Streaming Hollywood in an Era of Independence

Since the 1920s, Hollywood’s film industry has been dominated by infamous business moguls. The same can be said for major labels in the music industry. As explained in Jon Wilkman’s documentary “Moguls and Movie Stars,” legacies such as William Fox, Samuel Goldwyn and Louis B. Mayer were in charge of everything in front of and behind the scenes. Similar to television revolutionizing the format in which film was consumed, the Internet has changed how we engage with music. Now, independent artists can make a song, post it on Soundcloud, and the rest is up to the masses. Someone like Justin Bieber can upload a video of himself singing on YouTube and then get scouted by Usher and turn into a superstar. Artists don’t need a major label in order to be commercially successful. The same can be said for filmmakers, directors, screenwriters and actors— they don’t necessarily require the support of major motion pictures to promote and distribute their work.

In the 1940s, MGM, Warner Bros., Paramount Pictures and 21st Century Fox were the main film studios in Hollywood (Wilkman). The legacy platform gave the men behind these companies a major advantage in the industry, but others like Jules Stein and Lew Wasserman decided to create a new entertainment empire. Beyond the political power struggles, “Wasserman’s influence stretched from Hollywood Boulevard to Pennsylvania Avenue” (Wilkman). With MCA, Wasserman and Stein had a company that “moves out of music, moves into television, moves into talent representation, moves into the movie business that understands that the entertainment industry in the United States is large and multi-faceted and in some ways, is or can be integrated” (Wilkman). As integration was underway, entertainment monopolies were making headlines again, dating back to the Edison Trust of 1906. This incident proved that representing talent was merely a strategy for making money in the business, not necessarily a rite of passage for the actual talent to be successful.

Similar to screenwriters, actors, and producers like Budd Schulberg “finding more opportunity in television,” artists have found more opportunity on the independent music route (Wilkman). “Major labels’ varicose bureaucracy has been tolerated for a long time; artists relied on their marketing clout and monopoly of large-scale distribution. But that has changed – independent artists can be just as, if not more, successful than those on major labels and have started to question whether majors offer enough to compensate artistic sacrifices” (Bassil). Some of the most successful independent directors of our time like Alfred Hitchcock, Charlie Chaplin and Billy Wilder were foreign immigrants.

Walt Disney, another major independent producer, was one of the “first visionaries to recognize the link between animation and the integration of television” (Wilkman). He “cut a deal with ABC for his weekly Disneyland series” and the rest of his legacy is history (Wilkman). The Mirisch brothers had the right idea in the late 1950s by seeking out producers that they wanted to work with in the foreign film industry. Independent film producers like Roger Corman and Stanley Kramer created low-budget B movies all on their own terms. D.W. Griffith built his own studio so he could “distance himself from Hollywood” and Stanley Cooper’s independence “added to his appeal and his price tag” (Wilkman). “Major labels were steadfastly reluctant to embrace and invest in innovation, often preferring to wait for independents…to sink or swim and then buy them up afterwards. They neglected technological innovation too; coming late to the game only when other start-ups – MySpace, iTunes, Soundcloud – had sourced alternatives” (Bassil). Similar to what MCA used to do, major labels “help get artists on radio playlists, music channels, and TV shows” (Bassil). Evidently, being independent pays off more than the industry wants to give it credit for.

Today, streaming services are all the rage and allow independents to get their products out immediately. People now have the ability to listen to music for free via online mediums like Spotify and Soundcloud. In the film industry, audiences can access movies and television through paid streaming services like Netflix, Hulu and Amazon. According to The New York Times, “HBO and other premium networks have agreed to pay billions of dollars for the exclusive run of major studio films” because “movies are [their] most popular content” (Manjoo). The fact that people still physically buy their music and movies in the form of vinyl, CD, DVD and blu-ray is rare, but for the most part, everyone downloads their entertainment in an MP3 file.

