The death throes of an industry

I was literally 90% done with my Kill Hollywood RFS application when I saw Paul's tweet about this article and it stopped me dead in my tracks. Can anyone tell me that the Kill Hollywood is about making the world better and not simply about revenge?

I just finished ranting like a lunatic on twitter (sorry Paul), but I'm going to try and be nice here. Keep in mind that you are attacking my very livelihood. I've been working in the film industry for my entire adult life. I recently quit my job at Paramount, a key member of the "most unscrupulous of all the industrial conglomerates" and rampant exploiter of "artists they pretend to represent."

I'd like to offer my perspective as a humble filmmaker. Are there any other filmmakers here... any? I highly doubt it, the amount of ignorance I see tossed around on the subject of Kill Hollywood is simply staggering. When will I see ANY balanced perspective? One real solution? One real alternative? I can promise you that it won't happen unless Silicon Valley is willing to at least talk to a damn filmmaker about these issues. Here's my email: odnamra@gmail.com. Hell, here's my cellphone: 323-963-4433. You want to kill Hollywood, call me anytime.

First, everything the RIAA and MPAA has down is WRONG. As a filmmaker whose future is on the line, I can tell you that it affects me more that it affects you. It's my livelihood, but only your inconvenience.

Now, on to the article. The author makes two technical points: sharing is easy, and storage is abundant. My response is… well, duh!

Here's a hint, killing Hollywood is NOT an engineering problem. All of the engineering problems have been solved, the technology already exists! We can instantly share a movie to all devices anywhere. We can store every type of media ever created. Thanks. It isn't helping.

The author also offers one pseudo solution about marketplaces. I hate to tell you this, but distribution is already a marketplace! Sure it might be inefficient, sure it is mostly dominated by a few key (evil) players, but it DOES exist. Paranormal Activity was made by one solitary man. It then went through a series of marketplaces and eventually pulled in $200 million dollars. I know the guy who made the film, we met when I helped make Paranormal Activity 2 and 3 (he's a former videogame developer fyi), and I can tell you that his "blood, sweat, energy and tears" paid off pretty damn well, thank you very much! Question: Can this marketplace be improved? Answer: Yes, but… here's a snapshot of what this mythical marketplace would have to replace:

Total industry size $90 billion. New movies enter the market through theaters, generate $30 billion, then proceed through windows rental>cable>VOD>DVD/Blu-ray>streaming>etc. The order can sometimes be different, what's important is that there are relative amounts of money made at each stage. A distributor might pull in $7 per ticket PER PERSON at a theater (how many friends do you take to the movies with you?), $5 per DVD/Blu-ray, and only 50 cents on streaming. [source: http://paidcontent.org/article/419-forecast-online-demand-fo...] Can your solution replace three friends going to a movie theater and generating $21 for the distributor with three friends watching Netflix and generating 50 cents? Also consider the fact that you may see a movie in theaters, then buy it on dvd, then buy a blu-ray, and THEN watch it on Netflix over the span of several years. Also, marketing is a huge problem, the cost of marketing that movie worldwide is amortized across the entire lifecycle, and is heavily front-loaded. If you skip straight to digital streaming, for example, you skip out on huge amounts of advertising. Don't believe me? Name five indie movies that came out this year. Now name five Hollywood movies. Lastly, and this is important, what Jacques fails to realize is that the cost of making new movies REQUIRES all of these windows to exist. I personally don't want to live in a world where the only movies I can watch are kickstarted documentaries. You tell me we can crowdfund a $500 million dollar Avatar without using the hedge fund approach of a major studio, and I will change my mind.

P.S. income from ALL DIGITAL is currently ~$3 billion of the $90 billion pie, why would Hollywood be in a hurry to abandon scarcity?

Ignoring everything I've said, what happens when you get your wish? I can promise you that if cut out theaters so you can stream Ironman 4 (the documentary) to your retina display iPad while sipping lattes on Powell St., the whole system will come crashing down.

