Our Digital Future

The studios have yet to embrace the coming reality of computer technology in home entertainment. How can so many rich people overlook these new revenue streams?

The emergence of the internet in the nineties has changed much in entertainment over the last fifteen years. The music business is in tatters, decimated by their own greed and a revolution in music piracy. The film and television industries have found it to be a blessing and a curse; they can now promote their products in clever and far-reaching new ways, but constantly risk their products being stolen by the same crowd (see: WOLVERINE). The one common problem that I see among all of the media corporations is a lack of insight into the problem of the internet and computer technology. They continue to look at innovations like broadband or YouTube or dedicated servers and they see only copyright infringement and piracy. It's unfortunate. This lack of insight will cost them dearly in the years to come. While it hasn't happened yet, the computer will eventually become the entertainment center of every home. It will replace those fancy and expensive Blu-Ray players, cable television connections, video game systems, and TIVO. Although we might still retain the use of a computer for private internet uses (i.e. porn), the main computer of the household will stream entertainment media directly from the internet and onto our bigscreen in our livingrooms. I bet it happens within ten years, if not much sooner. This is the reality that Hollywood and other production houses face, yet they continue to flounder in the old media model. That outdated system saw the studios create a product, which was then sold to television studios / movie theaters, and was then sold via VHS and DVD to consumers at an exorbitant price. There was always a middle man. Piracy was the enemy. Giving product away for free was sheer lunacy. But the internet has taught valuable lessons in what works in the new system. Remember when people had to pay to watch porn on the internet? Why have those sites essentially disappeared? Because there are millions of sites out there giving the stuff away for free! These free porn sites make their money on viewable advertising; each visit and click means more money in their pocket. These sites also have the advantage of linking lots of similar sites together, creating a network of sites that boost their overall traffic. That model of business will only get more lucrative in the near future. So far, sites like Hulu have experimented with providing a quality video experience, coupled with short lead-in ads. I think that's a pretty decent way to go. People don't mind sitting through a 15 second ad to see what they enjoy. However, they start to get unruly when the video is stopped midstream for another ad, or when ads are intermittently placed throughout the video. Advertising has its place on the internet. But here's what I simply do not understand about the current Hollywood mindset: why are the studios catering to sites like YouTube or Hulu so readily? Right now, it's about traffic; YouTube owns about 45% of all video traffic at the moment. But YouTube owns nothing that's played on its channel, and the only original programming it shows comes from fat kids on their cell phone cameras. Meanwhile, the studios own all of their own product. Why not prepare NOW for the coming home entertainment shift, rather than wait around and remain behind the curve? For example, if I owned Twentieth Century Fox, I would be building gigantic dedicated servers in order to stream my movies and television shows directly to the public. I would be building an online network, complete with its own community, in order to reach my audience directly. Money would come from advertising that my company would sell directly, rather than going through traditional network channels where everyone gets a cut. Think about it. Right now, studios only get a fraction of the money for their product, because percentages of the monies collected go to theaters, television channels, cable and satellite companies, etc. With the internet, the money can go directly to the studio entirely, because it cuts out all of the middle men in the process. If Hollywood is wondering how to make money in the internet age, THAT'S how you do it. Yet they seem to be stuck in the traditional mindset. Pretty foolish and shortsighted, if you ask me. P.S. If anyone important at Fox is reading this, I'm willing to give you more of my insights at a price. Make me President of Internet Development or something fancy like that. And I'd like a corner office facing the Pacific. Oh, and a hot secretary would be pretty cool, too. Write to me ... we'll talk.

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All you need to know is that I love movies and baseball. I write about both on a temporary medium known as the Internet. Twitter: @rayderousse or @unfilteredlens1 Go St. Louis Cardinals! www.stlcardinalbaseball.com