According to Rolling Stone, “digital music sales, once believed to be the record industry’s savior after years of Napster-induced piracy, dropped for the first time since the iTunes store launched in 2003, according to new year-end data from Nielsen SoundScan” (Knopper). “Just like in the music business, eventually the entire home-video market is sure to move online, and many consumers will abandon pirate sites in favor of easy-to-use legal services. The music industry lost a lot of money when it dithered over this transition, and now the movie business seems to be making the same mistake. It could be raking in a lot of cash by selling us easy online rentals” (Manjoo).

As for the rise of online movie streaming, journalist Farhad Manjoo argued that services of this nature fail to be successful in his “State of the Art” column for The New York Times. Gaining the rights to movies is difficult enough, but it is also expensive. Last year, an app called Popcorn Time allowed users to instantly stream newly released movies online. “But like Napster in the late 1990s, Popcorn Time offered a glimpse of what seemed like the future, a model for how painless it should be to stream movies and TV shows online. The app also highlighted something we’ve all felt when settling in for a night with today’s popular streaming services, whether Netflix, Amazon, iTunes, Hulu, or Google or Microsoft’s media stores: They just aren’t good enough” (Manjoo).

Manjoo also mentioned that while music streaming services that give users the option to pay for unlimited music listening exist, this probably won’t be happening in the film industry anytime soon. “Instead of a single comprehensive service, the future of digital TV and movies is destined to be fragmented across several services, at least for the next few years. We’ll all face a complex decision tree when choosing what to watch, and we’ll have to settle for something less than ideal” (Manjoo). In a different article for Slate, Manjoo insisted that the industry understands that online distribution is the future of media, but “everything in Hollywood is governed by a byzantine set of contractual relationships between many different kinds of companies—studios, distributors, cable channels, telecom companies, and others” (Manjoo). There are too many restrictions in place to make a service like this tangible at this time.

However, “as more people in the U.S. watch digital media on a growing range of devices, streaming services are stepping up their competition for subscription and advertising dollars” (eMarketer). Today, people are more willing to pay to have personal access to entertainment content on their own devices than to go out of their way and use traditional services like movie theaters. In 2012, “Netflix reported U.S. streaming revenues of $2.19 billion for 2012, with moderate growth from quarter to quarter. U.S. DVD revenues totaled $1.14 billion and declined each quarter during this period, highlighting the company’s transition from a packaged-goods model to a streaming business” (eMarketer). Marketers also see the value of reaching customers on digital platforms and online streaming services open a wider window of opportunity for growth. “YouTube’s built-in ad revenue and Spotify’s $10-a-month premium subscriptions are also helping artists and labels make up for lost sales” (Knopper). For both industries, the youth market is still the gateway to success.

The biggest hurdle for streaming services will be moving past the pay-per-listen/watch profit and applying some sort of a final down payment to ensure long-term success. Major studios, production companies, and labels have all of the resources at their command, but they don’t always utilize them properly. At the same time, “if you self-release, you still need someone to get your name out there, get your product into the marketplace, and get it sold” (McCabe). The film and music industries have come a long way since the 1920s, but there are still so many obstacles that have yet to be tackled— perhaps we will have an anecdote for some of them in 2015 though.

Works Cited

Bassil, Ryan. “It’s Not Me It’s You: Why So Many Artists Want To Break-Up with Major Labels”. NOISEY, Jun 4, 2014.

Knopper, Steve. “Digital Music Takes a Dive as Record Sales Slip Again in 2013”. Rolling Stone, January 8, 2014.

Manjoo, Farhad “Why Movie Streaming Sites So Fail to Satisfy”. The New York Times, Mar 26, 2014.

Manjoo, Farhad “My Mythical Online Rental Service for Movies”. Slate, Apr 27, 2009.

McCabe, Allyson. “To Sign Or Not To Sign: Artists Big And Small Face The Label Question”. NPR, July 6, 2014.

Wilkman, Jon. “Moguls and Movie Stars: A History of Hollywood”. TCM, 2010.

“Digital TV, Movie Streaming Reaches a Tipping Point“. eMarketer, Apr 2, 2013.

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