
Apple Should Buy Hollywood  - senjamin
http://techcrunch.com/2012/01/26/apple-100-billion-buy-hollywood/
======
oldstrangers
If Apple buying Hollywood means I can look forward to more interaction with
iTunes, then no thanks.

The last thing we need Hollywood to turn into is an even more walled garden.
The best answer for Hollywood is an open approach from end to end, from
funding to distribution to better bandwidth.

Fund independent movies and television shows. Continuously. Encourage the
death of dvd and bluray. Encourage the death of all hard copies of media, even
thumb drives. Give NetFlix and Hulu more money. Lobby the FCC to regulate
broadband speeds. Everyone should have 10+Mbps by now. These are the right
steps towards defeating Hollywood.

~~~
cbs
>Encourage the death of all hard copies of media, even thumb drives

This is a pipe dream that doesn't think more than 5 years into the future or
understand the realities of distribution.

The properties inherent to physical media are some of the most consumer
friendly aspects of distribution. Some can be approximated with a software-
only approach, provided that the content provider wants to not only take the
time to implement, but also wants consumers to continue to have those
benefits. There are also properties of physical media that are impossible to
duplicate with the internet, and what they do provide relies on them never
going offline and never stop serving any each and every piece of content.

I have NES cartridges in my closet that are much more versatile than games on
steam. I have a netflix streaming account that I _can not_ use when I visit my
father because he doesn't have an internet connection and I can't cache
netflix movies on my laptop. I have a friend, who because of hardware failure,
can only use xbox dlc if he is connected to the internet (I don't really know
the DRM specifics, but on the original hardware he didn't need to be
connected).

I put up with some of these limitations because I hope they are temporary and
digital distribution companies will eventually get their act together, but
they're still a "last resort" option when I buy media.

~~~
slowpoke
_> The properties inherent to physical media are some of the most consumer
friendly aspects of distribution._

I don't think so. What's consumer friendly about plastic garbage that takes up
space, is ridden with unskipable ads, DRM to boot, and is a pain to handle?

The true "problem" (for those relying on this business model) still remains
the reality that you ultimately cannot force people to pay for virtually cost-
free distribution of content. You cannot stop free sharing either. All efforts
to do so will eventually result in heavy censorship (actually, copyright and
free speech are fundamentally at odds).

Pretty much all problems with digital media you describe are caused by this
failure to accept reality on the side of distributors. It's not a problem with
digital media, it's a problem created by trying to make digital media like
physical media (-> being able to control distribution), when the former is so
much more powerful, versatile and plain better than the latter. Distributions
as a business model is _dead_. The future of digital media is one that doesn't
rely on it, and embraces cost-free distribution and free sharing.

~~~
ctdonath
What's consumer friendly about physical media is simplicity & independence. My
2-year-old can climb onto the bookshelf, dig out whatever disc he wants, open
the Bluray player, insert disc, close it, and watch it - THAT is "consumer
friendly". Sure there are things to complain about with discs, but those are
way into the "first world problems" realm.

When you buy a disc, it's yours. No remote server can deny you access to it on
a whim.

There was an old saw "don't underestimate the bandwidth of a station wagon
stuffed with magnetic tapes." Until we get consistent >25Mb/s streaming cheap,
you're not going to see Bluray-quality video from Netflix et al ... but a
2-year-old can deliver it in seconds.

~~~
slowpoke
If you're seriously basing consumer-friendliness on the ability of a two-year
old to operate it, then I'm sorry, but I fundamentally disagree with your idea
of consumer-friendly.

Also, if you can teach a 2-year-old to put a disc into a player, you can most
likely teach him to click on (or touch) an icon in a digital media library.
There's no difference. None at all.

 _> When you buy a disc, it's yours. No remote server can deny you access to
it on a whim._

Again, that is not a problem with digital media, that's a problem of people
trying to control digital distribution, which is impossible. I have loads of
nice .mkv (and some older .avi and .mp4) files here, in addition to a huge
music library, and short of a double harddrive fault, _nothing_ can deny me
access to them.

