Hollywood Disrupted

Reading through the LA Times, as I do before The Oscars every year, I came across a fantastic Op-Ed written by a respected Hollywood author by the name of Neal Gabler. The opinion piece, titled “The Movie Magic is Gone”, explains how Hollywood is losing its place as the epicenter of cultural products and how movies are losing their relevance as the “barometers of the American psyche”.

And what is culprit? You guessed it… the rise of social media! As Gabler elaborates:

“All of this has been hastened by the fact that there is now an instrument to take advantage of the social stratifications. To the extent that the Internet is a niche machine, dividing its users into tiny, self-defined categories, it is providing a challenge to the movies that not even television did, because the Internet addresses a change in consciousness while television simply addressed a change in delivery of content. Television never questioned the very nature of conventional entertainment.

The Internet, on the other hand, not only creates niche communities — of young people, beer aficionados, news junkies, Britney Spears fanatics — that seem to obviate the need for the larger community, it plays to another powerful force in modern America and one that also undermines the movies: narcissism.

It is certainly no secret that so much of modern media is dedicated to empowering audiences that no longer want to be passive. Already, video games generate more income than movies by centralizing the user and turning him into the protagonist. Popular websites such as Facebook, MySpace and YouTube, in which the user is effectively made into a star and in which content is democratized, get far more hits than movies get audiences. ”

What Gabler calls “narcissism,” I prefer to use the term “digital self expression”. And as I wrote almost a year ago in a piece titled “Social Networks are the New Media”…

“To some extent, self-expression should be viewed as a new industry, one that will co-exist alongside other traditional media industries like movies, TV, radio, newspapers and magazines. But in this new industry, the raw materials for the “products” are the people… or as Marshall McLuhan might say, “the people are the message” when it comes to social networks. So for any player who seeks to enter this industry and become the next social networking phenom, the key is to look at self-expression and social networks as a new medium and to view the audience itself as a new generation of “cultural products”.

In the past century, the creation of cultural products was centered in Hollywood. Now, social networks are broadening the scope of cultural media to include “identity production” (a very appropriate term coined by danah boyd), all the while decentralizing the ecosystem out to the edges. For traditional media companies that are seeking to enter this space (e.g. MTV, Martha Stewart, etc.), it’s critical to follow the audience into the development of this new market by re-focusing core assets that have the capability to deepen the level, and heighten the production value, of self-expression. ”

What Gabler and I both seem to be focusing on is the very real possibility that what is truly disrupting Hollywood is not technology per se, but what the technology is enabling the audience to do and how it’s affecting the public’s “consciousness”. In other words, the future of Hollywood may not ultimately rest on issues like how well the studios transition their business models to adapt to digital distribution schemes or how they handle massive copyright infringement.

Instead, what Hollywood might look like in the year 2020 could have more to do with how studios develop new “products”… much like they did with the advent of television (when they created sitcoms, game shows, movies of the week, etc.). But this time, future Hollywood products will probably have to integrate and leverage the virtually unlimited digital resource of self-expression and social media.

At the end of the day, what we’re talking about is the emergence of a new medium with its own art form. And whether Hollywood will remain at the epicenter of future cultural production is the big question. For the first time, Hollywood should be concerned like never before simply by virtue of the fact that, this time, the means of production are now in the hands of the audience itself. What this implies, at the very least, is that the studios will have to increasingly democratize their business model. What does that mean exactly? Go ask the CEO of Veoh.