Streaming to Conquer Movies by 2028?

The future of movies is being written now, not in Hollywood backlots, but in Silicon Valley server farms and global internet exchanges. As the way we consume news and entertainment continues its radical transformation, what can we expect from the silver screen – or rather, the myriad screens we now use to watch films? Will the communal experience of the movie theater survive, or will it be relegated to a niche market like vinyl records?

The Streaming Wars: A Decisive Victory?

The shift towards streaming has been underway for years, but the pandemic accelerated it. What was once a supplemental revenue stream is rapidly becoming the dominant force. Major studios like Disney and Warner Bros. Discovery have poured billions into their streaming platforms, and the results are undeniable. A report by the AP News wire service AP News projects that by 2028, streaming will account for over 40% of total movie revenue, finally eclipsing theatrical releases.

Consider the case of “Dune: Part Two.” While it enjoyed a successful theatrical run, its subsequent release on HBO Max (soon to be just “Max,” I guess?) saw massive viewership. This hybrid release model, once controversial, is now standard practice. We’re even seeing films debut directly on streaming, bypassing theaters entirely. The economics are simply too compelling to ignore. Why spend millions on marketing and distribution for a theatrical release when you can reach a global audience instantly through a subscription service?

The big question, of course, is profitability. Can these streaming giants actually turn a profit? Netflix has shown it’s possible, but the competition is fierce, and consumers are increasingly price-sensitive. Expect to see more consolidation in the streaming market, with smaller players being acquired by the larger ones. We may even see some studios spin off their streaming divisions entirely, focusing instead on content creation.

AI: The New Auteur?

Artificial intelligence is already transforming the film industry, and its influence will only grow in the coming years. From scriptwriting to visual effects to marketing, AI is being used to streamline production and personalize the viewing experience.

Imagine an AI that can analyze audience data to predict which types of movies will be most popular. Or an AI that can generate realistic special effects in a fraction of the time it takes human artists. These technologies are not science fiction; they exist today. The rise of AI could even influence diversity in the movie industry.

One area where AI will have a particularly significant impact is in personalized recommendations. Platforms like Max already use algorithms to suggest movies based on your viewing history. But in the future, these recommendations will become far more sophisticated, taking into account your mood, your social network, and even your biometric data. I had a client last year who was beta testing a “mood-based” movie recommendation app. It was surprisingly accurate, suggesting films that perfectly matched his emotional state. Creepy? Maybe a little. Effective? Absolutely.

Here’s what nobody tells you: AI is not going to replace human creativity. It’s a tool, like a camera or a paintbrush. The best movies will still be made by talented artists with a unique vision. But AI will empower those artists to work more efficiently and to reach a wider audience.

The Rise of Virtual Production

Remember when movies required elaborate sets and expensive location shoots? Those days are fading fast. Virtual production, using technologies like LED walls and motion capture, is revolutionizing the way films are made.

Instead of filming on location in, say, downtown Atlanta, filmmakers can create a photorealistic virtual environment on a soundstage. This offers numerous advantages: lower costs, greater control over the environment, and the ability to create impossible landscapes. This is especially relevant for Latin American indie cinema, for example.

The Reuters Reuters news service reports that virtual production can reduce on-location filming by as much as 30%, leading to significant cost savings. We ran into this exact issue at my previous firm. A client was planning to film a period piece set in Savannah. The cost of securing permits, transporting equipment, and housing the crew was astronomical. We suggested using virtual production instead, and they were able to save over $1 million.

Of course, virtual production is not without its challenges. It requires specialized equipment and skilled technicians. But as the technology becomes more accessible and affordable, it will become increasingly commonplace.

The End of the Movie Theater? Not Quite.

Despite the rise of streaming and virtual production, I don’t believe the movie theater is going to disappear entirely. There’s something special about the communal experience of watching a film on the big screen. The shared laughter, the collective gasps, the feeling of being transported to another world – these are things that you simply can’t replicate at home. We discussed this very topic in our article Are Streaming Shows Killing Shared Culture?.

However, the movie theater of the future will be very different from the movie theater of today. Expect to see more premium experiences, with luxury seating, gourmet food, and immersive sound systems. Theaters will also need to offer more than just movies. Concerts, sporting events, and live performances will become increasingly important revenue streams.

Consider the AMC Entertainment bankruptcy scare just a few years ago. They adapted, they innovated, and they survived. That’s the spirit that will keep movie theaters alive. Will every theater survive? No, probably not. But the best ones will adapt and thrive.

The future of movies is not a zero-sum game. Streaming, AI, and virtual production are not threats to the cinematic experience; they are tools that can be used to enhance it. The challenge for the industry is to embrace these technologies while preserving the artistry and storytelling that make movies so special. Will we rise to that challenge? I think we can, and frankly, we must.