Many physicals disks have copy-protection schemes, too, by the way. What if
the industry for disk players decides to not make any players anymore that can
play disks with a certain copy-protection scheme. Or switch to a new format of
storing media, as they did quite a lot of time in the past. It's the very same
thing as a "remote server denying you access". There's no guarantee you'll be
able to play these disks you own in 5, 10 or 20 years. I have that guarantee,
because short of the complete replacement of the general purpose computer, I
will be able to play my aforementioned media collection.

 _> There was an old saw "don't underestimate the bandwidth of a station wagon
stuffed with magnetic tapes." Until we get consistent >25Mb/s streaming cheap,
you're not going to see Bluray-quality video from Netflix et al ... but a
2-year-old can deliver it in seconds._

Netflix (and other streaming services) are as much part of the problem as
physical media are. Streaming is DRM, no matter how you turn or twist it. You
pay per watch, and you don't own what you watch. And again, I'm not paying for
something that's cost-free to begin with (distribution). Distribution-based
business models are dead, and trying to save them will only lead towards more
shit like SOPA, ACTA and the DMCA, which hurt the internet and Free Speech.

------
nl
No.

Apple (and Google, and Netflix and anyone else..) should campaign to have
statutory music licensing[1] extended to video/film.

That originally came about when the music industry couldn't agree to
reasonable licensing terms for radio, so the government intervened to impose a
licensing regime that allowed the new industry to build audiences while still
making a return for artists.

Sound familiar?

[1]
[http://en.wikipedia.org/wiki/Compulsory_license#United_State...](http://en.wikipedia.org/wiki/Compulsory_license#United_States)

------
jonnathanson
This makes no sense whatsoever. Sorry.

What upside is there for Apple in owning the expensive, unwieldy, production-
side apparatus of Hollywood? Why should Apple be devoting resources, human and
economic, to developing content when its hardware and software businesses are
so much more profitable?

All this talk in recent weeks about "destroying Hollywood," and now, "buying
Hollywood," focuses too much on Hollywood as it currently exists. If we're so
confident that Hollywood-of-today is a ripe for disruption, then let's focus
on _disrupting_ it. The way to do that isn't to fight Hollywood on its own
terms. It's to make the creation, distribution, and marketing of non-Hollywood
films and shows easier for those outside of Hollywood to do. You don't kill
Hollywood with a management change. You kill Hollywood by building -- or,
really, supporting the growth of -- an alternative to Hollywood.

Apple already has the means to do this. Its software makes filmmaking and
editing cheap, easy, clean, and powerful. And, at least in theory, there's
nothing stopping Apple from placing independent films right alongside
mainstream Hollywood films on the iTunes movie page. Or serving them up
through Genius-powered collaborative filtering algorithms. Etc.

Apple already _owns_ the future of Hollywood in a very meaningful way. To
suggest that Apple needs to "buy" anymore of Hollywood is to miss the forest
for the trees.

~~~
aptwebapps
Well, that's what you might guess from the title and from the first half of
the article where he posits that Apple _could_ buy Hollywood if it wanted to.

But then he goes on to say that what they _should_ do is to buy a bunch of
distribution rights so that they can offer true a la carte TV programming.

~~~
jonnathanson
Where strategic acquisition of distribution _would_ make some sense is as a
competitive advantage over Amazon and Netflix (and over any similar
competitors who might emerge). But to secure exclusive rights on key pieces of
content, Apple would need to pay an exhorbitant amount of cash -- essentially,
protection money to Hollywood to keep content out of competitive hands.

This also forces Apple into the game of picking hits, by betting on which
pieces of content are going to be worth buying exclusive rights for. Hit-
picking is a notoriously tricky business. (Even Hollywood gets it right only
about 10% of the time).

Strategic, overall partnerships with key content providers -- HBO, for
instance -- might make a great deal of sense. But to do so would be to place
Apple's fate in the hands of HBO's development arm, i.e., to bet that HBO will
keep turning out hits at the rate it currently is.

Perhaps a hybrid approach here is best: prime the pump with some exclusive,
big-studio content, but over time, focus on developing a content ecosystem
that is attractive to content developers the way the App Store is to software
developers. Hollywood is a very pricey middle-man for content development; the
long-term goal should be to build up the independent development system. If
nothing else, this forces Hollywood's costs down by introducing legitimate
competition.

------
stellar678
Seems to me that Apple has already locked down a distribution and promotion
model that is significantly less expensive than Hollywood. The only thing left
is to replace Hollywood's role as "VC for TV/music/movie ideas".

