Kara Swisher

Recent Posts by Kara Swisher

I Love L.A., Part 2

losangeles

So, I am back in Los Angeles today, part of my ongoing quest to make sense of the wrenching changes facing the entertainment industry in the face of the continuing pummeling by the digital tidal wave.

I just had a bracing lunch with Ross Levinsohn, former Fox Interactive Media head and newly minted investor, where we talked about his recent efforts to invest in digital media and communications with his partner, former AOL head Jon Miller.

gordianknot

More on that chat next week, including a video with the voluble Levinsohn about his new venture, in which he is seeking to bridge the gap between the Silicon Valley and Hollywood (good luck with figuring out that old Gordian Knot).

But–all mythical legends aside–someone has to, and anyone interested in the tech business in the years ahead has to understand the stakes and challenges ahead for Hollywood.

That’s because the intersection of that industry and tech is one of the more important stories going forward, especially since their fates are inextricably linked to each other now.

As is clear from the current writers’ strike, which is destabilizing Hollywood further, the heart of the issue in the battle here centers around the best way to make a success out of digital entertainment, both in terms of audiences and monetization.

So far, there has been very little true success to point to in the monetization arena, as neither user-generated nor professional content really makes the kind of dollars Hollywood moguls are used to.

The problem, of course, is that the way the industry has done business is seriously flawed for the new medium–it’s high cost, process-intensive and slow-moving, as well as full of gate-keeping mechanisms that funnel talent rather than expand it.

In the risk-to-reward ratio, Hollywood still wants much too much reward for very little risk.

In fact, the very cliche of Hollywood–jockeying for primo tables at restaurants in a bizarre pas de deux of status–still feels deeply true here, all speaking of exclusivity, back-room deals and a lot of self-dealing.

Now, Silicon Valley has definitely got the self-dealing thing down, but the more open and more widely distributed system is more flexible and open to inevitable failure that is sure to be part of the landscape ahead.

The problem? Techies still know next to nothing about content. Sure, they have proved they can create a popular widget (I am sorry to say, but whoop-de-doo on that score). Sure, they can do social networking. And, yes, they know how to make all the tools that are part of this important ecosystem.

But when it comes to figuring out content that will work on the Web that consumers will love and advertisers will pay for, such innovation simply will not come from Silicon Valley.

Luckily for both the tech industry and Hollywood, there is only one thing that counts–use of the Internet is still growing exponentially, as consumers shift to digital everything from analog.

I always joke that “the kids sure love it,” when someone pooh-poohs the lunacies of Web 2.0 (and there are some definite lunacies to be found, to be sure).

But in every important category–especially video–the trends are all headed in a very promising direction and one that both tech and media must keep heading in or suffer the consequences.
clapboard

How hard that will turn out to be remains to be seen. But, remember, the Gordian Knot was solved in a rather dramatic way by Alexander the Great, with one fell swoop of a very sharp sword, which changed an intractable problem instantly.

Or, as they say in the movies: Cut!


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work