency network to deliver real-time AR features and language translation via mobile apps, enhancing guest engagement beyond passive viewing.
Another strategy is the reshaping of corporate structures to better align with digital ecosystems. For example, Lionsgate acquired the cable network Starz to bulk up its media offerings but later split from it to concentrate on its core studio business and focus on capitalizing on distribution capabilities.
Studios like Universal Pictures actively use digital marketing, including social media platforms and search engine optimization, to promote films and engage global audiences directly online. Their high organic keyword rankings and substantial monthly website traffic illustrate investment in maximizing digital visibility and attracting consumer attention through tailored content and campaigns.
Industry leaders also emphasize consumer satisfaction, data analytics, and building subscription-based platforms (streaming) to drive brand loyalty and advertising effectiveness. Sessions at industry events like Digital Hollywood focus on how media companies evolve their advertising strategies and innovate platforms to thrive in digital ecosystems.
The digital age created a scarcity of customer attention as consumers had many choices, making customer retention a competitive advantage. The studios had no direct access to customers, while digital age companies like Netflix, Amazon, Google were consolidating their position and leveraging it to move into content creation.
A successful digital transformation requires the active participation of the CEO. The big six Hollywood studios had maintained their dominance over the last century by controlling finance, technological means to create content, distribution channels, and copyright law. However, the digital age disrupted this equilibrium, and the studios had to adapt to maintain their dominance.
In 2015, a senior colleague at a well-known Hollywood studio felt that companies like Amazon, Netflix, Google posed no immediate threat to the dominance of the Hollywood studios. However, the digital age has since proven otherwise, and the studios have managed to recover their footing by adopting new technologies, creating new digital distribution platforms, restructuring their organization, and making their marketing efforts more data-driven.
In conclusion, digital transformation should be viewed as an opportunity rather than a threat. By integrating cutting-edge technology, restructuring corporate assets for agility, harnessing digital marketing and data analytics, and creating new consumer engagement models, traditional Hollywood studios are transforming digital threats into competitive advantages and retaining relevance and financial strength in a rapidly evolving media landscape.
In the context of Hollywood studios adapting to digital transformation in the media landscape, CEOs should recognize technology as a means to foster agility and leverage digital tools for long-term business growth and value. This perspective can lead to strategic investments in advanced technologies like virtual reality (VR) and AR to create immersive experiences and better engage audiences.
Moreover, restructuring corporate structures to align with digital ecosystems can help studios capitalize on distribution capabilities and focus on core business operations while remaining competitive in the ever-evolving media market. By shifting their focus from traditional distribution channels to direct consumer engagement through social media, SEO, and streaming platforms, studios can attract consumer attention and build brand loyalty in the digital age.
