Tuesday, January 18, 2011


From the L.A. Times via BigHollywood.

Broad swaths of the entertainment business declined in 2010. DVD sales were off 13%. Music CD purchases plummeted 19%. Video game sales as well as concert and theater attendance also fell. Even the turnout for America’s favorite pastimes — baseball and NASCAR — was down. And swift changes in technology will make it difficult for Hollywood to capture pre-recession levels of revenue. …
Cable and satellite subscriptions, DVD sales and video rentals long have been the profit pillars that supported Hollywood. Although media executives continue to boast “content is king,” recently released year-end data suggest entertainment companies are vulnerable to the same disruptive forces that imperiled the music and newspaper industries. …
But perhaps most ominously, last summer the pay-television industry suffered an unprecedented net loss — for the first time — of customers, a yellow warning light that consumers may no longer regard cable TV as a must-have utility on par with electricity and phone service.
Big Hollywood's John Nolte:

New content is no longer king because there’s so much of it already out there and available at a much cheaper price and in a more convenient way. Should we pay $10 a piece to drive to a theatre, get raped at the concession stand, and live with the frustration of all the rude talkers during a movie that kinda sucks? Or… Should we hunker down in the comfort of our own home and for the absurdly low Netflix price of $8 a month, stream a favorite movie we haven’t watched in a while or get lost in Season One of some television show we’ve been meaning to try? 
 And whether Hollywood likes it or not, streaming is the future. Personally, I’m sick of paying my cable company for a hundred lousy channels I don’t watch just to get Fox News, Turner Classic Movies, and Investigative Discovery; and everyday I get closer and closer to the realization that the money I would save canceling my cable is worth going to the Internet for my news. It also personally disgusts me that dishonest organizations such as NBC, CNN, and MSNBC profit from my cable payment. You sports fans can save money buying only the packages.
I mentioned this before at anime conventions. The amount of people watching content has grown with these new platforms, however, the amount revenue that are being drawn from these platforms are in many instances pennies on the dollar compared to the old platforms. The industry infrastructure has been built on $15 USD per unit  high yield revenue stream, while the new platforms might get you $1 USD per unit revenue stream. An infrastructure built on the $15 USD yield revenue cant sustain itself on a $1 USD per unit yield revenue stream.

I think you will see what I mean when I say go read the whole thing.

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