Killing Hollywood Will Require Learning Hollywood's Game

By Sarah Lacy , written on January 20, 2012

From The News Desk

Looking around the Web today, there's been a mixture of we-killed-SOPA high-fiving and crestfallen realism that the bill isn't really dead. As long as there are movie studios and lobbyists, it'll just pop up in another form like some horrible game of whack-a-mole.

So Y Combinator's Paul Graham has a solution: Just kill Hollywood. I love his post because it encapsulates why a culture of entrepreneurship is so powerful. It displays an absolutely ballsy rejection of any aspect of the status quo.

Graham rightly postulates that it won't be file-sharing that actually kills Hollywood, it'll be someone else coming up with something that is more entertaining.

For the Valley to do that, it's going to have to get out of the mindset that eyeballs equal quality. My guess is far more people watch a funny video of a talking dog on YouTube than many Oscar nominated films. Even the most commercial blockbuster films have 40,000 showings in a given weekend. Compare that to a YouTube video which can get 40,000 views in a viral minute.

There's no contest, because YouTube has vastly better distribution. But Hollywood shouldn't care (if the MPAA had a clue) because it offers something YouTube can't: An experience that you will get in a car, drive to, and pay $12 for. The points of friction actually work in Hollywood's favor. It's a constraint that forces Hollywood to put out something highly entertaining. The lower the friction, the worse content you get, because you can get away with lousy content and still get eyeballs. This is why a lot of stuff that's wildly successful on the Web doesn't translate on TV.

Hollywood isn't on the ropes because of content, it's on the ropes because of lame, outdated business practices. Even the biggest Web fan boys I know all still go to see the big movies. If we've cut the cord on TV, it's because we're watching TV programming on Hulu, iTunes or Netflix. In a digital world flooded with disaggregated content that can be produced without a gatekeeper, we still want what Hollywood is putting out. And we're willing to do more and pay more to get it. (Ironically, Hollywood doesn't get this either, or else it'd be more secure in its position, and just reinvent the business model around it.)

The lesson: Eyeballs aren't equivalent to one another. For Hollywood to be killed, the Internet needs to focus on a metric other than eyeballs. It's not about mass, it's about good. That's absolutely anti-YouTube and anti-Farmville and any other content which we expect to be rapid, mass and disposable. Disposable content isn't bad, it's just not everything. And as long as that's all that the Valley is putting out, we won't kill Hollywood.

Graham is right to call for it, but it's a cultural shift that will be hard for the Valley to make. Whether it's making movies or something totally different but awesome enough that it scratches that itch, it'll require our own rethinking of what's driven entertainment on the Web thus far.