From Netflix To Blockchain, 12 Storylines That Will Dominate The International Film Biz In 2019

Will Netflix be welcomed back to Cannes (will the fest be able to resist The Irishman?) and Venice this year, or will the European biz make a stand? A year after Cannes said it wouldn't take the service's films in competition, the streamer this year declined the festival's out-of-competition invite. To date, Berlin has not been a staging post for Netflix movies, and that doesn't look like it's changing anytime soon. France’s windowing laws are strict and the country is keen to protect the theatrical experience. Venice’s artistic director Alberto Barbera subsequently embraced the streaming giant, taking six high-profile films, but that led to major backlash from the Italian industry. Netflix cast a shadow over the world's leading film festival again in 2018.
Some see Southeast Asia as a particularly fertile growth prospect, and U.S. Can a new international darling emerge for Hollywood? Saudi Arabia might not be the new frontier some in the film world were hoping it could be (not now at least). firms continue to kick the tires on London management and agency businesses.
Hola, Netflix! 2.
Theatrical receipts dropped this year in Spain and Italy and nose-dived in Germany, so Netflix's expansion will be watched with a certain level of anxiety. The company is launching a major production hub in Spain (Netflix's Spanish-language audience is its second-largest; La Casa De Papel (Money Heist) was a huge hit this year), and it is growing its production footprints in France, London (via some splashy senior hires) and India (earlier this year, CEO Reed Hastings said the "next 100 million [subscribers] for us is coming from India"). Local language productions are a major growth line for Netflix, a trend that will provide opportunity and challenges for national industries. Netflix's international penetration continues apace: the streaming giant is adding five new overseas subs for every one in the U.S. Japan, India, Germany and Brazil are among the markets that could see significant growth in 2019.
As theaters add bars, food offerings and comfort tiers, the market for event-style releases is growing, with ballet, stage plays, musicals and sporting events all on the menu. Who will be the next entrants to this lucrative space? The global theatrical successes of docs such as Burn the Stage: The Movie, Coldplay: A Head Full of Dreams and  Peter Jackson's They Shall Not Grow Old continue to prove the value of event cinema.
Kim Yutani is in place for her first Sundance as director of programming following the departure of longtime programmer Trevor Groth last year. Locarno’s Carlo Chatrian and Mariette Rissenbeek will assume the reins in Berlin, with Lili Hinstin taking over in Locarno. Toronto in 2018 added Joana Vicente as co-head following the departure of longtime CEO Piers Handling, and has also added more women programmers to its team. Dieter Kosslick, Berlin’s artistic director since 2001, will oversee his final Berlinale. Meanwhile, Tricia Tuttle has taken over from Clare Stewart at the London Film Festival. The coming year will see major changes afoot at leading festivals the world over. The winds of change are blowing through the festival landscape and many are keen to see what direction these vitally important events go with new blood at the helm.
Cultural shifts are shaking up industry norms and generating welcome opportunities for new voices. Progress has been slow, but there are green shoots of change in some areas. At the same time, the question of who should or shouldn’t be able to tell certain stories is becoming an increasingly complex and important one, creatively, financially and reputationally. The debate has been amplified by Belgian trans drama Girl, a film about a trans experience, told by a cis gender man and star. Thankfully, many in the film industry now acknowledge the need for more gender, racial and social diversity on screen and in the business. There is a new and growing frontier of concern in this necessary battleground: Who should be able to tell which stories? The film has found critical acclaim but also a backlash from trans critics.
10. Fox-Disney merger
What to watch for in the overseas film industry in 2019:
UK & France in flux 8.
China blues 5.
Sadly, the market for foreign-language films in cinemas is not moving in the same direction. and international firms are increasingly on the lookout for remake rights to local successes that can be updated and tweaked to suit different markets. Audiences are increasingly happy to watch good local-language shows on TV or online. Companies such as CJ Entertainment, Ivanhoe and Filmsharks are among those plowing successful furrows in this space. Just look at the global success of series like Gomorrah, Babylon Berlin and Fauda. U.S. However, the market for remakes of local-language film hits is booming.
China has become a key buyer at film markets, and the territory can still be a major box office boon for studios who recoup 25% from turnstiles. Although the Pony Ma-led behemoth was a Tang backer and experienced losses spurred on by a Chinese government crackdown on online gaming, it took a sizable minority stake in David Ellison’s Skydance, teamed with JJ Abrams to launch Bad Robot Games, and made strategic investments in Sony’s smash Venom as well as Paramount’s Bumblebee and the upcoming Top Gun sequel. However, after 2017 saw the precipitous fall of Wanda and a government harness on capital flight, its position as a go-to investor hit the skids and some lofty ambitions fell flat in 2018 (see the implosion of Tang Media Partners’ Global Road, Wanda's exit from Beverly Hills real estate, etc.). Ever since China started its box office boom in 2012, it's been a shape-shifter whose rapid economic growth and political détente presented Hollywood and international markets with significant economic openings, but also has been a confounding bedfellow. Elsewhere, Warner Bros’ U.S.-China co-production The Meg was a surprise summer breakout that served as a lesson in wide-appeal partnerships. A sequel is in early development. Still, we were told to keep an eye on Tencent in 2018 and that was wise advice.
The year 2018 saw significant independent film companies go out of business (Global Road), falter (EuropaCorp) or reconfigure and reroute (many smaller international firms have had to do this). In this environment, newcomers such as Solstice will be keenly watched, as will whatever labels former The Weinstein Company exec David Glasser and foreign sales supremo Patrick Wachsberger cook up. One of the most common refrains I hear from independent sales and distribution companies is how tough it is just to survive these days. As Netflix soars and studios, theaters and audiences continue to gravitate toward sequels, prequels and spinoffs, independent cinema becomes more treacherous territory.
'Glocal' remains an important destination 6.
Whose story is it, anyway? 9.
(Nancy Tartaglione contributed to China Blues)
12. Blockchain, block party?
UK box office and admissions are surging and the country is readying a handful of new shooting facilities to help drive its inward investment boom. Luc Besson's once vaunted EuropaCorp is on its knees, Wild Bunch has needed to refinance, Pathé found itself the subject of an embarrassing and costly online sting, while Vivendi-owned StudioCanal continues to rejig its executive ranks and focus. France, long considered Europe's biggest theatrical market, is experiencing its own challenges. It's hard for local indies to thrive in such a market and a number have bitten the dust. Two major European powers are in flux. Six U.S. But there are also major challenges looming such as the potential impact of Brexit and increasing polarization in the market. On one level, the picture is promising. studios accounted for more than 85% box office market share in 2018; not one movie from an indie distributor cracked the top 25. With industry totems shaken, civil unrest led to the temporary closure of some of France's cinemas, and the country's strict media chronology laws mean it is one of the few global holdouts against Netflix's day-and-date model, something that could be seen as a positive or a negative.
The shape of things to come remains unclear. These studios boast sizable and successful international teams, and jobs may still be in the balance. Rivals will be looking on in interest at release calendars, potential departures and how the new mega-studio will prioritize.
In recent weeks I’ve spoken to multiple international firms looking to launch blockchain-based services for the industry and a number of blockchain-based content platforms are due to launch in 2019. But will they take off in a meaningful way?” /> Blockchain continues to be a watchword in Hollywood and beyond. The desire for transparency is growing in step with the secrecy of streaming platforms (Netflix in particular), and companies are experimenting with new accountancy models in a bid to shore up their assets and clients. Even films are being sold at markets using blockchain.
Will Euro festivals Netflix and chill? 3.
Staying alive 1.
Instead, we are seeing growing European Union pushback against online titans (see Facebook's recent grilling in the UK) at a political and legislative level due to concerns over perceived tax avoidance, cultural monopolization and illicit data sharing. Disney and AT&T are both due to launch major streaming services in 2019, while Apple will surely launch some of the buzzed-about shows it has been working on. Apple's launch is set to be a global rollout, but the international launch dates for Disney's and AT&T's services remain less clear. Outside of China, few international markets have developed their own major streaming services. That push and pull looks set to ramp up next year.
Streaming wars: rollout and pushback 4.
7. Festivals shake-up
Either way, talks between the USTR and China on a new film agreement, which the studios have long hoped would increase revenue splits, remain at a stalemate following President Donald Trump’s trade tirade with the PROC, and there is no indication these negotiations are gearing up any time soon. In the wake of that scandal, regulators are keeping a close eye on film companies, and there is concern the fear of audits will lead to a production slowdown, meaning local product could dry up significantly as early as 2019. While the current quota of 34 is oft-cited as a limit, China can increase it at will. It has already padded the end of 2018 to ensure overall year-on-year growth, but welcoming too many studio titles could mean the Middle Kingdom market share dips below 50% — and authorities are loath to see that happen. As for what’s ahead, China’s crackdown on tax evasion within the entertainment business saw one of its biggest stars — Fan Bingbing – disappear from public view only to resurface months later with a mea culpa and a hefty fine. If that comes to pass, the question remains: Does China turn to Hollywood and increase the number of quota movies it accepts?
11. Eventize me

