Why The TV Model Is Unsustainable

The Hollywood Reporter tells the story in greater detail. The Networks' ratings are down a collective 16%.

Perhaps Joseph Schumpeter summed it up best when he coined the term Creative Destruction in his work entitled, "Capitalism, Socialism and Democracy" (1942) to denote "the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one." In other words, new technology renders old technology obsolete. A kid in Iowa who owns a Flip camera can produce a video and publish it online at a fraction of the cost of producing a television pilot.

The game is far from over, but the pressure is on TV and Film execs to lower costs. The internet has leveled the playing field and the barriers to entry are an upload away. Twenty hours of Video are uploaded to YouTube every minute!

A Bright Spot Amid the Downturn For Hollywood Studios

The LA TIMES business section features positive Box Office news on the front page.

Consumers want to go out, but are looking for ways to save money. Some theater owners have answered that call with concession specials, such as dollar popcorn. Movie attendance is up 14%, while sales of video games and DVDs are down double-digits.

Let's hope a strong showing at the Box Office leads to more creative output from the Hollywood Studios and fewer remakes and sequels.

Is Online Video Going to Kill the TV Star?

Can TV survive in its current state? That question was hotly debated at this years Digital Hollywood.

TV economics don't look promising. The broadcast audience is steadily declining and migrating online. Furthermore, ad spending is slowly shifting online and costs are rising for TV production.

TV has the advantage of aggregating its audience more efficiently than online video for the time being, but as innovation arises and technological breakthroughs occur, TV will no longer have a distinct advantage.

The major TV networks look to be hedging their bets. NBC, Fox and ABC are partnering with Hulu and providing the online platform with premium content. For those that don't own TV sets and that number seems to be increasing in a weak economy, alternatives will abound to view premium programming online.