I would imagine with their huge cost advantages, Apple could offer much more
attractive deals to the creative people in the industries. Why not just start
funding productions?

Hell, content is just Apple's carrot to get people to buy hardware. They don't
even need to make a profit from it.

------
jessedhillon
_Imagine any show or movie on demand on your TV, way beyond what is available
in iTunes now. There is no program guide, no schedule. Everything is there,
organized according to your taste..._

This is what I want. Despite paying for Hulu, Netflix, and Amazon Prime, and
being willing to pay for other such services I still can't get it. I have the
Plex client installed on my Google TV, streaming shows that I torrent (even
when they are on Hulu) and I rip Netflix movies. Not because I'm cheap and
won't pay -- I would if they sold all this to me.

I can watch any content, on any device, anywhere but only because I'm a thief.

------
dave_sullivan
I'm starting to wonder if all these SV guys talking about fixing Hollywood is
kind of like Hollywood saying they're going to fix SV (or revolutionize it
with a poorly conceived product, poorly conceived because they have no domain
experience there). Hubris?

I tend to agree there's likely a better model, but I suspect there's a bit
more to it than the tech industry seems to think. Something to consider.

------
notatoad
as the article says, the concept of actually buying hollywood is a little
ridiculous and a little pointless, but they don't need to.

putting up billions to license first-run shows is a terrible idea though. it
validates all hollywood's reluctance to change any of their old business
practices, and encourages then to keep being stick-in-the-muds. Hollywood
needs to be disrupted, and a huge pile of cash is exactly what is needed for
that to happen. If apple wants access to high-quality content for their TVs,
they need to do something drastically different to scare hollywood into
playing with them.

------
arturadib
What they should really do is distribute some of those billions to their
employees, and set a precedent for fair/social capitalism. Because yeah Steve
Jobs was a genius, but any engineer who uses their devices knows that the
folks who _executed_ his ideas were just as critical for Apple's success.

------
jey
Apple has tremendous proven ability to create/ride new markets, but no
demonstrated ability to rescue doomed businesses with (soon-to-be-)failed
business models. Why should they start now? Sure, that's only a backwards-
looking argument against Apple buying Hollywood, but the burden is on those
arguing in favor to explain why this makes sense for Apple. Seems like it'd be
better for Apple to just milk the distributors while they can and at the same
time make it easy for the next generation of content to be distributed via
Apple... which is exactly what they're doing with iTunes.

Hm, what are some new business models (or more generally, pivots) that would
make the dying distributors continue to be relevant?

~~~
buu700
> _Apple has ... no demonstrated ability to rescue doomed businesses_

Uh... Really?

~~~
jey
The rest of the quote is relevant too: "no demonstrated ability to rescue
doomed businesses with (soon-to-be-)failed business models".

If you're referring to Macs, the Macintosh line is more like a luxury clothing
brand than a horse-drawn buggy manufacturer. Macs sell because they're
_commodities_ that have been dressed up with a luxury veneer[1], like a
boutique clothing brand or "luxury"-class car. The perceived (and monetary)
value of "luxury" commodities comes from the cachet of owning it more than any
increase in value from better quality. Sure, luxury goods do usually have
better craftsmanship too, but the high profit margins of luxury brands is
pretty good evidence that consumers are paying for more than just the increase
in quality.

There isn't really any analogue to luxury commodities in the media
distribution space. The closest I can think of is HBO, and that's a pretty
good model of the future: it's a service you subscribe to if you want it, and
it's delivered over a generic pipe. More pure HBO-like entities are the
future, except without the artifacts of having to be shoehorned into a cable
and satellite distribution system.

1\. Some would argue that they're also better from a functional perspective
too.

------
raarky
how about completely ignoring Hollywood and instead, focus on creating a
better production/marketing/distribution chain for film makers?

------
saturdaysaint
Apple is where it is because they see "where the puck is going" and high risk,
blockbuster-driven Hollywood is not that. If anything, they should be looking
to the far more complementary game industry. Exclusive games would translate
directly into iPhone and iPad sales (ie their main profit centers!) in a way
that's hard to imagine with movies. An acquisition or exclusivity deal with
the increasingly desperate Nintendo would be money well spent.

