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Feb 24

My post in “Future of Film”

The Real Culture Wars: Hollywood vs. Silicon Valley

February 24, 2012 10:00AM EST By David Larkin

It’s no secret there is a disconnect between the technology/digital media industry and the filmmaking community. As CEO of Plexus, which runs Go Watch It, we are focused on (legally) connecting films and audiences. We have a foot in both doors, and are well situated to be a reasonably objective and frequently amused observer.

For this post I am not differentiating between Hollywood and the indie film business, although there are important differences between the two in terms of their embrace of, and need for, innovative technology platforms for marketing and consumption.

The most important difference between the movie and technology industries lies in each community’s very raison d’etre; movies are rooted in art and personality and technology is driven by increasing the efficiency of transactions (for a good overview of this in the economy as a whole, read: The NY Times:Economics Made Easy: Think Friction). The two communities attract very different personality types.

Not long ago I was having a beer with an investor in Plexus and some hedge fund quants who were friends of his. One of them had an idea. He wanted a website where he could watch speeded up films so he could find out what happened more quickly. He thought he would still be able to understand the dialogue and follow the action if a film played approximately twice as fast.

I burst out laughing but no one else did. The group liked the idea. These were quants at a hedge fund, mind you. Their job was to basically to try to tease out patterns in stock trading and reduce them to algorithms that could anticipate future trading activity. The buying and selling of corporate securities is a largely human driven activity, propelled by story telling and amplified by hope, fear and greed— in fact the same elements behind filmmaking.

You could imagine that if the director David O. Russell heard that idea, things could well end in violence. Or imagine a Roehmer film sped up. But these guys, who all liked watching movies, by the way, just wanted to see what happened next and make that process more efficient. One of them suggested they could watch twice as many movies that way.

At its heart, filmmaking is an art that mostly starts with an idea about people and how unpredictable they are as they navigate the world. In that unpredictability lies all the surprise and magic.

Digital technology and computing in general starts from the opposite pole. Human activity is varyingly inefficient and somewhat unpredictable. It needs to be digitally modeled on large scales, then analyzed and optimized through behavioral incentives, making it predictable. This is the power of computation.

The digital media industry has focused on enabling efficient content discoverability— helping people find the films they want to watch. They are frustrated by the barriers to consuming those films that are imposed by the film industry. They also dismiss piracy as an inevitable consequence of the film industries foolish practice of creating demand by making eagerly anticipated movies, and then limiting supply by expensively premiering them in theatres, and then printing them on costly plastic disks  which are sold with restrictions designed to create more inefficiency of distribution. They are fixated on the marginal costs of distribution and not very interested in the complexities or costs of production. In fact some of them assume that before too long, feature films will be made on kitchen tables on Macbook Airs with simulated actors.

Hollywood has frantically resisted every new distribution format, before enthusiastically embracing them (“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.” — Jack Valenti, Motion Picture Association of America, 1982). Yet the economics of making Avatar or Dark Knight seem to be very far from being profitably distributed through efficient and inexpensive streaming media. But how about Margin Call or newly acquiredSundance film, Beasts of the Southern Wild?

What if the Internet can help the film industry with much more efficient marketing to the right consumers for each film? What if P and A costs can be aggressively reduced? What does that do to the economics of the film industry, and the kind of films that can be made and seen?

More thoughts on that in another post…


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