Tuesday, November 13, 2007

Marc Andreessen on the Future of the Entertainment Industry

I believe the entertainment industry is in the early stages of being rebuilt in the image of Silicon Valley. ... 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. ...

Suppose the writers' strike continues for months to come -- and even beyond that, suppose the actors or the directors also go on strike. In such a scenario, it is hard to see how many companies based on this new model won't be created extremely quickly -- after all, if you really can't work for the Man, why not start your own company, if you can?

And if you are a primary creator in Hollywood, the model for starting your own company is suddenly becoming very clear.

Read the whole article here.

How much of what Andreessen predicts is really part of a more general trend whose effects are gripping the media companies as well? The Man is showing some vulnerability. Suddenly you can be a reportorial talent or "pundit" unto yourself. Of course you don't reap the monopoly rents the earlier generation of media companies was able to harvest. But if your costs are low it's a doable deal. Which is why hiring reporters who are in place may suddenly become more attractive than flying them around.

Taking an even broader point of view, what will the demise of the "bottlenecks" that Andreessen describes mean for the generation and distribution of future cultural product? My own guess is that the new technologies will also mean a relative decline in the cultural power of the West. It's already happening in anime and video games, where Japan is a major power. I don't see any reason in principle why declining barriers to entry won't open up at least niche markets for countries which presently have no cultural industries, though perhaps "industry" is the wrong word to use.

Finally, I can't help thinking that Andreessen's trends represent an existential threat to radical Islam. While it might be feasible for fundamentalists to turn the screws on big news companies or entertainment conglomerates, against this tidal wave of distributed creativity they will have no chance at all. Their censors could never cope. The Islamic meme will founder in an ocean of competing ideas; and it will either compete on its own merits or become submerged.

I don't know if the end of the cultural dominance of the West and the demise of radical Islam's dreams of conquering the world of the mind quite balance each other out, but maybe neither trend can be stopped. Who will win the culture wars of the 21st century? The culture that is to come.


Blogger NahnCee said...

If there's an end to the cultural dominance of the West, does that mean that the tired, the poor and the huddled masses will quit trying to swarm in here uninvited, and instead go to Japan and India?

If so, good.

11/13/2007 09:57:00 PM  
Blogger wretchardthecat said...

If things work right, then yes it will mean a huge decline in mass physical immigration. Functional, basically democratic societies like India will experience rapid economic growth. There'll be less reason to risk everything to become a waiter in London or gardener in LA when opportunities open at home.

But in many countries change will bring unrest. Many core American values are built into the ethos of the Internet. It puts a premium on knowledge, creativity and competition. No traditional society can embrace it without subverting itself.

The coming decades may bring many destabilizing trends. Outsourcing may mean jobs flowing overseas even as physical immigration declines. It will cause a deepending crisis in Islamic societies. It will cause an upheaveal in all traditional societies. But it will also mean unprecedented opportunities in Africa, Asia and Latin America where the challenges are successfully met.

Andreessen's account of the decline of Hollywood vis a vis new entertainment industries can be thought of us an example of that upheaval writ small. The world may be moving from "Do you know the way to San Jose?" to "Do you know how to post on YouTube?" Maybe there are fewer aspiring writers thronging the New York Times offices these days, but that's only because they are setting up shop in other ways.

I'm sure most of these musings will prove wrong or only partly right, but I think there's a deep kernel of truth in the idea that we are standing on the threshold of really large changes. And not just in Hollywood.

11/13/2007 11:46:00 PM  
Blogger L. C. Staples said...

I actually wrote about this two years ago, in Wingnuts and Dreck.

11/14/2007 12:19:00 AM  
Blogger wretchardthecat said...

I don't think the US is self-consciously revolutionary enough, in the sense that it isn't fully aware of the effects the revolution it is causing creates.

Robert Kagan called America the world's most Dangerous Nation. It has been in the past; and may be even more dangerous in the future, simply because of the amount of change it introduces into the world's societies. Maybe that perilousness is inherent in the idea of America itself and can't be helped. But surely it's useful for American opinion leaders to have some clue about the upheaval US society is helping to create. That doesn't mean pulling back, but understanding what is going on.

