Will Hollywood Be the Next Industry Consumed by the Internet?

As someone who recently turned the big 4-0, I can say that I have seen a lot of technology come and go in my time. I remember the days when families used to gather around a black and white TV, and you had to get up to change the channel. The stations would also shut off at night leaving you with the much-maligned test screens.

I am sure this sounds prehistoric to the YouTube generation, but it show how much things have changed in the past few decades. One of the biggest changes in the media industry over the past 20 years has been the radical reshaping of the music industry.  I have seen many changes in this medium over my life. I grew up with the record player and used to enjoy and cherish the artistic designs on those huge album covers. I then progressed to the tape, and watched the boom of portable music with the Walkman.

Watching technology change, reminds me of how each technological advancement has its own flaws. With records, it was getting them scratched and not bumping the record player. With tapes, it was dreading that the tape would tangle in the cassette deck (I got quite adept at repairing broken tapes, which is a long-dead skill). CDs were supposed to be the definitive music technology, but now they look as outdated as an abacus (we also found that CDs scratched too).

Digital music pretty much killed the CD, although it had been long rumored that the industry was overcharging people for CDs. But digital music, MP3 and WMV files, also devastated the music industry. When I was a kid, there used to be warnings about people illegally copying songs from the radio or dubbing them on to blank tapes. Now that is standard operating procedure.

Kids today have thousands of songs on their phones or MP3 players and many of them have not paid a dime for that material. There are thousands of sites on the Internet, where you can download songs for free. Although many of these free downloads came loaded up with spyware that will kill your computer.

But more importantly, the music industry’s business model has been shattered. Record companies don’t make most of their money from selling music anymore, mainly because we have raised a generation of kids who expect to get music for free. When I was younger, I used to enjoy the ritual of going to the music store and browsing through CDs looking for bargains or little-known albums. Now, that is another anachronism.

While youngsters may love this brave new digital world that allows them to access entertainment for free, spare a little thought for the content producers. No one will be sad to see the demise of the huge record companies, who often ripped off their artist, but you have to feel for the musician who labors to produce music, and is not getting paid. John Mellencamp once called the Internet, “the most dangerous invention since the A bomb.”

Even though, I have gotten into downloading music and I insist on going to the pay sites such as Amazon, iTunes and Rhapsody, so at least some money goes to the artist. Some artists say this new model allows them more freedom, because instead of trying to get your music backed by a record label, you can instead create and sell it yourself over the Internet. Public Enemy front man, Chuck D says that he doesn’t even make albums anymore, he makes songs one at a time. Public Enemy is still thriving as a rap group and apparently make the bulk of their money from touring.

Other artists like 50 Cent and many rappers have realized they can make more money from endorsements, merchandising and acting, than music, so they are willing to take the loss from music. 50 Cent is worth almost half a billion dollars, and the bulk of that money didn’t come from music.

The music industry is still reeling from the sea change in technology, and now Hollywood is scared too. Pirating was already a huge problem, but now the Internet is threatening to make things worse with movies available on sites such as YouTube and various file sharing sites. I went on YouTube and found Michael Moore’s “Sicko,” available for free in 10-minute segments.

The video store is soon going the way of the pay phone, but I wonder if we are heading for a future where young people think the idea of paying for video content is laughably quaint?

Eventually video content producers are going to have to think of a different business model, whether the revenue comes from ads embedded in video streams or product placement. It seems you just can’t count on people to pay you anymore.

Manny Otiko, vice president of social and new media at Desmond & Louis PR, has worked in the public relations and journalism field for about 15 years as a journalist and a media relations specialist. His experience includes stints as a reporter at a daily newspaper, serving as a media relations specialist for a state agency and working for Southern California public relations agencies, Dameron Communications, Tobin and Associates and WunderMarx PR.

Manny has worked with clients in the public affairs, technology, education and economic development fields. He has secured coverage in publications such as The Los Angeles Times, USA Today, the Associated Press, the Wall Street Journal, CNN.com and Men’s Health.

Manny has been published in The Riverside Press Enterprise, The LA Sentinel, The LA Wave, The Washington Afro-Am, IE Weekly and Our Weekly. He is an active member of the Orange County chapter of PRSA, the National Association of Black Journalists and the Black Journalists’ Association of Southern California.

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  • Great article! It really is amazing to think that Hollywood may have to rethink their business model. Personally I only go to the movies about once a year. In between I am on Netflix, Redbox or the file sharing sites you mentioned. I am a movie buff, but just don’t see the need in this economy (I make minimum wage at the job I am blessed to have and run a startup business) to spend the extra cash.

  • Emcdonough

    This post is so true. Technology truly has transformed the music and movie industries. It’s sad to me to see all these movie rental businesses going out of business and a majority of cars don’t even have places to play cd’s anymore. It’s almost impossible to keep up with it all! I’ll be very interested to see how Hollywood continues to change as technologies do.

  • Amerante

    I always think about what will be the next thing to go? Instead of CD drives in a car their are MP3 plugs, computers now come with downloading software already built in, and nobody runs to the TV anymore for their show because they can watch it online at their convenience. Hollywood is changing, literally, every day and I worry about how we are all going to keep up with it.

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