The death throes of an industry

http://www.jacquesmattheij.com/The+death+throes+of+an+industry

by hawke • 14 years ago

52 76 14 years ago

jacquesmattheij.com

Tyrant505• 14 years ago

Your formatting got screwed on a copy/paste I assume, bit difficult to read.

jacquesm7• 14 years ago

Indeed it was, thank you for noticing that, it should be fixed now.

paulsutter5• 14 years ago

Couldn't all of the mobile apps our friends are writing fit onto that same disk drive? With room to spare for the source code to Facebook and Google? Does that indicate that the entire intellectual property business is in its "death throes"?

You could also include all the credit card numbers and ACH information for all the accounts in the world on that same drive. I guess that means its OK to use those numbers?

How can so many software guys really believe that their bits are more valuable than the bits created by media companies? Or that stealing is "ok" just because it's easy if you know how?

The media industry has done a shit job of making its product easy to buy or making money ad supported. They're in decline because they have done such a bad job adapting. But someone will figure it out.

Entertainment will definitely evolve, but it won't go away. There's a lot more to learn reading pg's request for ideas than reading pro-piracy posts like this that seem to litter hacker news.

jacquesm7• 14 years ago

The big difference is between stuff that you release and stuff that you don't.

Once released bits become common knowledge and they lose a large amount of their potential value because the scarcity element is instantly gone.

This is one of the driving engines behind the the whole software-as-a-service game, it gets rid of the problem of piracy and it turns the product into a subscription rather than a one-time sale.

No second hand version of google docs will ever be sold.

ajscherer• 14 years ago

Software is not analogous because it has been developed from the very start with the knowledge that the bits would be easily copy-able, and has been designed accordingly. I remember being asked to type in phrases from a game instruction manual at least a decade before anyone was consuming commercial audio or video on their PC. Furthermore, software is an interactive medium, which makes copy protection easier, and copying riskier. It isn't clear to me how you could make copy protection inherently part of music (without ruining it). Even if you fully controlled all the hardware and software used for playback, you wouldn't control the link between the speaker and my ears.

As to ACH information, it depends on what you mean by "use those numbers," since they have no inherent value. If you mean reading them for fun, I would be OK with that. If you mean using them to drain money from people's bank accounts, that would not be okay, but it also wouldn't be copying (since the original would be destroyed). If you knew of a way to copy money from one account to another, I would be completely fine with you copying my checking account in full.

I know you would probably prefer that people think about stealing and unauthorized copying as the same thing, but there is a difference and it's important. One is completely physically undetectable to the victim, and the other isn't. How can you tell the difference between your CD selling poorly because people are pirating it, and it selling poorly because it sucks? Without widespread snooping on other peoples' electronic communications, you can't. If someone drained your bank account it would be trivial to detect.

guard-of-terra2• 14 years ago

"the bits created by media companies" They don't. Media companies don't write songs, neither they're really shoot movies. They are the middlemen.

Yes, I think that my bits are more valuable than the vapor created by middlemen.

But there's more important issue: Once I have 100000 books, 1000000 songs and 10000 movies on my hard drives, I might lose desire to have any of their bits at all. I don't even need them produced because the bits already there are just as fine.

nyellin2• 14 years ago

I'm not convinced this is a global issue. Here in Israel, many local TV shows are freely available on the internet, including the ever-popular Eretz Nehederet.

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.

vectorpush2• 14 years ago

I'm not convinced this is a global issue.

I wouldn't be so sure.

http://www.bbc.co.uk/news/uk-england-south-yorkshire-1735520...

nyellin2• 14 years ago

Yes, the death throes of the American media industry are a global problem.

However, evidence is needed to prove that the global media industry is dying.

PaulHoule• 14 years ago

This is big talk, but in the meantime I went to the gym the other day and checked out the movies for sale and bought a Blu-Ray of the Truman Show for $7.99.

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.

paulsutter5• 14 years ago

I think jaquesm's point below about mobile apps is (accidentally) a great point.

People are happy to pay for media when it's easy to do so. Mobile apps are pirated only rarely because it's so easy to buy them. That's why they're growing like crazy.

