In this episode, Angela Johnson interviews Professor Rahul Telang, author of the book "Streaming, Sharing, Stealing: Big Data and the Future of Entertainment." They discuss the role of streaming in the entertainment and arts industries.

Referenced resources

• "Streaming, Sharing, Stealing: Big Data and the Future of Entertainment" by Michael D. Smith and Rahul Telang

Transcript

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Angela: Hello, AMT Lab listeners, and welcome to an interview episode brought to you by the Arts Management and Technology Lab. My name is Angela Johnson, the Podcast Producer. In this episode, I sit down with Professor Rahul Telang, author of the book "Streaming, Sharing, Stealing: Big Data and the Future of Entertainment." We talk about the role of streaming and the changing technological landscape of entertainment and the arts. Hope you enjoy.  

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Alright, thank you so much for joining us. Would you like to introduce yourself?  

Rahul: Yeah, sure. My name is Rahul Telang. I'm a faculty in the Heinz School. I am in the faculty for almost 20 years. And a lot of work I do is at the intersection of technology and entertainment industry, especially movie and music industry. So that's really my area of work and also area of teaching. 

Angela: Okay. So you wrote a book in 2016 with Michael D. Smith called “Streaming, Sharing, Stealing,” and it's about, like, big data and how new technologies are changing creative industries. I read it, like, this week. It's good. And I was wondering if you want to talk about that a little bit, because that's really a lot of stuff that we've been talking about on the podcast.  

Rahul: Yeah, I mean, one of the most interesting things, and I didn't realize that whatever the book says actually is coming true. The whole purpose of the book was how the data and analytics is reshaping the whole music and the movie industry. So at that time, Netflix had just had just started coming in and started getting popular, and one of the things that we talk about in the book is that Netflix was able to be so successful because it was able to get the data from the users because it had one-on-one programming. So, whatever I did, Netflix could capture. And that allowed them to be able to personalize the offering to me. And it also allowed them to actually figure out what people like, so what kind of genre people like, what kind of show they should make, what kind of show they should promote to individuals. So, this whole big data actually started playing a much bigger role in the entertainment industry. Which is—until that point, the entertainment industry had been basically driven by creative people and not necessarily by marketing, personalization. So, it typically used to be in the theater, everybody go and watch it, then it goes on DVD, everybody go and watch it. It goes on TV, everybody go and watch it. So, basically, there was very little so-called personalization. So it was like a cookie cutter product: you take it or leave it. And, you know, typically, that did really well. I mean, studios had done so well, at some level. And Netflix basically came in with a different perspective. And the book essentially talks about how Netflix was able to come in, be successful. And it sort of basically mentions about the future: that, where are we going? And, essentially, one of the arguments was that this big data that Netflix was able to, you know, collect, I think that basically is paving the way for future. So in future, we expect the same thing in some way: that the studios will be able to harness the data and be able to create the product, maybe some pricing too, in such a way to fit our needs. And that's really the main takeaway point from the book. Of course, we also talk about piracy, we talk about streaming, so you know, sharing—all kinds of things, but the basic gist remains the same. That is, the role of data in the creative industry is having a big impact. A revolutionary impact. 

Angela: Definitely. I think one of the most surprising things from the book that I learned was about how, just how everything is getting more specific and more, like, geared towards us personally. So then you can have your really random, I don't know, hip hop violinist. And that's the thing that you're really into. And that can exist in a way that it couldn't before just because it had to reach a broader audience.  

Rahul: Yeah, if you think about it broadly, when the studios, basically, they made a movie and presented it to the audience. The studios actually did not sell directly to the audience. It went through the theaters, went through the cable companies, went to DVD players. So they were kind of one step removed. So they've never been able to connect with the audience—not the way we think about it—but they could not connect with the audience to be able to figure out what people like and what they don't like. So they had broad idea, but they had no idea at the individual, specific level. And that was the major change that Netflix was able to come and introduce. And, obviously, as you mentioned, that, obviously, it had a major impact.  

Angela: Yeah, definitely. I was also wondering—so the book was in 2016—and do you think that things have changed a lot in the four or five years since then? Like, have things just gotten worse, or better, maybe?  

