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The entertainment industry today is caught in a kind of purgatory, somewhere between Zero Mostel and Franklin Roosevelt. It's an odd place to be, and not sustainable to be there for much longer.
From Mostel, comes the line, "Without our traditions, our lives would be as shaky as... as... as a fiddler on the roof!" from the play, "Fiddler on the Roof." The industry respects, and clings to, its traditions. It is simply trying to scratch out a simple living without breaking its neck, and because of its traditions, the industry has more or less kept its balance for many years.
Even so, the industry's lives are becoming increasingly shaky and the balancing act more precarious. In the face of ever-changing audiences and environments, the industry has maintained the never-faltering tradition of steadfast opposition to any technological change whatsoever that would disrupt their business -- even if it eventually profits from those changes. Rather than see technology as an opportunity, the industry always sees it as a threat.
Bloomberg BusinessWeek broke the story of the latest chapter in a long saga, as the Motion Picture Association of America (MPAA) admitted it feared the arrival of Google’s high-speed network in Kansas City. The headline is instructive: "Google Fiber in Kansas City Makes Hollywood Nervous." A follow-up in Ars Technica conveyed the same meme: "Big Content eyes Google Fiber deployment in Kansas City warily."
Rage Against The Machines
Before going to Kansas City to check out what's on the industry's mind, it's important to remember just how the traditions have evolved in just the last 100 years or so. John Philip Sousa wrote in 1906, of player pianos: "I foresee a marked deterioration in American music and musical taste, an interruption in the musical development of the country, and a host of other injuries to music in its artistic manifestations, by virtue -- or rather by vice -- of the multiplication of the various music-reproducing machines."
Musicians for years fought rear-guard actions against the perceived threats to their livelihood -- whether it was the player piano, or radio, or recorded music, or "talkies," with a musicians' union eventually barring their members from playing on records as late as the 1940s. Record companies barred artists who recorded with them from performing on the radio, a free service with which records had to compete. (Sound familiar?) When FM radio entered the picture, existing broadcasters on AM fought to keep the new service out of the picture.
Of course, TV was its own disruption. For years, studios barred their stars from appearing on TV or from having their movies shown on the rival medium, thus opening the way for lesser actors and production companies to gain entry. When NBC aired "Saturday Night At The Movies," it was a big deal in 1961 when, up until then, movies were only seen in theaters.
The Consumer Electronics Association (CEA) did a wonderful capsule history of the entertainment industry's attitudes through the decades in a poster the group published in 2006. It had the Sousa quote, as well as quotes disparaging radio, the video-cassette recorder and cassette tapes, spanning 1925 through 1982.
Of course, the most famous,immortal quotation, came from Jack Valenti, the late head of the MPAA, who told the House Subcommittee on Courts, Civil Liberties and the Administration of Justice on April 12, 1982: "I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone." The hearing came at a pivotal time, following the decision of the U.S. Appeals Court for the Ninth Circuit to find there was infringement from use of the VCR, overturning a lower court ruling, and before the U.S. Supreme Court two years later overturned the appellate court.
Valenti's testimony started another grand tradition, one followed to this day by his successor, former Senator Chris Dodd. What Valenti said then has been echoed time and again since by MPAA, by studio and by their advocates:
"I am merely coming to start off by talking about the American film and television industry, not as an economic enterprise, but as a great national asset to this country, to the U.S. Treasury and the strength of the American dollar. And I am not just talking on behalf of people whose names are household words, like Clint Eastwood and some of his small band of peers. I am speaking on behalf, as he is, as he will no doubt tell you on behalf of hundreds of thousands of men and women who without public knowledge or recognition, who are not besieged by fans, but who are artisans, craftsmen, carpenters, bricklayers, all kinds of people, who work in this industry, not only in this State but in the 50 States where American films are shot on location. And they deserve no less, Mr. Chairman, than the concern of the Congress for the preservation of their industry."
In March this year, Dodd said: "It’s simple: When content is stolen, the working men and women who labored to produce it — carpenters, truck drivers, accountants — are not fairly compensated for their work. And the small businesses that also benefit from film production — caterers, dry cleaners, and so many more — are robbed of that revenue.”
The Fiber Threat
And so now we come to Kansas City, (both Kansas Cities, actually) the latest chapter in the saga, where Google is building its test-bed network with blazing speeds of 922 mbps, must faster than anything else. Howard Gantman, the MPAA spokesman, acknowledged such a network would be a great opportunity for consumers, but added that in South Korea, “the home entertainment marketplace was decimated by digital piracy” that the story quoted Gantman as having been "enabled by the widespread availability of high-speed Internet."
By most accounts, however, MPAA's assessment of South Korea, one of the most wired countries on earth, is off. Fueled by high-speed broadband, there's a "booming digital music market" that's driving up sales.
There's no certainty that such high-speed broadband will achieve anywhere near the widespread deployment that would give the entertainment industry heartburn. Verizon has stopped building out its fiber network. It will no longer sell even its slower DSL service without bundling it with voice service that most people don't want.
AT&T isn't breaking any records with U-verse, a copper-based service that is laughably regarded as "high speed." And wireless will be constrained for years in the speeds it can offer. The big carriers, landline and wireless, are putting caps on data "usage" that threaten to slow down, not speed up, the development of alternative delivery systems for video and music.
The Illusion of Comfort
Those developments must, for the time being, give the entertainment folks some measure of comfort. But the heart of the industry's problem is its attitude. If it now takes its cue from the Fiddler, it should learn to take inspiration from Franklin Roosevelt. On March 4, 1933, in his first inaugural address, FDR said: "So, first of all, let me assert my firm belief that the only thing we have to fear... is fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance."
The entertainment industry should no longer fear technological change. It should no longer cling to a precarious balance on the roof of an industrial structure constructed long ago. It's time to look on technology as an opportunity, and to conquer its fear of the unknown.