Attention Hollywood:Generation Z Is Leaving the Building. (Here’s what will help them stay.)

If Hollywood has been nervous about Millennials, it’s petrified about Generation Z. 

For years, online platforms have been shifting the viewing habits of young people, steadily eroding market share from feature films.  As teens increasingly entertain each other on mobile platforms and apps, they’re simply losing interest in films. The most important demographic to Hollywood - 18-to-24-year-olds - is abandoning movies faster than any other group. 

Amidst these changes, film studios have had to work hard to stay relevant to the next generation. The smart Hollywood players are adapting to how young people are platform-agnostic in the way they consume content, recognizing that Gen Z is catching its entertainment less at theatres and more often on mobile, laptops, YouTube, and streaming platforms like Netflix. Just as the borders between platforms has faded, the definition of a Gen Z celebrity has also blurred, with young stars from TV, movies, and social media crossing back and forth amongst different content spaces. 

(Pictured: Lauren Orlando and Emily Skinner, stars of Next Level, have had considerable influence on the creation and marketing of the new Gen Z film.)

I’ve had a front row seat to this evolution while shepherding the new Gen Z dance film Next Level, an indie feature driven by teen celebrities from both social media and mainstream TV. Collectively, our cast brings more than 30 million enthusiastic followers to this film.  

The stars of Next Level were instrumental in how the project was conceptualized and created, down to helping write many of the film's 12 original songs. This hands-on approach has electrified the film’s built-in fanbase throughout its production, as our stars have kept their followers involved every step of the way. Since Next Level’s limited theatrical release a few weeks ago, our cast’s fans have taken ownership of marketing the film themselves, even creating and promoting their own customized trailers, photo edits, and animated shorts; hosting viewing parties; and other unique forms of involvement.   

Not too long ago, studios would have balked at the power we've given away when it comes to the production and marketing of Next Level. But our filmmaking team and forward-thinking studio partner, MarVista Entertainment, know that Gen Z is used to controlling the way they consume content. Hollywood traditionalists should take note: reinvigorating Gen Z's interest in movies means taking a fresh look at how studios create and market films for this audience.  

Lessons from the music industry 

Four years ago, it seemed astonishing that 73 percent of teens owned or had access to a smartphone. Today, that number has risen to 95 percent.  

Last year, a Pew Research Center study found that 85 percent of teenagers use YouTube, with a smaller number also using Snapchat and Facebook. A report by Trendera found that teens spend 34% of their video time on YouTube.  

A different survey by LendEDU found that almost all respondents (92%) had access to a Netflix account at home, with the Trendera report concluding that teens watch about twice as much Netflix as live TV. 

Across five social media platforms, one study found that teens watch an average of 68 videos per day.  

Another survey found that 45 percent of teens say that they’re online “on a near constant basis.” Think about that: nearly half of all teens are always online.  

Generation Z is doing just fine entertaining itself, and Hollywood knows it. So how is the film industry adapting to this shift?  

Unevenly. 

Some Hollywood innovators are looking for ways to evolve along with their young audiences. Others from the industry’s old guard are closing their eyes and hoping hard that the ground isn’t, in fact, shifting beneath their feet. The latter reaction is reminiscent of how the music business ignored, then fought, then finally figured out how to manage and profit from the transformational shift of music consumption to digital platforms like Spotify.  

(Pictured: Promotional art created by a ​Next Level ​fan for their own followers. Many of the stars’ fans have taken it upon themselves to put their own spin on marketing the film to their own networks, with full permission and access by MarVista Entertainment, the film’s studio distributor.)

With each passing year, many studios rely ever more heavily on expensive sequels, adaptations, or reboots. It’s a deliberate risk management strategy for Hollywood executives, who are jittery about "making an expensive product for tens of millions of people whom studios don’t know and will never meet,” as Derek Thompson wrote in The Atlantic. 

This is a chicken and egg dilemma. Some studios aren’t doing much to create and support a more authentic kind of storytelling process that would foster smaller, targeted projects for teens. For them, the path is to quadruple down on expensive tentpole movies with breathtaking marketing budgets just to get the attention of young audiences. The stakes get higher every year, with a shrinking selection of mainstream teen-oriented films that take any risks at all. 

Knights of the traditional studio kingdom have too much invested in their legacy system to reimagine the rules of engagement. But young people are fascinated by the spontaneous, no-budget media that their peers are creating on the fly, where transparency and interactivity drive the way that stories are told, consumed, and distributed. Social media and platforms like YouTube are commandeering Gen Z attention precisely because of their fluid, decentralized approach to entertainment, where the borders between viewer and star are porous.  

When any story can find an audience, as is the case online, why not follow your creative whim wherever it may lead? The result is an emporium of imagination, where there’s something for everyone. And some of those random “everyones” are becoming massive online powerhouses, with followings that can outnumber those of major mainstream celebrities. 

Hollywood is learning to adjust to this trend, where star-making is being ceded from the executives to the audience itself. Young people are grabbing control of the reins, kicking out the middleman, and becoming or anointing their own stars. Turns out that multi-million-dollar marketing budgets can’t purchase authenticity, nor can they compete with a viral democracy where young people are in charge. 

MarVista Entertainment released its young adult film “Back of the Net” this summer with an innovative distribution strategy geared towards Gen Z.

Empowering young audiences 

With Next Level, we’ve made a point of empowering the kind of fans and tastemakers that mainstream studios undervalue. For example, a few weeks ago at our buzzy Los Angeles premiere, 400 teen influencers attended and walked the red carpet. These are young people with the power to create priceless word-of-mouth marketing for new films. But only a select few of these influencers would ever score an invitation to a film premiere like The Lion King, where only A-level stars are coveted. 

(Pictured: the stars of Next Level at the Los Angeles premiere, Sept. 6th, 2019.)

As Next Level’s press tour has traveled to cities like Toronto and New York, where we’ve organized fan parties, we’ve been blown away by the magnitude of audience interest. “I’m obsessed with this movie!” and “My favorite movie ever!” are just some of the fawning comments we’ve overheard fans telling each other – and presumably then repeating to their huge social networks. 

Why the “obsession”? Because Next Level offers young audiences the chance to see stars they helped create in an accessible media project where fans feel engaged with peers, not marketed to by a system.  

Sure, Next Level doesn’t have the same production polish as a mega-budget studio film, but Gen Z is accustomed to imperfect entertainment; it’s what they create for each other every day. In fact, we think that Next Level’s tiny budget forced us to be resourceful in ways that helped us resonate more with fans – like writing the script in two weeks, shooting the film in 13 days, writing and recording a complete soundtrack with 12 original songs sung by our talent influencers, and leaning on our built-in fanbase, not a traditional studio marketing machine, to grow awareness. In the end, our fans have supported and championed us because we seem real to them, and our underdog approach has helped the film connect even more strongly with a target fanbase that feels a vested interest in our success. 

When it comes to Gen Z, Hollywood has a choice: react to a looming threat or embrace a burgeoning opportunity. We can stubbornly insist on bending this digital generation to our will...and watch ever more young people abandon movies altogether. Or we can listen, learn, and adapt to the interests of Gen Z with more tailored filmmaking approaches that organically engage young audiences at a fraction of the typical studio cost.  

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Kristi Kaylor is the CEO of The Loft Entertainment, L.A.’s leading (yes, we’re biased) marketing and content development agency that helps brands leverage the power of celebrities and influencers.