What is wrong with the trades?
As a former publisher of the Hollywood Reporter, I am often asked this question.
Massive layoffs, smaller issues, editorial cutbacks, fewer ads and doubts of print product viability all suggest that the trades are in trouble. So are they, and if so why?
The answer is simple. The trades are in trouble because the industry they cover is in trouble. The trade papers are nothing more than a reflection of who and what they cover. The trades don’t make the news, they report the news. They do, however, choose who and what they report on.
Go to the Motion Picture Academy library and read issues of both papers going back to their inception and you will find a mirror image of the industry’s evolution. Good, bad, warts and all, the history of the business is in the pages of those trade papers.
If there is a bogey man consistently present in the history of entertainment, its name is technology. Sound, color, television, video and now broadband have all threatened the then-current management with total annihilation, until it became clear that the new technology would not only save the business it would make it considerably larger.
Now on the cusp of what could be the greatest explosion in media and entertainment, the industry is once again resisting the advent of transformational technology by thinking smaller. Consolidation has created fewer media companies, studios look to make fewer films, networks want fewer pilots, and NBC is reducing prime time. The current strategies are to pay talent less, cut ad budgets, lay off employees and outsource whatever they can. In western parlance they are circling the wagons, going into protective mode, waiting for the threats to disappear or some miracle to occur.
The rationale begins with the video business. The industry’s current technology savior, for the first time, is down an alarming 9%. Add to that video trend, forecasts for sales in television, cable, syndication and the international arena are also going down. Television ratings are down, share of market is down, PVRs are eliminating simultaneous viewing and, while theatrical ticket sales are up in revenue, they are marginal in units sold. Getting leaner, more focused and more profitable is what management thinks Wall Street is looking for and we all know how smart Wall Street turned out to be. The business is in a melt down mode and the trades are providing an X-ray view of its condition. It is not a pretty sight.
If the industry actually embraces the technologies of the last 20 years, then the trade papers will mirror a transformation in the business that will rival any that has ever taken place. For that to occur the industry needs to acknowledge a few facts of life. Today technology allows anyone to make a film and everyone has access to it. Control of what is made and how it is distributed is a thing of the past. Publishing, broadcasting, studios, music labels and cable companies will cease to exist as stand alone businesses. They will all be replaced by digital media companies that offer all forms of content, on all platforms, all the time. New companies and new players are coming into the business and they are not bound by the same rules of the past. Products widely promoted, but limited in availability, will be pirated. An audience, sharing an experience on a large screen, does not have to be sitting in a movie theater, viral marketing will replace traditional marketing and the message cannot be controlled. Entertainment has to be redefined. It is no longer film, television, games and music. eBay, Facebook, YouTube, MySpace are all forms of entertainment, as are texting with friends, gabbing on cell phones and playing parlor games on computer screens. However a consumer spends their discretionary time is how they define entertainment. Fortunately, the interest in being entertained will never go away.
What is lacking is creative leadership, leadership willing to reinvest in risk. Entertainment is a risk business. Always has, always will be. Trouble is, legacy management has learned how to reduce risk. Going back to the western parlance, we are back on the frontier. No one rules. There are no rules. It’s every man/woman for themselves. Whoever comes up with the right idea, at the right time, wins.
When the trades broaden their mandate to include subjects, companies, products and people who are already influencing entertainment but not currently found in their pages they will finally mirror the 21st century version of the entertainment business as it really is. When that happens the trade publishing business will come back stronger and more robust than any time in its history.