The War on Terror is arguably one manifestation of the changes to the world America itself has helped create. There may be more in store. If we can't help going forward, we can at least keep our peepers open.

11/14/2007 01:05:00 AM  
Blogger hdgreene said...

Actually, I think San Jose is in Silicon Valley, but I live in Ohio so I'm not sure. But you might try heading south from San Fransisco and make a left at the bottom of the bay. San Jose is the quite little town of maybe a million people. I wonder if You Tube is there?

Of course, if you're coming north from Hollywood, you should stop in Los Gatos for lunch and ask directions. Or just push the button on your GPS tracker. Now That's Entertainment.

11/14/2007 04:43:00 AM  
Blogger Celia Hayes said...

"The Internet has already been forcing a rethink of the structure of the media industry, particularly for entertainment."

It's starting to happen in other venues too. I am involved as a founding member of an authors collective (website here http://indauthguild.tripod.com/ ) which began as a discussion group of writers who had done POD (publish on demand) historical novels and wanted to swap tips on marketing them to readers. As the discussion developed, we realized the possibilities of a nimble and responsive organization, and the various internet-fueled means we had to get our books in front of readers - and circumvent the dinosaur-like literary-industrial complex. As writers, we could just circumvent the whole gruelling process of playing by the old rules. So, there we are, with a publication, and a website and ambitions plans to make the book-fair scenes, have an awards program and even eventually do POD books under our own imprint.

I don't know if our plans will play out quite as successfully as we hope, but we all realize that the time for such an organization is now.

11/14/2007 07:03:00 AM  
Blogger Yashmak said...

Finally, I can't help thinking that Andreessen's trends represent an existential threat to radical Islam. While it might be feasible for fundamentalists to turn the screws on big news companies or entertainment conglomerates, against this tidal wave of distributed creativity they will have no chance at all. Their censors could never cope. The Islamic meme will founder in an ocean of competing ideas; and it will either compete on its own merits or become submerged.

I'm not so sure. Yes, hundreds of thousands of distributed, yet unique, sources of ideas and information would make it difficult for fundamentalists in 'open society' areas to censor the ideas generated by those sources. However, it's my understanding that exposure to these sources of information is at the moment, rather limited (How much internet access in the Pashtun region of Pakistan, for instance?). Large blocs of these ideology sources can be blocked at once (Google & Yahoo in China for instance).

It is (in part) this insulation from contradictory ideas that protects extremism. The breakup of media and entertainment monopoly of ideas will not, in and of itself, break the power of extremists or fundamentalists who remain beyond the reach the new ideas generated by disparate sources.

At least, not in the short to medium term. Perhaps in the long run.

11/14/2007 08:14:00 AM  
Blogger Mad Fiddler said...

It's highly interesting that Andreesen specifies the "Silicon Valley" model.

I worked at several companies in Silicon Valley for about a decade ending in 2001, and several items stick in my memory:

a) at a time when American citizen employees were being laid off by their Silicon Valley employers--- especially programmers, system administrators, computer animators, composers, and other computer professionals --- a number of those same Silicon Valley firms petitioned the U.S. Department of Immigration for a special exemption to then-existing quotas applied to Pakistani, Indian, and other South Asian workers. They claimed they could not find qualified U.S. workers at the same time they were ***Laying OFF*** qualified workers with precisely the same skillsets as the foreign workers they wished to hire. The only difference was that the Americans had been working for salaries substantially higher than the wages that would suffice for the foreign workers.

Well, it makes economic sense ***for the companies*** to do that, except that all those laid off workers immediately qualified for many months of unemployment compensation. And because Clinton's administration HASTILY granted the exception to quotas, thousands of those laid off were suddenly looking for work in a market where the available jobs had been filled by people working for much lower wages, and they ended up having to either leave the state or apply for state-and-federally funded jobs training, after exhausting their own savings.

