Hollywood's bipolar icecap is starting to melt. This week brings a flurry of announcements about Hollywood establishment content heading online, even in league with former file sharing enemy, BitTorrent. Warner Brothers has finally figured out that meeting illegal downloaders halfway is more progressive than trying to erase piracy by trying to shut down P2P sites. Of course, in the WB/BitTorrent service, they still come up with Draconian DRM--the WB/BitTorrent service requires a password to watch the file (OK), but the file can only be viewed on the computer to which it was dowloaded (not OK). WB hopes to convert perhaps 10 percent of the pirates into legal users as a starting point, but the DRM might just drive those trying to become honest downloaders to other P2P sites to get less encumbered content. The TV shows will be priced starting around $1, but movies will be about the same price as DVDs. Not a great incentive for content that is tied to one machine.
In other news, the Apple iTunes store has added episodes from Fox's library, including "24" and "Prison Break," at $1.99 per episode for locking into Apple's device. Slowly but surely, Hollywood is trying out new models to increase the dollar yield per TV episode or movie and join the digital world.
In some ways, this shift by the networks and studios is driven by a realization that they have to intersect with viewers, especially the younger generation, where they consume media--less newspaper, TV and movie theater and more PCs, mobile devices and place-shifting, such as via the SlingBox.
In addition, the infusion of so-called user generated content is changing viewing habits, meaning less time devoted to what's produced by mainstream media. In the near term it’s a David and Goliath story, in which every David, or Dianna, has a high tech slingshot loaded with Web pages, blog posts, podcasts and video clips that are competing for attention with what the incumbent salaried media elite produces. YouTube's most viewed video is a three-minute lipsynch to the Pokeman theme song---over 10 million views, nearly 8,000 comments, 19,000 favorites, production cost=zero. The Pokemon franchise might have issues with the music rights, but the amount of brand exposure for Pokemon from is massive.
While the vast majority of bloggers, podcasters and vcasters are not on the radar or merely hold sway in their micro-communities, some are attracting lots of attention, at the expense of Hollywood's money machine. This phenomenon doesn't mean that the products that come out of Hollywood, like the recent Mission: Impossible III, won't be successful, but the digital world is calling. Following Moore's Law, it won't be too long (a decade?) before anyone can have their own high-definition Hollywood studio in their living room and access to millions of virtual objects and billions of viewers...