I've worked at studios and networks for a large part of my career. They have hired plenty of people over the years with "skill at managing disruption." They've poached talent from the Microsofts, Googles, Facebooks, hot startups, etc., of the world plenty of times over.
The problem is that they tend to place these folks -- or any of their people ostensibly charged with "innovation" -- in isolated silos. Typically they'll hire a handful of "innovation" people, most of them ex-McKinsey consultants, but a lot of them tech people, and put them in a sort of internal consulting group. This group will have no P&L of its own, and no real authority to change or mandate change. And it will be tasked with influencing the rest of the company to change. As you can imagine, it's a recipe for failure.
And even this is a symptom of a bigger problem: silos, silos, silos. Every department might as well be competing with the next -- because nobody talks to one another, people are constantly politicking against one another, and nobody wants to fund a win that shows up on somebody else's P&L. The whole thing is very reminiscent of "Game of Thrones," actually. Each studio is host to a bevy of competing fiefdoms, and the heads of the fiefdoms are constantly plotting each others' downfalls.
And even the studios are, themselves, fiefdoms within much larger media conglomerates. The head of the Disney movie studio, for instance, still answers to the head of The Walt Disney Corporation, and competes for his favor with the heads of ABC, ESPN, Theme Parks, Licensing, etc. And the head of The Walt Disney Corporation is beholden to Wall Street and quarterly reports. (Big risks and disruptive strategies are extremely hard to implement when you've got quarterlies to answer for).
If you ask me, these companies have grown too big and unwieldy to innovate properly. I'm not saying that in an antitrust-activist sense, but rather, in the sense that it's extremely hard to get everyone within a giant conglomerate on the same agenda when the goal, business, and job description of each P&L leader is so wildly different from the next.
None of this is meant to be an apology for the entertainment conglomerates, but rather, an observation. It's an observation born out of intense personal frustration, of course, at having seen the same patterns over and over again. At the end of the day, "innovation" is a very easy word to preach, but a much more difficult word to implement.
At the same time, I get the sense that a tipping point is very close at hand. Producers, writers, actors, directors, and other talent are themselves getting very tired of the same old studio game. And many of them are seeking out innovative deals with tech firms, brands, and other direct-to-consumer channels. All it takes is a handful of breakout hits -- shows, movies, or what have you -- that occur outside of the established Hollywood distribution system. The second you've got a legitimate hit series only on Netflix, or a direct-to-Amazon smash hit, or a Facebook series drawing in more viewers per week than a network show (very feasible), Hollywood will take notice, and it'll start getting serious about rethinking its approach. It may be too little and too late by then, but that's how these things go.
Bloomberg's Businessweek had an article (link below) not long ago about Sony that mentions this issue. Here is a quote:
In his biography of Jobs, Walter Isaacson writes that Sony had “all of the assets,” including a record company, to create its own iPod. “Why did it fail?” he writes. “Partly because it was a company … organized into divisions (that word itself was ominous) with their own bottom lines; the goal of achieving synergy in such companies by prodding the divisions to work together was usually elusive.”
While it's true that Sony has messed up their opportunities with DRM and the like, I highly doubt that Sony realistically could do what Apple did, simply because competing record labels would never in their right mind license their music in this way to another competitor. iTunes on the other hand, was just another distribution channel to the record labels, and not a direct competitor.
Does it really matter ?. They had around 25-28% market share in 2004 [1].
If they had created an ecosystem like Apple based around the Sony Walkman brand they could have dominated this sector as well. There was a chance for them to create an end-to-end system as Apple did it.
This could have easily blown away the ITunes Store we know today and if i remember correctly Sony`s CEO was the only one opposed to the proposal of Steve Jobs. Did he had something like this in the pipeline he would never had agreed to it.
Studios are hopeless, for the reasons you detail. They're just big companies in the end, and they move slowly if at all.
But there's another layer of Hollywood, the indie production companies, that has been a world of what are essentially startups, and that's existed for decades. The ability to innovate isn't just available, it's almost essential to those folks.
So Hollywood can innovate, and can do so quite well, actually. Independent producers are as good at what they do as anyone in silicon valley. One of them, or a group of them, will stumble on a model that is wildly successful and then the herds will follow. It'll happen.
I tend to agree with you here. The challenge I've run up against is this: big studios can't really position themselves for innovation, but tech companies don't always understand the complexities and idiosyncracies of putting AAA content together.
Producers bring the material and content expertise directly to the tech companies, who can function as distributors (and need not get their hands too dirty on physical production or development).
> Studios are hopeless, for the reasons you detail. They're just big companies in the end, and they move slowly if at all.