It is interesting to note that as a consequence, Mr. "I-can't-control-my-pecker-if-my-life-depended-on-it" gained a very solid bunch of supporters among the Silicon Valley Enterpreneurs.

Later, when the POTUS of the ungoverned gonads was doing the same thing to logic that he'd earlier done to Monica, it was a bunch of SILICON VALLEY ENTERPRENEURS who founded a new organization to counter the efforts to bring Clinton to account for his violations of his victims, and of numerous federal laws. These people argued that what he had done may have been exactly as he was accused, but that it just didn't matter, really, in the grand scheme of things. In their minds the problem was everyone who wanted to punish or remove Clinton from office, NOT that Clinton had done the things he himself finally admitted.

"We concede that he did everything you say, BUT CAN'T WE JUST MOVE ON?!?!"

Thus, "MoveOn.org"

I have my reservations, thank you very much, about the Silicon Valley "business model."

11/14/2007 12:47:00 PM  
Blogger Mad Fiddler said...

As a reference to what I mentioned in my post, see Migration News from UC Davis.

The article in "Migration News Vol. 5 No. 4, October 1998" mentions that

One major issue was Department of Labor power to investigate the validity of attestations by employers that they pay prevailing wages. Under the compromise, DOL will be able to investigate only cases where there is strong evidence of a willful violation of the program guidelines, and then only with the personal approval of the Secretary of Labor.

and further mentions

The Institute of Electrical and Electronics Engineers-USA said that the "White House capitulated to industry groups two days before a fund-raising trip to Silicon Valley." Just after the compromise was reached, Clinton raised $650,000 from Silicon Valley executives for the Democratic party.

11/14/2007 01:10:00 PM  
Blogger Mad Fiddler said...

sorry, BLOGGER will not allow me to reference the URL using the format that worked some months ago I'll include it here with spaces to fool the system

h t t p: / / migration.ucdavis.edu/mn/more.php?id=1641_0_2_0

11/14/2007 01:13:00 PM  
Blogger NahnCee said...

The culture withIN America puts a premium on "cool" -- who's the first with the best with the newest. I don't ever see that culture changing, that aspiring to be one step ahead of the Jones.

So if we're not going to rein ourselves in internally, why on earth would we want to hold our expansion back because it makes the have-nothings over there uncomfortable?

Isn't that the definition of Darwinism? If you can't keep up and evolve, then you die? Obviously many of the countries around the world that are in trouble now (i.e., Pakistan) aren't able to keep up. Equally obviously they are fighting for survival. In my opinion, they will end up dying, and the format that Pakistan (for example) is built upon will die with it.

11/14/2007 04:25:00 PM  
Blogger Whiskey said...

Wretchard -- with all due respect I think you are fundamentally misreading both American culture and a transient economic change (from "Big Hollywood" to ... something else).

America CANNOT be understood without understanding the frontier and social churning, leveling, restriction of elites that the frontier produced. The last "frontier" aka Suburbia 1950-1980 has been closed (maybe you could expand it to Dot-Com boom mid-late nineties) and we are seeing massive effects as middle class people become poor. America has been founded on cheap land and expensive labor and with the closing of the frontier elites seek to reverse the equation.

[Good points there about Clinton-Moveon and the Silicon Valley Mad Fiddler.]

Secondly, Andreesen may be wrong. He does not work in the Entertainment industry and doesn't get a lot fundamentals. TV could have afforded that 2% success rate because the ad market had been rising and the Grant Tinker strategy (go smaller audience, richer/yupscale demo) had "cheated" a bit and moved that success rate upwards. However we are seeing Men totally absent from TV viewership, even accounting for fragmentation, men are no longer there.

DVD revenues from TV shows are likely at risk because of piracy, reruns in syndication have had price collapse (too much product).

Meanwhile, Film is also a home-run or bust syndrome, even worse, but with half of revenues from foreign sales profoundly at risk through piracy.

