Hollywood is about to repeat the catastrophic mistakes of the music industry.
What happened to the music industry over the last 10 years or so was a lot like the plot of The Hangover. Bad judgment and self-indulgence producing chaos, pain, blinding sun, dim but lacerating memories … and you wake up to find there's a tiger in your hotel suite. It's been more than 10 years since compression technologies and ever-faster online speeds started making it easy to move media around online. That's the development that put the plot in motion. For music fans, what was first the slow agony—and then the thrill—of emailing a song to a friend evolved with ever-increasing speed into a world in which we can easily swap discographies of 10, 20, even 50 or 100 albums.
What that meant for the music industry was painful: Its sales are about 40 percent of what they were 12 years ago, and there are even worse metrics than that. (There's a chart on this blog post, for example, which demonstrates that people are buying about one-fourth as many CDs as they were in the 1990s.)
Throughout, chaos reigned: The fall of the CD. The rise and fall of the DVD; the rise and fall of Napster. The rise and rise and rise of the file-sharing networks and cyberlocker sites. Thousands of legal attacks by the record industry on file-sharers; the coming of Netflix; the opaque future of streaming services and cloud storage. Indeed, Steve Jobs recently announced Apple's foray into cloud storage. The idea is that we'll be able to match our iTunes libraries—music for now, but eventually video as well—to online repositories, where they will be accessible to all of our computers, TVs, phones, and pads. (I'm not buying it, but that's a subject for another time.)
But note that this has come a decade after the introduction of the iPod. While many of the industry's humiliating Hangover-like pratfalls took place in public, a lot worse was going on behind the scenes. The labels knew something was happening, but they didn't know what it was, and scrambled wildly—and spent that way, too—to get a piece of it. (Remember Warners and Imeem?) It took more than 10 years of rights wrangling, much of it done personally by the irresistible Jobs himself, with the recalcitrant and stubborn levels of the music industry, from artists and their agents and managers, to the record industry with the various labels and corporate parents, and then songwriters and their various rights organizations, most of which resisted technological change in every knuckleheaded way possible.
Speaking of which, look at the New York Times today. Hollywood and the cable industry are teaming up to penalize illegal downloaders by taking away part or all of their Internet access after five or six warnings, the beginning of a new Whac-a-Mole game that, even if successful, will just see the downloaders move to new and more secure ways to move media around.
Right now, in fact, the movie and TV business looks a lot like the music one did in the early 2000s. And as we've seen, that decade didn't work out too well for the labels. So it's worth looking at the situation and wondering how things are going to fare in the TV and movie world in the decade ahead. It can all be summed up in one single sentence. I'll get to that in a minute.
The situation for watching a movie or a TV show these days is a mess. Here's a case study. If I want to watch some old episodes of The Office, for example, I have an extraordinary slew of options. But there are two problems with this. For one, I don't want a slew of options. I really just want one. And, as for the second, they're all hard to use or incomplete in one way or another.
DVDs, once so sleek and cool—you don't forget your first director commentary—are now unwieldy and a drag to use. You have to sit there waiting for the things to load, chugging like the digital equivalent of a Model T. Then you get all the FBI and Interpol warnings, several of them, in various languages. Go ahead, push the "top menu" button on your remote all you wish and curse the screen the way your father did his old console TV, but you're not going to be taken anywhere. The studios deliberately program the warnings so they can't be skipped. At some point, the disc allows you to start navigating menus to see the episode you want … and then you do it all over again, including all the legal warnings, when you go to the next disc.
Now, this is all for a product you as a consumer have taken the time and effort to pay and bring home to your house. In other words, you bought the thing legally, but the studios still petulantly want you to hear them whining about piracy, and have no evident interest in giving you control to use it as you wish.
So let's move to cable. When I used to subscribe to DirectTV, my DVR box had an enormous hard drive. As I watched my favorite shows—three or four on NBC, a lot more on HBO and Showtime, just for starters—I just archived the current season, along with scores of movies and the churn of daily and weekly news shows I keep up on. Then I moved, and am now back stuck with Cox, the Yugo of cable service.
My new DVR holds so few shows I thought the hard drive was damaged originally. They weren't. It was just the (sub)standard Cox offering. It holds now about 20 shows, and a few movies, and is basically useless in that it fills up every few days and starts deleting older programs. And, of course, there's no way to archive the shows I want to keep or add my own extra hard drive.
But what about "on-demand," you ask? Cox's is dismal. Press the on-demand button, wait a few minutes and you can page through something that looks like an in-room viewing interface in a Marriott from the 1990s. (There's no search.) Eventually you'll find the NBC archive, and then eventually a few episodes of The Office. Click a few times and wait patiently, and you'll find each episode comes with un-fastforwardable-through commercials, generally from movies of NBC sister-company Universal. Most of the time, there are only two, and they are each repeated about four times during the 22-minute episode. Most recently they were a mirthless preview of Little Fockers and an already-forgotten, simpering Zach Galifianakis movie called It's Kind of a Funny Story. Watch two episodes of the show and in the space of an hour you will have seen each of those commercial eight times. This is a less than optimal viewing experience.
Now NBC's not the only network, of course. HBO, too, has some on-demand shows available on Cox's system. But only some.
Since I'm an HBO subscriber, I have another venue for seeing old HBO shows that I want to watch or series I want to catch up on. The network provides it … on the Web. HBO now has a service called HBO Go. The site contains a fairly big chunk of the network's history. There's no Larry Sanders, but it's got most of the tony stuff—the complete Sopranos, The Wire, Six Feet Under, Deadwood, and Sex and the City, for example. This is great, and the next time I'm in NYC maybe I'll be the cool guy at the Spring St. subway station watching old episodes of Carnivale on his Nexus One. But I really want these TV shows available where I actually, um, watch TV, which is on the couch in front of the TV set. That, I can't get, and it seems odd.
