(They were also stymied by a failure of imagination brought on by decades of corrupt machinations, short-term bottom-line thinking, and the arrogance of having milked a lot of money out of their ability to resell their product in different formats to each new generation of consumers.)
Anyway, because of all these things, the music industry, when it began to feel the effects of the technological change coming, doubled down on stupid. The labels didn't get together to co-opt this new rough beast. When Napster appeared, they sued it instead of working with it and creating a central repository for its product. When kids started file-swapping on other venues, the labels adopted the scorched-earth policy of suing its own customers, even though it wasn't offering most music legally. And then when Steve Jobs showed the labels a way to get their product to consumers easily and smartly, they insisted on digital-rights-management software, which again made the legal product less desirable than the illegal and led to years of stunted progress before they finally gave up.
It seems plain that the 2010s are going to be the decade of video. There are good reasons, looking at matters in the short term, for the movie and TV industries not to get their acts together. There are genuine economic forces at work that prevent it as well. (For one, the principals involved need to accept what the music industry never did—that the overall value of its product, which had been propped up by its monopoly control of it, has been considerably and permanently lessened. It's a lot to ask.)
But we can see what didn't work for the music industry. Will Hollywood figure it out? I doubt it. For one, the power of the parties involved, the complexity of their interrelationships, and even the internecine battles playing out inside some of them dwarf those of the music biz. Consider: Sony, Microsoft, Apple and Nintendo; the TV hardware makers (including Sony); the studios, each with corporate parents and international interests (Sony again); theater chains; TV studios (Sony again), TV networks; stars, writers, directors, and their unions; ancillary players like Netflix, Amazon, and the like; and others I'm forgetting. (And then add antitrust regulators here and, even more importantly, in the EU into the mix.) Try getting that crew of misfits and miscreants to agree on anything.
Another factor mitigating against them proactively fixing the problem: The stakes are in a sense lower, in that theater exhibition, a big chunk of the studios' income, won't be affected, for now. The exhibition field can be thought of as the movie industry's equivalent of the live-concert industry in music, but one where all the money doesn't go to the artists. But: The increasing quality of the home-viewing experience, particularly for adult-appeal films, is I think an underappreciated iceberg ahead. And the free money coming from innovations like 3-D and IMAX showings, however evanescent their appeal, are for now covering up a lot of softness in the industry.
Another bright spot, from the industry's point of view: The machinations needed to use illegal video are presently a lot more complicated than they are for illegal music, particularly for segments of the audience that are older than, say, 30 and don't play video games. But that's a phenomenon whose prevalence decreases with every passing year. Younger people grew up manipulating their game consoles and computers. They won't have the problems fortysomethings today have.
If the studios were smart they'd go to the mat and create a massive one-stop shop for TV and movies, find a price point they can live with and then set programmers loose to make the thing as easy to use and ubiquitous as possible. Instead they've been wasting their time strong-arming the cable companies to help them on a new crusade against illegal downloaders—an unwieldy process that doesn't address the root problem and won't work.
Where have we heard that before?
I'm not saying that using illegal media is right. And of course it's free—the studios can't do anything about that. But does it have to be easier?
No—and until something is done about the ease of use, the film and TV studios are going to live out a script very similar to the one the music industry just acted out. I know the name of that movie. It's called The Hangover 2.