If anything the pressures on both TV and Film are NOT more fragmentation but aggregation. As movies lose marketing money for all but Summer Blockbusters (Movie advertising dominates Wed-Thur in TV ads), and Games become more dominant in TV ad-buying you can expect to see stuff oriented towards men more.

Economies of scale are not trivial. Just as likely is a Media Corps deciding to be vertically and horizontally integrated, with process improvement to increase success rate, drive down costs, and lucratively compensate a few superstars and outsource all other stuff to India or China.

As far as the "collapse" of Western Cultural Hegemony -- nothing in the other world centers is likely to be very attractive. Certain aspects will be more popular, like Anime, Samurai movies, Bollywood, but as far as Indian, Japanese, or other cultures competing with the individualism and dynamism of the West? Please.

11/14/2007 07:31:00 PM  
Blogger NahnCee said...

Agree. What Whiskey said.

I always think of Australia as being a younger brother of America, brought up on the same values and striving towards the same goals. But fairly often, Wretchard will post something that does indicate that he hasn't entirely wrapped his mind around what it means to be American.

His comment that we should pull back, or consider the impact on the rest of the world of our striving and our life-style is one of those comments.

For example, if Americans had colonized the Australian continent, there would be railroads criss-crossing the whole country by now, and possibly even a canal or two dredged through the middle, so that developers could start building more towards the middle instead of massing everything in three or four cities along the coastline.

And *that* is just the energetic money-making aspect of "being American", and doesn't even speak to concepts like freedom of speech, freedom of press, the right to be represented by an attorney, innocent until proven guilty, and all the other concepts we see even the most rabid jihadists latching onto gleefully.

11/14/2007 09:37:00 PM  
Blogger wretchardthecat said...

I had a long discussion with some guys about why the Australian states each developed a separate railroad gauge. I couldn't understand it. In US history the railroad was the handmaiden of property development. Railroad engineers would be bribed to shift the line so as to boost real estate values. So why should the Australian states not see the value in a standard gauge?

The answer probably lies in the different histories. Joining the American east and west coasts was a vital part of achieving Manifest Destiny. But which Manifest Destiny? Some southern states hated the transcontinental railroad because it meant the end of the dominance of river traffic along the Mississippi. It meant New York and Boston, rather than New Orleans, would be the gateway to the Midwest.

Australia, by contrast, was very much a colonial creature of Britain until fairly recently. The continent was secured by the Royal Navy. There less urgency to penetrating the interior. And so the gauges could be different. It was the luxury of free security that made it possible. There never was the equivalent of the Mexican-American War. Not even the equivalent of the War of 1812.

From the very beginning America was self-conciously a nation. Australia discovered it was one. It's interesting to reflect on which psychological differences between Australia and the USA are rooted in history.

11/15/2007 12:37:00 AM  
Blogger NahnCee said...

The old robber barons like Leland Stanford, John D. Rockefeller, Cornelius Vanderbilt, and William Randolph Hearst didn't let a little thing like government or the law get in the way of development and making money.

Hearst even fabricated a war (the Spanish American war) in order to have better headlines to sell more newspapers. Interesting that Punch Sulzberger and the NY Times has had the opposite experience with Iraq, and are selling FEWER newspapers, to the point of bankruptcy.

11/15/2007 06:29:00 AM  
Blogger NahnCee said...

From the very beginning America was self-conciously a nation.

See - this is another one of those comments that just doesn't ring true to a American. We are not self-conscious, but tend more towards isolationism. We don't pay attention to what people in the rest of the world are doing because we just don't care. That's what drive the French crazy, because they're prancing around poofed up like a peacock, and we simply don't care enough about France to even notice.

We're pretty focused and insistent upon maintaining our Constitution and the laws the country was built upon, but that's not for show. The last few years we're trying to demonstrate to a bunch of savage overseas that they'd better learn this democracy thing or we'll have to severely punish them, possibly until a nuclear death.

But that's part of the cool factor, I think, that makes the rest of the world want to be like us: that we simply don't care what they think, and it will take demolishing two of our highest skyscrapers to make us sit up and take notice.

11/15/2007 06:36:00 AM  

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