Choose your poison: market-driven contraction, the digital revolution claiming its victims, fear mongering, paranoia, shock doctrine or just opportune cost-cutting under the auspices of financial burden, the strains of the financial crisis have culminated in an orgy of blood bathing for media and entertainment companies.

Scanning the trades today is an exercise in gloom. Layoffs across the big studios. Venerable newspaper companies filing for bankruptcy. Production deals not getting renewed. SAG rattling its sabers for an insane strike. The sky is falling fast for traditional media leaving lots of questions and very few answers. (more…)

Take an hour out of your life and watch this important video. It’s an excellent overview of the evolution of new media’s impact on human interaction. It highlights the role that YouTube is playing in the development of Fan Fiction (a somewhat inaccurate yet my current preferred euphemism for User Generated Content). If you’re short on time, skip to the conclusion at 45:15 and listen to Lawrence Lessig’s take on the cultural inflection point that we have communally reached due to the connectivity and access provided to us through digital distribution.

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Today, Safran Digital went public with the details of our partnership with Xbox. In particular, we’ve announced the directors for our slate of original web video pilots, which launch this fall to coincide with Xbox’s user-interface redesign.

The directors involved include James Wan (Saw, Death Sentence), David Slade (30 Days of Night, Hard Candy), James Gunn (Slither), Lucky McKee (May), Andrew Douglas (The Amityville Horror) and Marcus Nispel (The Texas Chainsaw Massacre, Friday the 13th).

I’m extremely proud of the filmmakers and their camps, the deal we’ve put together and what I believe it represents for the future of digital content economics. (more…)

The Chris Anderson discussion was a uniquely Hollywood cocktail of the enlightened apocalypse. About 60 guests, all in the blockbuster business, a mix of actors, agents, artists, studio execs, media types, digital entrepreneurs, game developers and political commentators gathered to hear a polite version of their own eulogy, complete with Q & A.

The event was at the Bel Air home of entertainment mogul Peter Guber. The backdrop couldn’t have been more poignant. Chris sat in front of Guber’s massive wall of awards, an honorarium of old-media triumphs, and delivered his take on how the sky is falling and why that’s OK. Guber, who is no stranger to managing rowdy personalities, (he ran studios for years, but more germane teaches a entertainment class at UCLA), did a stellar job of giving Chris a forum to speak in what could have been hostile waters.

According to Chris, the big media structure is doomed because “any product that touches digital turns to free.” In an increasingly fragmented media landscape, where it’s harder than ever to aggregate and distribute to audiences efficiently, the blockbuster business will see greater risk and less return. It’s a vicious cycle that is tightening the hourglass, squeezing out the middle market of specialty studios, thinning the ranks of the bankable talent and commercial franchises at the top while broadening the long-tail of low cost, low return web product.

He right. It’s a massive restructuring of the supply chain of entertainment.

Recent shuttering of the middle budget specialty studios like Warner Independent, Fox Atomic, Picturehouse and Paramount Vantage (updated 6/5) are more than just casualties of culture clash, they’re indicators that the digital death knell has rung and we’re already deep into this process.

This shouldn’t come as news to anyone. We’ve been talking about this since Napster sparked the end of the music industry as we know it. What’s interesting is that Chris drew a line in the sand. He said that anyone under 25 would embrace this change and anyone over 25 would fear it.

I wanted to get Chris’ opinion on Google and their role in facilitating the culture of free. Are they becoming the new gatekeeper and if so, how do we reconcile that we seem to be trading one set of monopolies (studio distribution) for another (Google distribution).

Chris’ take is very Zen, and I admire him for it. You can’t extract financial value from free, but you can extract personal and community value. So in Chris’ opinion, it’s very likely that the world will see a net gain in overall value earned from the transition to digital distribution and communication. I’ll extrapolate that to say enabling free, as Tim Street aptly puts it “takes the locks off of the distribution business” allowing more voices to be heard and therefore more art to reach an audience, albeit a smaller one. It’s the long-tail.

What effect the limitation of the tools offered to artists due to reduced production budgets will have on the quality of that art is fodder for another discussion.

I called Chris out on his esotericism and found out that he has deep ties to Berkeley. No wonder I felt a connection. But for the rest of the room, the majority of whom made their fortune based on the management of the scarce resource of entertainment talent, it’s not enough to be an observer. They wanted answers.

Interestingly enough there was one guy in the room who didn’t give a damn about the sky-is-falling scenario. His name is Sam Elhag and he just sold his website, DrunkUniversity.com, to National Lampoon. As it turns out he got a movie deal out of it too. Sam told me he’s not interested in making blockbusters. What he cares about is providing short bursts of ridiculously funny content based on drunk girls, videos and photos. How’s that for a net gain?

By the way, Sam is 24.

Tonight I’m going to hear Chris Anderson, Editor in Chief of Wired Magazine, speak about his upcoming book, “Free.” In a previous post I presented my position on the culture of free, the gift economy and how I think it’s driving the quality of content and applications towards amateur hour. It will be interesting to hear Chris address web economics and I hope to engage him in a discussion about what this means for the future of web-based entertainment content.

I’m specifically interested in Google and how they’ve enabled the culture of free online. From my perspective, Google is bad for business. Let me qualify that, bad for business-as-usual (added). By offering everything you need on the web for free, Google has effectively put web-based business opportunities on life support. (more…)

My recent post “Economic Constipation and Digital Malnutrition” was an attempt to critically analyze Mark Cuban’s provocative May 4th post entitled “The Ala Carting of Video on the Net - Will it lead to disaster?”.

Incidentally, it was my most trafficked day and much to my surprise, I received a comment from one of my favorite bloggers, Hank Williams, who writes the influential whydoeseverythingsuck.com?”

Mark’s post has sparked a debate that has spilled over from the circle of web video bloggers into a broader conversation. Next week I’m in New York for the Advertising 2.0 event and plan to bring Mark’s position, and my rebuttal, to the panel on which I’m speaking. (more…)

Despite its cliche, the question of “what is the next version of the web” provokes as intense a debate as you’ll find within digital circles. Web 3.0 definitions vary wildly with any number of partisan descriptions coming from very smart, yet fundamentally biased people.

These descriptions are all forward thinking, yet intrinsically flawed. They neglect that versioning, or defining the next version of the web, isn’t just about software or hardware. It’s about culture.

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The gift economy that powers much of web 2.0 is unsustainable. The internet offers an unmatched infrastructure for the distribution of communication, information and entertainment. But professional creators i.e. bloggers, video producers or application developers that build web 2.0 products and help us realize the value of that infrastructure won’t keep making their content and giving it away for free much longer. Why should they? (more…)

Lew Henderson, who oversees the William Morris Agency’s digital business, is one of the most respected players in the digital entertainment business. And for good reason. He’s been making deals during every cycle of convergence fever: from the CD-ROM to Bubble 1.0 to the Dot Com Bust to Web 2.0 to Rise of the Social Nets to the M&A Frenzy of ‘05/’06 to Video Site Landgrab of ‘07 to today. That depth of experience translates to a sophisticated perspective of the ways things work. When Lew talks, I listen closely.

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