Rahul: I mean, I wouldn't say it's worse or better. I just think that the whole issue of streaming has actually accelerated. I mean, if you look at now, if you look at Disney, if you look at NBC Universal, if you look at, you know, HBO Max. All of these are essentially carving out a streaming niche for themselves. They fully well realize that they cannot rely on the old strategy. To be able to compete in the market, they have to have their own streaming platform. And, you know, in the last four months, the number of streaming players who have entered the market is basically exponential. So what I think is going to happen is, over the next two, three years, these streaming companies are going to compete heavily, and eventually there's going to be some consolidation. There's going to be a winner. And I think that, going forward, our way of consuming movies, TV, or even music is going to be like streaming. So it's going to be some combination of streaming, theaters...but the streaming part is here to stay. You know, I think the TV industry, essentially, is sort of, that we know, is kind of dead. I'm working on a paper trying to think about the cable company—the how many people are kind of giving up on cable And that number is kind of astonishing. So, again, five years down the line, I mean, that thing is going to become a thing of the past. It's going to become these streaming players who are going to become the major players in this space going forward. So, again, when I said that our book never actually predicted this pandemic, but this pandemic actually has accelerated the growth of the streaming player in a very huge way. And I think it's going to have a major impact on how the movies are made, how they're marketed, and, you know, how the whole value chain is going to be reorganized. Like, who has power? How will the actors fit in? How will the directors fit in? How will the distributor fit in? I think the whole thing is going to go through a major shake up going forward.  

Angela: Yeah, I definitely agree. I don't know anybody, really, who still watches TV, like network television. 

Rahul: If you look at the number, that number is still pretty large.  

Angela: Another thing that I found interesting in the book was just how, like, at the beginning of, like, the music and television and movie industries—like, from the beginning, there have been these, like, really large companies that basically have had all the power. And I feel like, now, it's different companies, because now it's like streaming companies that have all the power, but it's still just like a few players, basically, in the game. And I'm wondering, like, even as we're getting more niche content and more independent creators, is there a future where it's not still just, like, three or four companies that have all this monopolistic power? 

Rahul: I mean, the whole economics of this market works that, you know, a few companies have to become the dominant players. Because the movie budget is so large, to be able to sign up the director, the actors to make the movie up to the mark, that requires some serious investment. And that automatically means that too many players cannot come in and pop in. I mean, they can all make small movies. So they can make small, you know, television content. I think that will happen. But when it comes to the big one, the one that kind of catches our attention...I mean, that is going to be always dominated by three, four major players. So, as you say, now the shape will change: the studios, which used to be the big players, some form of that will basically merge with the streaming player and they might become big players. You know, Netflix, it didn't even know, we didn't even know like 10 years ago. It was basically a niche company and now it has become a major player. So, again, going forward, it won't be surprising that they become the dominant player going forward, making movies, TV, serials, all the content. But, again, as I mentioned, that whole the economics of this market work, that it has to be consolidation. It has to be three or four major players who are going to play a major role. 

Angela: Yeah, I guess mostly I just worry if, like, Disney makes all the movies, then the only movies out there—or the only major blockbuster movies—are Disney. 

Rahul: If you look at HBO Max, if you look at NBC Universal, if you look at Netflix—they're all big players. They have the money. I think, you know, again, the whole thing is kind of really, you know, kind of uncertain. The whole thing is kind of shaking out. How will the movie industry merge? How are the big movies going to be made when the theatrical revenues kind of go down? But again, you never know. I mean, the whole thing is shaking out: how the movies are going to be made, marketed, what the budget is going to be? I think that we cannot make a prediction right now.  

Angela: That's fair. I feel this is all still really new technology. Even as we're moving so rapidly away from what was the norm for so long, it's still really new. So, I think one thing that is really important is just embracing these new technologies. Like, questioning them and, like, understanding them, but also embracing them, and I feel like a lot of arts organizations are not famous for that, outside of the movie and television industry, and I feel like that's one of the recent, like, you know, museums and theater and everything, and they're all trying, especially now during Covid, and you have to use technology or you're not going to get your content out there. But, like, do you have any advice for people in the arts and nonprofit and, like, creative industries that are trying to stay ahead or keep up with these new “big data” ideas? 

