M+E Daily

On May 22, at the Hollywood Innovation & Transformation Summit (HITS), The Content Delivery & Security Association (CDSA) predicted what the largest opportunities and threats will be in the next decade.

Technology cycles don’t repeat, but they often rhyme. Tech cycles from the transistor to the PC have transformed the business landscape, elevating some players to global dominance while rendering others completely obsolete.

Two of the other main questions explored during the session were: What tech will dominate the next era, and how can media & entertainment (M&E) players harness them to increase their revenues and market caps?

During the AI/Advanced Tech breakout session “The Next Tech Supercycle: What Will It Mean for M&E?” Seth Shapiro, co-chair of the CDSA Blockchain Working Group, pointed out that, in the mid-1990s, the economic power of Hollywood and tech were more or less equal, even if the “long-term growth prospects for big tech were better.”  There was, however, a very different economy now vs. 1994.

But, he said, “right now, the market cap of Hollywood in total is about $0.4 billion.” Meanwhile, the market cap of the five companies that the Hollywood studios have spent a lot of time licensing projects to is “approaching $11 trillion,” he said. That means “Hollywood, from a market cap perspective, is worth about 3.7 percent of the companies that they’re supplying to,” he added.

What has long happened, he noted, is that a “new technology comes along and some creative person or persons finds a new business model by harnessing that technology.” He added: “The first of these was probably Charles Dickens, who looked at the industrial printing press and completely changed what he did as a writer.”

When you look back at the time, “people would publish these voluminous Victorian novels that they’d sold once, but [what] Dickens decided to do, once the printing press was around, was to break” up books into “installments, which kind of created the idea of the cliffhanger, and then he sold them,” he said.

“Once he got more successful, he then bought the magazines and then he bought the printing presses,” he went on to say. “So he completely owned the chain of production.”

On the technology front, there is now “something called a tech super cycle,” he pointed out. “With the move into desktop computers” and mobile devices, “where essentially a new platform is created” and new players arrive on that platform, he noted. Meanwhile, margins get “pushed down,” he said.

He added: “Consumers come as new applications are built on the new platform. More entrepreneurs come…. Then the new platform sort of becomes the dominant one, displacing the old…. This just happens over and over and over again.”

From the “two archetypal successes of Web1, which [were] Amazon and Google,” we moved on to Web2 and mobile/online app stores and the “notion of democratized video,” he said.

Amid all of this were skeptics. For example, Jeff Bewkes, who was Time Warner CEO at the time, was asked, when Netflix was a new company, if he considered it a threat to his company, recalled Shapiro. And Bewkes responded by saying something along the lines of that’s like asking if the “Albanian army is going to take over the world. I don’t think so,” recalled Shapiro.

While moving into the streaming era, there was an “opportunity for creators and tech people in our business and the studios themselves, hopefully, to reinvent [their business model] and to take a more active role rather than just licensing,” Shapiro said.

There is now “a lot of skepticism obviously around blockchain because of the NFT space and because of the popular press,” and that is why CDSA created the Blockchain Working Group,” he noted.

Shapiro was interviewed by Richard Atkinson, president and chairman emeritus for CDSA, during the session.

“It’s pretty interesting for those of us that have been around a long time … that these things kind of come in waves,” Atkinson said. “It feels, in some ways, foreign, but in many ways, it’s the same old thing. Yeah, it’s evolving and, inevitably, things wind up in this trough of disillusionment. And I think that’s where we saw NFTs go. Metaverse has kind of gone down that hole. But meanwhile, Web3 [and] blockchain infrastructures are being deployed out there.”

To download the presentation, click here.

To view the presentation, click here.

HITS Spring was presented by Box, with sponsorship by Fortinet, SHIB, AMD, Brightspot, Grant Thornton, MicroStrategy, the Trusted Partner Network, the Content Delivery & Security Association (CDSA) and EIDR, and was produced by MESA in partnership with the Pepperdine Graziadio School of Business.