Saturday, December 31, 2005

The Hollywood Economist's 2006 Forecast

(Photo: "Hollywood You Marry Me" - oil on canvas by Tony Peters)

Ed J. Epstein gives his predictions for The New Year in LaLaLand.

Here is the synopsis:

Before the invasion of television, the big screen provided 100 percent of the studios' revenues. Now it is 14.4%. The small screen (TV's, PC's, DVD's, iPods) provides 85.6%.

Hollywood's celebrity culture remains rooted in nostalgia for the big screen, yet the corporate owners have realized that the business is about creating intellectual properties—a movie, TV series, plug-in toys + games—that can be sold or licensed for personal entertainment in a raft of different forms and markets.

The home entertainment explosion will be aided by the following events:

1. The success of Google's Wi-Fi experiment in San Francisco.

A free Wi-Fi network means the studios no longer need to rely on cable operators, local TV stations, or telcos to have a pipeline into homes. They could directly rent any movie to consumers and bill their credit card without paying a cut to anyone.

2. The further collapse of the video window.

The window between the theatrical release and the DVD release can be expected to further shrink, if not disappear entirely. As a result, more and more people will choose to wait for the DVD instead of going to the theatre. This will surely result in bankruptcy for many theatres.

3. The proliferation of digital video recorders.

A plethora of personal entertainment can be watched whenever the viewer wants to, without commercial interruptions, will take a huge chunk out of the "clock" of potential movie-goers.

4. The Blu-Ray DVD.

5. The mandated digital conversion of television.

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