Hollywood Is Headed For The Meat Grinder: Mass Revenue Loss!

The End Of Hollywood?

File-sharing put a dent in the music industry, blogs/online publishers is shutting down print publishing and sooner or later, Hollywood will face the same scare. They are “headed for the same meat grinder that has chewed up the recorded music sector and print publishing.” ( Greg Sandoval, CNET.com).  Is this true? Can it be? It makes perfect sense….

I read this shockingly alarming article on CNET and felt it was 100% necessary to re-post and spread the word.


*For the original article, go to CNET.com.


End of the world as Hollywood knows it

To: Charlize Theron, Hugh Jackman, Seth Rogen, Tina Fey, Steven Spielberg, Michael Mann, every actor, actress, screenwriter, costumer, best boy, cameraman, set designer, makeup artist, and agent–plus anyone else who makes their living in the film industry.
From: Greg Sandoval, CNET media reporter and film fan.
Re: Your livelihood

October 20, 2009 4:15 AM PDT – Cut your spending. Save your money. Many of the revenue streams that have gushed into your industry for decades, some for nearly a century, are about to dry up. This will likely mean a period of belt tightening like you’ve never seen before.

The end is coming for DVDs, traditional movie rentals, and yes, much of your cable money will likely disappear.

The news isn’t entirely bad; you still have iTunes and Netflix–places where people spend money to buy or rent movies. You still have Hulu, Crackle.com, and YouTube, which are generating ad revenue by streaming full-length films and TV shows online. But the reality is that the amount of money that these legal operations generate is far less than the returns your industry is used to making. Unless some dramatic technological breakthrough occurs that can defeat file sharing, then you are staring at checkmate. Your business is headed for the same meat grinder that has chewed up the recorded music sector and print publishing. What will come out the other side is still uncertain but will likely be much smaller.

I’m sure many of you will write this off as the apocalyptic rantings of Silicon Valley propeller heads. But I urge you to pay attention to recent events.

Over the past five days I’ve been in Los Angeles talking to entertainment attorneys, studio executives, and some of the tech vendors who do business with the studios. I’ve been covering the sector three years now and I’ve never seen people in the film industry so dejected. DVD sales are falling, the number upcoming film releases is expected to drop. Some big shots have even acknowledged the bleak situation in public. The past weekend, at a conference on the USC campus, Disney CEO Bob Iger said the “business model that formed the motion picture business…is changing profoundly before our eyes.”

Iger warned that studios must make profound changes, “or you will no longer have a business.”

Earlier this month, Francis Ford Coppola, the director of “The Godfather” said at the Beirut Film Festival that “the cinema as we know it is falling apart.” He also predicted several of the studios would go out of business.

Of course, not all of your industry’s problems were caused by the Web. Hollywood has paid creators handsomely over the years and costs have skyrocketed. Then there’s the problem with Blu-ray. Iger noted that consumers aren’t upgrading their DVD collections with Blu-ray discs to the degree that the industry had hoped.

But if you’re really inclined to wag a finger, there is nothing disrupting your business more than the Internet. The MPAA has worked hard to force file-sharing sites out of business or push them to the Web’s fringes. At first, the studios tried to kill file sharing with lawsuits. Then they hired security firms, such as MediaDefender and MediaSentry, which promised to discourage file sharers by blocking or slowing the sharing process. None of that worked.

Maybe that’s one reason the MPAA overhauled its “antipiracy” operations three weeks ago. CNET reported on Friday that the studios’ trade group decided to change the name of the “antipiracy” unit to “content protection” and fired three leaders, including the MPAA’s general counsel.

And now, snatching a pirated film or TV show doesn’t require knowledge of torrents. There are scores of sites that stream movies and TV shows over the Web and a viewer doesn’t have to actually download the movie to their hard drive. I spoke to someone at the studios last week who said these sites are tougher to fight because they can crop up anywhere and many are based overseas. Often, said the source, “We don’t know where they are.”

“Hulu may be doing immediate harm to elements of your business, but waiting right behind Hulu in the shadows, are things that do so much more harm.”–Eric Garland, Big Champagne CEO

What is happening is that the consumption of unauthorized content appears to be moving out of dorm rooms and into the living rooms of average Americans. Here is what you’re up against:

A 28-year-old woman I’ll call Alexandra (she asked for anonymity) grew up in Missouri, graduated from college, attends church every Sunday, and told me that she watches episodes of the hit cable show “Mad Men” at least twice a week at Surfthechannel.com, a site that hosts links to many unauthorized clips. She gleefully said that visitors can find almost any TV show they want and not pay a dime.

Alexandra said a friend told her about Surfthechannel.com a year or two ago and she watches shows there because she doesn’t want to pay for a cable subscription, or a TV and because it’s so easy.

She explained that she is not a bad person and that “everybody is doing this.” She says one of her professors told her “he and his wife sit at home on the weekends and enjoyed movies they downloaded (illegally) off the Web.”

I ask her if she has tried Hulu, the popular video site created by News Corp. and NBC Universal. The site offers a few feature films and lots of TV shows free to viewers and pays for them by serving ads. She said she had visited Hulu but added that “there’s more of the stuff I want at Surfthechannel.com.”

