What’s Next for Hollywood?

This post by Liz Losh at Sivacracy about the writer’s digital dilemma reminds of this older post by Grant McCracken about the producer’s digital dilemma.

Liz Losh:

One of the problems that professional writers for both the large and small screen are currently grappling with is media consolidation, which significantly erodes their bargaining power as a group of specialized professionals, but the other looming threat to their livelihood is the consumption habits of the digital generation themselves as viewers and their general unwillingness as an audience to pay outright for content, even if their parents are still content to shell out for those video store late fees and write that monthly check to their local cable company, like other oldsters. If the digital generation consumes the standard Hollywood fare, the fear is that they will do so without paying through participating in common file-sharing practices or logging onto shadowy offshore websites. Or, even worse, the entire market may continue to shrink as audiences reject the value of dramatic or comedic expertise entirely and opt to turn their eyeballs to the all-volunteer entertainment galaxy that is proliferating among amateur dramaturges online. Reality TV — which is already taking over much of the broadcast spectrum — could become the norm into the Nth dimension, and the “participatory culture” celebrated by Henry Jenkins could put the entire membership of the WGA on the unemployment rolls.  . . .

So here’s my list of possible strategies, suitable for a memo to a Hollywood bigwig, that tries to answer my friends’ basic question about what’s a nice scriptwriter to do now that the world is going digital.

Grant McCracken:

The TV series called Arrested Development was just cancelled by Fox. 

I think this real life situation would make a dandy case study.  (And there is, to my knowledge, nothing in the Harvard Business School case study archive on long tail markets.) 

If this  were a case study, the first paragraph would read something like this:

Series creator Mitch Hurwitz was sitting at his desk at The Hurwitz Company.  The office was quiet, even a little mournful.  Mitch’s  baby, Arrested Development, had just been cancelled. 

Five Emmys and the 2004 award for “best comedy series” had not been enough to protect it.    As Fox executive Peter Liguori put it, ”The fan base is unquestionably one of the most loyal in TV – it’s just too small.” The numbers this season had been disappointing, around 4.3 million viewers a week.

(if this were a real case study, we would do a quick review of economics of TV: how many viewers are required to sustain a series, what it costs to mount one, what the break even point is, how decisions are made, famous exceptions, etc.We would also note how the audience for AD took shape.  Did the numbers build slowly?  Did early adopters convert to loyalists?  Was there a good deal of “churn” is fans came and went?)

In the old days, Mitch knew, cancellation was cancellation.  The networks were god.  There were no stays of executive.  When the network cancelled a show, it stayed cancelled.  But because Mitch was familiar with the writings of Chris Anderson at Wired Magazine and because he was a man deeply acquainted with the trends of his industry, he knew there was still hope.

(if this were a case study, we would talk about Mitch’s career in television, what he had come to know about the industry, how things had changed as he came up, etc.  There is a good interview at the AV Club (link below) from which we could steal shamelessly.  We would also talk about how network TV had changed, how cable plays had emerged, the role of HBO in the reinvention of cable, how even small cable outlets were now producing, and how the economics of the industry had changed as a result.  This would also be a place to talk about Anderson’s small tail theory.  We would also talk about new distribution options opened up by DVD sales, video iPod, Internet access, and consumers who “prepay” for access to TV shows as they do in the world of the arts [the opera subscription] and in the world of marketing research.] )

(Here are the four scenarios which smart students would extract from the welter of details with which we have filled the case.)