19 Nov When Worlds Collide

Over the past several years, I have noted the raw and increasing power of digital media. A wide variety of sites have blossomed across the internet, covering everything from animation to household tips and vast new extremes in personal narcissism. The result is a digital landscape that is a strange and unpredictable mix of film, television, and stuff that looks like it just fell off of a truck.

To get a better sense of the growth of digital presentation, you can refer to the recent chart for YouTube as provided by ChannelMeter. At the very top of the list is the YouTube animation channel Mondomedia with a subscription list of more than 1.2 million and a worldwide viewership of 1.3 billion plus.

In an age of declining TV and movie viewership, these figures from the digital realm glow like a bright beckon piercing through a deep fog of despair. Of course, they also look a lot like potential cash cows ready for slaughter.

Which helps to explain why so many heavy players are currently making major moves. Just recently in the United Kingdom, the Chernin Group has bought a large stake of Base 79, a major YouTube network. Time Warner is seeking a sizable minority stake in Maker Studios. Meanwhile, Netflix and their VoD business is so desirable (despite their many ups and downs) that they are fending off takeover bids by both Amazon and Carl Icahn.

And this is barely the beginning. Everyone and their idiot brother wants to go digital. It’s the place to be because…OK, here is where we hit the gray zone. The vast global audience available online is incredible. This obviously represents an equally vast global market. But nobody exactly knows what that means or the most effective way of tapping it. The current commercial model is still based on advertising, as if the net were mainly an extension of radio.

Take for example the recent decline of Hulu.com. In a way, Hulu represents the prefect blend of online access and cable television, which are supposed to make it a win-win site. Unless it’s actually part of the problem: maybe people are going online to search for something beyond cable TV. Maybe, just maybe the analogy to TV is wrong. The parameters of digital online media are seemingly all over the map. For example, YouTube covers a range from UFOs to post-feminist satire as well as five zillion cat videos (special note to Henri the Cat) and everything else in between. It is completely unpredictable, totally chaotic, and has no working relationship to the cable TV model whatsoever. But the major companies (such as Time Warner) have so far persisted in seeing the digital zone as an extension of cable TV and appear to be utterly clueless to anything else.

Which is not surprising. I have said this before, but I am going to say it again. Corporate media operates as a relatively rigid, top down hierarchy. Because of this, they inevitable are locked into yesterday’s model of operation (because that is basically how the current head honchos got to the top in the first place). This sharply limits their ability to adapt to a radically changing environment. It is not because they are necessarily stupid (though some are). But they are essentially clueless.

The digital world is a completely new and ever shifting environment. Its only constant feature is that it doesn’t have one. It has no center. It has no real top or bottom. It is more sideways. A rapidly and infinitely expanding sideways. It is not television, though you can use it to catch up on shows. It is not film, though you can practically do film history through it. It is its own creature in the earliest stages of its own evolutionary development.

What the major companies can bring to this process is money. Lots of it. Almost everything else they have to offer will be potentially detrimental. Virtually all significant forms of change and development within the digital zone have been achieved through its decentralized structure. Though immense rewards are potentially available, it is not an area that responds well to heavy centralized management. Ho Hos, yes. Bossy CEOs, not quite (unless their name is Steve Jobs).

The current business speculation is that Time Warner will channel their move on Maker Studios through one of their TV subsidiaries. Of course this is exactly what I am talking about. The major companies see the digital world as merely an extension of standard corporate broadcast operations. Yes, you can now sit at any airport waiting for a plane and watch old episodes of Mr. Ed. Sometimes, that is even OK.

But it is barely the tip of the digital iceberg. One of the problems with the major companies is that they have neither the ability nor a vested interest in seeing beyond this extremely limited range. Instead, they have a predatory tendency toward wanting to control and limit digital development in an attempt to contain it within established mainstream production and distribution structures. In short, they think they have a vested interest in strangling the goose before it lays too many golden eggs.

Corporate media and the digital model are virtually two separate worlds, and they are in the process of colliding. It’s almost like that old science-fiction film minus the nerdy scientists and the grasping greedy plutocrat. Or is it?  Simply substitute the characters from The Big Bang Theory for the scientists and replace the plutocrat with any studio honcho and you got the set-up.

So the real question is: Which way will the debris fly?