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Pontifications

2024. Well. That Was Something.

By December 30, 2024January 2nd, 2025No Comments

2024 was known as “survive until 25” because people could not figure out which way the wind was blowing. Change wasn’t just in the air – it was smothering the life out of it. So many were feeling the weight of the world on their shoulders as they waited for the next shoe to drop/kick them – layoffs, buyer stasis, tight capital markets, high interest rates etc ad infinitum. And as co-founders of a business and as members of the people of Earth, this collective holding of breath was felt by Dario and I as well. So much so that we operated under the assumption that instead of “survive til 25”, the shorthand should be “through” as in “survive through 25”.

The signs were all there for this flip of preposition: economic indicators across business sectors signaled constriction, mergers & acquisitions corralled most markets, a widely used and even more widely misunderstood technology was upending multiple sectors, and a turbulent election season had shaken up more than a few psyches. And specific to entertainment – very little was working in the way everyone was used to things working. But what’s not working? 

Some in the c-suites have blamed the creative (including film, tv, video games, etc. But for the purpose/ease of this post, I’m using content. You’ll live.) Yup. The content that people buy/watch/play/listen/etc. I’m not sure if there has ever been another industry that willfully says that the thing they make is a shite product. As if it were made in some black-ops site and miraculously got to market without anyone on the business side knowing. How does that make sense?

Next on the blame train is “the audience” (including players, listeners, watchers, participants, etc. But for the purpose/laziness of this post I will use audience). Yup. The people who pay for things with their wallet and/or their time. Can audiences be tricky and at times controversial? Of course – especially when it comes to old IP (way too many examples to list here of old fans vs newcomers vs IP). But blaming the audience who represent pretty much the monetization that is needed to keep the entertainment circle of life circling is a fascinating tactic. It’s one thing to say “hey fans, come along with us as we discover new ways to entertain you”, but it’s a whole other thing to just expect them to come along because you say so and regardless of the output that the gatekeepers themselves proclaim as no bueno. How does that make sense?

It doesn’t. Because the fact of the matter is that neither the creative nor the audience are broken. The business model is.

The legacy studios are machines. All parts work towards one goal. But the challenge is that each part has its own p&l so at times the idea of working together doesn’t make sense for the business model these divisions find themselves under. So if next year is full of sequels, prequels and known IP, these are the types of films that make the most sense for the profit margins of studios that are integrated across business units and have partnerships with other media that fill out their franchise model i.e. licensing a game to Ubisoft, a licensed doll with Mattel. This model of acquisition, full buyouts and licensing works for them. 

But it is showing some wear and tear. It is not as welcoming towards new creators and different mindsets as one would think. And that’s okay as long as there are other ways for creators to create, audiences to find those creations and for a healthy ecosystem to emerge that allows for monetization that doesn’t always feel like a cash grab.

So whether it’s survive until or through, we landed on one theme for us:

2024 was the year of transition 

Tran•si•tion:  tranˈziSH(ə)n; the process or a period of changing from one state or condition to another.

It’s not that people hate change (though some really really do). It’s the process to get to that change that people hate because it is MESSY. It’s dig deep into your worldbuilding to find a new story that speaks to a next gen audience messy. It’s go back into contracts and make sure that a new opportunity is covered messy. It’s figure out new tax codes messy. And as you wade through that mess you can get exhausted. I think that alot of people have hit peak exhaustion trying to wade through what this whiplash year means. 

The first 100 years of the US studio system (based on the founding date of The Walt Disney Company in 1923) was an incredibly strong run. It survived world wars, civil unrest, corporate raiders and managed to absorb each incursion of technology. But 2024 not only marked the entrance into the next century but also put on display what of the previous century is no longer relevant to today’s audience demographic and their relationship to entertainment and technology. In 2024 the structures began to break – but you can’t build the next future on a broken foundation of the past. 

And as this was also the year of prep for our company fundraise in 2025, we needed to be observant and focused on what was relevant to bring with us (creative, business, legal and tech) and bid a fond farewell to what wasn’t additive to our core principle: Creative is a business and we are in the business of creative. So we were observant, learning as much as possible about what was going on across all sectors of entertainment because our work is across all of them.

