2024. Well. That Was Something.

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 Kinetic Energy Entertainment and as members of the people of Earth, this collective holding of breath was felt by Dario Di Zanni 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”.

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

2024 was the year of transition?

Tran?si?tion:? tran?ziSH(?)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), but that the process to get to that change is messy. And as we wade through that mess, thinking reshuffles and relevant lessons from the past can get left in the muck. And as this was a year of prep for a company fundraise in 2025 we wanted to be as observant as possible to 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 “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.

Please note that the version below is truncated for LinkedIn. To read the full spread with additional links, sources and other goodies, head to the mothership: Kinetic Energy Entertainment.

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 KCRW’s The Business 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.

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 were made during SXSW 2024 panel "Videogames as IP". One of those conspirators, Simon Pulman , has some excellent year end posts with a focus on legal that everyone should read).?
• 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.

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.

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? Puck’s The Town podcast with Matt Belloni has an interview with Michael O’Leary, CEO of the National Assoc. Of Theatre Owners - NATO).

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 (see article by Emma Keates for The AV Club ) has aided in buoying the "pop" in total box office revenue. We know that inflation is going to do what it does. 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? This is not about shareholder value, this is about rebuilding a healthy entertainment 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?
• 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??

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 2 xmas 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 (created by Zach Mortensen) 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.

As per The National Park Service, bison will turn into a snow storm rather than drift. Despite claims of them instinctually knowing to do this, their head size, fur and metabolism enable them to withstand severe weather conditions. Regardless if true or not, it does make for a great photo and metaphor for #keepitmoving.