Over the holidays, Sharon Waxman, of TheWrap, wrote a piece about how the two Hollywood trade papers are facing their “end game.” Steering clear of the debates about the impact of leveraged buyouts, downsizing and the lack of Academy Award advertising, there is a fundamental reason why the trades have lost their way.
They’ve lost sight of the “community” they were designed to serve.
The entertainment industry is more in need of information and insight than possibly ever. The trades are perfectly positioned to provide this, and should be cashing in. But they’re not reacting to the changes that have seen the entertainment community burst from the constraints of Hollywood into a global enterprise.
Let me explain.
In 1988, when I began my career at the Hollywood Reporter, more than 70 percent of the world’s entertainment business emanated from within what could be called the “Hollywood Beltway,” a horseshoe-shaped, 150-square-mile geography, defined by Sony Pictures in the south, Warner Brothers, NBC, Universal Pictures and Disney to the north and Paramount Pictures in the east. That was Hollywood, not the 3,400 square miles of greater Los Angeles.
It was a community. In fact most people working in the business referred to this small geography as “the town.” Its influence was recognized and deferred to throughout the world. What happened in this community was what counted. The community dominated the entertainment business.
The two trade papers were able to leverage the overwhelming influence Hollywood had on the world business by hand distributing their two papers daily to the industry professionals that controlled almost three-quarters of the business. Within that local trading area there was a large subscriber base and an advertising community looking to influence that local community.
The two trades accommodated that interest and profited handsomely because of it.
So what happened? In less than a single decade everything changed.
Everything.
Driven by a staggering array of new technology the industry faced challenges that overwhelmed it: Cables were laid, satellites were launched and cell towers were erected. Phone companies became entertainment distributors. And PC’s, digital transmission, the Internet, Napster, Netscape, Yahoo, Google, YouTube, iPhone, iTube, Facebook, texting, Twitter, Hulu, etc. all contributed to the colossal changes in entertainment.
The creative community then began taking advantage of the more powerful and less expensive technologies to create content outside the traditional avenues that catered to a new audience. Suddenly, consumers had a stream of content that was birthed outside the “community.”
Finally, partly fueled by these user-friendly production technologies, the majority of advanced nations found it more sensible and profitable to produce and distribute their own entertainment product, rather than importing it from the states. People around the world would prefer to watch their countrymen on local television rather than Americans, so locally produced domestic entertainment markets exploded all over the world, to the potential detriment of the American suppliers.
To compete with the technical disruption and globalization of entertainment, the American majors responded through aggressive acquisitions, mergers and international co- ventures. They continued to seek control of every facet of the entertainment business from the creator to the consumer. They