So instead of making predictions for 2025, these are some of our “Observadictions”. Some are data based analysis, some are experience-led opinions, and some are fueled by the successes and learnings we had during this year.

CREATOR ECONOMY and IP

Back in the aughts, I had a meeting with a studio exec who stated “Good thing we’re not music. They are so screwed with this whole internet thing.” Cut to this interview with songwriter/music exec Evan Bogart wherein he lays out what is going on in music which parallels the shift in thinking around legacy media, IP ownership, and hints of how it could potentially playout for indie videogame developers: 

  • Onus and power is going back into the hands of the creator/producers
  • An emphasis on owning as much of the distribution stream for as long as possible
  • A reminder that in this next era of entertainment, it’s not just one product or media that can serve up a hit and provide sustainability – it’s the sum of all the parts working cohesively and strategically together. 

With the consolidations and mergers, and entertainment becoming everything to everyone everywhere, there’s no such thing as something happening in one corner of the entertainment ecosystem that won’t eventually find its way over to another. Creators, musicians, developers, etc. across the entertainment spectrum are beginning to ask alot of questions of the legacy system that it cannot (does not?) want to answer.

BUSINESS MODELS

An ecosystem is, in very basic terms, a particular area in which all things interact with each other in a way that sustains life. Creative, business, audience, production, legal, distribution, tech, etc are all a part of the entertainment ecosystem. This ecosystem had an incredible 100 year run of being overall healthy (with some strikes, globalization, disruptive technology pops, etc included). But the cracks started showing in 2007 – which got forgotten when we had another amazing sprint starting in 2012 – until the pandemic blew those cracks wide open. And now we are wading through the mess of transition. 

Everything works until it doesn’t, and those things that didn’t may now be the new. The industry is in need of new mindsets for the next era of entertainment. New mindsets have nothing to do with age. It’s about seeing this transition and being willing and able to act upon it and build the next healthy entertainment ecosystem with creative, business, legal and technology at the core at the beginning. 

Sure these are alot of frothy words for a big idea. But we are in need of big ideas right now because this year has told us in no uncertain terms that change is around the corner and the current legacy systems are not able to move as nimbly towards/with it. The current gatekeepers are also somewhat deincentivized to briing on too much change too quickly because the legacy systems do still “work”(ish) but only to the benefit for a select few.  But this does mean that there is an opening, a total addressable market hungry to come in. So when you look beyond the headlines, there are new mindsets in the form of companies, creators, and investors who are putting strategy, time and money towards building the next era of entertainment.

VIDEOGAMES

The layoffs and shutdowns this year were brutal. I truly hope we are on the other side of it. In the meantime, Amir Satvat has a game community resource guide.