The big Hollywood studios should have really died at the end of the '60s-early '70s. But then the likes of Lucas, Spielberg and Coppola came along and they won themselves another few decades. But unless something similar happens in the next couple of years they're going to go the way of the dodo, simply because, artistically speaking, their movies are shit (pardon my French).
There's no artistic innovation, there's no connection between what they produce and the audience (I want to see a poignant a movie as Rambo I was, damn it!), they're too scared to "indispose" the political administration, they've just turned themselves into a propaganda machine (and they're no Eisensteins, mind you). And for all those that think "Hollywood is too big to fail!", just think about what happened to Cinecittà or to the Japanese big studios like Toei or Nikkatsu.
I did licensing deals with Studios for a few years. My experience was similar to jonnathanson's. I found these organizations to be difficult to work with, with a great deal of fear about disrupting existing relationships with cable distributors.
I don't think Studios will ever innovate from within. Its gonna take an outsider who can create unique content and make their own decisions about distribution. If I were a producer I'd be thinking about how to make low-budget episodic content that could be distributed over Netflix/Kindle/AppleTV/Youtube/Facebook.
I know there are plenty of people working on this, and it's going to be interesting to watch and see what emerges. Pass the popcorn.
"If I were a producer I'd be thinking about how to make low-budget episodic content that could be distributed over Netflix/Kindle/AppleTV/Youtube/Facebook."
Interestingly, there are a lot of big-time and smaller producers starting to think this way. And I know, at least anecdotally, that a lot of those would-be recipient companies (Netflix, Amazon, Facebook, Google) are trying to develop internal groups to service such deals. (Microsoft, too, is seeking to build out a big original content group as we speak; it is actively trying to poach Hollywood creative execs).
Which one of these companies will get the first hit? It's tough to say. All of them have top-notch distribution pipelines. Any of them could be very fertile ground. I suspect it'll come down to which, among them, get the most serious about the content business. Serious in the sense that they'll make original content a big corporate priority, will funnel adequate funding into said initiative, will not shake up that group or initiative every five months (as typically happens at companies dipping a toe into this industry), and will commit to growing it if it starts to bear fruit. And which, among them, has the least organizational inertia/politics/complexity working against such an initiative.
The problem is that they tend to place these folks -- or any of their people ostensibly charged with "innovation" -- in isolated silos. Typically they'll hire a handful of "innovation" people, most of them ex-McKinsey consultants, but a lot of them tech people, and put them in a sort of internal consulting group. This group will have no P&L of its own, and no real authority to change or mandate change. And it will be tasked with influencing the rest of the company to change. As you can imagine, it's a recipe for failure.
And even this is a symptom of a bigger problem: silos, silos, silos. Every department might as well be competing with the next -- because nobody talks to one another, people are constantly politicking against one another, and nobody wants to fund a win that shows up on somebody else's P&L. The whole thing is very reminiscent of "Game of Thrones," actually. Each studio is host to a bevy of competing fiefdoms, and the heads of the fiefdoms are constantly plotting each others' downfalls.
And even the studios are, themselves, fiefdoms within much larger media conglomerates. The head of the Disney movie studio, for instance, still answers to the head of The Walt Disney Corporation, and competes for his favor with the heads of ABC, ESPN, Theme Parks, Licensing, etc. And the head of The Walt Disney Corporation is beholden to Wall Street and quarterly reports. (Big risks and disruptive strategies are extremely hard to implement when you've got quarterlies to answer for).
If you ask me, these companies have grown too big and unwieldy to innovate properly. I'm not saying that in an antitrust-activist sense, but rather, in the sense that it's extremely hard to get everyone within a giant conglomerate on the same agenda when the goal, business, and job description of each P&L leader is so wildly different from the next.
None of this is meant to be an apology for the entertainment conglomerates, but rather, an observation. It's an observation born out of intense personal frustration, of course, at having seen the same patterns over and over again. At the end of the day, "innovation" is a very easy word to preach, but a much more difficult word to implement.
At the same time, I get the sense that a tipping point is very close at hand. Producers, writers, actors, directors, and other talent are themselves getting very tired of the same old studio game. And many of them are seeking out innovative deals with tech firms, brands, and other direct-to-consumer channels. All it takes is a handful of breakout hits -- shows, movies, or what have you -- that occur outside of the established Hollywood distribution system. The second you've got a legitimate hit series only on Netflix, or a direct-to-Amazon smash hit, or a Facebook series drawing in more viewers per week than a network show (very feasible), Hollywood will take notice, and it'll start getting serious about rethinking its approach. It may be too little and too late by then, but that's how these things go.
[Sorry for the tl;dr text wall!]