A Report on the Uneven Progress of Disruption in Digital Entertainment

This is ultimately not about Race at all, but that’s where it began.  

I still had The State of Race in America on the brain this morning when I followed the #stateofrace hashtag on Twitter to this video of Spike Lee. Spike, as it happened, was appearing on a panel at the Aspen Institute called “The State of Race in the Media”.

Spike is slow to get rolling, but at about the 3:30 mark of the video, he starts to talk about why Black creativity is still frustrated in the Movies:

“We can do a lot of stuff independently. But we’re talking about the institutions of Hollywood and Television, you break that down into Network and Broadcast.  Unless we become the ‘Gatekeepers’, it’s not going to change.  The Gatekeepers are the people, a very select few, who, again, in Hollywood, in Television, in Film.  These few decide what’s going on, and what’s not going on.  And there’s not one person of Color, that I know of, that’s a Gatekeeper.  Well, except for Ms. Winfrey.

But you cannot use a Will Smith, a Denzel.  Because even if Will Smith wants to do a film, and most of his films are done at Sony, he has to call Amy Pascal and say ‘I wanna do this film.’ Of course, with him being the biggest star in Hollywood, if he wants to do the Phonebook, they’re going to say ‘Yes’. But he still has to go to any one of the Studio Heads and say ‘This is what I want to do’.

We’re not in the Room.

When Masterminds at a certain un-named Studio decided that they wanted to do a film called ‘Soul Plane’, there was no one in the Room who said wait a minute. Can we just talk about this for a second? An African-American airline, Dago plate, rims that spin on the plane, hydraulic wheels. Snoop is the Captain, cheebin’ up. We got a pole in the back. And we serve malt liquor and fried chicken. No one in the Room is saying WTF, wait a minute, maybe this is not a good idea.

We’re not in those decision-making roles.”

I’m sure Spike Lee is right.  There is probably something broken there with Race in Hollywood that keeps some films from getting made.

But, upon reflection, it’s clear that lots of people are missing from that Room, actually.  It’s not just African-Americans that are missing. It’s also the filmmakers, the people who write and shoot the films. They are missing from the Room.  

Also missing from the Room are You and I.  

Gatekeepers vs. the Indie Artist

Ultimately, the problem is not a matter of who is or is not in the Room. The Big Picture problem is that there is a Room. And it’s not just in the movie business. There’s still a Room in Music. And, to a rapidly-diminishing degree, there is still a bit of a Room in book publishing.  

The closed “Room” is of course just a synecdoche for a “Gatekeeper” System in which a relatively small number of executives control the Entertainment the public can consume. They do this in three ways: 1) by interposing themselves between the individual creators of the content and the general public, 2) by imposing a paid consumption model and distribution chain that they control, and 3) by spending lots of money to promote the stuff they put out. We’ve been living with Gatekeepers for decades.

Why there are Gatekeeper Systems like this in the world, and whether or not there is any value to the Culture in them, are not the Big Picture questions I want to take on today. Ultimately, if people are happy to eat what they are fed, who can gainsay the rightness of that? There is also the very compelling philosophical argument that we’re already suffering under an abundance of choice.

What’s a bit more interesting is to try to see where we are today, now that we’ve had a few years to observe the Struggle, as it were, between the Independent Artists who want to gain a big audience for their work, and the Gatekeepers who still purport to choose, promote, popularize and monetize them through these old models.

We know there must be considerable pressure there, obviously, as Creators of all types rush to avail themselves of all the New Tools, while incumbent Gatekeepers scramble to hold on to their share of the public’s attention through their traditional methods.

Because “Artist” and “Creator” are such wide words, we have lots of “stuff” out there of every conceivable type (both digital and tangible) that people are making and trying to sell online. Mostly, that is all outside our scope.  

Because what we want to look at are Entertainment categories where there was a strong, pre-Internet Gatekeeper incumbent, I’m going to look at just Movies, Music and Books. In the first case, the incumbent Gatekeeper is the Hollywood Studio System that Spike Lee described above. In the second case, it’s the Record Labels. In the third case, it’s the Big Book Imprints.  

These are all fundamentally similar. In all three cases, the model requires that the individual Creator “apply” to the Gatekeepers for admittance. Aspiring filmakers pitch their scripts and ideas to the Studios. Musicians and bands send their tapes to the Labels. And would-be novelists send their manuscripts to the Publishers. From there we all know how it works. Many are called, few are chosen.

One of the strong ideological indictments made against the Gatekeeper System is that all we’re ever going to get from them is homogeneous crap. We won’t look too closely into the reasons why they make mostly homogeneous crap. It’s an unflattering philosophical loop I’m determined to avoid.