  • UCLA’s Center for Scholars and Storytellers (led by Yalda T. Uhls) released their Teens and Screens 2024 Report. There is alot of great info in here across media and behaviours, but for the first time, the study included questions about gaming, providing “valuable insights into this key part of adolescent media consumption. Only 12% of adolescents surveyed said they don’t play.” Mathing (100%-12%=88%) and then pulling on that from the quantitative to the qualitative, this means that the majority of the next era audience has grown up with avatars, interface, digital communities, in-app-purchases, and visual styles that to others can feel uncanny valley but to them it’s just how things look. 
  • That 88% stat perhaps pokes into some of the why behind Disney’s second investment into Epic. Admittedly I am biased since I am on record in a bunch of places with the belief that video games will be where the next generation defining franchise IPs will come from (pontifications with some notable co-conspirators can be found here: SXSW 2024 panel Videogames as IP). 
  • Everyone has had their fun beating up on the word metaverse but sliding the nomenclature hateration towards the idea of persistent worlds and digital communities, it’s worth contemplating what this means for the next era (this is a great piece by Alex Kruglov from 2022 Gaming companies are best placed to build the Disneylands of the metaverse). 60-70% of GenZ has engaged with a combination of Roblox, Minecraft and/or Fortnite. I hesitated to use “played” primarily because of how GenZ and older Gen Alpha refer to these: they say meet me. Fortnite, Minecraft and Roblox are their communities. 
  • Secret Level the anthology series on Amazon Prime was picked up for a second season. Whether that’s because of the cost of building the engine it was pre-ordered with 2 seasons or its debut viewership numbers were strong enough to warrant a renewal – Secret Level is demonstrating that there’s potential in this kind of storytelling AND because the whole thing is done in game engine it is exposing that specific look to a broader group of people. So if even 10% of that audience is non-gamers they’re all possibly growing accustomed to the videogame aesthetic (though NY Times has an article questioning if continuing to innovate on the look is worth the cost). 
  • And along with this, GenZ habits and their view that everything is content (don’t shoot the messenger), there’s potentially a new model brewing on the horizon that is a cohesive and dynamic interplay between linear and interactive.
  • Arcane. Alot alot alot of digital ink has been spilled analyzing (perhaps a bit too gleefully?) on the total production cost and failure of Arcane. Riot took a major swing on a narrative expansion of its wildly popular video game that pulls in more money than the GDP of quite a few countries, because it could. League of Legends is a game that has a global base of players and a deep story world yet to be explored. In trying to chart its own course through the treacherous seas of tv land Riot made a bunch of missteps and yet still produced a show that creatively can compete against the many shows currently on TV – animated or not. So I query – as a video game company that is among a small group that has tried to control its own franchise media destiny, what if Riot had succeeded? What if in 2024 those highly rated 18 episodes had come in at an industry “acceptable” per episode cost?  Would we instead be talking about yet another shift away from traditional legacy studio power dynamics?

YouTube

YouTube Q3 beat ad revenue estimates and in June, according to Nielsen, gained enough in time spent watching to make Disney, Netflix and others take notice. But with both of these data points and the well-documented fact that the studios and streamers have a GenZ problem – what next for YouTube? 

  • Can and should YouTube be playing more of a role in the growth and sustainability of narrative? We’re keeping an eye on them rejiggering a few algorithms to figure out how to promote and monetize narrative storytelling.

There have been significant narrative series that had their start on YouTube including Insecure, High Maintenance, Adventure Time, Broad City. But that was in the before times. Now leaning into this next era of entertainment,  the more recent examples have had big splashes for places other than YouTube:

As YouTube matures and the creator economy comes into its toddler age, there is a growing need for the fundamentals. The article that accompanied THRs list of 50 influencers has some interesting points around this:

  • “Diversification of platforms, diversification of revenue streams. It’s not enough to be single-platform dependent or single-revenue-stream dependent anymore.” Dan Weinstein, co-founder of Underscore Talent. (A takeaway: the platforms drive how money can be earned via their algorithms. Focusing efforts on only one platform puts creators in the backseat of their own car.)
  • Tareasa “Reesa Teesa” Johnson of “Who TF Did I Marry” TikTok fame, amassed 3.6 million followers and began partnerships with major brands including Target, Marriott, Adidas and Microsoft. (A takeaway: Is she building a business with her brand or are brands – including whichever streamer/buyer lands the Natasha Rothwell adaptation – building a business with or off of her?)
  • “Even though they’re making lots of money, there are no producers for the creator economy. There are day-to-day people that can help you organize a shoot … but it’s very transactional,” Adam Goodman, the CEO and founder of Invisible Narratives. (A takeaway: creative and business go hand in hand. There is no “I” in team if a creator wants longevity and sustainability. See – Dude Perfect gets a CEO in Andrew Yaffe)

AI

This is a high-level perspective on a technology that is quickly and continuously evolving. It is fraught times as it feels like it could be the protector and the destroyer of an already weakened entertainment industry:

  • From a tool perspective, the horse is out the barn – but some are doing their best to hold onto the reins. 
  • From a Generative AI perspective, the story is still to be written – but will need to be done so by a human if you want to get a copyright (Wired has an amazing breakdown of every AI copyright Lawsuit in the US).
  • From a waiting for the VC market to crash perspective, markets come and markets go – but who’s left holding the bag remains to be seen.

