Will Silicon Valley Own Hollywood?

Posted on June 22, 2007
Filed Under OMG! Old Media is Dying! |

One of the most prominent conflicts within the media world is that of new media versus old media. Technologists argue that technology is making old media less relevant. Many go as far as to claim that old media is dying.

As an individual who is passionate about both technology and media, I enjoy looking at the collision of these worlds and analyzing the claims that are being made. It’s a difficult subject to analyze thoroughly because both industries are quite complex. Additionally, the terms “new media” and “old media” are often not used in a consistent manner and when you consider that many old media businesses, like Viacom, are actually quite involved with what most consider to be new media, you have all the makings of a subject which can be debated ad nauseum without basic assumptions being agreed upon.

In a recent TechCrunch post, that Silicon Valley would take over Hollywood. I find the arguments for this to be less-than-compelling, and believe the simplest way to analyze the situation is to first establish just how technology is impacting the media business. There are two primary changes:

Technologists often jump to the conclusion that these two changes make old media irrelevant. If individuals can produce their own content and distribute it themselves, who needs “professional” content and who needs the media giants that control traditional distribution platforms like television?

Because The Drama 2.0 Show will often examine topics related to technology and media, I’d like to lay out my basic philosophy on this issue. To do this, I think it’s important to address the two areas that technology impacts media: content production and content distribution.

Content Production

There is no doubt that it has never been easier for individuals to produce media content. Technology provides sophisticated tools, often at little or no cost, which can produce quality content when placed in the right hands. This is certainly a positive thing, but does not mean that “professional” content is a thing of the past. Why? There are a number of reasons:

User-generated content is here to stay, but professional content isn’t going anywhere. If the average person was to take a daily inventory of his or her content consumption, I think most would find that a significant amount of that content was professionally produced. Additionally, one need only look at the prevalence of copyrighted materials on services like YouTube to recognize the only logical conclusion: if user-generated content is good enough to quench our thirst for entertainment, why are people finding it necessary to upload and consume professional (copyrighted) content to these services in the first place?

Content Distribution

The Internet is arguably the most democratic and flexible content distribution platform ever. Because of this, many technologists argue that old distribution platforms are doomed to die along with the “dinosaur” media companies that control them. There are several problems with these arguments:

The Internet is a powerful distribution platform and its impact on the media industry has been significant. It will continue to be. But the claims that old media is dying are exaggerated. Like radio, other distribution platforms will be around for a long time sharing the stage with a new character - the Internet. Old media companies are adapting, and at some point technologists will realize that old media has become new media too.

Silicon Valley vs. Hollywood

When Silicon Valley veterans speak of the inevitable takeover of Hollywood by Silicon Valley, they usually fail to distinguish between Hollywood’s two primary businesses: content production and content distribution. For a long time, Hollywood had almost unlimited control over both. It’s reluctantly losing some of its control over distribution. However, the primary driver of the entire media business is content production and it always will be because without content, there is nothing to distribute. This gives Hollywood significant leverage. While Silicon Valley has an increasingly loud voice in the content distribution business, its voice in the content production business is, in my opinion, never likely to be anywhere near as significant (outside of possibly working with Hollywood to produce content that is created specifically for Internet distribution). Content is created to entertain and inform people. The culture that is best capable of creating the content that entertains (Hollywood et. al.) is much different than the culture that is often best capable of finding new ways to distribute it (Silicon Valley et. al.).

So what does this all mean in the grand scheme of things? Hollywood and Silicon Valley are going through a courtship process and will eventually find that even though they don’t always like each other, they’re better off together than without each other. With a little honesty, respect and understanding, it’s a marriage that just might last. And because Hollywood knows how to have a little more fun that Silicon Valley, the wedding is best held at the Casa del Mar and the after party at the Playboy Mansion.

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5 Responses to “Will Silicon Valley Own Hollywood?”

  1. OMG! They killed Internet radio! You bastards! : The Drama 2.0 Show on June 23rd, 2007 6:54 pm

    […] entire situation highlights the point I made in my post Will Silicon Valley Take Over Hollywood?: distributors of content will always find that they play second fiddle to creators of content […]

  2. OMG! Perez Hilton Sells Out! : The Drama 2.0 Show on July 15th, 2007 2:46 am

    […] and sell ads to advertisers who are currently weary of advertising on user-generated videos. As I have made clear, I believe that most user-generated content is lacking and that quality, professional content is […]

  3. The Future of Media is Integrated : The Drama 2.0 Show on July 28th, 2007 3:21 pm

    […] the moment is that they truly believe old media is dying. When Silicon Valley types proclaim that Hollywood will be taken over by Silicon Valley, it’s a reflection of a certain level of arrogance on the part of technology-oriented […]

  4. Dogtown on August 1st, 2007 8:24 pm

    blogs, podcasts, internet radio, p2p downloading, lack of digital rights all point to one thing: The model is changing for content creation and distribution. Silicon Valley will not take over Hollywood… However, Hollywood’s influence is wanning. Niche content creation will dominate and content distribution will not require securing Hollywood backing.

    In fact, I will be so bold to say that the culture of fame that surrounds Hollywood will diminish as the mega movie stars become a thing of the past. Movie stars were products of the narrow content distribution channels. Look at what is happening in the music industry…

  5. My Response to Arrington’s Post About “Those Crazy Musicians” : The Drama 2.0 Show on March 25th, 2008 8:29 am

    […] So if it isn’t entirely money, what drives the hate kool aid drinkers have for record labels, newspapers and television networks? Why does Michael Arrington relish attacking the record labels and arguing that Silicon Valley is going to take over Hollywood? […]

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Drama 2.0 spikes the Web 2.0 kool aid by providing critical analyses of Web 2.0, its people, its startups and its impact on the world of media. Other topics are explored when Drama 2.0 has been drinking too much 1975 Dom Perignon. Read more about the Internet's version of Keyser Söze here.