Will the Writers’ Strike Make Hollywood More Like Silicon Valley?

Legendary tech entrepreneur Marc Andreessen explains that the Silicon Valley way of creating businesses might be what its polar opposite, the entertainment industry, might turn into as a result of the WGA strike; and of the underlying issue behind the strike, the convergence of scripted movie and TV entertainment with the Internet.

The whole, very long piece is worth reading, but here’s the nut of it:

What would a new entertainment media company, producing original content, look like in the age of the Internet?

  • Starting from the end of the process: you know distribution is now nearly free. Put it up on the Internet and let people stream or download it.
  • Marketing is also free, due to virality. Let people email your content to their friends; let people embed your content in their blogs and on their social networking pages; let your content be searchable via Google; let your content be easily surfaced using social crawlers like Digg. All free.
  • Production is very cheap. Handheld high-definition video cameras cost nearly nothing. You can do almost every aspect of production and post-production on any Mac. Hell, you can even score an entire movie for free — there are hundreds of thousands of bands on the Internet who would love to have their music embedded in a new entertainment property as promotion for the bands’ concerts and merchandise.
  • The creators of the content are the owners of the company. The writers, actors, directors — they are the owners. They have a direct, equity-based economic stake in the company’s success. They get paid like owners, and they act like owners.
  • Financing is straightforward: venture capital, just like a high-tech startup. We live in a world in which financing a high-quality startup is simply not difficult — not for a high-quality technology startup, and increasingly not for a high-quality media startup. Modern financiers love being co-owners of a new company with the talent that will make the company successful — and that’s how it will happen here.

This is not a difficult thing to envision. And in fact, it’s already happening. Will Ferrell’s Funny Or Die, in which I am a minority investor, is one early existence proof of this model. And there are a ton of other such new companies either already underway, or currently being incubated, or currently being negotiated.

Funny or Die gave us Pearl, the 2-year-old landlady and Pearl, the 2-year-old homicide investigator who twice reduced comedian Will Ferrell to tears.

In the rest of his post, Andreessen explains why this model hasn’t already happened. It’s all about the cost of production and distribution. The cost goes down far enough, the studios lose their rationale for existence. In my opinion, the studios’ best hope would be to build a stronger relationship with the writers, and jump into the Internet hand-in-hand. But, as the music industry has already demonstrated, businesses sometimes will pursue the old, profitable model for a long time after the profit is gone, in the belief that the old truths will reassert themselves.

In the meantime, keep monitoring news of the strike via Nikki Finke’s blog.

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One Comment on “Will the Writers’ Strike Make Hollywood More Like Silicon Valley?”

  1. Kyle Says:

    I agree, the studios need to acknowledge the importance of writers and forge ahead together. Have you see what they’re paying these writers now?? http://writerspay.hollywoodstrikes.com


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