These represent maybe .0000082% of all of the AI  announcements from this past year. But from a macro-view they cover a range from exciting to foreshadowing the complicated relationship between the traditional entertainment industry and generative AI:

BRANDS AND BRAND STORYTELLING

One thing that Hollywood does very well is figure out how to separate the money from the next batch of investors. And it’s got its eyes on Brands. But this time around I think Brands may be a step ahead as some have moved their creative power structures in-house.  From LVMH, Chick Fil-A, Starbucks to the work Brian Newman does via Sub-Genre and its brand clients, it will be interesting to see who takes the lead in this brand dance. We think that branded content will be how Brands continue to reinvent themselves in this next consumer era which includes direct-to-consumer. So will the next growth strategy focus on marketing to smaller, passionate fanbases rather than trying to reach only the four-quadrant mainstream culture? When did niche become a dirty word? How is niche not thought of in the same light as Kevin Kelly’s 1000 True Fans? I guess that’s a post for another day. But for now Axios covered a survey by communications and marketing firms Confidant and Vytal of 1,000 adults between 18 – 59 about their brand loyalty:

  • 45% of Gen Z, Millennial, and Gen X Americans “feel more connected to these niche communities than to mainstream culture.”
  • 88% of Americans “engage in niche communities.”
  • 46% of people prefer to engage with or shop from a brand that caters to a niche community rather than the mainstream.
  • When it comes to Gen Z, that share of niche shoppers jumps to 53%.

EXPERIENCE ECONOMY

This is a broad category that includes but is not limited to theme parks, location based experiences (LBEs), sports, concerts, pop-ups, immersive theater, and etc. Regardless of our society becoming more digital, there is still a need for communal experience. And this is a category that continues to grow both in North America (the biggest market… currently) and globally. This year GenZers made good on their promise (see: Mastercard’s 2023 Travel Industry Trend report) to visit more attractions within the Experience Economy category. The Immersive Experience Institute will be releasing an industry report in 2025 that will illuminate even more of these shifts in not only the creative but also audience behaviours. And these shifts have not gone unnoticed by legacy media and distributors from Netflix announcing Netflix House to the eight largest theatre chains in North America committing US$2b to modernize theaters which includes “creating family entertainment options such as arcades and bowling” (which somewhat sounds like a mall or a family fun center? More here in this interview on Puck’s The Town).

MOVIES

For anyone whose primary business is film, the 2024 NATO report is worth the read. To paraphrase Monty Python, film is not dead yet. From tentpoles to indiefilm, it’s how we discover new creators, different forms of storytelling, new ways of reaching the audience, better use of new technologies, etc. 

Even though linear passive film storytelling is technically not within the first phase of Kinetic’s IP development, we believe in and are focused on creating, maintaining and supporting a healthy storytelling and media ecosystem. Everything serves a purpose in the ecosystem. And when something falters it can signal that the ecosystem is weak. The NATO report pointed out that while tentpoles are crucial to the success of the movie industry, they are only part of the equation. “To truly thrive and sustain the business, smaller and medium-budgeted films must find a place.”

  • Box office is back…but is it? The United States determines the health of the movie industry by box office dollars as opposed to admissions. But year over year admissions are down in the United States as per a 2022 Gallup poll. Increasing the price of movie tickets has aided in buoying the increase in total box office revenue. Inflation is going to inflation. But this type of glossed-over economic health indicator can lead to people and industries leaning back in comfort as opposed to charging forward into innovation.
  • And how does this “box office is back” trickle up to the studios? Depending on negotiated contracts, the theater can keep anywhere from 30-70% of the reported box office revenue. So the theaters are doing better but are the studios? Disney is not getting all of that US$5b in box office. So taking out the theaters % and other unknown to the general public %’s, does that revenue cover what the studio spent on production, marketing and overhead? Again, this is not about shareholder value, this is about a healthy ecosystem which needs more money to come in than what goes out.
  • The top 10 films of the year are sequels, prequels and known IP (you have to include Wicked, the 4th longest running musical on Broadway and a book by Gregory Maguire, as known IP). Is that a sign of a healthy theatrical market? Last year was proclaimed to be the year of franchise fatigue and this year it’s saving the theatrical market (Joker 2 aside). There was a point in which three movies in the top 10 (Moana, Wicked and Gladiator 2), took up 75% of the screens – three of four screens went to 3 movies.
  • If next year is also going to be full of sequels, prequels, and known IP… Then where does this leave indie film and original IP that has no built-in audience or business model or other revenues. What are the new distribution models? Is it “fair” that only certain media centers like Chicago, Seattle, New York, Los Angeles, Miami, etc get movies in theaters that are not sequels, prequels, known IP? So who’s going to step up here? What will become the next indie art house market? Is there a way for film societies and film festivals to play a better role in this? Where can they help make this sustainable for creators as well as reach markets beyond the aforementioned media centers?