I'll be surprised if there aren't a round of game company acquisitions to this
effect in the next few years for exactly this purpose, as blue chip game
makers struggle to compete with increasingly rich $3 smartphone apps, and as
games are the main beneficiary of increasing smartphone power. Microsoft
understands the value of a well timed acquisition (buying Bungie basically
made the XBox an instant success), so I wouldn't be surprise if they initiate.

~~~
slowpoke
_> An acquisition or exclusivity deal with the increasingly desperate Nintendo
would be money well spent._

Please elaborate, in what way is Nintendo "desperate"? I'm not really
following the console market anymore, but last I checked was Nintendo being
the only of the big three console manufactures pushing innovative new concepts
and making a killing with the Wii and DS. I know they are worrying about the
mobile market, but is that really true competition for them right now?

~~~
Someone
Google their recent financial report. It says something like "revenue down
30%, net loss half a billion $".

I would not call it desperate, but they likely are more than a bit worried.

------
nicktelford
I honestly can't think of anything worse for consumers.

By purchasing the content producers they would own the entire supply chain
(from production to delivery), purchasing (nearly) every content producer
would make them a monopoly both horizontally (owning every player in a single
stage of the supply chain) and vertically (having interests at each stage of
the supply chain).

I doubt (I'd hope at least) the US government would ever allow this to happen
due to anti-competition laws. Honestly I'd be surprised if they weren't
already investigating Apple over their current music/movie (and future book)
distribution businesses.

I'm pretty disappointed that Erick (the author) could think this would ever be
good for consumers.

The big problem with both the music and movie industry, from a consumer
perspective, is that they operate a lot like a cartel. They should be
competing with each other, not their customers.

------
raheemm
Louis CK has shown one way to bypass hollywood. If more artists replicate the
CK model; if there are more online distributors that can reach any device
(youtube, netflix); and if there are angels, VCs and more crowdfunding
platforms for content creators, we can move closer to killing hollywood. What
this does validate is that content is king. It needs better/alternate funding
and distribution systems.

------
alabut
Sony made this same mistake in the 80's by buying a movie studio. I can't see
Apple going down this road of diversification through acquisition.

Then again, Sony's terrible product divisions are propped up by their massive
sales in life insurance and the company wouldn't exist without it:

<http://www.splatf.com/2011/11/sony-profits/>

------
ChrisNorstrom
I wish Silicon Valley knew who they were talking about before coming up with
this "kill hollywood" nonsense. As if Hollywood is 7 guys with rich parents
sitting around waiting to be bought.

Hollywood BOUGHT congress, I doubt Apple or MS can buy Hollywood. I really
need to write a piece on this.

~~~
jedbrown
Remarkably, Hollywood bought Congress while being a remarkably small part of
the economy, both in terms of revenue
(<http://en.wikipedia.org/wiki/List_of_companies_by_revenue>) and jobs
(<http://en.wikipedia.org/wiki/List_of_companies_by_employees>). These are
global lists, but you'll notice that not even Disney makes either one. As an
economic matter, why should Congress be more responsive to Disney, Time
Warner, and Viacom than to, say, Kroger, which has more employees and revenue
than the others combined? The MPAA is visible far more than it is important.

As far as being for sale, publicly owned companies are always for sale.

~~~
ChrisNorstrom
Hollywood does not report profits on many of their films.

<http://en.wikipedia.org/wiki/Hollywood_accounting>

[http://www.dailyfinance.com/2010/07/08/hollywood-applies-
cre...](http://www.dailyfinance.com/2010/07/08/hollywood-applies-creative-
accounting-to-harry-potter-movie/)

Google around and you'll find tons of articles on famous successful films that
"never turned a profit".

Star Wars, Harry Potter, Lord of the Rings do this as well. They use VERY
creative accounting to mark up overhead costs and hide profits.

~~~
jedbrown
Look at revenue, not profit. The economy doesn't care how much the company
profits, it cares how much the company is spending (on employees and other
services).

------
anamax
Apple doesn't have $100B, or even $90B, that it can use to buy Hollywood, pay
dividends, give more money to employees, etc.

A huge fraction of Apple's cash is outside the US. Bringing that money into
the US would require paying 35% (US corporate tax rate).

------
radley
Why buy the cow...

------
hessenwolf
They say they have 96 billion in cash, yet their financial statements only
list 54 billion. Where is the rest? Is it in a subsidiary? If so, aren't there
also liabilities in the subsidiary? I don't get it.

