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David Poland

By David Poland poland@moviecitynews.com

Posted Monday, November 15th, 2010 - 1 Comment »
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Fattening Up For The Coming Media Ice Age

A quick thought…

The least talked about strategy in the current media environment is deep-pocketed media players – many of them newly on the field – quite intentionally putting on a layer of fat in anticipation of the Ice Age… or simply, the shakeout, if you will… that we are probably a year or two away from experiencing in New Media, which now also includes ALL Traditional Media.

But It’s not just news-type media. I mean, everything. Movies, television, internet, news, books, and on and on.

The filmed entertainment business (which includes TV) is still looking at a further correction, in my opinion, of the overall business being shrunk by another 10% – 20%. But even when that is done, technology and the short-sighted response to it, is likely to be the cataclysmic event in which we see massive changes… 1969 all over again. But as you all know, the industry survived the end of the old studio system and changed. Corporations bought in. Then, Home Entertainment changed it all again.

The machine will sustain its core. While one can say that, all things considered, the film business is still putting on a show in the barn, the changes to the studios, movie theaters, home entertainment, international theatrical, etc, are all massively different… even though a projector is still shining pictures on a screen.

It makes one wonder whether MGM’s creditors screwed up by going the Spyglass route. Thing is, Spyglass may be incredibly successful making movies for the next few years. There may be a slight upturn in valuations of libraries. But the billions in losses that are directly connected to nothing but the devaluation of film libraries at the end of the DVD wave are never being recovered. I believe it will get worse… and be incredibly wonderful for consumers of existing content.

The Spyglass choice – to ride it out and hope things will get better – is not the fattening up for the winter choice that Lionsgate would have been. Yes, the whole thing may have been eaten by Carl Icahn before there was a chance of turning it all around. Boo, Icahn! But if it doesn’t turn around – and if the Ice Age comes, as I think it will, it ain’t turning around – they will have to take even more losses, even in the face of Spyglass success.

But if they had merged with Lionsgate – and Icahn wanted a real merger, with him owning 50.1% – that would have been the FATTEST library in the world. And when the Ice thawed, they would be assured of a dominant position simply by being massive… something that Lionsgate has failed to make work, at least in the eyes of Wall Street, for a long time now, as they have built their library into a behemoth, had success with film, and still have never gotten the stock price up high enough to get bought out for the price they dream of getting.

On the other hand, Netflix is preparing for the Ice Age. When the freeze comes, they want to be one of the companies big enough and strong enough to survive. There is enormous mythology around this company, which did invent and execute one idea brilliantly. But owning digital delivery is a lot more complicated and unlikely. But if they can get fat enough when it all goes to hell in a hand basket, the theory is, they will have to survive and their fattiness will go from being a drain on the bottom line – which it will be in the next couple of years – to being a mighty asset that draws the product to them like moths to a the last flickering candle on earth.

Likewise, The Daily Beast eating Newsweek… all about the fat content. Newsweek is not worth much on paper, but the brand still draws eyeballs and perceived legitimacy. And for all the drool spilled over Tina Brown, turning 57 next week, she has not been able to create a financial winner on the web. (It’s okay… almost no one has… and HuffPo, often cited as the exception, wildly exaggerates their fiscal situation.) Hooking up with Newsweek will not fix this. But it will make the Beast brand fatter. And, so the theory goes, when the Ice Age comes, they will be so well branded that Diller will write off the losses and whatever the truly successful web effort called BeastWeek is going to be will emerge only then.

Of course, the next question is, how much ice will there be before NYT or News Corp buys Tribune for $1? Tick, tick, tick…

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1 Comment »

One Response to “Fattening Up For The Coming Media Ice Age”

  1. Joe simms says:
    November 16, 2010 at 1:42 pm

    Very interesting read David.

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It shows how out of it I was in trying to be in it, acknowledging that I was out of it to myself, and then thinking, “Okay, how do I stop being out of it? Well, I get some legitimate illogical narrative ideas” — some novel, you know?

So I decided on three writers that I might be able to option their material and get some producer, or myself as producer, and then get some writer to do a screenplay on it, and maybe make a movie.

And so the three projects were “Do Androids Dream of Electric Sheep,” “Naked Lunch” and a collection of Bukowski. Which, in 1975, forget it — I mean, that was nuts. Hollywood would not touch any of that, but I was looking for something commercial, and I thought that all of these things were coming.

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I was walking down the street and I ran into Bradbury — he directed a play that I was going to do as an actor, so we know each other, but he yelled “hi” — and I’d forgot who he was.

So at my girlfriend Barbara Hershey’s urging — I was with her at that moment — she said, “Talk to him! That guy really wants to talk to you,” and I said “No, fuck him,” and keep walking.

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My friend paid my rent for a year while I wrote, because it turned out we couldn’t get a writer. My friends kept on me about, well, if you can’t get a writer, then you write.”
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