The evolution of new media Making money in a world where digital streaming rules

Making money in a world where digital streaming rules

Green Hasson Janks

Los Angeles is synonymous with entertainment, and LA based Green Hasson Janks is the premiere accounting firm servicing privately held, high-growth entertainment and media companies in Southern California.

As a business advisor, Green Hasson Janks is well aware that the industry moves quickly and is driven by technology and industry disrupters. In October, Hollywood insiders gathered at a cocktail reception to watch industry experts discuss everything from monetising streaming to the introduction of global video-on-demand services. The reception also marked the release of Green Hasson Janks’ 4th annual Entertainment and Media Whitepaper: ‘The Evolution of New Media: Making Money in a World Where Digital Streaming Rules.’

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Executive summary

Streaming services have emerged as significant disrupters in the entertainment industry. With this in mind, the Green Hasson Janks 2016 Entertainment and Media Survey focused on global distribution rights and monetisation in a world where video streaming services are growing exponentially.

Given the new environment, this paper explores what producers and talent need to do to maximise monetisation in the digital space and prepare for the future.

Streaming services

In the early days of streaming media, many entertainment leaders wondered if consumers would pay for content beyond their cable television channels — this was a cost that had already been accepted and was likely to continue, despite the options offered by subscription video on-demand (SVOD) services. Netflix was initially launched as a way to access the enormous amount of content that had already been viewed on television or in movie theatres, but Netflix has now become a leading source of new programming for consumers worldwide and gives content creators and talent a greatly expanded market for their talents — and a whole new world of monetisation opportunities.

Globalisation: Where will the industry grow?

With digital largely eliminating the need for land lines, there will inevitably be growth in the developing world. Some areas may not even have electricity or running water, but they have phones. Statistically in Asia, there are three times as many people in India as in the U.S., and China’s consumers use mobile phones more than the U.S. Green Hasson Janks survey respondents and experts agreed that Asia has the biggest potential for SVOD growth, with 79 percent pointing to it in the survey.

Will Tiao, producer at Formosa Entertainment, adds that “in Asia they are much more advanced than we are in this area. Most people in Asia consume content on their phones. They never really went to the traditional form. I see much more experimentation over there. They love a one-stop shop, so the digital channels are broad. It’s about convenience.”

International tax implications

One major step is aimed at addressing Base Erosion and Profit Shifting (BEPS), which refers to tax planning strategies that exploit gaps and mismatches in tax rules shifting profits to low or no-tax locations where there is little or no economic activity and resulting in little or no overall corporate tax being paid. The G20 and some other countries have agreed-upon guidance on how to address BEPS.

A likely outcome will be that every country will implement it slightly different from each other so companies will need to understand multiple regulations in multiple jurisdictions

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