Clearly the MPAA and the RIAA are assholes that need to be destroyed, but consider what you destroy along with it. Some of the greatest living storytellers on this planet are filmmakers. Tell me what you are offering James Cameron, creator of the 1st and 2nd highest grossing films of all time (almost $5 billion dollars worth of customer validation) in exchange for the theater, his medium of choice?

I believe there are solutions, LOTS of them, but we need to work together to create them.

/rant complete

Is there even any evidence that they are dying? Are their revenues falling year upon year, piracy advocates insist that they aren't.

I still see trailers every year for the latest $BIG_MEDIA_MOVIE with no sign of slowing down, how many movies you can fit on a 4TB drive is pretty irrelevant. Since the original iPod came out people have been able to store more music than they actually listen to anyway.

Anyway, what would replace it? Youtube? Half of their content is either scenes from TV/Movies or people talking about TV/Movies. Kickstarter? Yes for folks who are passionate enough to think about what they want and go out actively looking for stuff they might like. Many people just want to see a trailer for latest big blockbuster so that they know what to buy for their kids when they want some peace and quiet or what to talk about at the watercooler on monday.

What about piracy? Everyone seems to be firmly of the opinion that the cat can not be put back in the back with this one. Me, I'm not so sure. The feds are going after pirate websites with the big guns. Not to mention that on the whole the people who make your software and hardware are on the side of the content producers.

Since we are all going "Post PC" and many computers will become more like appliances, what's to say that your future Apple TV will even play any content that has not been directly licensed from iTunes and the like?

Look at the MSN Messenger/Pirate bay issue. You don't really need the government to do anything, the big tech companies can do it all by themselves.

What would happen if Windows 8 and the next OSX just flat out refused to let you navigate to a torrent website, or even install a torrent client?

Sure , you will have an underground scene of jailbreakers and people who still run open hardware etc but they won't be getting the subsidies on buying that new family entertainment system that everyone else is getting.

People are lazy and don't want to make their cultural choices themselves.

That's a spectacularly vague assertion. Let me give you a more pointed one: there is no such thing as the media industry. In [textual] publishing alone there are at least a dozen different highly specialized industries that, aside from a common technology base (the printing press) are radically different in structure and operation. And that's within any one language/nation; if you look at, say, mass-audience consumer movies, is it reasonable to stretch and assertion that "the movies are dying" to cover both Hollywood and Bollywood, much less crowdsourced low budget SF epics from Finland and state-subsidized art films from France?

(I'll agree that the MPAA and RIAA are parasitic and preside over a business model that doesn't appear to be long-term viable without lobbying for government support -- but that's not the same thing at all, and I really wish pundits like Mattheij would be a bit more circumspect in their predictions.)

If you look at the next generation of consumers (kids) they're watching more broadcast television than any other demographic, they're camping out overnight to see films like the Hunger Games and this may surprise you ancient twentysomethings but these kids are actually paying for their music too. This is why Katy and Gaga are making real money, but more sophisticated music aimed at young adults isn't doing well.

The biggest mistake that techies make is that they assume that their lives are the lives that everyone else leads: And this just isn't the case. Are kids spending tons of time looking at YouTube? Yes! But they're also spending hours looking at the Disney channel too and paying for songs on iTunes with that gift card that grandma got them for their birthday.

Will the film and music companies go through a great deal of disruption? Very much so — but they won't be replaced by tech companies, unless those are videogame companies. The only way that tech companies will disrupt Hollywood is if they get into producing content - so far the only examples of this is Steve Jobs taking over Pixar to make films and Sony with their valuable music and film business.

Marketplaces have existed for years in various forms - iTunes, Amazon, YouTube, TPB, MegaUpload etc ... their users are almost exclusively interested in Big Content stuff. Mininova highlights this - they went legit and right now 135 people are downloading their most popular video, 70 times fewer than the number of people currently downloading the 4th Mission Impossible rip which is pretty much the very definition of Big Content easy, safe fluff. Mininova was one of the most popular websites in the world before they went legitimate - this isn't people not knowing, this is people not caring.

Kickstarter-ish models for production is just surreal - it is the complete opposite of on demand and that's a critical component for the future.

