Tech and media have been nurturing each other for 100+ years and they hate it.
Those whose paths I've crossed over the years have heard me repeat what has become a motto of sorts: "Everything Old is New Again" in media.
My main point is that the dogfighting we've just seen between Netflix and NATO (National Association of Theater Owners) on who is really killing film as a business and an art, is but the latest episode in a century-long battle between technology and media, between incumbents and new blood.
Auguste and Louis Lumière held their first public screening of films at which admission was charged was held on Dec. 28, 1895, at Salon Indien du Grand Café in Paris
At the dawn of cinema and the Lumières brothers' invention in 1895, vaudeville theatre owners cried wolf and tried to get cinemas shut down because they competed with their moneymaking live theatre. This was Tech vs Media Battle #1 -- vaudeville theater vs. cinema. Fast forward to the 20th Century, teens and these same vaudevillians had taken over the industry and were building the integrated studio system which lived on until the U.S. Supreme Court decision of 1948. Cinemas were sprouting up everywhere in the US, there were 5,000 screens in 1905 and 20,000 in 1920.
The second battle was shaping up as home entertainment was on the rise with the advent of radio as a mass medium but the apex was television which became de rigueur in the 1950s. The radio networks -- CBS, ABC, NBC -- morphed into television networks and live television gave way to recorded shows, financed by a steady stream of advertising. The promoters of branded content in 2013 should also remember that Procter&Gamble started its production division in the 1930s and that the "soap operas" that they produced and financed ran for decades -- Guiding Light for example started in radio in 1937 and only ended in 2009 !
Cross-country radio networks set up in the 20s, RCA-NBC in 1926, CBS in 1928. Their corporate "children" are still very much around...
Motorola print ad circa 1950
Television became the battleground for Tech vs Media Battle #2, now incumbent cinema vs. television. The studios vociferously argued that television was unfair competition, that tv was "giving" its product away as opposed to paid movie tickets, etc. These arguments from the 1950s are almost identical to the ones that entrenched incumbents of today use against digital media. This battle was being fought as the US Supreme Court broke up the integrated studio system in its 1948 US vs Paramount Pictures decision. The studios kept kicking and screaming against television, until they came to terms with it. They shrewdly realized that the switch from live television to recorded meant they could resell their ENTIRE film libraries and create a steady revenue stream, a "second window" for films. A modus vivendi lasted from the 1950s to the early 1970s, with Tech vs Media Battle #3, now incumbent cinema/tv against cable and VCRs.
An early push button cable tv box
The studio system was pretty much dead in the early 1970s and the corporatization of the industry was accelerating. MCA took over Universal in 1962, Gulf&Western acquired Paramount in 1966, Seagram bought MGM in 1967 only to sell it to Kirk Kerkorian in 1969, and Steve Ross's Kinney bought Seven Arts-Warner in 1969. The stage was set for the corporate-run studios to launch one of its most epic battles, which also ended in front of the Supreme Court,the Sony vs Universal "Betamax" case, which cemented the concept of recording shows as fair use. Yet again short-sighted incumbents were fighting windmills as they rambled against the unfair competition. The MPAA president Jack Valenti, testifying before the U.S. Congress in 1982 said: "the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone... We are going to bleed and bleed and hemorrhage, unless this Congress at least protect[s] one industry that is able to retrieve a surplus balance of trade and whose total future depends on its protection from the savagery and ravages of this machine."
Circa 1978, the taglines are eerily similar to the promise of VOD and SVOD.
The Court ruled against the studios in 1984 and cemented the "fair use" concept, aided by none other than Fred Rogers, yes Mr Rogers saved the VCR... All was forgiven and forgotten when the third window for films came forth with home video, which soon became the studios' main revenue stream. Plus ça change....
We're hearing the same ramblings today against digital media, as Netflix is being called the "Albanian army" by TimeWarner CEO Jeff Bewkes. The same apocalyptic tone as in past scuffles surrounds Tech vs Media Battle #4, with analog incumbents vs digital upstarts. The media conglomerates enjoyed the benefits of VHS and DVDs for a couple of decades and ran very profitable quarters. They are up in arms again with the logical consequence of the digitization of entertainment ie the disappearance of physical formats in favor of streaming. Legal streaming took root with iTunes and most spectacularly with Netflix which now accounts for a third of all U.S. bandwidth during prime time hours.
Netflix now totals 31M US subscribers vs 29M for HBO. Its international presence is also growing fast.
