Will the strike change Hollywood?

by Mathew on December 21, 2007 · 8 comments

(this is cross-posted from my Globe and Mail blog)

As the strike by Hollywood TV and movie writers drags on, one question that keeps popping up is whether the strike is a boon for online content. The short answer is that it’s impossible to say for sure. Will the strike be one of those turning points for online media, as the previous strike in 1988 was for reality TV and satellite programming? No one knows. But one thing is pretty clear: writers like to write, and if they can’t write for television or movies then they will write for the Web.

According to The Hollywood Reporter, several writers have signed on to create a Web-based comedy series for Worldwide Biggies, a digital studio run by former MTV Networks executive Albie Hecht, the creator of Spike TV. The writers have experience working on shows such as “The Late Late Show with Craig Ferguson,” VH1′s “Best Week Ever,” and “Saturday Night Live.” They will share in the revenue from the series, which Hecht said could be posted on a dedicated site or distributed through a portal.

The report also mentions that former News Corp. executive Ross Levinsohn has discussed funding writers who are on strike but want to do online projects, through a venture Levinsohn has called Velocity Interactive Corp., which he co-founded with former AOL head Jonathan Miller and recently merged with a venture capital firm called ComVentures.

On his investment blog, hedge-fund manager Barry Ritholtz wrote recently that the strike could be a tipping point, and that Silicon Valley VCs could see it as an opportunity to start getting into the content business. As he puts it: “The TV studios have already lost. The VCs will find a business model that works on the cheap, and begin competing with the studios, even if the strike is settled tomorrow. I suspect that Television, as we know it, is now officially over.”

Netscape founder and venture capitalist Marc Andreessen put forward a similar theory on his blog recently, first in a post entitled Suicide by Strike and then in a follow-up post called Rebuilding Hollywood in Silicon Valley’s Image. In Andreessen’s view, the arrival of the Web means (as it has for the music industry) that while distribution costs have fallen virtually to zero, production costs have also fallen dramatically, and that means the number of potential competitors is theoretically limitless. Whether that increases or decreases the amount of quality content out there is another question, of course.

A recent L.A. Times piece looked at a number of writers who have been pursuing a Web strategy as a way of keeping their creative juices flowing — and also of increasing the amount of creative and financial control they have, another of Andreessen’s major themes — including Aaron Mendelsohn, co-creator of the Air Bud movies. Groups of like-minded artists have formed and are looking for venture financing, using a model not unlike the original United Artists studio in the 1920s by Charlie Chaplin and several other prominent stars.

Funny or Die, a comedy-video portal founded by SNL star Will Ferrell that now includes content from filmmaker Judd Apatow and others, recently got $15-million in funding from several venture capital groups, although a profile in Portfolio magazine pointed out that the site has yet to achieve the same amount of traffic its first hit (Ferrell’s Landlord sketch) achieved. Some skeptics, meanwhile, have argued that Web content isn’t going to replace TV content anytime soon, for a number of reasons.

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