What Really Keeps Studio Executives Awake At Night
I’m going to tell you a little secret: Hollywood is in a state of panic (it’s also in California, but that’s another issue). Those of you who have been paying attention have surely noted that the new media is moving at warp speed. Now you could say, in the studios’ defense, that this rapid turn of events has been, well, rapid, but the Dawn of the New Media has been predicted since Amazon.com sold its first book.
Hollywood has been actively digitizing product for years now. Every studio has been scrubbing and remastering and relicensing music in anticipation of a digital windfall. Maybe it’s that DVD has been so dominant, so profitable for so long, but the studios remain unprepared for the future. Item Number Ten on the Absolute Value analysis of Google’s Analyst Slide Show asks the question that has Hollywood biting its nails:
Do you know exactly how many assets you have? By assets, I mean all the content you’ve ever owned or created. Do you know exactly? Do you have the count? (Remember, I’m a computer scientist. I have to ask these things.)
The answer, simply, is no. Studios great and small do not have complete, authoritative catalogs of their product. When Sony acquired Columbia Pictures from Coca-Cola in 1989, it made no secret of the fact that the acquisition of a major software library was the guiding reason. Setting aside the fact that Sony hasn’t done all it can do to exploit said library, Sony recently added MGM’s approximately 4,000 title library to the mix. That’s not counting individual episodes and whatnot.
Yesterday, MGM announced that it’s stepping back into the theatrical distribution business. Sure, there’s speculation that this is a ploy to fulfill the terms of its Showtime agreement (see: “Studio Briefing” and other rumors floating in Hollywood), but its plans highlight one of the challenges facing the motion picture industry. MGM will handle domestic theatrical distribution (and presumably pay television via Showtime); Sony will do domestic home entertainment and Blu Ray (it’s unclear if the Blu Ray portion applies only to the U.S. or worldwide); someone will do domestic television; someone will do international theatrical; someone will do merchandising; MGM is acquiring its initial releases from third parties. Who owns the product?
Rumor is that Google wants to get into digital asset management game. Reality has it that the studios need to better manage their products; heck, they need to figure out what their products are. There are solutions, of course, and I’ll be talking about one soon. But right now, Hollywood needs to stop chasing the next big thing and take some time to figure out what it has already.
Technorati Tags: Google, Sony, MGM, Blu Ray, New Media, Showtime, Hollywood
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