Alexandra’s statements about Hulu come at a time when the site’s backers are mulling whether to build a pay wall around some of its content. Alexandra and people like her aren’t even accepting Hollywood’s offer of free content because unauthorized sites offer better selection.

What do you think will happen if Hulu begins charging?

Don’t get me wrong. I understand that the returns at Hulu are probably much smaller than what the studios are accustomed to getting. There’s also the problem of growing dissatisfaction among the cable operators. How long will they continue to pay big bucks if more of their customers dump their subscriptions in favor of sites such as Hulu? Leaving a business that generated billions for one that makes far less would be hard for anyone.

But the possibility that studio chiefs must consider is what if the money offered by iTunes, Hulu, and Netflix is all that a digitally ravaged media world offers.

Eric Garland, CEO of Big Champagne, a company that tracks file-sharing usage and sells the data to the studios and major record labels said: “Hulu may be doing immediate harm to elements of your business, but waiting right behind Hulu in the shadows, are things that do so much more harm.”

Posted under Blogs, Online Marketing, Online Video, Social Networks, Tech2.0

This post was written by Joshua Russak on October 20, 2009

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The Inauguration ‘Live’ On Hulu + Drinking Game

Obama Hulu Inauguration

If for some odd reason you’re unable to access a TV today…If you’re boss feels that President-elect Barack Obama’s inauguration as the 44th president isn’t as important as a sales call, then here’s a solution:

According to Alley Insider, “NBC Universal (GE)  and News Corp (GE) joint venture Hulu will stream President-elect Barack Obama’s inauguration live Tuesday.” You can watch it on Hulu.com/inauguration, or feel free to watch it below on this blog.

If you’re not at work, then I suggest the official “Barack Obama Drinking Game”. The SF Weekly’s blog – The Snitch perfectly detailed out the history and rules, which are as follows:

Take a small sip of whatever you’ve got if:

  • Obama mentions his wife or family by first name;
  • He mentions Joe Biden, Nancy Pelosi, or Harry Reid;
  • He mentions Martin Luther King, Abraham Lincoln, John F. Kennedy, or his own numerous Kenyan relatives;
  • “Hope” or “Change” is uttered;
  • He talks about puppies.

Take a moderate sip, if:

  • He mentions John McCain or Sarah Palin (or winks);
  • He mentions some random American from a swing state who’s up shit creek health- and economics-wise;
  • He uses the terms “crisis,” “meltdown,” “Depression,” or “Ponzi”;

Drink liberally, if:

  • He connects the departure of George W. Bush with the most well-known term from his home state: “Aloha”;
  • “Allow me to express my feelings with this brief interlude of interpretive dance”;
  • He quotes Dick Cheney;
  • He quotes Cheney and follows it up by clutching his heart and shouting “Here I come, ‘Lizbeth! It’s the big one!

Go on a rampage, if:

  • Profanity is uttered;
  • Obama has the Rev. Rick Warren finish the speech for him in an act of bipartisanship;
  • He mentions that betting a dollar in Vegas that a black man would be sworn in as president in the same year the Arizona Cardinals went to the Super Bowl would make you a millionaire many times over.

Is it a lame game? yes. Will it render you useless for the rest of the day, yeah probably.

(*Remember to stop at 3pm or you pass out whichever comes first.)


Hulu Presents: Barack Obama’s Inauguration



Posted under Events, Viral Marketing

YouTube Goes Widescreen (16:9)!

“Is it just me, or has YouTube gone widescreen?” Just do a search on youtube wide in Google and you’ll get an endless list of blog posts (including this one). YouTube has apparently changed all videos on its site to play in widescreen by default, and not the standard ratio of 4:3. They’ve had the option to go widescreen in the past, but now it’s their Default. As a result, most of the videos have these horizontal black bars on the sides. Check out JagerBomb video to see what I mean. (Take note, that is how Jager Bombing is supposed to happen!)

According to the YouTube Blog article Bigger Isn’t Always Better… But in This Case, We Believe It Is, this is what they had to say:

“Over the years we’ve heard a lot of feedback from you about what you’d like to change about YouTube, and the size of our video player is always top of mind. That’s why today we’re excited to announce a bigger YouTube player. We’re expanding the width of the page to 960 pixels to better reflect the quality of the videos you create and the screens that you use to watch them. This new, wider player is in a widescreen aspect ratio which we hope will provide you with a cleaner, more powerful viewing experience.”

I’m not really sure what they’re doing. Maybe they’re playing the game of ‘catch up to the competitors’. Just a few days ago YouTube went Live! and now they’re going Widescreen. According to TechCrunch “YouTube is by no means the first video site to go widescreen – Blip.tv (my favorite YouTube alternative) has long had the feature. And as the comments point out, sites like Vimeo and SmugMug already offer video in HD”. (TechCrunch)

You know what doesn’t make any sense? When you embed the video on other sites, it maintains the 4:3 ratio! Well, one thing is for sure, YouTube is making improvements and the world is noticing!

Posted under Online Video, Social Networks

This post was written by Joshua Russak on November 25, 2008

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