PODCASTS

2023 the podcastenators proclaimed audio to be on life support. And it took one little election to breathe life back into this media. Of the many many think pieces around the podcast strategy of the election cycle pundits, The Colin and Samir Show had the best analysis How YouTube Podcasts Decided the 2024 Election. 

Do not count out audio as a part of building your IP. Of the media spokes available to creators, audio can allow for the ownership not only of your IP but also the go-to-market corridor and the engaged fanbase (with assists from newsletters, substacks, etc.). We’d love to see the continued growth on the narrative fiction storytelling side of audio. Creatively there are some great podcasts out there in audioland. Perhaps some new mindsets will develop the next revenue models around narrative fiction audio that aren’t just ad buys.

PRODUCTION 

Every headline and split-the-tab lunches around town are all saying the same thing: The buyers aren’t buying. Production is way down and out of California and a bunch of other states including Georgia and chasing international savings. British Columbia entered the chat hard recently upping their tax credit. At IndieWire’s Future of Filmmaking Summit “Filming Outside of Hollywood” many truths and hopes were laid bare. Will the proposed California tax credits pass quickly enough to stop the bleed?

TELEVISION

Streaming ran the ad market and began releasing shows either in 3-4 episode buckets or once a week. So survey says – This year streaming became plain ‘ol television. Just like grandpa used to watch. Netflix showed two Christmas football games without a glitch – but also nothing that made the “telecast” stand out or take advantage of Netflix being a tech company. But it is early days and Netflix rebounded after the Paul/Tyson cotillion harder, faster and sassier than Dennis Rodman. Live sports rights (and monetization) are being atomized across broadcast and streaming platforms which makes the coming year in sports watching kind of bananas. Place your bets!

We are in a pretty ok position (see above re: buyers not buying) because our graphic novel series The Gatecrashers was acquired a few years ago for episodic adaptation. But as to its forward momentum like when will it shoot, at what budget, where, etc ad infinitum is all up in the air and out of our control. And it’s the “out of our control” part that seems to be the underlying cause of dissatisfaction being now loudly murmured by creators across the industry (see above re: creative IP). 

FINAL THOUGHTS

Despite the headlines and the knowledge that there will be terrible and awesome on the horizon, we remain excited for 2025 (including appropriate sage smudging).  We were fortunate to build Kinetic in stealth through the pandemic which gave us time to bluesky around what the next era of entertainment could be, who we wanted to be in it and who we wanted to be in it with. We bootstrapped our first three years, partnering with ambitious & innovative creators and technologists to transform our bluesky sessions into strategy that we’ve been executing on to go-to-market, supported by legal and tech. So what are we doing in 2025, a year in which, to quote the often quoted William Goldman, “Nobody knows anything,”?  We are fundraising for Kinetic to grow and scale our creative business model. Will another merger or acquisition loosen up or tighten the capital market? Are creative entrepreneurs and investors ready to step into the next era of entertainment? This all remains to be seen as the year develops. 

But what we can see now is the opportunity to take advantage of this transition, find the signal in the noise to discover a new path into this next era of entertainment so that we can all keep telling stories and producing entertainment for people to enjoy.

Like us, there are people across this industry – creative, business, technology and legal – who are not interested in sitting still and waiting for the storm to pass. Many are choosing to build a new path and #keepitmoving.

WELL HELLO! SINCE YOU MADE IT THIS FAR….

