Groundhog Decade

Distribution, Miscellaneous | 01. Aug, 2011 by | 6 Comments

Hollywood is about to repeat the catastrophic mistakes of the music industry.
By Bill Wyman

What happened to the music industry over the last 10 years or so was a lot like the plot of The Hangover. Bad judgment and self-indulgence producing chaos, pain, blinding sun, dim but lacerating memories … and you wake up to find there’s a tiger in your hotel suite. It’s been more than 10 years since compression technologies and ever-faster online speeds started making it easy to move media around online. That’s the development that put the plot in motion. For music fans, what was first the slow agony—and then the thrill—of emailing a song to a friend evolved with ever-increasing speed into a world in which we can easily swap discographies of 10, 20, even 50 or 100 albums.

What that meant for the music industry was painful: Its sales are about 40 percent of what they were 12 years ago, and there are even worse metrics than that. (There’s a chart on this blog post, for example, which demonstrates that people are buying about one-fourth as many CDs as they were in the 1990s.)

Throughout, chaos reigned: The fall of the CD. The rise and fall of the DVD; the rise and fall of Napster. The rise and rise and rise of the file-sharing networks and cyberlocker sites. Thousands of legal attacks by the record industry on file-sharers; the coming of Netflix; the opaque future of streaming services and cloud storage. Indeed, Steve Jobs recently announced Apple’s foray into cloud storage. The idea is that we’ll be able to match our iTunes libraries—music for now, but eventually video as well—to online repositories, where they will be accessible to all of our computers, TVs, phones, and pads. (I’m not buying it, but that’s a subject for another time.)

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  • http://twitter.com/ckukahiko Chad Kukahiko

    whoa. can’t wait to read this whole article. how’d you all find it before me? =P

  • http://www.facebook.com/profile.php?id=829308839 John Sandel

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    Here
    you go:

    Paragraphs
    1-7 are your usual magazine-style intro, meant to get you to read the piece
    (worked for me). Then Wyman pulls a Jefferson: launches into a laundry-list of
    complaints about the current content-delivery techs. This is germane to his
    piece, but it whines like the Declaration of Independence: “King George won’t
    let us do X; he won’t let us do Y or Z …”

    Wyman
    fills 80% of his word-count pissing about DVDs, cable, DVRs & VOD are
    passé. His conclusion: because of the movie industry’s fear of piracy, illegal
    files are—NEWSFLASH—easier to get & use. So you can skip paragraphs 8
    through 29.

    Finally,
    in paragraph 30, he looks forward: “2010s are going to be the decade of video”
    … the studios “need to accept what the music industry never did—that the
    overall value of its [sic] product, which had been propped up by its monopoly
    control of it, has been considerably and permanently lessened.”Okay, that’s
    true; one reason monoplies are legal under US trade law is that they tend to be
    self-defeating: they eat everything in sight an then the mammals sneak in.

    Why,
    according to Wyman, is it so hard for the industry to change is model? He uses
    paragraph 31 to cite only “the power of the parties involved, the complexity of
    their interrelationships,” including (way down the list) “writers, directors,
    and their unions … and others I’m forgetting. Try getting that crew of misfits
    and miscreants to agree on anything.” Oh, those ragtag kids and their billions!
    I wish Wyman would just call it “greed” and move on to some discussion of
    different revenue models.

    The
    elephant hiding its warty ass behind his verbiage is the antique distibution
    arm of the industry. Wyman tiptoes up to this in paragraph 32 when he FINALLY
    mentions exhibitors. But all he has on this is: “[The] home-viewing experience
    … is I think an underappreciated iceberg ahead.” Then he complains some more
    (paragraph 33) about how hard it is to collect illegal downloads.

    His
    grand conclusion—what took him 3,215 words to discover— is that “If the studios
    were smart they’d … create a … one-stop shop for TV and movies, find a price
    point they can live with and … make the thing as easy to use and ubiquitous as
    possible.”

