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Hooray for Hollywood?

The cinema as we know it is falling apart.” – Francis Ford Coppola at the Beirut Film Festival.

Coppola, who describes the current state of the cinema as experiencing “a period of incredible change,” expects two or three of the members of the current six or seven big film companies to go out of business and the remainder to focus on specialty films, e.g. “Harry Potter.” Believe it or not, Coppola still has challenges finding sponsors for certain projects and financed his latest movie, “Tetro,” with revenues from his vineyard and winery in California.

A CNET author has urged actors (who are already “under the gun” from movie studios curbing their use of social media) to “Cut your spending. Save your money.” because “Many of the revenue streams that have gushed into your industry for decades, some for nearly a century, are about to dry up.”


What’s going on?

The CNET author, Greg Sandoval, predicts the end of DVDs, traditional movie rentals, and much of the cable money from motion pictures. Their replacements…? iTunes, Netflix, Hulu,, and YouTube… some of which are earning ad revenue by streaming full-length films and TV shows online.

The “kicker (definition 2)…?”

The revenues generated are MUCH LESS than the motion picture industry is accustomed to collecting!

For all of the often-inappropriate use of the term “paradigm” in business, the motion picture industry, like the music industry before it, is undergoing a fundamental “paradigm shift.”

After interviews with Los Angeles entertainment attorneys, studio executives, and some of the technology vendors who do business with the studios, Sandoval paints a bleak depiction of the movie scene. DVD sales are falling; the number of new film releases is expected to drop by one third, and people are not upgrading their DVD collections to Blu-ray discs to the extent hoped for by the movie industry. The CEO of Disney, Bob Iger said that the “business model that formed the motion picture business… is changing profoundly before our eyes.” Iger warned that studios must make deep changes or find themselves without a business.

Disney, itself, will soon unveil its “Keychest” media-access technology to adapt its business model to the new reality of customers who have replaced their DVD players and televisions with computers and cell phones with regard to entertainment. The Keychest technology would allow customers to pay a single price for permanent access to a movie or TV show across multiple digital platforms and devices, including the Web, mobile devices, and on-demand cable services.

The motion picture studios have essentially failed in their attempts to force file-sharing sites out of business, to kill file sharing with lawsuits, and to slow or block file sharing by employing security firms such as MediaDefender and MediaSentry. About a week ago, the MPAA changed the name of its antipiracy unit to “content protection” and fired three leaders, including the general counsel of the MPAA.

As the CNET article notes, the downloading and streaming of movie and TV content have become “mainstream.”

Rather than end this entry with a series of questions (you can ask your own questions), :-) I will end it with some advice from Bob Dylan:

“Come writers and critics

Who prophesize with your pen

And keep your eyes wide

The chance won’t come again

And don’t speak too soon

For the wheel’s still in spin

And there’s no tellin’ who that it’s namin'”

-Bob Dylan, “The Times They Are A-Changin’

-Bill at Cheshire Cat Photo™

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