3 Leadership Insights From The 2023 State of Virtual Production Report

When new technology suddenly foists itself upon an industry, leaders can choose from a limited set of approaches. I like to chart them like so:

The most common reaction, I'd dare say, is the middle one—in part because most people don't know much about new technologies as they're emerging. But when you're the leader, doing nothing is a choice itself.

We see this spectrum of leadership reactions on full display today with AI (with some leaders fully embracing it, some fighting it tooth and nail, and some saying "let's wait and see"). But I have my eye on another technology trend in my own industry (filmmaking, where I run a company called SHOWRUNNER).

This trend is called virtual production, where film studios—including those used for commercial advertising—use technology to bring virtual locations into their studios instead of sending crews out to real locations. This technology was especially appealing to filmmakers during the pandemic, which was also when it started becoming available to more of the industry. But the question now that pandemic restrictions have lightened, is how should the technology be embraced in the long term?

This year, my colleagues and I conducted a set of surveys of 800 professionals in the film industry to gauge their opinions on virtual production. The result was a 25-page report called The State of Virtual Production 2023. And the results reveal that the real choice leaders have in front of them has fewer sensible options than the chart above would lead one to believe.

Insight 1: Skeptics, Enthusiasts, and Holdouts Are Split... Unless They Have Experience With The New Technology

The first set of stats that jumps out of the State of Virtual Production report is about the industry's level of enthusiasm. Among the general population of filmmakers surveyed, about half are "excited" about the rise of this new technology, with 22.3% "skeptical."

But when we filter for just those professionals who have a year of experience using the new technology (about one-sixth of the survey population), the enthusiasm jumps, and the percentage of skeptics is cut in half.

The real kicker, though, is when we filter for those professionals with three or more years of experience with the new technology. At this point, the number of respondents who fit the criteria was in the low double digits—so we'll need more data for statistical significance—but rarely do you see a pie chart that looks like this:

When the more experience folks have with a new technology correlates with increased excitement about the technology, it's a pretty clear indicator that the tech is here to stay.

Insight 2: The Amount of Work Being Accomplished With This Technology Is Increasing

When asked, more than 75 percent of filmmakers said they anticipated doing at least some work using virtual production technology this year.

And more than three-quarters of studio owners and operators indicated that they would be doing more virtual production work this year than last. Fifty-seven percent said they anticipated doing "a lot more."

These charts perhaps explain the data on the survey respondents' excitement. If you anticipate getting more work because of a new technology, chances are you'll be excited. But this second set of charts indicates that the excitement is likely merited.

Insight 3: The Industry Is At The Beginning Of Its Learning Curve

The surveys asked a variety of questions about specific tools and techniques in virtual production, but two high-level stats jumped out at me, as they indicate what work needs to be done before every leader in the film industry might fully embrace the new tech.

Those stats are about just how unsure folks are about the quality and technical difficulty of virtual production.

This says to me that some filmmakers are going to still play the "wait and see" game until other, more bullish early adopters figure out these answers definitively.

It's important to remember: that disruptive innovation, as it was originally defined, begins with lower-end solutions that are more cost-effective—and which then increase in quality until there is no excuse to do things the old way. In the virtual production space, slightly fewer people think that the new technology is not cheaper. As the cost of computing goes down, virtual production will likely get cheaper.

But if one is placing bets on the virtual production technology, data indicates that the choice to fight against it is a losing one.

And for those leaders reading this who aren't in the film industry, that is the general lesson of this post:

The choice to adopt any new technology is really a choice between Embrace vs Ignore, not Embrace vs Fight.

In purely pragmatic terms (leaving moral dilemmas aside), the chart at the beginning of this post really only has good options on the left-hand side. That's because, if a new technology ultimately fails to improve things in your industry, spending effort fighting that technology is wasted effort.

It's better to have ignored the new tech, not over-invested or over-stressed about it, and continue focusing on your goals.

However, if the new technology ends up being useful, it's highly advantageous to have embraced it early on. The rising tide will create outsize rewards for your early outsize efforts.

This is why many sensible leaders choose the middle path when it comes to new technology. Waiting for others to place bets, and only diving in when things are proven, is a luxury that organizations with resources can make. But with truly disruptive technology, the catch-up effort will be expensive. (Just look at Kodak.)

The worst choice, it appears, is to deplete your resources by fighting the new technology, so when it becomes inevitable you don't have the time to adopt it. (Just look at Blockbuster.)