Search form

Window Wars

We all have a front row seat at the bar-room brawl that is the media business in 2011. In one corner, the barons of Old Media – the Ruperts, Sumners, the feisty Jeff Bewkes of Time Warner, and the (for now) low-profile but deadly Brian Roberts of Comcast. In the other corner: Netflix’s Founder/CEO Reed Hastings, Larry and Sergey from Google, patriarch Steve Jobs, and the other new gen entrepreneurs who are not afraid of where the business is going, including (in a fascinating case of the puppy taking a bite out of its master(s)) Jason Kilar at Hulu.

We all have a front row seat at the bar-room brawl that is the media business in 2011.  In one corner, the barons of Old Media – the Ruperts, Sumners, the feisty Jeff Bewkes of Time Warner, and the (for now) low-profile but deadly Brian Roberts of Comcast.  In the other corner: Netflix’s Founder/CEO Reed Hastings, Larry and Sergey from Google, patriarch Steve Jobs, and the other new gen entrepreneurs who are not afraid of where the business is going, including (in a fascinating case of the puppy taking a bite out of its master(s)) Jason Kilar at Hulu.  No wonder Old Media is upset: streaming content distribution is up-ending their revenue streams, pressuring them to release content to post-theatrical platforms earlier and earlier, and at cheaper and cheaper prices. 

Let’s face it: content is now a commodity.  Gone are the days when windowed distribution was a gentlemen’s game that allowed our bosses/benefactors to bilk/milk the consumer in successive waves of revenue streams. By maintaining the scarcity of content, and rationing it to the consumer, not to mention republishing to new media platforms and incentivizing everyone to upgrade (VHS to DVD to BluRay, e.g.), Old Media has had a very lucrative 30 years.  To be fair, this run has allowed the business to grow, to keep us employed, and to build out the technology innovations that are ironically now precipitating this mess.  By scrambling to monetize our catalogs, by putting everything onto DVD, by developing better and better delivery systems and upping bandwidth, we have hastened the end of the business as we know it.

Because if everything is available (including, yes, illegally), and we live in an instantaneous, on-demand technological culture, then why can’t we have it… now?!  And with the proliferation of platforms and screens, consumers are now in control of time, place, screen and style (DL, stream, DVR) in which they’ll consume content.  I can’t get my No. 1 choice right now on my laptop?  Well, what can I get?  Let me do a search… 

Which brings us full circle back to the conundrum at hand.  Distributors know what’s going on, and they are all experimenting – whether it’s Bob Iger releasing ALICE IN WONDERLAND on DVD early, or Bewkes trumpeting his Premium VOD window ($30-50 to see a movie 3-6 weeks after theatrical release).  They know they have to collapse the windows and make more content available more immediately to the consumer who is oversaturated with too many choices.

This is a train wreck in full 500 fps HD.  For now, it is a lose-lose situation, and something Brian Gott, publisher of Variety, refers to as an “Armageddon scenario,” because the fact is that theatrical revenues benchmark the entire revenue lifecycle of our business.  If we cut into the theatrical window revenues, everything downstream depreciates accordingly, including DVD, pay TV and the rest of the licensing streams.  They are all based on those domestic theatrical numbers, so expertly projected as a multiple of that fabled opening weekend.  So there’s nowhere to go.  We’re damned if we do and we’re damned if we don’t.

Personally, I’ve never been a fan of the theater owners.  I have always felt that they don’t get the business, ironically – that they’re not really showmen (they’re popcorn salesmen).  And while I believe that it is up to them to re-energize the theater-going experience (because consumer marketing today is not so much about price as it is about experience) and stop blaming others for their failings, they do have a point that collapsing the windows isn’t doing any of us any good in the business as it currently stands.

So I think it’s time for Old Media and the new generation to take a breath and start doing a better job of talking to one another, and enlisting some of our best and brightest minds to collaborate on the new business model(s) of the 21st century entertainment content business (including the gaming industry).  We need some pan-industry leadership, here – whether it comes from the more visionary CEO’s on the Hollywood side (Iger is my only real candidate), or someone on the tech side like Hastings. We may not be able to avert the train wreck in progress, but we need to figure out how to prevent it from demolishing the entire business.

Tags 
More From 321Future!:
Next Post
Hulu: Who Knew?
You're currently viewing the oldest post.
randomness