Bad Internet!

According to the CEO of Sony Pictures Entertainment, the Internet has been really bad for film making. CEO Michael Lynton was, of course, talking about copyright. This was at a breakfast panel discussion on the future of film making sponsored by Syracuse U. and the New Yorker.

Co-panelist Nora Ephron zeroed in on what really worries folks like Lynton: the potential death of copyright and what this does to their corporate empires. She equated the Hollywood film business to a giant Ponzi scheme that enriches a few at the top.

If anything, the Internet is pushing the content-production business back to its roots: creating “shows” that draw a quick crowd and pay for themselves immediately. This isn’t necessarily a bad thing. A lot of great productions were made on a shoestring.

Sony got into the film business because it wanted to own some of the content played on its electronic products. This reflected a huge shift in the entertainment business model. Before the videotape, content was often expendable. There was a small market for “syndicated” TV shows and movie reruns. Otherwise, old productions just gathered dust.

The BBC provided a depressing example: in the mid-1970s they had to deal with a budget crunch. To cut costs they discarded a big chunk of their film archive. Some of this work has been lost forever. Apparently there were public TV stations left with the only remaining reel of early Dr. Who episodes.

I’m sorry, but you just don’t need $200 million to create a great film. If anything, the high price tags make it harder to create greatness. Great films usually come out of a unique vision, a new way of seeing things. Such visions are risky. Investors with $200 million are usually risk-averse.

Sony’s problem is that their entertainment business is tied to the “content for sale” business model. Sony got screwed in the early video casette days when the content owners all moved to the VHS format. Sony’s Betamax format was superior in many ways, but nobody wanted to pay them a premium to use it. Sony bought into the film business to control the programming source. If there’s no money in reselling programs, then they don’t need an entertainment division.

This reminds me of Tom Edison’s situation: after inventing the phonograph he had to go hire entertainers to create content for the records. The problem was that he had horrible taste (he was, after all, partially deaf from a youthful incident). Competing phonograph companies hired Caruso, Ross Colombo, Maria Callas, and other famous singers.

The only “big name” I ever saw on an Edison record was John Philip Sousa (or, at least, his band). At least their music was loud.

Sony produces a lot of content I love. Their presence in the entertainment business is an artifact of technological evolution. If people don’t feel the urge to switch to Blu-Ray (just how eye-popping does home video really have to be?) then what’s the point of pushing fancier technology?

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