The overall premise that the RIAA/MPAA are or have to die at all is pretty sketchy - the problem is they're predatory and not keeping up with technology and consumers, not that they're redundant.

I went home and played it, there were no annoying trailers or anything. Me, my son, and the reporter who's always writing about our coven in the newspaper all watched it and had a great time.

Hollywood offers consumers many chump choices (like bloated cable packages) but it also offers good value too.

Hollywood leads the world in producing compelling content and it's always been smart about turning it into money -- I'm sure things are going to change in the next 20 years, but odds are good that some fraction of Hollywood is going to stay on top.

Plenty of Israelis pirate content, but the local media industry seems to be doing fine. I can't recall any attempts to crack down on pirates, let alone attempts to pass draconian anti-piracy legislation.

This is all anecdotal. If someone knows where to find the data supporting or contradicting this, please post.

Why The Movie Industry Can’t Innovate and the Result is SOPA[1]

In a nutshell, it shows how much the movie industry always fought change, it always lost, and it always made more money out it.

[1] http://steveblank.com/2012/01/04/why-the-movie-industry-cant...

The way I look at it, government power and spending are on the rise. Meanwhile, big media continues to be very important to politics, both as a source of money and as a source of star power for re-elections. Those two forces working together will be extraordinarily difficult to kill. Like a many-headed hydra, we'll whack off a head or two, but the darned thing will keep fighting for its existence.

I already have a torrent of 100 thousand books on my mirror raid, for example, so I'm sure I won't be missing much even if they go nuclear on internet piracy. In a few years you'd be able to do the same with music and movies.

Why would that be? The superstars are the ones most likely to survive in some sense. You need to 'think at the margin': http://journal.dedasys.com/2012/01/21/thinking-at-the-margin - it's the little guys on the edge of doing their art full time or not that are the ones most likely to be buffeted around by the winds of change. The Rolling Stones will still make lots of cash somehow.

Also, the ransom model has been with us for a while - it was proposed as a way to fund open source software too. So far, it hasn't worked that well (a few anecdotes notwithstanding). It can, in some cases, but most consumers want to have a look at something, evaluate it, and then get their instant gratification, not wait another N months for it to actually be produced.

Simply getting rid of IP is not the answer - this is an opportunity to completely replace them with something better.

IP law, if it worked as intended, has two consequences: * The more quality content you produce, the more revenue you derive from it. * The more content you consume, the higher your costs for it are.

The former is a good thing from a macroeconomic perspective - it incentivises the creation of quality content - and very few people would disagree that it is a good thing.

However, it is a bad thing to make people pay more to use more content / ideas / knowledge - from a macroeconomic perspective, if there is no marginal cost to using something, but it improves efficiency, then if more people use it, that is better for everyone.

Therefore, there is a need to decouple paying people based on how much content they produce and how useful it is (the good part) from the idea that you pay more to use more content. Some kind of flat rate (perhaps as an alternative to the current system in the interim) would be one solution - everyone pays a flat fee for blanket exemption from liability under copyright and patent law, and are obliged to cite sources for their product. Content producers declare their costs, and the received flat fees are divided to content creators / knowledge discoverers based on development costs and level of usage (direct and indirect).

There would be numerous complex cases and ways to exploit the system that would need to be closed and resolved through the courts, but I don't think it is fundamentally impossible, and it would both revitalise innovation and allow new types of content creation industries to be sustainable, reversing some of the vertical integration that currently occurs due to the current difficulty in making certain types of ideas profitable if you don't apply them yourself.

There is value in curation, marketing and management. I expect some of the current media companies will surive but they will look different and be much more competitive.

There are producers and customers. There is no place for anything else in the 21st century.

Here's a startup formula for you all:

1) Identify a place where a middleman is taking a cut or gate-keeping an industry.

2) Design a system, technology, or service that either eliminates the middleman entirely or replaces it with something far more efficient and much lower margin.

3) Profit.

On the other hand I like indie musicians more as they try to innovate or make music for people more than just get their money and aren't connected to labels.

An interesting group – Singleton is an example.

I just wish we had it back when Firefly was dying.