Neither can we completely discount that Gatekeepers have the capacity to discover and cultivate talent that would otherwise have gone undiscovered.  So, it’s not like the Gatekeepers are averse to brilliant new genius, so long as it can be shaped into something commercial.

There is good and bad in the Gatekeeper System. But, suffice it to say that individual Creators and Artists are going to continue to exert pressure on the old Gatekeeper models. And things are going to continue to change.  

We concern ourselves, now, with the factors both driving and frustrating the shift in power from the Gatekeepers to the Artists — in Movies, Music and Books.

There’s a lot that’s different, obviously, between each of the three Entertainment verticals: Movies, Music and Books. Films are a lot more expensive to produce than novels, and usually involve a lot more people. A musician’s output can be readily broken down into component parts that can be sold individually.  You can sell albums, or you can sell songs. This is not so easy for novelists and filmmakers.

It’s a long list of differences. 

We expect that the big, innate differences between the three categories are at least partly responsible for the differences in the degree of disruption. But sometimes you have to look for the wacky way in which three disparate things are alike.

To be clear, we define disruption in this context as how well the individual Artists in that category have been able to disintermediate the Gatekeeper. That’s the measure of disruption we’re looking for.

Movies

If I had to line them up by degree of disruption, I’d say that the Movies had been disrupted the least. All that’s different about the Movie Gatekeeper System in the last ten years are a few innovations in distribution. With those innovations, some new players have emerged that now sit between the content owners and the public. The representative examples there are Netflix and Hulu. But it’s still the Studios that are deciding what movies are made. 

The Movies are virtually un-disrupted, I would say. The fact that the movies we prefer are extremely expensive to make has a lot do with this, I’m sure. 

I would consider the Movie space disrupted if there were a site where independent filmmakers could go upload their feature-length films, and where we the public could go discover them and pay a reasonable amount to watch them. There are probably a bunch of companies trying to do something in that space right now. But I haven’t heard of them, and that proves they’re not working. Right?

I want to be able to ask my Facebook friends on a Saturday night for an Indie film recommendation, click on a link, pay seven or eight bucks (of which like 75% would go to the filmmakers), and watch a freaking movie. Disrupted.  

Flixster looks like they’re pretty well plugged-in socially. They have also built a movie-viewing experience, which appears to be just a front-end to Hulu content, at the moment. What’s special about that is that Flixster has built a nice bridge between the Social side (Facebook) and the viewing experience.  Why not open that channel up for Indies and let a social market happen? Just a thought. 

Music

Music is considerably more disrupted than Movies. Bands and musicians have been a lot more successful at circumventing their Gatekeeper than filmmakers. Part of that difference is that bands and musicians have done a much better job using the New Tools to promote themselves and build a following. It also helps that individual songs can be readily shared. 

Bands and musicians have been successful at circumventing their Gatekeeper’s “path to fame”. Word-of-mouth has been very good to them. But they have not been so successful at getting paid for their work. Part of the problem there relates to the high portability of songs. That which helps a band get famous makes it harder for them to get paid. The conceptual model for distributing free songs to generate sales expects that the songs you give away will make people buy the rest of the album, or other songs. In practice this falls apart because you want to give away the better songs, since they will do the best job making you famous. Catch-22.  It’s also been hard to keep people who paid for your songs from sharing them freely with others.

In Music, as in Movies, there have been a few innovations on the distribution side in the Internet era. These innovations have created new players that now sit between the content owners and the consumers. Pandora, Spotify and iTunes, to name just a few. These work really well for the consumer, since they facilitate new music discovery and don’t force you to buy entire albums. iTune’s $1/song model is arguably the best thing that ever happened to the Music Industry. But since these new players still cut their deals with the Labels, they don’t really create new opportunity for the independent Artists. We still have a Gatekeeper in place. He’s still the arbiter of talent and the assessor of commercial viability. And he’s still taking the lion’s share of the revenue.

Of course independent Musicians (among others) are welcome to peddle their wares directly on iTunes. But, given the dominant presence of promotionally subsidized, “Gatekept” content on iTunes, it remains to be seen whether it’s really the best platform for Independents.

The most disrupted behavior in Music we see is where independent Artists are using social media to build their audience (circumventing the Gatekeeper’s marketing engine), and then driving sales of songs and albums through sites that they control (financially disintermediating the Gatekeeper, as well). There are recent encouraging examples of this sort of thing from both musicians and stand-up comedians.

