One disappointing thing from the article is that they state that Hollywood loses billions a year to piracy - as if it were an established fact. Sure, there's billions of dollars worth of content traded via piracy, but it's debatable how many of those dollars were lost to Hollywood.
Otherwise I have to say this article is one more example of why I love The Economist. You'd never see a publication from, say, a Time Warner company chiding Hollywood for being stupid. I started reading The Economist in the 90's because it was the only news outlet that didn't have weekly in-depth coverage of the O.J. Simpson trial or Monica Lewinsky. I've never looked back.
To say that Hollywood loses billions of dollars a year is not only true, but a gross understatement. The figure is actually about 1,000,026,000,000,000 (one quadrillion, twenty-six billion).
The reason is that, a few months ago, my six-year-old cousin filmed a skit in drama class and planned on selling it to my parents, who told her they were interested in buying it. My Dad once told her he had a bajillion dollars, so she figured a quadrillion would be a drop in the bucket. Unfortunately, before the transaction was completed, my cousin's unknowing mother found the DVD and sent a copy to us, causing my cousin a quadrillion dollars in lost revenue.
When she found out, she cried. I had to give her a lolly-pop to console her.
The article misses the entire point. Why aren't people watching TV, going to the movies, or buying DVDs as much? Because they are on the internet doing other things. This is a seismic shift they cannot change. They should embrace it not by putting the same old fare on a new medium, but by getting into new web-based businesses.
Faster horses couldn't have stopped the advent of the automobile. And people don't want the one-way communication of movies on the internet any more than they want it from the big screen.
While I understand the point you are making, I think you are underestimating the value and appeal of Hollywood's traditional offerings. Just look at the amount of movies and TV shows shared using bittorrent.
Humans really really like stories. This has been true for literally thousands of years. Dramatic storytelling and sport have been the prime form of entertainment in all human societies since the dawn of time. Think of storytelling shamans, greek drama, elizabethean theatre, hollywood blockbusters. I don't think the demand for this "one-way communication" will be going away anytime soon.
...but the willingness to pay for it might. That's why we have sequel overload - rather than risk a new movie, they just copy one that people have always shown willingness to pay for (Shrek, Pirates, etc)
yeah, the willingness to pay is dropping. Its already disappeared for music (but itunes is changing that).
Figuring out what the audience will like exactly is a different (and difficult) problem. I'm sure there were a lot of greek tragedies that flopped.
If movies don't make money, they can't be made. So people don't get to watch them for free off the pirate bay. Hollywood needs to find ways to charge for and deliver content in a way that people are willing to pay for and consume. What they don't need is to go off and start trying to find crazy ways of making money on the internet. At that point they are no longer satisfying a basic human need, and there already are a million people working on "monetizing" the web.
For the past 100 years you had a choice. For one way communication, radio, TV, movies. For two way communication, telephone. (I'm not even counting the books and letters for centuries before that.)
For the first time in human history, we have a medium that offers audio, video, text, and 2 way communication with (almost) anyone else in the world. People seem to like it. Any wonder they're abandoning everything else in droves to use it?
I don't think the mode of delivery changes the passive nature of the activity. A movie downloaded and watched from the pirate bay is no more 'two-way' than one seen in a movie theatre. I read your original comment to mean that because people can do many interesting things on the internet, they will give up traditional 'one-way' things like movies and tv shows. My argument was that there is a basic human need for listening to stories that will not go away. So it makes sense for movie makers to figure out how to best fulfill this need on the internet.
As I pointed out, one of the biggest uses people are putting this amazing new two-way medium to, is obtaining loads and loads of one-way material.
"basic human need for listening to stories that will not go away"
Absolutely. I just suspect that now that we have more options, we'll spend a little more of our time doing and a little less receiving. I have noticed that this is true for many people. It is, alas, not so true for many others.
Otherwise I have to say this article is one more example of why I love The Economist. You'd never see a publication from, say, a Time Warner company chiding Hollywood for being stupid. I started reading The Economist in the 90's because it was the only news outlet that didn't have weekly in-depth coverage of the O.J. Simpson trial or Monica Lewinsky. I've never looked back.