YouTube CEO Susan Wojcicki Warns Against “Unintended Consequences” Of EU’s Article 13

YouTube CEO Susan Wojcicki is once again raising concerns about the European Union's proposed update to copyright law, warning it would have profound unintended consequences.
"EU residents are at risk of being cut off from videos that, in just the last month, they viewed more than 90 billion times," Wojcicki writes.” />
But uncertainty about whether the YouTube has identified all the rights holders might lead YouTube to block this video, simply to avoid liability, Wojcicki wrote. The video contains multiple copyrights, and YouTube has a number of licensing agreements in place to pay for rights to the video views. Take Luis Fonsi's hit song Despacito, whose music video set a worldwide record with 5.6 billion views.
Otherwise, the toll of Article 13 is more than financial. She urges policymakers to the entertainment industry to find a solution to copyright infringement that would allow the creative economy to thrive.
That's on top of the $899 million in licensing rights paid to content owners across the EU last year, and $1.7 billion in shared ad revenue. Wojcicki argues that YouTube has acted responsibly, taking steps to address copyright infringement through technologies like Content ID, and paying out $2.8 billion for third-party use of copyrighted content.
She argues that the European Parliament's approach — which places responsibility on YouTube, Facebook, Twitter and other websites to ensure copyrighted material isn’t illegally shared on their platforms — is "unrealistic." This is the second time in two months that Wojcicki has written about Article 13, which would make online platforms liable for copyright infringement.
"Multiply that risk with the scale of YouTube, where more than 400 hours of video are uploaded every minute, and the potential liabilities could be so large that no company could take on such a financial risk," Wojcicki writes.

