December 21, 2009

Top 10 Technologies Tormenting Hollywood This Decade

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10. Connected TV
Expect Internet-connected boob tubes to be everywhere at the 2010 Consumer Electronics Show. With the ability to watch Internet video on your TV screens -- and do a whole lot of personal online stuff from there as well -- consumers will have less and less free time for traditional television. Plus, the advent of tiny startup companies like Sezmi that combine free, over-the-air signals with TV delivered through the Internet could become a headache down the road for providers of satellite and cable television. And rumors keep swirling that Apple will upgrade its Apple TV product to a full-fledged networked TV experience with DVR.

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9. HDTV (2004)
Although American viewers first got a glimpse of it in 1998 when astronaut John Glenn flew in the space shuttle Discovery, the first regular broadcasts of HDTV began in Europe in 2004. Consumers quickly learned to love the experience, and television executives have wholeheartedly embraced the technology. So what's the problem? Only about a gazillion dollars spent to upgrade equipment and to train personnel. And most of the value has accrued to the makers of flat-panel TV sets.

8. Hulu (2007)
Hulu is kind of like this decade's version of the DVR because it allows viewers a super-convenient way of time-shifting. Sure, Fox, NBC, Disney -- along with Hulu users -- are all singing its praises, but there's no escaping the obvious question: What will happen to the traditional TV model if Hulu and its imitators begin to dramatically cannibalize the television audience? Ad revenue generated from Hulu remains a drop in the bucket, and television executives can get giant headaches from dreaming up ways to substantially increase it -- and quick.

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7. Satellite radio (2001)
Ten years in the making and with billions of dollars on the line, XM launched in 2001 and Sirius in 2002. They weren't only looking to outdo each other, but to change the industry entirely. It wouldn't be easy convincing consumers to pay for something they were used to getting for free, but Sirius XM -- now one company -- succeeded. On March 31, 2003, Sirius boasted a whopping 68,059 subscribers. Today, 18.5 million subscribe to Sirius or XM, more than enough to make traditional radio plenty nervous. It has responded to the threat by creating HD Radio, with upgrades that set each station back to the tune of about $150,000.

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6. The bursting Internet bubble (2000)
OK, so it's not a technology per se, but a response to one. But isn't that what this list is all about, anyway? In the late 1990s, entertainment moguls and companies alike were pouring billions of dollars into Internet schemes that went nowhere. Remember the $50 million or so that DreamWorks and Imagine Entertainment poured into Pop.com without ever launching the site? Multiply that example by hundreds more to get the full picture (add to that the ridiculous notion that in January 2000 AOL was allowed to use its hyper-inflated stock to purchase Time Warner!). The Nasdaq peaked at 5,049 on March 10, 2000, then sunk 75% in three years. About $5 trillion in wealth was wiped out, much of it coming from the market caps and failed investments of media companies.

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I think Hulu will end up more a savior to Hollywood than a headache

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