The most infamous faux pas of the past few decades is the studios’ collective effort to quash the VCR in its infancy, a battle that went all the way up to the Supreme Court in 1980. The videotape and DVD market went on to become a major economic boon to the entertainment industry of the past 30 years. Some things have changed since then; a few have not, says David Wertheimer, CEO of the Entertainment Technology Center at the University of Southern California.
This trend-spotting think tank was founded in 1993 to feed the industry’s need to see around corners, he says. “This is an industry that gets it; they know change is upon them faster than ever,” he says. “But just because they recognize this doesn’t mean they can come up with answers to the question of how to pay for anywhere, anytime free content for everyone.”
Unlike in the past, however, he points out that many individual content creators realize they need to jump into new territory, “even if the money hasn’t been fully penciled in.” He points to such ventures as Hulu.com as a good example of what he calls moderate risk-taking.
Mr. Wertheimer challenges the notion that Hollywood resists new technology for its own sake. “This industry is built on technological innovation, trying out new and creative ways of telling stories,” he says, adding that what’s going on now is an understandable caution when it comes to keeping the lights on. “If nobody is making money, then all the shows we love to watch will go away.”
Google itself, he notes, has had a hard time making money on anything besides its core search business.