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Comment by qq66 | Hacker News Reader

The problem with companies like Hulu, Netflix, Pandora, etc. is that they are wholly dependent on media companies granting them licenses to content, and have to accept the terms offered. These content owners basically will extract higher and higher taxes for this content, just enough to keep companies like Hulu in business but not enough for them to become runaway successes.

Netflix has been the most successful in getting some power in this dynamic (reducing the demand for individual shows by not carrying current seasons, producing their own content, etc), but all of these aggregation businesses are vulnerable to coordinated action by a small handful of content owners.

It's like building your business on the Twitter API -- with the caveat that there are 4-6 companies that matter (but they can act in concert).

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Content companies want to commodify the intermediaries; the intermediaries want to commodify content. It will be interesting to see who eventually gains the upper hand.

It's getting cheaper and cheaper to build a Netflix but content creation isn't getting significantly cheaper.

Well actually content creation is getting significantly cheaper. Case in point have seen what artist able to do with small budgets and a Canon DSLR Hybrids ? http://vimeo.com/groups/beyondthestill*
Instead of looking for new talent, they continue to over pay veterans who continue to have flops after flops, of the top my head I can think of Jennifer Anistons and Nicolas Cage and a quick google search: http://www.radaronline.com/exclusives/2010/12/rupert-everett... http://www.dailymail.co.uk/tvshowbiz/article-1165345/King-mo...
So the problem is the big studios and the major record labels are content with the status quo have access to major promotional channels. Promotion is still very expensive. Even on Youtube where some indie content creators can thrive, the big players still dominate.

Amateur content is now cheap to produce. The stuff that the unwashed masses really want (Avatar, Toy Story etc) is more expensive than ever. Promotion will remain expensive as long as the potential payoff is high.

The tech/work behind Avatar is far more expensive then Toy Story. There are plenty of poor quality animation that pop up in films by major studios. And there are a number of quality cg animation by students for example http://vimeo.com/1470875 Avatar is really an edge case, majority of the shows on Hulu don't cost that much. For example: http://philipbloom.net/2010/04/10/house-season-finale-shot-e...
The finale of a popular show was shot using the Canon 5Dmkii. A camera many amateurs are using to capture their content. There are some stories that are best told with the big tech and budget of major studios, but like I mentioned, in most cases, the cost of promotion and over paying for hyped talent is keeping everything they do very expensive.

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