Listen: 

  • Doechii: Love all the love that is coming at her now. She is something special. If you don’t know her, here’s a quick baseline via a wackysweet interview with Nardwuar and NPR’s Tiny Desk Concert. She is all melodic bars make no mistake. Come through Grammys!
  • Green Day’s Dookie demastered: for its 30th anniversary, this 1994 classic album was demastered into 15 formats including player piano roll, Teddy Ruxpin audio and a Fischer Price record. The items are no longer available but you can listen to them on Green Day’s site.
  • Sault: I’ve loved their music, vibe, and how they choose to “be” with their fans. I was thrilled when Lance Weiler asked me to do a write up about them as one of the honorees of the Digital Dozen Breakthroughs in Storytelling presented by the Columbia University School of the Arts’ Digital Storytelling Lab. They are worth taking the time to meditate in all that they have put out. Currently their album Acts of Faith is available on vinyl. I have no idea if what they are doing is the future of music + experience so I’m just staying in their moment.

Subscribe and Enjoy:

  • Sub-Genre’s newsletter by Brian Newman for insights on indiefilm, distribution and brands/brand storytelling. Subscribe here.
  • Screentime via Lucas Shaw at Bloomberg. Entertainment, Business and tech (and great music recommendations as well). Subscribe here.
  • Aftermath was started by ex-Kotaku journalists who continue to cover video games and video game culture from multiple and interesting angles. Subscribe here
  • Media War and Peace by Evan Shapiro. If “IDGAF about how things were done because we are in the next era of entertaiment and the creator economy – and I have the receipts to back up what I say” was a person, he’s it. Follow him on linked in and Subscribe here.
  • Bluesky Starter Packs – these are curated lists of users by users that are centered around something specific (ie: a topic like science or personalized subset like shark scientists). These help with on-boarding and just getting used to yet another social media platform.
  • TSA (instagram): for anytime you ask yourself “is soup considered a liquid” or just to scroll through all of the things people feel they neeeeeed to pack in their luggage.
  • National Park Service (Instagram, Facebook ): if thinking about petting a bison lives rent free in your head, this is the account for you.

Play:

  • El Paso Elsewhere from Strange Scaffold. Actually just about every game coming out of this innovative and smart game studio is worth a download. Come for their human-centric ethos of creating games in a healthier way. Stay for an Airport for Aliens Currently Run by Dogs.
  • Political Arena from Wayside Press. If this year has taught us anything it’s that if you don’t promote what you do, does a tree fall in the forest. And if what you do is also a fun political simulation video game that is not only (and most importantly) fun, the game also gives you “Is that how this stuff works?!?” moments of incredulity. Oh DC. You do you.
  • Space Hoppers from Orbiter and Rover. If this year has taught us anything it’s that if you don’t promote what you do, does a tree fall in the forest x2. A family friendly cardgame that is but the first way in which to jump into this brand new story universe. More to come!

Watch:

  • Daughters and Kneecap: saw both of these movies at Sundance 2024. They still stick with me.
  • Club Shay Shay with Katt Williams was most definitely one for the ages.
  • Gangs of London. Give me the next season now.
  • Gary Hustwit’s generative AI documentary on and with Brian Eno. It’s a film that is different with each viewing. (sidenote: Brian Eno and Bette A. released “What Art Does” on metabel as a hardcover special edition book and a limited time pdf for $1. Both sold out.)
  • Piece by Piece, the lego documentary about Pharrell Williams directed by Morgan Neville, is pretty great. 

NumNumYummy:

  • Pro-tip on the “Tom Cruise Christmas Cake” aka The White Chocolate Bundt Cake by Doan’s Bakery: It freezes beautifully. I’m not a huge sweets eater so it takes me all year to eat it. 
  • Violet in Seattle (IYKYK)
  • The mac&cheese pie at Bridgetown Roti in Los Angeles
  • Everyone should have a butcher they trust. And if things are really going your way they also make delicious smashburgers. Standing’s Butchery in Los Angeles is it.
  • The Benjamin Hollywood in Los Angeles makes a damn great martini. Treat yo’ self!

PS: I did search to try to give credit to whomever created the photo that I am using for this post’s image but came up with bupkis.

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