Hollywood's mistake has been to make it so difficult to buy media. So few movies and shows are available for streaming, for example.

There's a great opportunity in helping shape the future of entertainment.

odnamra7• 14 years ago

I love this. You are correct on all accounts. In theory, creating a movie is about telling a story with the best possible content and the best possible experience. You might laugh at the thought, but I can promise you that all filmmakers toil under that aspiration. Actors, hair, makeup, wardrobe, location, sfx, vfx, audio, music... ALL handcrafted and laboriously created in pursuit of telling the story as best you can. Theaters, Blu-ray, Dolby, HD, 3D, all developed in the hopes of creating the best possible experience for that content. I'm not saying there isn't a lot of crap (lord knows I've personally worked on many terrible movies), but I'm speaking of ideals here. Shall we Kill Hollywood and replace everything with cat videos on Youtube? That's too easy. I can offer many suggestions on how to vindictively kill Hollywood right now, but that would be a disservice to people like you who just want to enjoy watching a movie. And it's because Hollywood contains this fantastic talent base, and enormous back catalog, that they will be around for a long time to come.

benologist3• 14 years ago

You're envisioning a future where you replace the middlemen you don't like with a set of ones you do like, that aren't up to the job anyway.

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.

jacquesm7• 14 years ago

> 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.

Tell that to these guys:

http://www.kickstarter.com/blog/the-kickstarter-film-festiva...

I'd happily pay for Pat Metheny to produce his next album before I can get my hands on it with a mechanism in place that would revert the money if he never released it, and even without that mechanism I'd take the risk.

benologist3• 14 years ago

Yeah it works when it's novel, now imagine that it's normal ... instead of going to Netflix and streaming a movie tonight you go to kickstarter-for-movies.com and book what you're hopefully going to watch for Christmas.

I cannot imagine a worse way to be entertained, it actually returns us to the pre-internet days with the added plus of gambling on and paying in advance for everything we want.

cstross2• 14 years ago

An industry is dying ... That industry is the media industry

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.)

jacquesm7• 14 years ago

You're right! That's why you're the writer and I'm the (very much part time) blogger I guess.

I'll try to be more precise in the future, the media industry is indeed a much too broad brush. This bit started out as an email I wrote to myself a while ago and then posted in response to another thread on HN, I should have done a better job of sharpening it before posting it.

cstross2• 14 years ago

Oh, right.

My gut feeling, FWIW, is that the internet is a communications medium that tends to disintermediate supply chains; because it makes it really easy for people to locate sources of supply, a lot of traditional middlemen suddenly discover that nobody needs them.

But that doesn't mean there won't be any middlemen; merely that the buggy-whip vendors will be replaced by the folks who understand how to sell automobile seat covers (if you'll permit me to stretch the metaphor).

jmillikin2• 14 years ago

The term "media industry" is not usually applied to "crowdsourced low budget SF epics from Finland and state-subsidized art films from France", any more than the term "agricultural industry" would be applied to someone's backyard herb garden.

The OP did not claim that "movies are dying", he claimed that the media industry is dying, which is a completely different statement. If the media industry dies, people will still make movies, they just won't have the massive budgets that contemporary movies have.

For what it's worth, I think the OP is letting his anticipation cloud his better judgment. While the media industry will certainly decrease in size and influence, and will probably become more selective about which scripts it funds, it will continue to exist so long as customers are willing to pay $20 for the experience of watching a blockbuster on a hundred-food cinema screen.

prawn• 14 years ago

Hundred-food cinema? Mine only stocks popcorn and choc-tops.

howardr• 14 years ago

Yeah I never like when people toss around the term "media industry" especially in the context the author is talking about (it dying) because what exactly is media?

The author might as well have said "the media industry is dying...long live the media industry." Most of the companies that are indirectly referred don't appear to be dying at all. It's true that they are taking in less revenue, but the digital age allows them to produce and distribute at a fraction of the cost.

Hulu is a joint venture between Fox (News Corp), NBC (NBC Universal), and ABC (Walt Disney). The WSJ (owned by News Corp) has been successful in monetizing the audience instead of the content (charging you only after you have read a certain number of articles).