Just as HBO revolutionized pay television by developing its own original shows, Netflix did the same with House of Cards and Orange is the New Black. This strategy worked, as Netflix recently overtook HBO, totalling 31M US paid subscribers vs 29M for HBO. Netflix is paving the way for non-linear television, and just as HBO was followed by Showtime and Starz in the 1990s, Hulu and Amazon have now also commissioned original programming of their own. My prediction is that others will quickly follow suit, like Walmart's VUDU. Walmart has been the US's top DVD retailer and also foresaw the demise of physical formats and reacted wisely with the purchase of VUDU. Alongside subscription VOD (SVOD), the VOD market is blossoming,thanks to an aggressive push by the cable companies. VOD is becoming a key revenue-generating platform for studios and independent producers. VOD has allowed indie films to go beyond somewhat limited platform releases and address an underserved market, the roughly 100 million homes that had no access to art house movie theatres.
The two prime examples are Margin Call and Arbitrage, two moderately budgeted films that over-performed on VOD: Margin Call is reported to have generated more than $5 million through VOD and $5.3 million in US traditional box office. Arbitrage did better: it grossed $8 million in theatres and $14 million in VOD revenue. It remains to be seen if VOD is the new DVD but audiences at home are responding to the call.
Fast forward to the battle of words between Netflix's Sarandos and NATO's Fithian. Both make valid points but in the end, we are all serving one master, the consumer. Event films still get people into theaters but rising costs per ticket, coupled with audiences increasingly enjoying long form television on large screens at home is disrupting the theatre-first model. Illumination's Chris Meledandri also spoke this weekend about his sons' rapport with film: "I observe in them is a very different relationship to the cinema than I've ever seen in previous generations. Simply put: They don't have to go to the movies. I worry about a generation growing up without that habitual commitment to the movie theatre." The question is: are we still in Battle#4 or is this already Battle #4.5?
NYC's Rooftop Films (http://www.rooftopfilms.com/)
One (not so) crazy idea that I've been toying with: given the relative low cost of home theatre setups, why wouldn't the entertainment industry foster neighbourhood cinemas in the back of bars, cafés, etc. and create new, communal venues for a common cinema experience ? Rooftop cinemas in NYC, Melbourne, London are leading the way. Neighbourhood cinemas could compliment multiplexes and offer an additional alternative to VOD for non-tentpole, indie films that warrant a theater experience. One of the missing elements in the puzzle is VOD data, kudos to John Sloss from Cinetic for posting the data from the release of Escape From Tomorrow and for daring other distributors to follow in his footsteps.
Storytelling and technology have been unruly partners for more than 100 years, with a never ending cycle of new tech challenging the entrenched interests of incumbent players. When's the next battle?
Also on Huff Post:
NOVEMBER 2011 The beginning of Android Insanity 2012, the original Droid Razr was released in November 2011. It would be all but obsolete by February, with the release of the Droid Razr Maxx. Weight: 4.48 ounces Display: 4.3 inches, 256 ppi, 540 x 960 pixels Processor: dual-core, 1.2 GHz, 1GB RAM Battery 12.5 hours talk, 1,780 mAH Operating system: Android 2.3 Gingerbread (initially) Keep your eye on these specs: the operating system, the battery life, the processor speed, the RAM and the display size. All will increase as we move forward in time. Onward!
DECEMBER 2011 At the beginning of the year, the Galaxy Nexus was probably the Android smartphone to own. It was the first phone with Android 4.0, or Ice Cream Sandwich, and would remain so for several more months; it came with a large (at the time!) beautiful display and a quick processor. It was a summation of what Android could be and a preview of the direction of the OS, especially in terms of display size and quality. (Remember the number 316 pixels-per-inch on the display, or PPI; the higher the PPI, the better. You're going to see this number increase from the 200s to a mandatory 300+ number as 2012 progresses). Weight: 4.76 ounces Display: 4.65 inches, 720 x 1,280 pixels, 316 ppi Processor: dual-core, 1.2 GHz, 1GB RAM Battery: 17.66 hours talk time, 1,750 mAh Operating system: Android 4.0 (Ice Cream Sandwich -- first phone with ICS) Yes, as we celebrated New Year's Eve 2012, the Galaxy Nexus was the superphone of superphones. Until...
