Scarcity, Experience, And A New Seat At An Old Table - Conclusions
1. Film isn’t going away. It’ll change a bit, and the home video market will go through some rough times, but the theatrical experience is too unique to disappear. I don’t believe we’re at the end of the era of the blockbuster film, I think that this can be a real boon for both the smaller and larger films.
2. Television is going to go through some real rough times over the next 5 years. Prepare for a lot more reality television (cheap to make, user participatory and thus timely) and other non-scripted content. Television Ad rates will continue to drop, and license fees will too, thus further cutting the budgets for content. There isn’t going to be another LOST for a very long time. In the first draft of this essay, I included the line “Maybe ever.” but I hope I’m very wrong there.
3. I don’t know whether the idea of a view online will come to be seen as equal from a monetary standard to a view on TV – at least concerning professionally produced content – but I sincerely hope it does. I don’t see any logical or economic reason why it won’t, but then again logic rarely has any place in arguments about art and commerce.
4. The larger media companies will remain, however they’ll never have the same power over the marketplace they once had. Since their competitive advantage is no longer distribution but financing and development, new competitors will come to market with Hollywood talent and outside money looking to exploit that more open distribution model. When scarcity is at play, it keeps competitors away. When “experience” is the driving audience draw, you get a lot more people banging on that door. Look to see more midlevel studios popping up over the next few years.
5. The new gatekeepers won’t be WB, NBC, or Fox, they’ll be Verizon, AT&T, and Time Warner Cable. As more and more is shifted to those pipelines (VOIP, VOD, TV, Internet, Fiber/Cable, etc.) they’re now the most valuable real estate in the world. Remember, NBC, ABC, etc were able to take advantage of the airwave scarcity to become huge media companies. That scarcity now applies to online access. The last thing those cable and fiber companies want to become is a basic utility, so they’re doing everything in their power to change the way they interact with (read: charge) the customer. Witness TWC’s attempts at consumption-based billing (no more “unlimited access,” you pay as you go) and the “tiered” access proposals which prompted the battle over net neutrality. They’ll fight tooth and nail against any challengers because as long as they control the route to the end consumer, they’re the most powerful companies in media.
Unless…
6. I’ve got a really dark-horse theory which ends with “Google provides free, basic, nationwide wireless internet access” which revolves around their dark fiber buying spree, testing of city-wide wireless, and creating an open-source mobile platform. My theory is that they’re looking to cut the legs out underneath the mobile service providers by attacking their handset and data markets with VOIP over city-wide wi-fi, but a side effect of this is that it also ruins the Cable and Fiber “scarcity” business model and puts them into the “experience” marketplace. I.E. “Google is free, but with us you get 50-100x the speed and a better experience.” This would be very interesting if it did happen, and falls right in the Google disruption wheelhouse.
7. Online content is still 12-18 months away from a “mainstream hit.” Right now there’s too much “filming radio” and not enough “making unique content” in online content. This can’t and won’t happen overnight, it requires a lot of experimentation within the medium. Mark my words: it will happen though. We’re coming closer, and each new project is about 5% better in the “unique experience” field, but there’s still a ways to go. Being cheap to produce is not a reason for a consumer to watch. Being an experience that they simply cannot have in any other media is.
8. The application marketplace and online content space is going to intersect in a big way. This falls under the “end user expectation” and “new storytelling tools” categories, but the simplest explanation is that the expectation for online content is “free,” and the expectation for the application marketplace is “paid.” People will pay for good applications (the same way they’ll pay for movies) so long as the experience is worth it. How “applications” differ from “content” is about to be seen over the next few years.
The takeaway from all of this can be summed up thusly: content is changing in a big way. Big changes to established industries are both painful to the aforementioned established companies, and an opportunity to the more nimble. Business models will change drastically over the next few years to compensate and remain relevant, but when everyone is comfortable there’s no room or interest in changes.
Right now, entertainment is in a low-to-mid-level state of chaos. There’s little confidence in the status-quo, and unlike past decades no one seems to know what the future will bring. This means that those who are willing to experiment will have first opportunity to rewrite the rules. Those who are content to live with the status quo will be replaced. This is equally true across the entire scale of entertainment, from large to small. We’re well placed in a disrupted field, and that presents unprecedented opportunities.
So what is the future of entertainment? It’s up to us to decide. All of us. Because we now have a seat at the table. Fortune (in all forms) favors the bold.
So grab a seat and speak up.