These companies will still be around for the foreseeable future, but instead of making billions on physical media (papers, DVDs, and CDs) they will be making billions from streaming and DRM'd content which have a lower cost to produce.

The cool thing though is that these same lowered costs allow artists to self publish if they want, but they will still need to make a deal with a distributor (perhaps directly with Apple or Amazon) to get there content into the market place.

Where the established industry has an advantage though is in its ability to market artists (and not so talented artists) outside of these new digital markets/channels.

VMG• 14 years ago

It'd be nice to have some data to prove the assumption that the industry is dying. Not that I can't believe it but I think one should back up these kinds of claims.

crusso• 14 years ago

The business model will definitely evolve with all the digitization and internet pressures. Claiming that the industry is exhibiting "death throes" is way way way premature, though.

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.

guard-of-terra2• 14 years ago

The idea of a digital stockpile of the world culture in your closet is very interesting.

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.

michaelpinto• 14 years ago

I do a great deal of work with youth marketing so I have a slightly different perspective. I can't speak to music -- but films cost a great deal of money to make, and YouTube videos just won't replace that.

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.

ippisl• 14 years ago

Why are they paying if they can get illegal copies ? and why watch broadcast tv when they can get on-demand content ?

eli_gottlieb6• 14 years ago

Because they often don't have personal computers anymore, not as we had them.

When I was a kid, I set up zsnes on the computer at my after-school program, downloaded a bunch of ROMs, and taught the kids the key-mappings. I became the Guy Who Made Video Games Run on the PC. I did it at home, rampant pirate that I was.

But do today's kids actually have an unlocked PC available to them? Do they have consoles whose games come in self-contained cartridges so that piracy becomes imaginable? I don't think so.

They have consoles and handhelds that work mostly via their connections to proprietary company servers. They have iPods and phones and tablets locked down with company DRM. They have Windows 7 or OS X computers at home, at school, at after-school, and in offices with actual security models that stop kids from messing around installing whatever they like. Pirating a game now involves torrenting several GBs of ISO, mod-chipping your console or installing a game crack, and then installing a crack/workaround for the network log-in based DRM (thanks, EA and Ubisoft). It's often easier just to buy the damn thing off Steam, but then you have to ask Mom and Dad for money to buy games. What kid wants to go through that ordeal?

We grew up in a Wild West playground of open personal computing where little was locked, locks could be picked, and there weren't any security guards. I fear today's kids have grown up in a walled garden guarded by men with flaming swords.

shalakhin2• 14 years ago

Here in Ukraine people are forgetting "TV" as more and more people use computers. So the TV situation could differ among countries.

But I totally agree with you that the strongest way to defeat Hollywood would be some "Anti-Hollywood" producing great media content appreciated by people watching it.

jiggy20119• 14 years ago

I imagine what they are watching on their computers is stuff that is basically "TV".

epscylonb• 14 years ago

The smart people in the music industry know that to remain relevant they need to stay close to the artists. This once lopsided relationship is changing to be more equal, the record companies need the artists to make money.

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.

davidw• 14 years ago

> Maybe that will mean that there will be no more media superstars.

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.

DanielRibeiro• 14 years ago

Steven Blank made a much more in depth analysis of this phenomenon on his:

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...

tsotha• 14 years ago

I'm not convinced that just because you'll soon be able to fit the world's entire electronic cultural output into your pocket the media companies will necessarily be out of business. They're pushing for controls on the way the rest of us consume content, and they may well be successful in the end. They don't have to be 100% successful, just successful enough to make money.

api• 14 years ago

I think there's a larger picture here. It's time to declare war on middlemen, period.

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.

DLWormwood• 14 years ago

> It's time to declare war on middlemen, period.

Got a "B Ark" handy?

jacquesm7• 14 years ago

Be careful, you might end up dying from an infection contracted through an un-sanitized telephone.

