"Hollywood at the Digital Crossroad: New Challenges, New Opportunities"

Abstract

The history of Hollywood runs in tandem with the history of technological development. However, the changes over the last ten years have been both more fast-paced and more far-reaching than anything that came before. The digital revolution and globalization have transformed the film and TV industry in ways which could never have been foreseen. The big Hollywood studios have been forced to respond to the uncertainty – and potential for profit – prompted by the popularity of the internet and the success of new digital platforms, especially among young people. Thus, Hollywood would appear to be standing at a new digital (and global) crossroads, charted by two basic movements: on one hand, the emergence of a new market for the commercialization of audiovisual products (internet, IPTV, digital reproduction devices, mobile telephones), referred to as the long tail market; and, on the other, the emergence of new type of consumer, known collectively as the iPod or net-generation. The two, linked questions set out below sum up the challenges facing the major studios in Hollywood: What new consumer habits define this emerging viewer/audience profile? What business model will define the network of relations on the internet with regard to the commercial practices of the film and TV series industry; or, in other words, what are the rules governing this new market? These two questions are closely bound up together; the response to one conditions any response to the other. This paper is an attempt to trace the framework of present and future challenges facing the entertainment industry. First, the defining features of the consumer profile shaped by the development of new technologies are examined. Second, the latest operational strategies of the entertainment industry, which also shed light on the alliance between Hollywood and Silicon Valley, are discussed. Then, the business models adopted by major American studios in relation to the downloading of films and TV programs are described. Finally, the most significant elements of the new digital economy are addressed, giving rise to a more structured conclusion in the form of a SWOT analysis of the new window of commercial opportunity opened on the internet for entertainment products.