So then there's Netflix. (Note that I'm now on my fourth media financial outstream—first cable, then DVDs, then premium cable, and now an additional $23.99 a month for Netflix.) Netflix has a fairly impressive library of film and TV shows available on DVD. But of course you have to wait a couple of days to get something (I'm including the time it takes to mail your other disc back), and there are the gaps for films and shows that just aren't on disc. (Like the Australian Wilfred, for example.) Irritatingly, Netflix doesn't provide a way to request titles, either.
Now, Netflix also has a limited number of films and TV shows on its on-demand streaming service. Netflix streaming works fine. It's fast and responsive. The only problem there is that the Sony PS3 through which I access it has become a supreme annoyance. Even before its recent hacking problems, the PS3 had become incredibly pushy, suddenly demanding I sign onto something called the PlayStation Network before I could watch a Netflix video. (This could have something to do with my move to Cox, I'm not sure. But I also don't care. I just want to watch a movie on Netflix.) In recent months the thing also began greeting me with an annoying Netflix sign-on screen instead of just signing me in. The sign-on screen includes a little check box that lets me tell it to sign me onto Netflix automatically. It shows me this little check box, in fact, no matter how many times I've already checked it.
Once the PS3-hacking issue got underway, a new phenomenon resulted: After being forced to use that annoying Netflix sign-on screen, I would then be told I needed first to go sign on to the PS3 network … which was of course down. I would be routed to a screen that said I couldn't in fact sign on to the PlayStation Network, and was told to push a button to go back to the previous screen … which told me I couldn't sign on to Netflix until I signed onto the PlayStation Network. This merry-go-round continued for a few more iterations before the thing gave up and let me onto Netflix. Imagine the fun for parents who just want to show their kids Toy Story 3.
Anyway, once you manage to access Netflix, the first six seasons of The Office are available for immediate streaming—but not, for some reason, the current season.
At this point I don't really want to spend the time to explain how annoying the PlayStation store's video offerings are to use. (You can get some Office webisodes there.) Or to talk about another video HD service on the PS3, called Vudu, offering "Top Quality High-Speed Streaming Movies on Your PS3™ System!," which sounded exciting and was intriguing right up to the point where nothing happened when I clicked on its icon. Or to discuss how difficult it is to get Hulu Plus up and running. That service lets me see the current season of The Office and finally makes the show's complete archive available to those who are not exhausted. (Who said TV isn't mentally stimulating?) It's $7.99 a month, too, or the fifth payment plan so far, but who's counting?
(Apple TV, you ask? Netflix works better on that, of course, but it has other problems. There's no disc drive, so I can't replace a DVD player with it, much less a Blu-ray, or play data discs the way the PS3 lets me. And there's no convenient USB port for a thumbdrive, which the PS3 also has.)
This frustrating and pointless process can be repeated with any TV show you wish, or any group of director's films or any genre. Some parts of it are available here under these circumstances, some are available there under those. Some in this place, some in that, and some not at all. And the availability can change without notice.
The trouble facing the movie industry right now is the same one the music industry had to confront 10 years ago. This is the summing-up sentence I referred to above:
The easiest and most convenient way to see the movies or TV shows you want is to get them illegally.
Now, I recently obtained, through sources I will not divulge for obvious reasons, a single DVD disc with 22 episodes of The Office on it as data files—a complete season. (Since I already own all the DVDs and got the disc just to make a journalistic point, I hope the courts will be lenient.) I can play it on my PS3 and I can take the disc with me when travelling to watch on the computer.
This obviates the need for four or five DVD discs. The quality isn't high-end HD, but it's quite good. And of course I don't get the extras like the deleted scenes, though I'm sure I could if I wanted. The PS3 has a Bluetooth remote, much better than standard-issue cable-company ones, that responds to commands with lightning speed. And there are no FBI or Interpol warnings.
Again, to belabor the obvious: The illegal version isn't just free. It's better.
Here's one more example. Vuze is one of the most popular bit-torrent clients. I don't know when it happened, but some months ago I noticed some new icons under the video menu on the PS3. "Vuze on Macintosh" read one. "Vuze on PC" said another. I poked around, and finally figured out that the Vuze program on my computers had added a new feature, one that that lets you play on your TV the video sitting on the connected devices on your home network. The feature had installed itself automatically on the PS3. That's a little scary, I guess, but compare this to how, right after I downloaded Hulu Plus, I started it up … and was told I had to download an update. Now I just toss any video I have on my computers in the Vuze PS3 folder and I'm good to go.
It's not perfect, but it's incredibly useful. It's also thoughtful, in the sense that the program anticipated what people might need and made it happen. (It also plays all of the various video codexes, unlike Apple TV, which handles just the limited ones its QuickTime player is comfortable with.) There are no terms and conditions, no Interpol warnings, and no sign-on screens, and best of all there is no artificial divide between this season and that of some TV series. It's all there when I want it. Why should I go back to on-demand or Netflix?
In the music industry throughout the 2000s, the record labels were hampered by a number of things—their own lack of technical knowledge, the sprawling and discordant number of rights holders, corporate paralysis in the face of change, or just, in some of the more enlightened operations that tried to ride the wave, some bad guesses about where the technology was going to go.
(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.