Blog Post

Hollywood Disrupted

Reading through the LA Times, as I do before The Oscars every year, I came across a fantastic Op-Ed written by a respected Hollywood author by the name of Neal Gabler. The opinion piece, titled “The Movie Magic is Gone”, explains how Hollywood is losing its place as the epicenter of cultural products and how movies are losing their relevance as the “barometers of the American psyche”.

And what is culprit? You guessed it… the rise of social media! As Gabler elaborates:

“All of this has been hastened by the fact that there is now an instrument to take advantage of the social stratifications. To the extent that the Internet is a niche machine, dividing its users into tiny, self-defined categories, it is providing a challenge to the movies that not even television did, because the Internet addresses a change in consciousness while television simply addressed a change in delivery of content. Television never questioned the very nature of conventional entertainment.

The Internet, on the other hand, not only creates niche communities — of young people, beer aficionados, news junkies, Britney Spears fanatics — that seem to obviate the need for the larger community, it plays to another powerful force in modern America and one that also undermines the movies: narcissism.

It is certainly no secret that so much of modern media is dedicated to empowering audiences that no longer want to be passive. Already, video games generate more income than movies by centralizing the user and turning him into the protagonist. Popular websites such as Facebook, MySpace and YouTube, in which the user is effectively made into a star and in which content is democratized, get far more hits than movies get audiences. ”

What Gabler calls “narcissism,” I prefer to use the term “digital self expression”. And as I wrote almost a year ago in a piece titled “Social Networks are the New Media”…

“To some extent, self-expression should be viewed as a new industry, one that will co-exist alongside other traditional media industries like movies, TV, radio, newspapers and magazines. But in this new industry, the raw materials for the “products” are the people… or as Marshall McLuhan might say, “the people are the message” when it comes to social networks. So for any player who seeks to enter this industry and become the next social networking phenom, the key is to look at self-expression and social networks as a new medium and to view the audience itself as a new generation of “cultural products”.

In the past century, the creation of cultural products was centered in Hollywood. Now, social networks are broadening the scope of cultural media to include “identity production” (a very appropriate term coined by danah boyd), all the while decentralizing the ecosystem out to the edges. For traditional media companies that are seeking to enter this space (e.g. MTV, Martha Stewart, etc.), it’s critical to follow the audience into the development of this new market by re-focusing core assets that have the capability to deepen the level, and heighten the production value, of self-expression. ”

What Gabler and I both seem to be focusing on is the very real possibility that what is truly disrupting Hollywood is not technology per se, but what the technology is enabling the audience to do and how it’s affecting the public’s “consciousness”. In other words, the future of Hollywood may not ultimately rest on issues like how well the studios transition their business models to adapt to digital distribution schemes or how they handle massive copyright infringement.

Instead, what Hollywood might look like in the year 2020 could have more to do with how studios develop new “products”… much like they did with the advent of television (when they created sitcoms, game shows, movies of the week, etc.). But this time, future Hollywood products will probably have to integrate and leverage the virtually unlimited digital resource of self-expression and social media.

At the end of the day, what we’re talking about is the emergence of a new medium with its own art form. And whether Hollywood will remain at the epicenter of future cultural production is the big question. For the first time, Hollywood should be concerned like never before simply by virtue of the fact that, this time, the means of production are now in the hands of the audience itself. What this implies, at the very least, is that the studios will have to increasingly democratize their business model. What does that mean exactly? Go ask the CEO of Veoh.

17 Responses to “Hollywood Disrupted”

  1. Social networks are merely the window for personal data. All else is interaction. As a result, it is not ‘social networks’ that are causing Hollywood to decline. It is the facade of Hollywood within those networks that is causing Hollywood’s power to diminish. Hollywood could be benefiting greatly by social networks if what was being said was beneficial. IOW, the original author is confused on the cause/effect issue.

  2. I keep hearing that the “social network” is the key to a new market and models that focuses on the user as the content creator and producer. MY question is this: Is the that really new?

    Geocities allowed real audio clips and links to sound files back in the day. There was a community behind geocities right? Ex: “Homestead”. Does the social network model then becomes the predicesor to the geocities model? If so, then the only unique aspect of the SN model is the direct viewing of relationships between people as “friends”. Who can come up with a solid point that says why the social network part enables this democratization?

    Personally, I’m not disagreing that SNs do not enable this new market. But if the market is new then WHY is it new? How is SNs different than Geocities communities? How is youtube different than burning a tape or cd to give to friends?

    Spell it out for me, I know I’m not alone here

  3. Hollywood deserves nothing less. It is amazing that from a macro perspective a relatively small subset of the population has been able to blatantly exploit market ineffciencies for such a long time. If something seems too good to be true you better plan for it to be shortlived. Furthermore, if you can’t tell the difference between luck and skill and/or believe you are righteous by virtue of who you are and not how you are, you probably aren’t too far from SoCal and likely are ‘in’ the entertainment business and probably aren’t an artist.

    Great post Robert! You really got me thinking and I couldn’t resist writing about it :)

  4. Meh.

    Hollywood will adapt, it always does.

    The prima donna directors like M. Night Shyamalan that say they only make films for the big screens are anachronisms. In ten years they’ll be “excited to experiment” in this new medium because they can’t get a feature film funded.

    The best thing about the new medium is that it returns all of the power back to the creatives. The DV revolution put the means of production in our hands, and now the net has put the means of distribution.

    Hollywood is not comfortable with this since distribution was the last card they held.

    The things that pop in Hollywood and on the net are the ones that have great writing and great performances.

  5. Good post, one thing I would add is that most of the Hollywood power (iron grip) has been due to the fact that audiences were captive, they really had no choice in how they are entertained. Because of this, allowing digital self-expression will break this grip and the movie industry will have a very hard time recreating it, I actually believe they never will have as much power as before but we will see.

    I think a similar phenomenon has been playing out in newspaper industry losing their grip and we clearly see what comes as a consequence – destruction of their main revenue base, classifieds.

  6. Hey, Om. Love your blog and get a lot out of it every week. Just wanted to share my thoughts.

    While I think social media and user-focused/user-generated content are playing a role in the demise of movies, I think consumer demand for instant gratification coupled with consumers’ short attention spans are even bigger factors.

    If I want to see a movie in current release, I have to find a theater, find a time that works, drive there, find parking, buy an overpriced ticket (if I didn’t get one online), possibly stand in line for concessions, and then find a seat. Compare that to the experience of opening up a web browser or RSS reader to instantly and easily peruse Internet content. Or, to using the DVR, Video on Demand, and Pay Per View that I have hooked up to my TV at home. The movie experience is the polar opposite of instant gratification and consumers aren’t standing for it.

    The movie industry had known about this problem for years, but it continues to follow the regular theater, to discount theater, to DVD, to cable paradigm that has been in place for ages. TV has moved aggressively to show recent episodes online and to sell episodes quickly after release via numerous digital storefronts. This is only just starting to happen with movies.

    The other issue, and the harder one to resolve, is that movies are more of a time commitment than almost any form of entertainment (other than a concert). You can web browse for any amount of time you want. TV shows take 30 to 60 minutes to watch (or less if you have a DVR to commercial skip or buy them online sans commercials). A movie is 90-120 minutes of time, plus all the time taken by the logistical tasks of getting into the movie. Even if we get to the point when current films can be watched easily online, the films will still be more of a time commitment than virtually any other entertainment option. In today’s ADD world of constant stimulation, I wonder if people are willing to focus on something for that long. (It’s sad, but I think it’s true.)

    Marc :-)