    There. 405 words. I saved you 87% of the words Wyman used.
    Now you have spares!

    • http://twitter.com/ckukahiko Chad Kukahiko

      nice! thanks for the summary!

      • http://www.facebook.com/profile.php?id=829308839 John Sandel

        Years
        ago a rich friend offered me money to make movies. He had millions; he
        gave me thousands (a fair deal). It was a test of my work habits; he let
        me go through some development shenanigans & after a few months, he
        wanted a business plan.

        So I went out & bought a book on how to write business plans … I
        researched my market, crafted a mission statement, elucidated my
        strategies, identified my tactics, did my whoozits & whatsits. I
        learned to run Excel formulæ, did my 3- and 5-years projections & blahbeddy blah. It was actually pretty fun.

        I came up with a company name, added some prose bloviations, printed up a
        few copies of the plan and made a presentation to the rich friend. He
        promised to read it.

        A week later, he called & said “Well, it’s a pretty good plan. Your
        numbers are all in place. You have some good ideas for movies, too.”

        But he didn’t give me any more money, because he learned from my plan
        what I learned: the business model for filmmakers was refined a hundred
        years ago. I didn’t need to plot any great innovation—I just needed to
        make some movies. (That bored him; it bores all entrepreneurs; they just
        want to do startups & then see if they fail.) What I lacked was not capital, but connections—which he couldn’t provide; he made his money in the dot-com boom of the 90s.

        I learned that:

        - Hollywood has been sleeping with exhibitors since the beginning
        - the feds have twice had to break up the affair with antitrust litigation
        - the only truly disruptive forces in the history of moviemaking have been
        distribution technologies: TV, home video & now the web

        The means of production fell into the hands of the workers. Now the
        other shoe (distribution) is falling—but so slowly! The effort is ad
        hoc; conceptually (if not technically or legally) it follows the
        open-source model. The studios’ corporate overseers will be major
        players for decades, at least … but wee li’l mammals will scurry between
        the great lizards’ toes & find their meals any which-way.

        That’s why there’ll be “a gazillion different individual
        models” for distribution. Business being a Darwinian process, periodic
        market shakeouts will coalesce & refine the models. Come back in 20
        years & you may find fewer players than you might hope. But they’ll
        include (if not be led by) a contingent of healthy, innovative
        filmmakers—what we, in our turn-of-the-century lingo, would call “independents.”

        If we do this right, though—if the web delivers on the egalitarian
        promise it seems to hold—the term “independent” will lose its power and,
        finally, possibly, its meaning. There won’t be monolithic corporations
        from which to cleave, or their power will be so reduced as to not
        matter. That’s why articles like Wyman’s are so unhelpful: what he’s
        describing are merely the death throes of a business model, whereas what
        we want, as filmmakers—as artists—is is to exercise the same freedom
        and have the same access to our audience as the older arts enjoy.

        • http://twitter.com/ckukahiko Chad Kukahiko

          the days where monolithic corporations ruled the world in the entertainment space are already over as far as i can tell … or at least very very near. but they’re never going to vanish. TV will never go away and the top of that hit scale will always thrive, but as that Chris Anderson Long Tail thickens up, the niches will get their sea legs – just like they have in the music world. Jonathan Coulton is doing quite well for himself and every day there are more and more self-sufficient musicians and bands out there – they’re not buying houses in the hills, but they’re surviving – doing what they love.

          however, i don’t think the niches will ever truly threaten the big guys – at least not individually. as a group or altogether, sure but it is not the nature of niches to bully big guys around nor should it be. we’re the little guys … and there’s nothing wrong with that as far as i’m concerned. making a living doing what i love sounds like an excellent life to me.

          • http://www.facebook.com/profile.php?id=829308839 John Sandel

            “they’re not buying houses in the hills, but they’re surviving – doing what they love”—definitely. It’s all about expectations & outcomes. Success is not a destination; it’s a verb.

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