FEBRUARY 2012 WHAT CHANGED: Screen size, screen size, screen size. Weight: 6.28 ounces Display: 5.3 inches, 800 x 1,280 pixels, 285 ppi Processor: dual-core, 1.4 GHz, 1GB RAM Battery: 26 hours, 2,500 mAh OS: Gingerbread, upgraded to ICS The 4.65-inch display on the Galaxy Nexus (previous slide) seemed positively gargantuan at the end of 2011; today, it's something like mid-size, thanks to a revolution in large displays brought about by Samsung and its Galaxy Note. Popularly referred to as a "phablet" (half-phone, half-tablet), the Note is noteworthy (see what I did there?) mainly for its size. Its pixel density (ppi) remains relatively low, as does its weak battery life (though the Note featured a large battery, it did not prove large enough to power the first Note for a satisfactory length, per many reviewers). Mostly, you see, we're highlighting the Note for its mammoth, made-for-man-hands screen size. Though none but Samsung would match the sheer enormity of the Note (more on that to follow), competitors would follow Samsung's lead in the race to get huge. At this point, remember, Apple's iPhone had a 3.5-inch display; one way Android manufacturers differentiated themselves from that phone, certainly, was in screen size. While few were willing to top 4.3 inches before 2012, after New Year's Eve, every single Android superphone (save February's Droid Razr Maxx) would top 4.5 inches. Speaking of which...
FEBRUARY 2012 WHAT CHANGED: Battery life. Also, a willingness by the manufacturer to release an entirely new smartphone just four months after its initial release, heralding an era of incredibly truncated phone release cycles. Weight: 5.11 ounces Display: 4.30 ounces, 540 x 960 pixels, 256 ppi Processor: dual-core, 1.2 GHz, 1GB RAM Battery: 21.6 hours, 3,300 mAh OS: Android 2.3 gingerbead (now ICS) This isn't really a tale of Motorola setting the pace for other Android makers so much as it is Motorola upgrading its own smartphone incredibly quickly, to the chagrin of early adopters. The Razr Maxx was a bit heavier and thicker than the original -- which had just come out, remember, four months before -- and the screen, processor and OS remained constant. The battery on the Maxx, however, was so much better than the battery on the original that it's really not even worth comparing the two. The battery life on the Razr Maxx remains, by most measures, the best of any smartphone you can buy today.
MAY 2012 WHAT CHANGED: An increase in screen size; one of the first phones with a quad-core processor, rather than a dual-core processor; shift to Android 4.0, or "Ice Cream Sandwich," rather than Android 2.3, or "Gingerbread." Weight: 4.55 ounces Display: 4.7 inches, 720 x 1,280 pixels, 312 ppi Processor: quad-core, 1.5 GHz (international); dual-core, 1.5 GHz 1GB RAM (in America) Battery: 8.50 hours, 1,800 mAh OS: Ice Cream Sandwich HTC's flagship phone for the first half of 2012 was the One X, widely renowned for its top-notch camera and excellent 4.7-inch screen. The One X was one of the first smartphones to have a quad-core (as opposed to dual-core) processor, though that feature was not compatible with 4G LTE in the United States; it was also one of the earliest to ship with Android Ice Cream Sandwich (4.0) rather some flavor of Android Gingerbread (2.3). The quad-core processor, the enlarged 4.70-inch screen and the terrific camera made the One X stand out (but only for about six months, until HTC released an even better One X phone).
JUNE 2012 WHAT CHANGED: Bigger display; speed, touchscreen responsiveness improvements; faster processor; bigger battery. Weight: 4.69 ounces Display: 4.8 inches, 720 x 1,280, 306 ppi Processor: quad-core, 1.4 GHz, 1GB RAM Battery: 22.50 hours, 2,100 mAh OS: Android 4.0, Ice Cream Sandwich Heralded by many as the best smartphone of the year, the Galaxy S III does not, on paper, seem too impressive. Other phones have crisper displays, faster processors, better cameras and longer battery life. The Galaxy S III, however, packaged above-average numbers for all these specs, combined with what was probably the smoothest touchscreen experience on an Android phone yet. It also packed in several intriguing, innovative apps available only from Samsung (see: Smart Stay, S Beam) and a 4.8-inch screen that was viewed as humongous for a flagship phone when it was unveiled.
