STRIKE IN THE DINOSAUR SWAMP

As I write this the screenwriters’ strike is edging toward its second week and no end in sight.

In one sense that’s beneath the notice of this blog. After all, we’re concerned with the new media and society, not with who’s going to get what percentage of which products. In another sense, it represents yet another example of the inability of big media companies to adapt to a radically changing landscape.

My prediction is that sooner or later the strike will be settled more-or-less on the writers’ terms. And it ultimately won’t make a damn bit of difference.

If you’re not sure what all the fuss is about, WebPro has a good video summary

Of course WebPro’s story is mostly from the standpoint of the writers. The media companies aren’t saying anything, which is probably the best thing they can do. First, they’re going to be cast as the bad-guys in this by hordes of drivel-starved television fans no matter what they say.

Second, they’ve been talking out of both sides of their mouth about the revenue potential of the internet, telling their investors that there are huge profits in internet entertainment while telling the writers no one is making money off it.

I’m willing to believe no one is making money off internet television, but that’s irrelevant. The writers are asking for royalties, not an up-front payment and sooner rather than later the entertainment companies are going to be making money off the internet. And more and more of it as time goes on.

Strategically the studios’ position smacks of the kind of especially myopic lawyers and accountants who infest big corporations. This wasn’t planned by strategic visionaries at the studios for darned sure. (Assuming that the phrase “strategic visionaries at the studios” isn’t a completely oxymoron.)

What is going on here is essentially another performance of the Dinosaur Follies. The media company dinosaurs are so busy trying to jostle the writers away from the tasty new growth in the swamp that they’re ignoring the much larger issues screaming down on them out of the sky.

The real problem the entertainment companies face is the same as the one faced by their music industry subsidiaries. Their business model is less and less effective in the world of the new media. You can see this in declining television viewership, stagnant numbers of moviegoers and the faint scent of desperation beginning to waft out of Hollywood and New York.

The decline in television watching has received a lot of attention, but the state of the movies has received much less attention, especially since numbers were up slightly in 2006 after declining in 2005.

In fact the 2006 movie attendance report from the Motion Picture Industry Association of America shows an industry in trouble and heading for crisis. This isn’t just the fact that movie admissions are still off from the 2002 levels. (This is the important number since it represents tickets sold and it dropped from 1.4 billion in 2002 to 1.33 billion in 2006.) It’s the pattern.

What that pattern shows is an industry increasingly relying on its best customers (frequent moviegoers) because it is having trouble attracting customers in general. The numbers also reinforce what everyone has known for the last 20 years. You’ve got to have a blockbuster to succeed.

Rising costs and stagnant ticket sales have pretty much killed the moderately successful movie, just as they have eliminated the moderately successful television series. Increasingly the only way to survive in either industry is to hit a home run with nearly every at bat. (In the case of television it’s generally accepted that if a show doesn’t last for three seasons – the magic number for syndication – it’s not going to make money.)

This need for home runs is a classic sign of an imploding industry being squeezed between rising costs and stagnant demands. Eventually most such industries are either squeezed out of existence or reduced to tiny niches.

The semi-morons running the entertainment industry may not be able to read the writing on the wall, but they can read a balance sheet. One of the reasons for their intransigence in the current strike is that they’re desperate for more revenue – and they’re stupid enough to think they can get it by squeezing the people who make money for them.

Nor is this the most ridiculous notion the entertainment industry has come up with. the MPAA is pushing for bizarre schemes like licensing home theaters (basically any house with a couch and a 29-inch television screen) for $50 a year.

"Just because you buy a DVD to watch at home doesn't give you the right to invite friends over to watch it too,” an MPAA spokesman explained in defending this piece of lunacy. “That's a violation of copyright and denies us the revenue that would be generated from DVD sales to your friends."

Not even a Congress bribed with millions in campaign contributions ($217 million since 1990) would buy that one, but it’s a measure of the studios’ desperation that they’d even propose such nonsense.

However in pushing into the world of the new media, the studios face a more fundamental problem. They don’t understand the differences between internet based media and movies and television. For the most part they’re still thinking in terms of episodic television and movies and ignoring the kind of interactivity and community that comes from with the media they’re trying to invade.

Ironically part of the problem is that the price of poker is going down. It’s getting cheaper and cheaper to produce videos of decent, or at least interesting, quality. What’s more the tools are getting simpler and more powerful, which makes it easier to “break into the movies” online.

To get a tiny hint of where the technology is taking us, take a look at Beowulf, which is hitting theaters this week. With its incredible graphics and blends of animation and actors, Beowulf is anything but a cheap home-made production. However inside a decade those kinds of effects will be readily available to anyone who wants them, just as the breathtaking effects in the original Star Wars trilogy can be reproduced pretty much at will by amateur video makers today.

The critical point in this for the future of the movie industry is that what you can do in a computer you don’t need to do on a sound stage, complete with the large number of experts and associated expenses. Need to fix the lighting? That’s a couple of mouse clicks on the computer, not a crew of highly paid electricians fiddling with the lights for a couple of hours.

Of course there are other features that will play an even bigger part in these new online entertainments. One of the most important is interactivity and the resulting community. Increasingly entertainment is going to be about communities interacting in created worlds. The model is going to more closely mimic World of Warcraft than Beowulf.

This is utterly alien to the ‘sit back and take what we push at you’ model of traditional studio products. That mismatch alone is going to make it hard for the studios. And there are a lot of other problems I’m not going to try to go into just now.

So how will the writers come out of these fundamental changes? Probably better than the studios but not as well as they will out of the strike. Writers are a notoriously adaptable bunch, and most of us are able to turn our hands to a lot of different kinds of writing. While screenwriting is about the most highly specialized form of fiction writing out there, and screenwriters are in their own way prisoners of the system they’ve enjoyed over the decades, the flexible ones will do all right.