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EDITORIAL: Slicing the Video Pie in 2004 (or Why the Real Phantom Menace in Hollywood is Personal Vi

EDITORIAL: Slicing the Video Pie in 2004 (or Why the Real Phantom Menace in Hollywood is Personal Vi

by Jason McCabe Calacanis

As many of you know, I’ve been spending more time in Los Angeles. I even
sublet an apartment in Santa Monica. I would guess that I’m in the L.A.
area about 25 percent of the time nowadays, although the amount of time
I’ve spent thinking about the entertainment industry here is much
higher. Why? Because video is the next wave of innovation and growth in
the Internet industry.

After reading the Hollywood trades regularly and hanging out with
Hollywood execs for the past couple of months, two things are clear.
First, people in L.A. love to network even more than people in New York
City do, and second, the majority of Hollywood is scared to death of the

Hollywood’s Netphobia is much deeper than the commonplace analysis that
the Internet provides an “open distribution” platform that allows for
quick and cheap video distribution and provides a friction-free
environment ripe for stealing intellectual property. While that is
true, the real reason Hollywood is scared is because it’s competing for
your attention from foes it can’t beat: your friends and neighbors (so
to speak).

Today we read more then we did five years ago. Crazy you say? Think
about it, how many e-mails a day do you read–25, 50, 100? I’m up to 300
to 400 per day, and I’m not alone. Five years ago, the overwhelming
majority of people did not even have e-mail, so this content is
additive. The overall pie of “reading time” is getting bigger, but the
growth is in consumer-created content, not professionally produced
content, such as magazines, newspapers and books.

For my mother, reading e-mail from her family is much more interesting
than reading the New York Times. She is not alone. Like her, I wake up
and check my e-mail before I crack open the Times. Personal
communications are more compelling and important, and they are taking
priority in our lives. Where do you go first, the bookshelf or your

Why is this important to Hollywood? Ask yourself how much of the video
you consume today is professionally produced? Maybe between 90 and 95
percent? Home videos and reality-based TV shows are some of the few
examples of video you consume that don’t have big-budget production
quality. Although reality-based TV is compiled and edited by Hollywood,
it is, at the very least, professionally manipulated and packaged.

Fast-forward five years when we will all have some type of high-speed
connection to the Net. Your e-mail alert goes off, and you click on a
message from one of your extended family members. A video pops up and he
asks you how your dog is. Sound far off? Well, it happened to me last
month after my family picked up a $50 desktop video camera and filmed my
4-year-old nephew asking that very question. If you take the
consumption-of-text example and apply it to video, the result is a large
group of people spending their time — one of the few finite things in
our “new economy” — watching non-professional video. This means NBC
will have to fight a whole new battle for video consumption time that
doesn’t involve Fox or cable TV. This is a battle they can’t win. What
grandparent is going to pick “Must-See TV” over a video of his or her

And creating video is getting easier and cheaper every day. If I told
you five years ago there would be dozens of magazines dedicated to Tori
Spelling, you would have laughed. Why on earth would anyone, let alone a
dozen people, create a ‘zine dedicated to an actress, even an actress as
talented and dynamic as Ms. Spelling? ;) Simply put, because they can.
Web publishing started as something very technical, and now anyone can
do it.

In five years, instead of creating home-pages, dedicated Ms. Spelling
fans will be creating their own documentaries on her epic career, which
I’m sure will include a couple of Oscars at that point. Sound crazy? So
did the idea of a dozen Tori Spelling magazines.

[Reprinted with permission from The Silicon Alley Daily. Jason McCabe
Calacanis is the editor of The Silicon Alley Daily and The Silicon Alley

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