The present and future of post production business and technology | Philip Hodgetts

Oct/12

10

Is “Hollywood” ripe for disruption, or immune to it?

Last week Larry Jordan invited me on the Digital Production BuZZ to discuss two apparently conflicting articles:

Max Wessel on The Inevitable Disruption of Television and

Andrew Wallenstein on TV Studios too strong for Apple disruption(Sorry about the Variety paywall.)

How to reconcile these seemingly contradictory reports?

As I said, it led to a lively discussion, particularly between Michael Horton and myself. Check it out.

http://www.digitalproductionbuzz.com/BuZZ_Audio/Buzz_121004_Hodgetts.mp3

Sorry I don’t have a player for this blog.

A couple of further comments. Personally I think disruption is likely. Having read and absorbed Clay Shirkey’s The Collapse of Complex Business models, I am inclined toward the Wessel view as more likely. Wallenstein is writing about an analyst report from  Anthony DiClemente. Now I view all analysts as being suspect. They are almost always wrong.

I also note that if the industry is doing so well, why does it still insist on suing it’s best customers?

However, I think the real answer is in Wessel’s article:

It’s easy to get caught up in the magic of Hollywood. I often find myself immersed in the perfect pacing of a well-constructed mystery, the flawless delivery of that once-in-a-lifetime monologue, the scale and grandeur of the next big blockbuster — I get so caught up in all of it, sometimes I forget that I generally go there to tell companies their businesses are in trouble. Last week was one of those times. By the time I boarded the plane back to Boston, somehow I’d been convinced that the television industry was safe from destruction — luckily, it only lasted about 10 minutes… then I regained my sanity.

It’s very easy to be seduced! I think that’s what’s happened to Wallenstein (or he’s just telling the industry what he thinks it wants to hear for his own business reasons). No industry is immune from disruption.

I also note that Wessel takes a more academic approach to disruption and also notes that disruptive cycles are quite long, and we’re still early in this one. He also accurately identifies control or freedom of the last mile connection, creating his own disruption by dropping cable for TV and Internet and replacing it with 4G wireless internet.

I also referred back to an old blog post of mine from December 2009: What if Apple or Google simply bypassed Networks and Studios?

If (and that’s a big if) Apple wanted to improve the TV experience – they are an experiences company after all – then nothing would stop them making the best experience possible, to the point that if content providers did not “play ball”, they could simply be disintermediated with Apple going direct to producers and Netflix and Google are doing already. (Particularly Netflix.)

And I wrote that when Apple only had $35 billion in the bank. It’s now $117 Billion and growing. Apple could buy all the current TV production companies (or divisions) bypassing the current gatekeepers. I don’t think it’s likely, but the studios are really not in a strong negotiating position long term.

 

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2 comments

  • Andreas Schmidt · October 10, 2012 at 10:13 pm

    Hi Philip,

    very interesting article. I am not sure if Apple would even have to buy production studios, maybe. But I wonder what would happen if they open up their TV and movie sections to everyone like what they are doing with the podcast and app site. Basically everyone can list a podcast in Apples directory or sell an app through them. Even books is not to hard, a little bit a hazel if you are outside the states but I guess doable. The TV (series) and movie sections seems pretty closed.

    Food for thought..

    Best
    Andreas

    • Author comment by Philip · October 11, 2012 at 9:11 am

      I also do not *expect* Apple to buy up production facilities (output, less unlikely). Terry Curren has long expected Apple to open up the directory for programming (publish to iTunes store button in FCP X) but I wonder how they will deal with ratings and related issues. Will likely require a review process like the App Stores.

      Philip

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