Rahul: Yeah, I mean, it has become less strategic and more like survival. So, if you think of Netflix, it was more, like, strategic to be able to get the data, use the data to be able to create the content. I think, in this world with the Covid, it has become more like a survival. So the goal is less about collecting data to be able to create the content that the people like. It's more about, "how do I get the content to the user and be able to make up for the revenue that I'm losing?" So, for example, again, you might know it, might not know it: if you look at the concert. If you look at the concert, that has really had a major impact, because people can go on these concerts and concerts are the major way for the artists to make money. So, nowadays, a whole market has shifted towards what is called is a live stream, where they have a concert, but the concert is online, and you actually pay for it. So, again, my feeling is that that kind of model is probably going to go forward in some shape or form. So I can imagine, going forward, there will be some live stream. So, somebody might have a concert, maybe in LA, and there might be a live stream that somebody in Korea, somebody in South Africa, might be able to enjoy the concert from their home using the live stream. So, I think that, going forward, some sort of business model is going to emerge, where whatever we know currently will kind of coexist or merge with what is known as the traditional way of doing business. So whether it's museums, whether it's concerts, whether it's any event, I think, you know, some sort of hybrid model. You know, it all depends on how the economics are going to work, but I feel like, right now, there's no hybrid. There is just a way to survive. There's just a way to get that technology in front of people to be able to fulfill the need, and I'm sure that the uptake level is really small. So, you know, if you're making, like, you know, a million dollars, now you're lucky to make 200–300,000. But, that provides a window into where the future might hold, and I am pretty sure that, especially with the arts, that technologies come in in such a way that it's going to merge with the traditional way of the way the market presents, you know, the products and services to the user. I think it's going to merge with this internet in some way that we are going to see a much more robust market going forward. So, in particular, for example, I want to go to a concert but the concert is maybe, say, in Kansas City. I cannot go. I cannot attend it. But if you have a live stream, then maybe I'm able to do that. So the reach of the concert, the reach of the artist, might go up actually significantly more than what is currently happening. But, again, the economics have to play out. All the pandemic has done that it has provided some alternatives to individuals, and whether those alternatives actually become economically sensible remains to be seen, but I think that's what is going to happen.

Angela: Yeah, I have said this before on our podcast: I think one of the really interesting things about the pandemic—obviously, it's not good—but it has opened up a lot of opportunities, and, like, as people are adapting, suddenly, you can see a concert that's nowhere near you. Or you can see a live stream of a show that you didn't have access to before. I mean, “Hamilton” being the obvious example, but, like, really, there are so many different ways that people are adapting and I think the thing with the internet is that, like, accessibility and convenience are the things that are moving everything forward. And this is almost forcing, like, arts organizations to catch up with that, in a way, where, yeah, it's a matter of survival.  

Rahul: If you look at art, it's basically very in-person, so everybody has to be in person to be able to enjoy. Technology is very impersonal. Nobody has to be there; it's all remote. So what we are seeing is that in-person is kind of combining with the remote, and I feel like some happy medium is going to emerge. You know, it will depend on what, you know, what particular context it is in—whether it's a museum, whether it's a concert, whether it's something else, but I think some happy medium in some contexts will emerge and that is going to be what the future is going to look like. 

Angela: Definitely. Like, there's no replacing live theater, but if you can't be there, then there should be good alternatives.  

Rahul: Absolutely. I actually think that the way technology is playing a role in the art industry is going to be revolutionary. So this is the area that one should be there, actually. If you are a researcher, this is a really ripe area. If you are a participant, if you are artists, if you are a recording label, if you are a movie studio, I think there's going to be a major change. It's going to be great opportunities, it's going to be a great destruction, too. You know, the traditional players who have been really dominant for, say, the last 50 years, I think their business model has shifted in a tremendous way. So I feel like, as a society, as a researcher, as an artist, this area is going to be a major change—a majorly interesting area going forward. 

Angela: Yeah, I agree. I guess that's pretty much it, then. Thank you so much for joining us.  

Rahul: Alright. Thank you so much. 

Angela: Thanks for listening to the AMT Lab podcast. Don't forget to subscribe and to leave a comment. If you would like to learn more, go to amt-lab.org. That is A-M-T dash L-A-B .org. Or, you can email us at amtlabcmu@gmail.com. You can also follow us on Twitter at Tech in the Arts, or on Instagram, Facebook, or LinkedIn at Arts Management and Technology Lab. You can find the resources that we referenced today in the show notes. Thanks for listening. See you next time. 

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