OCTOBER 2012 WHAT CHANGED: Yet another Razr in 2012! Operating system updated; larger and better display. Weight: 5.54 ounces Display: 4.7 inches, 720 x 1,280, 312 ppi Processor: dual-core, 1.5 GHz, 1GB RAM Battery: 21.00 hours, 3,300 mAh OS: Ice Cream Sandwich Surprise! Three flagship Droid Razr phones in under a year? It happened in 2012. Motorola's Droid Razr Maxx HD does not achieve the marathon battery life of the non-HD version, per tests, though it still rates highly. The Maxx HD improves upon the Maxx in other areas, though: The screen is larger (4.7 inches vs. 4.3 inches); the display is far crisper (312 ppi vs. 256 ppi, a significant gap); and the processor is more powerful (1.5 GHz vs. 1.2 GHz). We can see the move to larger, crisper screens and bulked-up processors here; the camera on the Razr Maxx HD is also an improvement from previous generations.
OCTOBER 2012 WHAT CHANGED: Almost everything. Weight: 6.42 ounces Display: 5.55 inches, 720 x 1,280 pixels, 265 ppi Processor: quad-core, 1.6 GHz, 2GB RAM Battery: 35 hours, 3,100 mAh OS: Android 4.1, Jelly Bean The big get bigger. Eight months after the Note came the Note II, with a larger and more beautiful screen, a faster processor, a better battery, a more competitive camera and a newer operating system. Reviewers were impressed with its absence of touchscreen lag and improved browsing speed as well. An improvement in almost every way on the first Note, the Note II not only boosted the acceptable screen size even closer to six inches, it also shifted the perception of how fast an Android smartphone could run. The quad-core processor? The 2GB RAM? These were about to become standard on Android superphones. Less than a year before, they represented pipe dreams.
NOVEMBER 2012 WHAT CHANGED: Updated just six months after release of original. Weight: 4.76 ounces Display: 4.70 inches, 720 x 1,280, 312 ppi Processor: quad-core, 1.7 GHz, 1GB RAM Battery: 2,100 mAh OS: Android 4.1, Jelly Bean In America, the first One X came out in May. Six months later, HTC updated it with the One X+. The processor increased from dual-core to quad-core; battery life was greatly improved; and the One X+ shipped with Android 4.1 Jelly Bean, rather than Android 4.0 Ice Cream Sandwich.
NOVEMBER 2012 WHAT CHANGED: It's all about the display. Weight: 4.87 ounces Display: 5.0 inches, 1,080 x 1,920 pixels, 441 ppi Processor: quad-core, 1.5 GHz, 2GB RAM Battery: 12.80 hours, 2,020 mAh OS: Android 4.1, Jelly Bean The final four great Android smartphones of 2012 measured in with displays of 5.5 inches, 4.70 inches, 5.0 inches (on this, the Droid DNA) and, again, 4.70 inches. Here we can see what top-of-the-line tech specs will get you: A 5.0-inch display with 441 pixels per inch, the highest ever on a smartphone; a quad-core processor, now seemingly standard on top-tier Android devices; a battery that measures above 2,000 mAh, to ensure that 4G LTE and the oversized displays don't diminish battery life too greatly; and a version of Android that is 4.1 Jelly Bean or higher.
NOVEMBER 2012 WHAT CHANGED: From one year ago, almost everything. Weight: 4.90 ounces Display: 4.7 inches, 768 x 1280 pixels, 318 ppi Processor: quad-core, 1.5 GHz, 2GB RAM Battery: 15.30 hours, 2,100 mAh OS: Jelly Bean 4.2 The Nexus 4 -- the followup to the Galaxy Nexus, and the fourth installment of Google's Nexus series, which Google produces annually to show what an Android phone can be -- is notable mostly for including Android 4.2, which makes it the slickest and most responsive Android device to date. Otherwise, you see a lot more of what we have come to expect from Android smartphones in the latter half of 2012: weight below 5 ounces; a display in the upper-4-inch range with a ppi above 300; a quad-core processor with 2GB RAM; a battery above 2,000 mAh. Compared to the Galaxy Nexus, probably December 2011's best Android smartphone, each of these specs has been increased, amplified or advanced in a tangible, observable way. The camera: better. The display: bigger. The processor: faster. RAM: increased. Battery: longer-lasting. Those are the smartphone qualities, I think, that have been most obviously augmented over the year (as well as a manufacturer's willingness to quickly turn around a sequel). Obviously, this can translate into other, less numerical enhancements -- phones are "faster," "smoother," "more enjoyable." But if you are looking for the concrete areas of improvement, there they are. It leaves us to ponder, once again, two questions: In what ways will Android smartphones be constantly improving in 2013? And just how many Droid Razrs will Motorola release this time around?
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