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In SOPA debate, is Hollywood on the wrong side of history?

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Senator Chris Dodd (D-CT)

The debate over the Stop Online Piracy Act is heating up. The SOPA bill could come to a vote this week in the House, and a similar bill is under consideration in the Senate. This has kicked the so-called "Geek Lobby" into high gear. Fred Wilson of Union Square Ventures, a venture capital firm in New York, has been vocal on his blog, going to far as to symbolically censor his post today as a call to action.

Wikipedia founder Jimmy Wales has suggested that the online encyclopedia could go on strike in protest. And California Republican congressman Darrell Issa has broken ranks and proposed his own alternative legislation, allying himself with Silicon Valley against Hollywood and the Big Content industry that supports the SOPA legislation.

The opposition has also created a video explainer on why the legislation is the worst thing that's ever been proposed. It's over-the-top and doesn't present the issue with anything resembling complete accuracy. But it is worth a watch (In the interest of reasonable objectivity, I'm not going to embed it, so follow the link if you're interested).

Yesterday, my KPPCC colleague Kitty Felde reported on former Senator and current Motion Picture Association of American head Christopher Dodd's views on the SOPA controversy:

The battle between Hollywood and Silicon Valley is being fought on Capitol Hill with lawmakers from northern California facing off over Internet piracy with their colleagues from Southern California. Dodd said his goal in the coming year is to bring the technology and creative communities together. He adds that copyright protection is as important to the technology industry as it is to Hollywood.

The tech industry — including Google, Facebook, Yahoo, Twitter, LinkedIn, eBay, and others — begs to differ. The counterargument is that SOPA, as it's currently written, would enable content owners to shut down websites that contain protected material, and also suspend search and billing processes until the legal issues are either worked out or dropped. The tech community foresees a chilling effect — the government going well beyond preventing foreign-based sites from pirating content and curtailing the kind of rapid business growth and innovation that's the hallmark of the internet economy.

So why can't Hollywood and Silicon Valley get along?

Simple: Because their business cultures are completely opposed to each other.

Hollywood may talk a good game about technology, but the fact is that tech terrifies the entertainment industry. Tech has done nothing but disrupt a business that was shaped in the 20th century but has struggled to adapt to the 21st. 

Silicon Valley startup culture rewards a lean-and-mean approach to business and actively encourages completely obscure companies to disrupt powerful, existing players. Creative destruction isn't just wound into the Valley's DNA — it's pretty much the core of the region's being. 

There's a solid startup culture in Southern California, as well. But the region continues to be defined by Hollywood. And the last thing Hollywood is interested in is innovation. Hollywood's idea of innovation is 3D. Hollywood is classic rock. Tech is punk. You get the idea.

True, you can occasionally witness quasi-disruptive episodes when the entertainment establishment comes under threat and confronts innovation, of a sort,  and even — Eek! — art in its midst. There was the movies-as-great-American-art-form explosion of the late 1960s and 1970s, out of which we got Martin Scorcese and Francis Coppola, Steven Spielberg and Robert Altman, along with a host of auteurs who now function as the fading éminences grises of American cinema.

The independent film movement of the 1990s also served to show the studios that there was another way of doing things and more importantly, an audience that would love it. 

Cable also opened up new content channels. It's telling that these days everyone in Hollywood with a good idea wants to get their show on HBO.

But while with a great tech idea, some MacBooks, and rented server space in the cloud, a Silicon Valley entrepreneur — or for that matter, an entrepreneur anywhere — can produce the next Facebook or Twitter for $500,000, your typical Hollywood aspirant needs to convince an ultra-conservative studio to spend a multiple many times that to get a project off the ground. And unless you're developing Angry Birds, tech startups usually don't come with merchandizing rights. Their are no plush toys in tech, and precious few action figures. (And the action figures that are created are promptly killed.)

Obviously, the next Foursquare doesn't need to have a name star attached. It just needs to be willing to sleep under its desk and live on Diet Coke for a year to attract that first big round of venture funding.

But in Hollywood, the old mogul model always seems to come back, with the studios doing whatever they can to defeat the barbarians at the gates. If this means that realty is denied, well...so what? Business-as-usual buys a mansion or two in Bel Air.

Silicon Valley and Hollywood are probably never going to get along. But the writing is on the wall. As more and more people get their entertainment through pipelines developed by technology companies, the Hollywood monopoly on the content that Tinseltown provides will continue to erode. 

There's no reason that copyright protection can't endure in a world in which technology allows content of all types to be much more widely and cheaply produced and shared. Issa alternative legislation actually sounds like a reasonable compromise, with the actual problem — foreign piracy — being attacked. 

But of course foreign piracy is SOPA's red herring. That isn't what Hollywood is worried about. Hollywood is concerned that it's on the wrong side of a historic disruption and it's going to do whatever it takes to prevent its own decline, rather than figuring out how it can partner in its future ascent. 

This has happened many times in the history of business. And the bad news — or good, depending on your perspective — is that those being disrupted pretty much always lose.

Follow Matthew DeBord and the DeBord Report on Twitter.

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