J3L2404• 14 years ago

Golgafrincham is a red semi-desert planet that is home of the Great Circling Poets of Arium and a species of particularly inspiring lichen. Its people decided it was time to rid themselves of an entire useless third of their population, and so the descendants of the Circling Poets concocted a story that their planet would shortly be destroyed in a great catastrophe. (It was apparently under threat from a "mutant star goat"). The useless third of the population (consisting of hairdressers, tired TV producers, insurance salesmen, personnel officers, security guards, management consultants, telephone sanitisers and the like) were packed into the B-Ark, one of three purported giant Ark spaceships, and told that everyone else would follow shortly in the other two. The other two thirds of the population, of course, did not follow and "led full, rich and happy lives until they were all suddenly wiped out by a virulent disease contracted from a dirty telephone".

The B-Ark was programmed to crash-land on a suitably remote planet on one of the outer spiral arms of the galaxy, which happened to be Earth, and the Golgafrinchan rejects gradually mingled with and usurped the native cavemen*, becoming the ancestors of humanity and thereby altering and distorting the course of the great experiment to find the question for the Answer to Life, the Universe, and Everything, or so Ford Prefect presumes. A lot of them didn't make it through the winter three years prior to Arthur Dent's reunion with Ford Prefect, and the few who remained in the spring said they needed a holiday and set out on a raft. History says they must have survived.

People from Golgafrincham are called Golgafrinchans. In some versions of the novel The Restaurant at the End of the Universe, the planet is also referred to as "Golgafrinchan", but this usage is less common and is thought to be an error of typography.

dustingetz• 14 years ago

....

its unclear how we could profit by replacing the middleman without seeing similar incentives to become a middleman ourself.

liotier• 14 years ago

Disintermediation may at first seem to be the destiny of a network whose connectivity trends toward a full mesh... But this superficial impression is later proved wrong by the rise of intermediaries made necessary by the wealth of possible connections. The trick is that those new intermediaries offer value by helping to achieve more connections, not by restricting connectivity. The old intermediaries die but the new world has a niche for new ones.

jiggy20119• 14 years ago

To be honest, most of what I see startups doing is creating middle men, not destroying them.

In fact in most cases that's all startups are, someone trying get between a customer and something they want. Hopefully adding some value on the way.

Facebook: Want to talk to your friends? Talk through us.

Dropbox: Want your files? Get them from us.

etc etc

If startups were serious about decentralizing anything they would be developing P2P protocols and open formats, not putting everything behind a big web app wall (with ads).

eli_gottlieb6• 14 years ago

Eliminating middlemen means going into the product business (especially in software), but we live in a service economy where there's little support for product businesses compared to middleman service businesses.

odnamra7• 14 years ago

You are saying exactly what I just said to another reader. Replace distribution with an open standard that has an embedded financial model, then we might have something interesting. Everything else is just a different middle man.

eli_gottlieb6• 14 years ago

How do you plan on eliminating a middleman and seeking their economic rent at the same time?

andrewfelix• 14 years ago

You're sort of describing Marxist economic theory there. More specifically 'Production for use'. Capitalism is built around the middleman.

odnamra7• 14 years ago

This will be your outcome: each system will race to the bottom, a market leader will emerge and converge into a monopoly, this market leader will begin exploiting everyone. Nothing will change except for the names of the companies.

shalakhin2• 14 years ago

It looks like media industry has to reborn and form a new way to do business and get their income.

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.

mattchew• 14 years ago

I'm glad he mentioned Kickstarter. I'm really excited about the potential there. I think Kickstarter (or something like it) will be at least as important as eBay or Craigslist.

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

jiggy20119• 14 years ago

You know, I've heard this Hollywood/The RIAA is dead meme repeated for at least 10 years now and I just don't see it happening anytime soon.

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.

odnamra7• 14 years ago

Wow. Simply, wow.

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

eli_gottlieb6• 14 years ago

Capitalism is supposed to be a way of dealing with scarcity, not maintaining it in the face of its oncoming abolition by technology. You are a bourgeoisie screaming that the Revolution has come and you don't like its shape ;-).

I agree with you, but moving to a post-scarcity bit-distribution model is, in its way, inevitable. After all, how much does the RIAA/MPAA claim as the "pirated" value of "their" content? As I recall, it adds up, in some estimates, to more than the current size of their industry, and possibly even more money than exists in the entire economy (of some nations if not of the United States).

