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The Benefits of Disruption

Tom Butts

Once upon a time, the world of video entertainment was fairly stable. You had your lines of demarcation between TV and movies. Sure, much of the programming you saw on TV was provided by many of the same studios who brought you the latest Hollywood blockbusters, but bigtime Hollywood stars rarely crossed the line into television, which was often viewed as an inferior product.

Those days are long gone.

Ever since shows like “The Sopranos” and “The Wire” made television “respectable,” we’ve seen a number of prominent film actors and producers gravitate towards the smaller screen, which is now viewed as providing a more open and diverse environment for experimentation. (Of course it helps if you have hundreds of channels to fill.) The film industry is increasingly seen as a stagnant, repetitive medium where the accountants rule the day and nobody makes a move unless they’re assured of a film’s marketability. There’s only so many reboots you can do to a super hero franchise. That familiarity is beginning to breed contempt.

Several of Hollywood’s elder statesmen agree. Speaking at an event in Los Angeles recently, Steven Spielberg warned of an imminent implosion if Hollywood continues to rely solely on $200 million blockbusters to pad their bottom line. This may seem ironic given that he was one of the men who helped invent the genre; but if anything, that background gives his point more credibility

“There’s eventually going to be an implosion or a big meltdown… where three or four or maybe even a half-dozen mega-budget movies are going to go crashing into the ground, and that’s going to change the paradigm,” Spielberg said. He and fellow director George Lucas predicted a future scenario that would demand a premium—perhaps up to a $25-$50 ticket price for the latest “Iron Man” sequel, compared to perhaps $7 to see something more original, like Spielberg’s latest movie, “Lincoln.”

Maybe this is the kind of disruption Hollywood needs; heaven knows television has been in a disruptive mode for a decade. Today, television provides the kind of flexibility in its approach to programming that Hollywood lacks. With the explosion of multiplatform options, including over-the-top services, the medium still referred to as “television” is providing the kind of cutting-edge variety that consumers crave.

Competitors like Amazon and Netflix are forcing the television industry’s hand; distribution threats such as a la carte and Intel’s campaign to launch its own virtual cable service are prompting the cable industry to circle the wagons. And with the FCC now considering revising the definition of what a multichannel video programming distributor is, the pay-TV industry may be experiencing more disruption than it can handle. One could argue this might result in a more conservative approach to programming, but the competitive factors probably won’t allow this to happen. The barbarians are already at the gate and moving in.

We’re beginning to see some movement in how Hollywood films are funded, with the onset of “Kickstarter” funding campaigns, and perhaps this will lead to more quality and variety. Will the industry wait until Spielberg’s “doomsday” scenario becomes a reality? Let’s hope not.