Joining The Conversation

I heard about The Conversation this summer and immediately bought a ticket:

[P]ioneers at the forefront of change in cinema, video, games, media and technology are coming together to share ideas, insights, and innovations. Our focus is on new tools, new distribution channels, and new rules.... The format of the gathering will be experimental: rather than a traditional conference, short talks and demos, "fireside chats," and roundtables will spark a dynamic series of overlapping conversations.

Their guest list is enough to make any independent filmmaker salivate—Peter Broderick, for instance. His recent article in Indiewire about the New World of Distribution for indie filmmakers is germane to how (I think) digital entertainment will be distributed. Hunter Weeks is another gem on the list—he's one of the co-creators of 10 MPH, a documentary about two guys crossing the United States on a segway. Week's movie home page is an exquisite example of how to use the internet to market your own movies. Other notable invitees hail from Netflix, Createspace, Filmbaby, JibJab, Lucasfilm, ILM, The Webby Awards, and YouTube. See the complete list of speakers at the bottom.

One really appealing part of The Conversation—you can throw out your own ideas. I thought about it for awhile and this forum seems ideal to mention some of my own predictions on the future of digital entertainment. Frankly, in one form or another, I've been observing, discussing, and molling over the movie industry for three years and have a pretty well-informed opinion about it. So I decided to make a presentation of my own about license-based entertainment which will be a riff on a recent article I wrote about iTunes' Death Knell. My ardent hope is that my presentation isn't eclipsed by someone else's brilliant 90 minute lecture. I do hate redundancy.

The Conversation takes place all day this Friday and Saturday. Tickets are still on sale, but a little steep now at $150. But if you have nothing to do, come be my own peanut gallery!

COMPLETE LIST OF SPEAKERS

• Alex Afterman, Founder, Heretic Films
  
• Alex Lindsay, Founder, Pixel Corps
  
• Arin Crumley, Director, As the Dust Settles and Four Eyed Monsters
  
• Barbara Robertson, Journalist, CGSociety, Computer Graphics World, Digital Production
  
• Chris Thilk, Director of Marketing, Spout LLC
  
• Cliff Plumer, Chief Technology Officer, Digital Domain
  
• Dan Gregoire, Founder, Halon Entertainment
  
• Dana LoPiccolo-Giles, Co-founder, CreateSpace (formerly CustomFlix)
  
• Danae Ringelmann, Co-Founder, IndieGoGo
  
• Dean Valentine, CEO, Comedy.com and Founder, Symbolic Action; former CEO of UPN and President of Walt Disney Television
  
• Diana Barrett, Founder, The Fledgling Fund
  
• Evan Spiridellis, Head Art Guy, JibJab Media
  
• George Strompolos, Content Partnerships Manager, YouTube
  
• Graham Leggat, Executive Director, San Francisco Film Society (Moderator)
  
• Gregg Spiridellis, CEO Guy, JibJab Media
  
• Hunter Weeks, Director, 10 Yards and 10 MPH
  
• James LeBrecht, Berkeley Sound Artists
  
• Jason Harris, President, Mekanism
  
• Jeremiah Birnbaum, CEO, SF School of Digital Filmmaking
  
• Jesse Keane, Chief Technology Officer, CinemaNow
  
• Jim Sommers, Senior Vice President, ITVS
  
• John Batter, Co-President of Production, DreamWorks Animation SKG; former Group Studio General Manager, Electronic Arts
  
• John Gaeta, Visual Effects Designer, Speed Racer and the Matrix trilogy
  
• John Knoll, Visual Effects Supervisor, Industrial Light & Magic
  
• Jonathan Marlow, Executive Director, San Francisco Cinematheque; formerly at Vudu and GreenCine
  
• Josh Wiggins, Senior Director of Global Strategic Sales, Ascent Media
  
• KC Blake, Anywhere/Anytime Content Lab, Entertainment Technology Center@USC
  
• Ken Eklund, Writer & Creative Director, "World Without Oil"
  
• Ken Goldberg, Director, Berkeley Center for New Media
  
• Lance Weiler, Filmmaker & Editor, The Workbook Project
  
• Michael Ferris Gibson, Director, 24 Hours on Craigslist & Producer, Truth in Numbers: The Wikipedia Story
  
• Michealene Cristini Risley, Independent filmmaker, Tapestries of Hope
  
• Mike Curtis, HD for Indies
  
• Mike Shiley, Director, Inside Iraq: The Untold Stories & Dark Water Rising
  
• Nick Braccia, Creative Director, Deep Focus
  
• Peggy Weil, Artist & Game Developer, "Gone Gitmo" and "The Redistricting Game"
  
• Pete Ludé, SVP, Sony Electronics
  
• Peter Broderick, President, Paradigm Consulting
  
• Phil Tippett, Founder, Tippett Studio
  
• Reed Hastings, CEO & Founder, Netflix
  
• Rich Bradway, Associate Dir. of E-Commerce & New Media, Boston Symphony Orchestra
  
• Richard Kerris, Chief Technology Officer, Lucasfilm Ltd.
  
• Scilla Andreen, CEO, IndieFlix
  
• Scott Kirsner, Editor, CinemaTech
  
• Ted Hope, Co-Founder, This is That
  
• Tiffany Shlain, Filmmaker & Founder, The Webby Awards
  
• Tim Napoleon, Chief Strategist for Digital Media, Akamai
  
• Wendy Levy, Director of Creative Programming, Bay Area Video Coalition
  
• Woody Benson, Managing Partner, Prism VentureWorks

The book's the thing

While looking over my the two and a half years of blogging about the film industry, it occurred to me that I write a lot about the form of digital entertainment, i.e., how digital content is delivered to consumers. For example, I was early to note how Netflix was developing downloadable movies through their site, how Universal was offering download-to-own DVDs, and how Steven Soderbergh tried to combat piracy by releasing his film Bubble in theatres and DVDs simulatenously.

