I used to do some social media consulting for Time Inc. and some of their subsidiaries (HBO etc.) and across the board what I found is quite simply the companies are not setup to be able to handle these shifts, it's not really that they don't have the ability to understand. This is the natural order: they are too big, and too established to be able to respond to this market with agility.
Time itself has moved away from the strategy of distribution and is going full on into content creation because they feel there is still a market for high quality content. I think they are totally correct about that, but wrong about what is considered "high quality" at this point. There will increasingly be a place for "premium information" such as Bloomberg terminals and other professional related information, but entertainment content has no expertise to sell. It's either good or it's not, I don't really care who made it.
So I'm not sure it's that they "just don't get it" it's more just the natural order of things: they are too big to respond quickly.
But I think we also have to think less about convincing people "these companies are going to die" and more about what we do when an industry goes out of business. Even if these companies survive, the only way to do it will be downsizing like crazy (and outsourcing to international stringers), and that wont really be good for anyone.
All they are trying to do is slow down the shift and preserve jobs. So we can sit here and criticize the MPAA etc (I know I do), but is what we really want a sudden collapse of these industries? I'm not convinced.
"entertainment content has no expertise to sell. It's either good or it's not, I don't really care who made it."
Entertainment is either good or it's not. But I can pretty well count on stuff coming out of Pixar as being good. So if I have limited dollars and/or attention to spend on entertainment and there's a Pixar film and something generic that I don't know if it's good or not, I'm going with Pixar. Clearly they have expertise to sell. There's also music I'll buy (or at least consider) just because of the label.
The challenge for Time or any other entertainment-content providers is cultivating the appropriate quality and expertise, fitting it into an appropriate business model, and cutting away the cruft. This might mean downsizing like crazy and outsourcing, or it might not. Some companies will find a new model that works and survive, while others will struggle and eventually fail. IMO, one big problem for the MPAA and RIAA is that they've made some actively-bad choices in that transition, inconveniencing and alienating consumers while not really protecting what they're trying to protect.
The key here is less limited $ and more limited attention span. We simply don't have enough time to consume both our user created content (facebook etc) AND still support pay content as well. Pixar absolutely has expertise over movie making, and I'm not saying they particularly are going anywhere, but the competition they have is NOT with other movie companies, it's with ALL media for attention span.
When you bring the long tail into this, and as it gets easier and easier to create what we would call "quality" media for a smaller, fragmented audience, it's going to be very difficult for consumers to see the value of a Time magazine-like broad, high level view of the world. This IS going to be competition for companies like Pixar because the choice isn't "I have 10 movies to see pick one," it's "how should I spend my day," and it's going to be rarer and rarer that the answer to that is go see the new mass market movie.
Now of course we are years ahead of the curve here. HNers tend to be pushing boundaries on stuff like this. So there are still a few years before places outside of metro America catch up.
I DON'T agree with you about the MPAA and RIAA. Their goal is not to protect long term, it's simply to slow this transition down so they lose fewer jobs and have more time to think about it. They NEED to because they represent the mega companies that need to move this slow. Think of it like a two lane highway, MPAA and RIAA are side to side trucks driving at 5mph. We'll just keep hitting detours and exits and eventually there will simply be no one behind them. So I think their goal is wrong, but I think they've succeeded in carrying out their mission relatively well.
One interesting phenomenon is when big players "panic" and try and shift their entire companies instead of feeling out the market for the best path forward. The AOL/Time Warner debacle was a great example.
Time itself has moved away from the strategy of distribution and is going full on into content creation because they feel there is still a market for high quality content. I think they are totally correct about that, but wrong about what is considered "high quality" at this point. There will increasingly be a place for "premium information" such as Bloomberg terminals and other professional related information, but entertainment content has no expertise to sell. It's either good or it's not, I don't really care who made it.
So I'm not sure it's that they "just don't get it" it's more just the natural order of things: they are too big to respond quickly.
But I think we also have to think less about convincing people "these companies are going to die" and more about what we do when an industry goes out of business. Even if these companies survive, the only way to do it will be downsizing like crazy (and outsourcing to international stringers), and that wont really be good for anyone.
All they are trying to do is slow down the shift and preserve jobs. So we can sit here and criticize the MPAA etc (I know I do), but is what we really want a sudden collapse of these industries? I'm not convinced.