~~~
MarkMc
I assume you are looking at the 'Total current assets' in the balance sheet of
their latest 10Q [1]. Instead, add together 'Cash and cash equivalents',
'Short-term marketable securities' and 'Long-term marketable securities' to
get $97,601 million.

[1]
[http://files.shareholder.com/downloads/AAPL/1659381773x0x536...](http://files.shareholder.com/downloads/AAPL/1659381773x0x536523/381559d7-04a1-40d5-8e2a-236e3f867158/AAPL%20Q1FY12%2010Q%2001.25.12.pdf)

~~~
hessenwolf
Hey, thanks millions.

Interestingly, the third google result for 'Long-term marketable securities'
is the following. Do you personally agree with adding this to cash?

[http://www.usatoday.com/money/perfi/columnist/krantz/2011-08...](http://www.usatoday.com/money/perfi/columnist/krantz/2011-08-09-apple-
cash_n.htm)

~~~
MarkMc
I expect that the marketable securities owned Apple are highly liquid, so yeah
I'm happy to call it 'cash'.

~~~
hessenwolf
From reading a bit more about it, I agree. It's not quite 'cash', but it's not
the worst nickname for liquid assets.

------
robomartin
Nah. Apple should turbocharge education.

~~~
bwarp
Apple should stay out of education.

The last thing education needs is lock in (content and application walled
gardens) and a high entry cost (expensive hardware requirements).

Education should be free and open.

~~~
robomartin
Education is not free and it certainly isn't open. You pay for it with your
taxes; the government decides what goes in the books and curriculum and unions
don't let us create a competitive marketplace where bad teachers evaporate
from the radar and truly good teachers compete and make two or three times the
money they make today while providing a better education. Much like anything
that government touches, the system is a mess and our competitors are eating
us alive.

------
beerglass
Is this the one who replaced Arrington as chief-editor of Techcrunch? Duh!

------
a_a_r_o_n
Then we can look forward to patent lawsuits over aspect ratios.

No thanks.

------
jiggy2011
Please god no.

Apple is great and all but there seems to be almost a call from some people
that the world would be best run by an international dictatorship with the
half eaten fruit as it's flag.

------
twiceaday
Apple should buy a telco?

------
ColdAsIce
One wall garden to buy another walled garden? Whats the point? We need to
disrupt the movie, tv and music business. We need to tear down the wall.

~~~
ugh
Apple’s music business is in no way a walled garden.

~~~
bwarp
The store front for it is however.

~~~
ugh
Are you serious?! Really?!

That’s not what a walled garden is. You can walk out at any time and keep
everything you bought. There is nothing forcing you to stay there. Getting in
is a bit harder than opening a web browser – but that’s getting in, not
getting out. It doesn’t matter. It’s not like you have a right to buy
something there.

~~~
bwarp
No you can't just walk away. You need to authorise a machine to play DRM
infected media from iTunes and you cannot play DRM infected media on devices
which do not support FairPlay.

I am referring to music purchased pre-2009 (which is a large volume of sales),
current movies, books, and television shows.

I don't have a right to purchase but the majority have a reasonable
expectation to be able to take their purchases away in the future in the same
manor as they expect their purchased DVDs to be usable on every DVD vendor's
equipment.

~~~
ugh
This is getting more idiotic every time. Are you for real?

First, I was explicitly talking about music. Second, DRM is no more. That’s
it. The music store was a walled garden. It is no more. To call it a walled
garden is stupid.

------
jeffdechambeau
"One thing they could do is buy their way into Hollywood. Think about it for a
second."

If only the author did, then maybe he wouldn't have written this post.

Why would anyone want to buy an industry in self-imposed decline when they can
sit on their hands, wait for them to wither, then push them around with
whatever terms they like.

People need to stop reading TechCrunch.

------
zeroboy
I've always taken "kill Hollywood" as a call to reinvent entertainment and
come up with fresh alternatives to the current garbage.

And oldstrangers nailed it with his iTunes comment. Ugh. Can't stand that
software.

------
rnadna
Apple should fix the iphone-4S battery problem.

