Kara Swisher, usually quite the quality reporter for WSJ’s All Things Digital blog, had a pretty surprising post this week lamenting a lack of business models for the entertainment industry in the digital age.  Surprising, in that Kara let herself get influenced by an industry that has been disrupted by technology, but refuses to change.

She started by referencing Prince’s insane rant (here’s just part of that gem):

“The internet’s completely over.  The internet’s like MTV. At one time MTV was hip and suddenly it became outdated.  Anyway, all these computers and digital gadgets are no good.”

This quote is ironic, as Prince’s own music studio is comprised of both computers and digital gadgets.  Kara then goes on to remark that perhaps Prince is actually not that far off:

But–after spending several days here in Los Angeles this week, talking to execs, talent and others who toil in the entertainment industry–I can’t say what I am hearing is that much different in terms of the continuing frustration with the lack of decent business models to replace the ones that have worked for so long and been so lucrative for the entertainment and media industry.

Wait – so an industry that constantly tries to sue it’s fans, scares off it’s own artists and lock up content is frustrated they have lost their old business model due to technology changing society?  An industry which tries to cling to the past does not get the right to complain of a “lack of decent business models.”  Perhaps if they spent their time innovating instead of fighting a changing world and treating their own customers like criminals we could feel sympathy for them.  But absolutely no one should feel sympathy for this litigious, backwards looking group attempting to protect a dead monopoly on both media and marketing.

From music to movies to television, the biggest minds here still sound perplexed as to what will finally be the golden ticket to carry them through to the inevitable next era of digital distribution.

Typical monopoly thinking – waiting for the “golden ticket” to carry them through the future.  Except, in a hyper-competitive world where everyone has distribution capabilities, power is now with the people.  In an open information world, leverage is not going to magically be given back to the past players who used to have monopolies.  Mike Masnick provides a nice analogy in his commentary to Kara’s piece:

These guys are sitting back and waiting for someone to hand them a golden ticket that replicates the old ways of doing things. That’s not how it works. No one gave the buggy whip makers a golden ticket that let them keep their old lines of business going.

Can you imagine what it would have been like if we subsidized horse and buggy manufacturers instead of investing in the automotive industry?  Society would have looked back in shame of such a move.  Thankfully, it looks like we’re making some good decisions.

I want to provide commentary on just a few other of Kara’s comments…

Who will pay for the high up-front production costs of most major entertainment projects? Can costs come down enough to make up the difference?

This is a problem with the industry – their artists were paid ridiculous sums and marketing budgets were bloated for so long they can’t fathom a world where they are not the only ones making and distributing art.  Huge production budgets are irrelevant in a long tail media world.  Technology such as Ableton Live made high quality audio production costs within the reach of everyone and high quality video cameras are also affordable.  Marketing and distribution of digital goods is even cheaper (if not free).  Now we all can make, distribute and consume music and other media and don’t have to blindly listen to what the controlling players force onto the world through payola.

“Why is the consumer always right?” said one exec to me this week in a typical statement. “You can’t have a business if there is no business model.”

Can anyone see what’s wrong with this statement?  They refuse to actually deliver what people want.  It’s no wonder their customers are fleeing in droves for competing services who actually do deliver what the market wants or simply pirating what they want.  The entertainment industry is no longer some special market, they are now part of a hyper-competitive market and just like others in similar situations they do need to actually deliver on what people want if they hope to survive.  We all need to realize the professional entertainment industry is actually not that special and that music and other forms of media can be of equally high quality when coming from the commons.

Steve Levitan, co-creator of ABC’s “Modern Family” echoed the “Why is the consumer always right?” statement, and goes on to say:

“At its core, 90 percent of my job is still sitting down in a room full of people and breaking stories,” he said. “And that requires virtually no technology.”

This quote shows just how little the industry actually pays attention to their consumers.  Rather than listening to conversations, mining information and being data-driven in their strategies or even asking fans for input, they still make decisions behind closed doors.  They aren’t listening, they obviously don’t care, and so we should be equally reticent to support them.  Why not support independent artists instead of propping up a dated industry who fights change?

Thus, instead of mocking that sentiment, perhaps it is time for tech leaders to figure out a way to keep talent from being dragged into the future without so much kicking and screaming.

So, according to Kara, it’s up to tech leaders to keep the entertainment industry alive?  That’s abusrd.  In a digital society, the web is everyone’s domain and if any industry is going to put their hopes for the future in the hands of another group, it’s unlikely they are going to survive.

The entertainment industry as a whole is doing better than ever, and we see new services to both promote and serve media cropping up daily.  However, the funds aren’t going to the existing industry players, thus all the “kicking and screaming” noted by Kara.  Perhaps it’s time they stopped banking on irrelevant strategies and wake up to the world they live in.