The Rise of the Audience

While listening to "Which way, studios?" on KCRW's The Business, Kim Masters, Stephen Galloway, and John Horn introduced the idea that star vehicles and franchises are no longer reliably effective in guaranteeing a return on investment in a major motion picture. This is attributable to the rise of the power of peer to peer communication superseding the hype of the Hollywood press or the allure of the super star:



"Movie ciritcs might not have liked Transformers sequel but the audience did. We live in a day where the audience can go see a movie on Friday night, and by the time they come out, their texting their friends, their putting something up on their Facebook or their mySpace page, so you can pay Eddie Murphy 20 million dollars and put him in "Imagine that" and by Fri night the audience has said this movie is terrible and your dead."



This idea can also be extended to the video game industry insofar that in the face of rising development costs and market overcrowding, it is becoming increasingly difficult to ensure a return on your development dollars even if you are in possession of a valuable franchise. It is far more important to generate a positive buzz from the core audience who will tweet the virtues or flaws of your product more cost effectively than any other form of advertising.

The way to capitalize on this phenomenon is to adopt a strategy of selling your title at cost in order to focus on getting your product into the hands of your audience. Whether on XBox Live Arcade, PSN, Wii Network, Facebook or iPhone Apps, it's all about getting your game in the top 50 downloads. If you've done your job and made a good game, you will quickly amass a huge following which can be monetized on the back end via micro purchases, level add-ons and game sequels.