M+E Connections

The COVID-19 pandemic that began in December 2019 was an accelerant of change in the media and entertainment (M&E) industry for which no one could have prepared.

Unprecedented closures of live performance and movie theaters meant consumers had few avail- able options for finding entertainment other than online. Forced to stay home, consumers turned away from broadcast linear platforms to streaming platforms to access thousands of movie and TV titles not available on traditional services.

This resulted in new content distribution opportunities not expected for another five or more years.

The data company Statista forecast back in 2018 that by the end of 2021, large OTT and VOD platforms would have 188.3 million total subscribers in the U.S., which reflected a respectable 3.2 percent growth rate from the previous year.

Thanks to COVID, streaming service subscriptions in the U.S. jumped 22 percent to nearly 230 million in 2020.

That’s a level that wasn’t projected to be reached until 2025 or later. Worldwide, the story is the same. Global VOD subscriptions are projected to increase by 108 percent to 1.6 billion or more by 2026, up from 769.8 million in Q3 2020.

Consumers going online found themselves with a wide variety of platforms from which to choose. Four- teen years after Netflix launched the streaming industry, 600-plus OTT and multiple flavors of VOD platforms are available worldwide. Hardware products like Roku, Amazon Fire TV, and Google Chromecast provide access to the major streaming services while hosting hundreds of independent channels. Roku reportedly hosts 3,000 channels, and Amazon’s Fire TV has more than 200 channels available.

Thus, platforms are providing consumers with a proverbial candy store of content options.

These providers have plenty of content upon which to draw.

According to IMDb, an average of 15,000 films and 270,000 TV episodes have been produced and released worldwide each year over the last decade. IMDB estimates the full content catalog available to providers consists of 438,554 movies and 5.2 million TV episodes from 216,017 TV series.

Content providers universally offer only a fraction of available titles on their platforms.

Amazon offers 14,600 movie titles in their U.S. catalog, which is just 3.3 percent of all titles currently available, and Netflix offers 3,500 movie titles in the US, which is 0.8 percent of all available titles. The demand or necessity for any one company to provide access to every title imaginable does not exist today.

Here’s the challenge facing content creators and distributors in a post-COVID world: figuring out how to profitably release content to a global market of two billion consumers on over 600-plus distribution platforms, when providers are drawing upon the same content catalog of six million-plus titles, while trying to differentiate themselves in consumers’ minds.

Decisions on where to release a title are typically made according to which markets provide the best audience and revenue opportunities. The total box office revenue from the top 20 box office markets worldwide in 2019, the last full year of theatrical releases before the pandemic closed theaters down, was $37.2 billion.

Comparatively, the global market for streaming video services was reported as $43.7 billion in 2020 and is expected to grow at a CAGR of 18.1 percent to $139.6 billion by 2027.

There are 7,139 known languages spoken in a world of 6.8 billion people. Of those, 4.1 billion speak at least one of the 23 most common languages used today.

Sixteen of those are spoken in the top 20 box office markets. Keep in mind that these numbers do not include the total number of dialects (or accents) or secondary languages spoken in any given country, which can impact distribution decisions and localization efforts.

Presuming the title’s original language is any one of them means it must be processed 15 times before international release in every one of the top 20 countries.

PREPARING CONTENT FOR RELEASE

Localization is the process of preparing content for international release by translating the spoken audio into the local language as either text subtitles (aka “subs”)
or spoken in a separate audio track (“dubs”) or both so that the content can be released, and money made.

“Culturalization” ensures the film is released with edits or deletions consistent with societal, legal, religious, or other cultural norms of the country so the content can earn an acceptable or targeted age rating, thus increasing the audience size and revenue, while avoiding negative press or legal jeopardy.

Localization is a very labor-intensive, human process.

Only humans, fluent in the target language and who understand the cultural and contextual nuances, can begin to assess the script, listen to the dialogue, and perform the translation competently to tell the story accurately.

Culturalization matters because some words or phrases do not translate well across borders, languages, or cultures, especially if slang or colloquialisms are used.

Until recently, the entire localization process consisted of choosing which market to enter and translating the script into subtitles or audio dubs.

Today, due mainly to local content regulation, attention must be paid to the in-tended audience, the desired age-based rating, depiction of characters or historical events, sacred places or themes, and other cultural sensitivities.

It cannot be overstated that regulators are increasingly more restrictive of the type of content and stories they’re willing to release in their countries. China, for example, prohibits content that, in their view, includes political criticism, deviancy or is a threat to “national security.” Titles with LGBTQ+ scenes or characters are often banned in Russia, the Middle East, and several Asian and African countries.

Content that regional groups may perceive as “blasphemous” is banned in India. These restrictions are becoming more, not less common, and knowing what they are in your target markets and preparing for them is a wise business decision.

Given the competitive challenges we’ve described, having tools available that help speed content to market while reducing localization costs is most welcome.

Artificial intelligence and machine learning are good at finding patterns, making rules-based recommendations, and automating repetitive business processes. Researchers have been working for years to make AI/ML recognize action and events in video properly.

It is now possible, for example, for AI/ML to correctly identify and classify a knife used in a kitchen to make a meal compared to one used in a violent act.

The benefit to content creators, post-production, and localization firms is significant because a trained AI engine could be used to flag dialogue, scenes, or actions requiring human review at any stage of production.

Spherex is investing heavily in developing AI/ML tools that know country-specific regulations and cultural sensitivities and can identify relevant compliance issues in advance, thus, shortening post-production time, reducing localization costs, and mitigating legal risks.

The pandemic has dramatically altered how and where consumers watch content. Never have more people had more access to more content in more ways anywhere in the world than they do today.

Never have content creators had a more straightforward path to global markets than they do today.

Yet, every title must still be individually assessed for linguistic, cultural and contextual compliance issues.

The challenge we face when creating automated tools to do this work is first developing our own capacity for understanding the cultural realities consumers and regulators take for granted.

Only when we have it right ourselves will we be able to teach machines how to do it for us. Steps are being taken in the right direction, but we still have a long way to go.

** By Teresa Phillips, CEO, Co-Founder, Spherex **

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