Alphabet Earnings Beat Street, But Stock Sinks On Revenue Miss — Update

Investors likely be watching to see if that translates into fewer device-makers installing Google's chrome and search apps. Google is appealing the decision.
Pichai has defended the controversial decision in an appearance this month at the Wired 25 Summit, saying Google would open up more information to Chinese citizens. He said the decision weighed heavily on the company, as it balanced providing access to information with freedom of expression.
Google parent Alphabet beat Wall Street's earnings expectations in its third quarter, but fell short on revenue. That miss caused the company's stock to drop more than 5% in after-hours trading.
And the effects of the new licensing policy would be felt as consumers replace their older devices. Pichai told investors that Google is working to make the transition as easy as possible for both device-makers and users.
This quarter's earnings also will reflect Google's change in its licensing policies in Europe. Up until now, Google offered its software free — though that ran afoul of European Union regulators, who hit the company with a $5 billion fine for anticompetitive behavior. The company now charges a license fee to phone manufacturers to pre-install Gmail, YouTube, Google Maps and Chrome on their devices. Its Android operating system powers more than 80% of the world's smartphones.
"We’re focused on doing the right thing there."” /> "Our products are very popular with users across platforms," Pichai said.
"That's where we are today." "We are constantly looking for ways by which we can better serve Chinese uses," Pichai said.
"But we also follow the rule of law in every country," Pichai said.
That compares to per-share earnings of $9.57 a year earlier. Alphabet reported per-share earnings of $13.06, well above analysts’ consensus estimates of $10.40 per share.
Asked about the China market, Pichai said the world's most populous country is a place Google cares "deeply about," and has been investing in for years. It reintroduced its Translate mobile apps to China a couple of years ago, and Android phones are sold in the market (absent a majority of Google apps and services). But the executive avoided any mention of bringing search to the country's 1.4 billion people.
Revenue for the third quarter reached $33.7 billion, up 21% from a year ago, but s shy of Wall Street's forecasts of $34.05 billion.
UPDATED with details from the earnings call
This the first time Google Chief Executive Sundar Pichai has spoken with investors since reports that the company was developing a search engine, codenamed Dragonfly, that would comply with China's strict censorship laws.

Google Parent Alphabet Surpasses Second Quarter Earnings Expectations, Excluding Fine

"While many had feared that GDPR would be an Armageddon to upend the digital advertising industry, we instead wondered whether it would be more akin to the Y2K bug, which after all the hype, turned out to be much ado about nothing," wrote media analyst Michael Nathanson in a report published this morning. "After checking in on various players across the digital advertising ecosystem, from agencies managing spend to publishers monetizing content, we heard that business for the major platforms is as strong as ever."
And that the decision would upset the "careful balance" of Android, which the company allows phone makers to use for free but generates advertising revenue whenever consumers use its apps. In a blog post, Google CEO Sundar Pichai argued that Android has enabled consumer choice, not stifled it.
The company has indicated it's willing to absorb those fines as it appeals the ruling. Google has 90 days to end its conduct or face additional penalties.
Considered the most sweeping changes in data privacy in two decades, it requires digital advertising companies and publishers to obtain a consumer's explicit consent to use their personal data. Also during the quarter, the European Union's new privacy rules took effect.
The company reported per-share earnings of $11.75, excluding the impact of a $5.07 billion charge in connection with a European Commission fine. That compares with analysts' earnings estimates of $9.66 per share.
Taking into account the fine imposed by European regulators, second-quarter earnings dropped 9.3%.
Investors reacted positively to the earnings report, driving Alphabet's stock price up more than 4% in after-hours trading to $1,258.39.” />
European regulators said Google's parent company unfairly favored its own services by forcing phone makers to pre-install the Chrome browser and Google search app in a bundle with the app store, Play. It also violated competition rules by preventing phone makers from selling phones that run modified versions of the Android software.
Google parent Alphabet blasted past Wall Street's earnings estimates in its second quarter, sending the stock up in after-hours trading.
Wall Street forecast revenue of $25.6 billion. Revenue for the second quarter reached nearly $32.7 billion, up 26% from a year ago.
This is Alphabet's first earnings report since the European Commission slapped it with a record fine for abusing the dominance of its Android mobile operating system.
The regulations, aimed at the digital powerhouses Alphabet and Facebook, appears not to have made a dent.