A number of my readers have been after me to do a book, citing that many of my posts are entertaining and informative about the film business. Between my own projects and other work, I've thought about it. Indeed, a man cannot live on blog alone. Given my inordinate fascination about The Shape Of Things To Come for digital entertainment, a book about piracy in the entertainment industry seemed like the next natural step.

However, I've been testing the winds to see which direction I should set sail. Filmmakers in the mini DV world live in perpetual anxst, one foot in each camp: I'd like to get a sweet studio distribution deal, but will I fare better if I offer up my film for a $1 download? If I'm going to write a book on music and movie piracy, I have to figure out exactly how I feel about it, and why.

Over the last two months, I've started to see the entertainment industry in a different light. I used to get violently angry when I saw movies getting copied. "It's immoral and illegal!" I used to say. "Why does everyone keep doing it? Don't they know they're destroying the entertainment industry?"

However, after hearing about how pervasive piracy is in India, China, Brazil and Eastern Europe, I changed my mind about it... a lot.

The world has changed. People treat digital content much more differently than they would a car or a house. And digital content is different. You can't duplicate a car 1,000 times and give those duplicates away for free. So why are we applying the rules of car ownership to something so inherently different? The fact is, the world is deciding on its own how it wants to pay money for this new kind of object—we can steadfastly enforce our car ownership rules on it and watch people steal anyway, or we can listen to what the world is telling us and find a way to work within that framework.

Anyway, here's a section of the book I started writing, which will probably end up in the introduction somewhere:

Let's say you owned a shop selling pastries in a small town somewhere. Every morning at 8:00 sharp, you unlock the front door, turn off the alarm, get ready for business. Your doors open at 9:00 and you serve your customers as they come in. One pastry costs you $1 to make, and $5 to sell, leaving you with a nice revenue of $4. Kids in the neighborhood stare longingly at your yummy pastries through your shopfront window, and while you're busy serving customers, they might try palm a pastry or two without you seeing, but you almost always catch them. Once you've caught them, you might call the cops and have them prosecuted, or you might dismiss it as a harmless nuisance. At 5:00 that evening, you close your doors, turn on your alarm, and go home. This is perfectly sensible approach to doing business and making a living. In fact, you could do this your whole life, and even teach your children to do it, if they wanted to. There is enough profit in it to allow your business to continue well into the future.

Now let's say your shop selling pastries suddenly had some alterations to it, some real and some magical. Let's imagine that anyone could buy one of your pastries and duplicate it perfectly... which they gleefully do, and pass along these duplications to everyone they know. Additionally, your shop now has no windows so anyone can lean in and take a pastry from your storefront before you even know what's happened. Your business still has an alarm, but now it has a 24 hour delay before going off so by the time the cops come, the thieves would be long gone. On top of that, everyone in this small town is constantly awake so you can't possibly stand guard all day long to ward off thieves. Even if you could successfully jail all the offenders, the local jail is nowhere near large enough to hold all the offenders. Worst of all, many of the thieves don't think what they're doing is fundamentally wrong; for years, they've been grumbling that $5 per pastry is really too high a price to pay, and they're finally "balancing the scales" by taking back what is owed them. Your revenues plummet, and you shout at anyone who will listen, how could everything have become so unfair to your once idyllic lifestyle?

This is the state of the movie industry now. Where once a small town business thrived under the buying and selling of the commodity business model, it now exists in a different game with different rules. The Old Pastry Shop existed under a capitalist framework derived from an Industrial Age, and the New Pastry Shop functions within a new economic model forged from the Information Age.

As with all evolutionary processes, only the animals who adapt to their new environment will thrive, while the others clinging to their old traditions will starve over time and, with venomous hissing, eventually self-extinguish. When DVDs are priced at $35 and CDs are priced at $20, movie and music producers have only themselves to blame for seeing their customers rationalize pastry theft.

Our world is smack in the middle of a war over how to most effectively monetize the distribution of digital content. We've already seen some successful business models emerge, but only time will tell if these new approaches have any stamina. In a global market of the Information Age where digital content is no longer bought and sold under the old storefront paradigm, piracy is the genie that won't go back in the bottle. Thus, the question movie and music producers—and even software developers—must ask themselves now is, how do we make money off this new model?

Because the alternative is death by a thousand cuts.

Here it comes...

Netflix is finally making good on its promise—they're offering instantly downloadable movies through their web site:

LOS GATOS, California (AP) -- Netflix Inc. will start showing movies and TV episodes over the Internet this week, providing its subscribers with more instant gratification as the DVD-by-mail service prepares for a looming technology shift threatening its survival.

The Los Gatos-based company plans to unveil the new "Watch Now" feature Tuesday, but only a small number of its more than 6 million subscribers will get immediate access to the service, which is being offered at no additional charge.

You just know Blockbuster's techies are scrambling to catch up, but this is only the most recent salvo in the struggle to provide disposable digital entertainment. If I can buy a movie for $1.99 through iTunes, why would I want to view it on my laptop? Because I don't want to keep 500 terrabytes of movies on my hard drive. Netflix is still the best way to see a large quantity of movies without worrying about late fees or where to store the DVD case. Now, because you can download a movie to your laptop, it doesn't even matter where you are.

One day, hopefully, consumers will be able to buy a "right" to view a particular movie at any time, and then downloading movies whenever you want to see them will at last become the new business model for digital entertainment distribution. This will cut out the annoying format upgrades we seem to go through about every 10 years (VHS to DVD to Hi-Def to Blu Ray to WTF!!!), but which means less money for DVD manufacturers and duplicators. All I can say to those poor storefront souls is... this is the world we live in now, people. Adapt.