Music also continues to suffer systemically from the Cancer of its outmoded licensing models. These old models (that date from the phonograph age) perpetuate an assortment of limitations on how and where Artists can distribute and get paid.  See Evils of Licensing.

Books

That leaves Books, which is the most disrupted of our three Entertainment categories. Working alone, a writer can turn out a piece of content in just a few months that can sell to the consumer for roughly the same amount as an album or a movie ticket. The disproportion in production cost creates leverage for the individual writer, making him the most independent of the Independent Artists. A writer doesn’t need to raise money to write, or recruit the assistance of other people to create a book. Neither does he rely on expensive equipment to produce, nor does he require special training.

The power to produce independently is a factor in writers being able to circumvent their Gatekeeper, the Book Publishers. One of the few reasons you ever go to a Gatekeeper is because you need money to produce your thing. Writers are free from all that.

But the, by far, the most important factor in the successful disruption of the Books vertical is the fact that the Platforms we have that connect writers and readers work really well. Amazon and Goodreads are great for writers. Their books can easily become objects in the Social Graph, and monetization and electronic fulfillment are never more than a click away.

And if that weren’t enough, let’s throw in a bonafide paradigm shift in reading. The iPad (and others) help the independent writer in two really important ways: 1) they make you feel really comfortable with a digital book, so you don’t miss having a physical book in your hands hardly at all, and 2) they come with entirely new experiences for book discovery, based largely on Social Data, that create bold new promotional opportunities for writers, and suppress the noise from the Gatekeeper’s marketing dollar almost entirely. 

Things are so good for Independent Writers that the old Gatekeeper Publishers, who’ve been doing business a certain way for a long time, are forced now to re-invent themselves. They’re going to have to work with writers in entirely different ways. If you are Hunger Games Authoress Suzanne Collins, for example, you are pretty much inventing entirely new business terms with your Book Publisher.

Some writers are turning their backs on the Publishers, altogether, and embracing new partners. The deal signed recently between Tim Ferriss and Amazon is a bright harbinger there.

Books are in a profound state of disruption. As the last of the bookstores close their doors forever and the iPad (and others) become the default book-reading method, more and more, this is what we are reading.

Well done, writers.

Forward

For all their deep differences, it’s been useful to compare the Movies, Music and Books in this way. The disrupted ideal we have in our minds for each one of these entertainment categories is simply an efficient marketplace where Creators and consumers connect and transact.  

And yet, even as we try to fathom those ideal marketplaces for Movies, and Music, already our instincts begin to tell us that these ideal markets cannot be. Why? Because there are things in us, in our ways of thinking that stand in the way of disruption.  

One problem is the way we assess the value of a piece of digital content against the price we’re asked to pay for it.  Is this movie worth $8 to watch once? 

In the case of Movies, consumers are reassured by the presence of the Gatekeeper. There is a value contract there. A historical one. On the other hand, we have Social Forces and Algorithms that promise to make compelling recommendations to us. They will appeal strongly to our sense of value, too.  

I think consumers are ready to have independent films offered up to them for a reasonable PPV price.  What is that price, is just something somebody’s going to have pull out of thin air.

Another force in opposition of disruption are the platforms that are already making money directly from the consumers under an all-you-can-eat model. Unlimited access to a large selection of titles for a fixed monthly price is a very attractive model to consumers.  But, unfortunately, it really sucks for the individual Artist.

Here is a great chart that shows what an independent band made on an assortment of platforms, ranging from the poorly-compensating (Spotify) to the well-compensating (Amazon and iTunes). This is a great way to see at a glance what models favor the independent Artists financially. All-you-can-eat models suck for the independent Artist. But marketplaces are absolutely great. And this applies to all three Entertainment categories. Netflix, for example, is a force in opposition of disruption in the Movie space, because they want to hoard as much content as possible and bring it under an all-you-can-eat model. That looks like a really bleak place for Indies.

I’ve made no effort to conceal my bias towards seeing disruption proceed all the way through digital entertainment. But, it’s not just a simple matter of building those ideal marketplaces. Consumers have old habits and intuitions trained in them by years of exposure to the Gatekeeper machines. These ideas relate to value perception, as I mentioned above. And there are also social benefits to the consumer that come from subscribing to the Gatekeepers’ output. Seeing the big new Hollywood release on opening weekend with the rest of America, puts you in the Conversation. 

I think consumers will be open-minded, but it will be up to the independent Artists to continue to push. It’s not just the existence of the marketplace, or the creation of the tools, it’s the craftiness and the audacity necessary to use them to effect. And that can only come from the Artists.

The final word goes to them. You have got to get over your distaste for self-promotion.