Why should we destroy all that value by rendering it illegal through copyright-based rent-seeking? Plainly we shouldn't.

But filmmakers, programmers, authors and other bit-producers need to eat too, need to somehow interface our desired post-scarcity "pirate economy" with the scarcity-based rentier capitalism of the current "material economy" to pay rent, buy food, carry health insurance, etc.

So the question is, how do we interface post-scarcity with scarcity to let people work in the former world but eat dinner in the latter?

jiggy20119• 14 years ago

post-scarcity? I think we've had that since VHS tapes.

The problem with this conversation is it always gets confused between "The MPAA are evil, let's kill them" and "let's abolish copyright!"

The only way I can see to kill "big content" would be to either reduce the size of the overall industry, or to break it up into smaller indie houses.

Neither of these seem plausible.

odnamra7• 14 years ago

Bourgeoisie? :) I worked my way up from nothing and my perspective is simply that of someone who has seen the industry from several different angles.

Also, like any sane person, I believe that pirates are only frustrated consumers (I know I am).

But where does that leave us... how do you keep humanity entertained while "software is eating the world."

What does that technology look like? For distribution, is it an open standards network of p2p+affiliate marketing+an index fund? For creators, will it be a cost equalizing combo of reality-emulating audio engines and photorealistic cloud rendering of user-friendly 3D modeling? What happens to the concept of celebrity (celebrities = risk mitigation for movies)?

I personally think it's important to step back and think about the user experience of a movie. Can you succeed in delighting users and negating Hollywood at the same time?

jacquesm7• 14 years ago

> 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.

That's a key problem. And I don't pretend to have the answer but things will change whether you or I like it or not.

That said I prefer Primer over Avatar, big budgets be damned.

jiggy20119• 14 years ago

I don't think the general public has the attention span to keep several hundred Primer type titles being released all year round in their consciousness.

I think the big "change" will be streaming videos over DVD/Blu-Ray rather than everything suddenly becoming an Indie movie.

odnamra7• 14 years ago

I guess my point is that the current (flawed) system at least allows for those big budget films to exist and be appreciated by the people who want to see them.

If our goal as entrepreneurs is to delight users, then we should be considering how we're impacting consumers/creators (the two users that matter IMHO) during this era of disrupting distribution (distributors being a third, less important type of user to me).

Call me naive if you wish, but people love movies and I think it's important to fight for that.

Thank you for allowing me to rant about your blog post.

JunkDNA• 14 years ago

It's always nice to have someone with an insider perspective around here, so thanks for taking the time to post. I think one thing that gets lost in a lot of these discussions is that there is no law of nature that says movie production will always be insanely profitable. Every reader of this site has grown up in a world where Hollywood actors and actresses (as well as directors and producers) have made exceptionally good money doing what they do (obviously not a majority of them; I realize that). However, there has been a lot of money sloshing around that system for our entire lives which has led to where we are today, with various middlemen lined up to take a cut. The thing is, while people want to be entertained, they don't necessarily have to spend their money (or attention) on products like movies and TV. For me personally, I find it increasingly difficult to find enjoyment in products from Hollywood. Instead of watching a movie tonight I'm noodling around on Facebook and HN. Both of them are delivering entertainment to me much more cheaply (both from their perspective and mine) and efficiently than Hollywood. This is a real threat to Hollywood in my opinion. The video game industry is getting schooled on this now. A whole generation is growing up buying video games in the App Store for close to the price it used to cost for one turn at an arcade when I was a teenager. That is hugely disruptive to established players. But again, there is no law that says video games must cost $50. The established companies have to adapt or someone else is going to swoop in from underneath and eat their lunch.

A1kmm• 14 years ago

Hopefully once the large copyright industries start to realise that the current system will lack efficacy going forward, we can all unite for something better to replace the current intellectual property laws (note: I'm excluding trademarks here because that is a different matter).

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.

goggles99• 14 years ago

Your argument has no basis. If storage capabilities have a relative relationship to the success or failure of the entertainment industry, why is there no trend of correlation thus far? Storage media keeps improving, yet the entertainment industry's size and profits are not declining at all.

The death throes of an industry

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