Wall Street analyst slashes Hollywood, making room for equally obnoxious new content gatekeepers
The six big TV-and-movie conglomerates — CBS, Viacom, Disney, NBC Universal, News Corp. and Time Warner — suffered in a handicap yesterday by Lehman Brothers analyst Anthony DiClemente, who downgraded the companies' ratings and stock-price targets. CBS fared worst, but even News Corp. didn't come out unscathed, and all six saw their respective share prices drop on the news. DiClemente's "color" had a familiar refrain — while DVD sales are only down 5 percent over 2007, the analyst doesn't expect digital downloads and other new media distribution revenues to keep pace with the decline in lucrative sales of packaged plastic. In other words, movies and television will take the same hit that music labels and newspaper publishers have. But what does this mean to your average plebe blogger with a script treatment busy shooting sketches on digital cameras and looking for a break?
Content is king, but only when you can enforce wildly profitable distribution rackets like "windowed" releases in different formats over time and in different places. But new media makers shouldn't be too gloomy — the courts of absolutist rulers always get the most wildly decadent just before heads roll. And then the new media Jacobins will need your propaganda just as much as the aristocracy ever did, if not more, but they'll demand a more ascetic approach.
The good news is that margins on the digital distribution business are insane compared to packaged and printed matter, and the margins on packaged and printed matter will only get better when you can sell it for a premium to a discerning clientele. Investors will move their money away from the publicly traded entertainers — it's been another record year for private equity, and digital-distribution enablers like Google and Apple are doing fine, thanks.
It's just a matter of changing the words to your tune to sing the praises of the new gatekeepers. Where you once might have had to kowtow to Sumner Redstone's minions, now it will be the likes of USC Film MFA David Siminoff, who signed up with Venrock instead of one of the major studios and will be the first to tell you he understands the "literature of what sites do."