Attention Slippage in Hollywood

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You can mint this essay on Mirror.

Key Takeaways

1. The real challenge in Hollywood is capturing the audience's attention, not just business issues. Memecoins demonstrate a new way to solve this problem.

2. Insights from memecoins can help understand what captures and keeps public interest, offering valuable lessons for Hollywood.

3. Hollywood needs to create new types of franchises that connect with current cultural moments and interests, going beyond traditional sequel-based models.

4. The future of franchises may lie in internet-native intellectual properties and immersive online platforms, suggesting a shift towards community-driven content creation.

5. Hollywood could benefit from adopting new technologies like NFTs for more precise measurement of audience interest, similar to metrics used in the world of memecoins, to better develop and market new content.

Sometimes my diverging interests take me on surprising paths. Over the past few weeks, I have explored and written about memes and memecoins as outlets for attention.

I want to circle back to Hollywood this week, but the learnings from the previous pieces offer insights we'll bring along.

Hollywood is in an interesting in-between phase right now: still adjusting after the pandemic, absorbing the effects of last year's strike, and navigating shifting consumer behaviours.

The movie industry is a machine that has perfected the art and business of capturing, aggregating, and recycling attention in cultural objects. In a trough now, some insider voices point to "franchise* fatigue." No more sequels. It's time for independent, mid-market content to shine.

(* I will use the term "franchise" as a catch-all for movies that are part of a series, based on already established and well-known IP and characters, and generally benefit from network effects.) 

This is a noble thought, but it fails to appreciate how instrumental franchising is to the movie industry and why it works: Of the total box office revenue generated from the top 100 movies, ≈86% came from franchises and sequels (and that’s not including the first movie of a sequel).

As we explored in the "Content Barbell Theory," powerful forces push more attention to the edges of the content spectrum: toward the big hits (driven by network effects) and niche content (driven by passion). Mid-market content sits in this attention vacuum, and most movies in this segment have to cold-start attention capture. If the industry were to cycle out of franchises into mid-market standalone movies, it would break the economics of releasing movies. Because buying attention in the market is so capital intensive.

Franchises work well because they build on top of cultural objects with pre-stored attention: previous movies of a series, other content formats like a book series, etc. It’s compounding attention over time.

Hollywood is not facing franchise fatigue. The challenge is that the current batch of franchises is over-mature.

Hollywood is experiencing attention slippage. 

Attention Slippage

Most franchises that bring in the big bucks are 10-15 years old. Over this period, people’s attention and interests naturally and gradually shift. This is further amplified as new generations of consumers age up to become crucial parts of the market, bringing their own cultural references along.

Attention slippage happens when one continues pursuing cultural objects, failing to realise that the aggregated attention of the object is decaying.

This can be difficult to track and measure for entertainment IP, as it typically happens along the axis of movie releases. There's a long lead time between each movie in a series/franchise. This creates staggered "moment in time" data (box office results) rather than a continuous stream of data.

Let's turn for a second to something else that thrives on attention but is easy to measure continuously: memecoins (here we go again.. yes).

This is the volume graph of a memecoin from the previous crypto cycle. 

As we have discussed, memecoins are akin to financialized attention markers online.

It's easy to track when the memecoin above held attention and when it lost it. The comparison between movies and memes only goes so far (for now). Most memecoins are attention sprints. Movie IP is attention marathon.

But there is value in finding ways to measure the attention of movie IP on a finer scale and with more frequent data points. This is a meta-argument for owners of this type of IP to explore ownership and NFTs for fans, not primarily as a source of revenue but as a source of attention measurement.

Out With the Franchise, In With the…Franchise

Attention is slipping from the established movie franchises because people care about other things. The solution to this challenge is simple and complex: establish new franchises that build on cultural objects with current attention.

This is easier said than done. Sequels have predictability. Attempting to launch new franchises is high risk and unpredictable. 

But the shift is already happening. I wrote a piece for Variety last year (it requires a subscription to read) about Hollywood's move into gaming IP as a source for stories to tell. I left one part out of that op-ed: Hollywood sourcing from gaming is only transitory.

Many still see gaming as a distinct content format. Still, the largest gaming platforms (Roblox and Fortnite) are proxies for a more immersive internet (More here about Roblox as a social network, for instance). 

Consumers will increasingly spend time in immersive spaces online. And where we spend time, we also form culture. The seeds of future Hollywood franchises may not be distinct games, but come from cultural objects that form and grow in these online spaces. Think of this as internet native IP.

The magic potion for Hollywood is identifying the right seeds and put them into the machine we discussed in the intro.

This requires a different approach than before. The communities that form around internet-native IP are living, connected, and real-time. They're also global by default. Hollywood studios have to account for this in how they approach and work with IP creators and the communities.

Internet native IP also creates opportunities to leverage digital objects as connective tissue in the community, creating the same trackable attention markers as the memecoin example.