There is an idea out there that the increasing "democratization" of content and distribution will mean that the age-old balance between artists and creative types and their corporate masters has changed forevermore. If that is true, investors should consider the possibility that there may never be another company quite like Disney (NYSE:DIS) with its ability to create enduring global and iconic brands.
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Has Distribution Changed the Game?
There was a time that if someone wanted to be an actor, they had to accept and work within the "studio system." Major studios like Fox Film, Warner Brothers and Paramount signed up all of what they saw as the talented actors, directors and crew to long-term exclusive deals, and they likewise controlled the production studios, distribution networks, and in many cases the theater chains as well. To be in movies outside of the major studios meant being in low-budget "B movies" and perhaps never having people see your work. (For related reading, see Why Movies Cost So Much To Make.)
Much the same was true for artists in other media. While there were quite a lot of small publishing houses, authors who wanted to make a living had to work through established publishers like Scribner's or magazine publishers like Amazing Stories and Weird Tales - and these publishing outlets were increasingly acquired and consolidated through the 60s, 70s, and 80s. When it came to media like cartoons or comics, there was likewise a limited number of venues - if you couldn't get a job with Warner Brothers, Hanna-Barbera, or Marvel, you were likely limited to self-publishing and had to hustle hard to get anyone to notice your work.
Now, there is a lot of attention as to what venues like Amazon (Nasdaq:AMZN), Google (Nasdaq:GOOG) (through channels like YouTube and Blogspot), and Lulu can do for the independently creative. Writers can often put their e-books on the Amazon platform and filmmakers can offer teasers of their work through YouTube, and web-hosting companies like Go Daddy make it relatively easy and affordable to set up independent websites to promote and sell an artist's own work.
But the More Things Change ...
So now that authors that see themselves as the next Tolkien or McCaffrey have self-publishing and easy electronic distribution, and now that would-be Lucases and Spielbergs have high-quality cameras, editing and production tools available at a low cost, the big media giants should be quaking, right?
Just because someone can put his or her creation in the public space, that is no guarantee that anybody will see it or care much about it. The fact is, it still takes a great deal of money to get creative content in front of eyeballs. Just think about the number of platforms that Disney, Time Warner (NYSE:TWX), News Corp (NYSE:NWS) and Comcast (Nasdaq:CMCSK) can muster to support a new franchise; Bloomsbury and Time Warner didn't "make" Harry Potter, but it certainly elevated its profile as did Little, Brown and Company and Summit Entertainment for the Twilight series. (For related reading, see Movie Genres That Make The Most Money.)
Moreover, it seems like the smaller players understand that there's little point in competing with the titans. Disney was able to acquire Pixar, Marvel and a large chunk of Jim Henson's IP, Time Warner bought properties like Hanna-Barbera and DC Comics and owns much of the content developed through channels like Cartoon Network, and Hasbro (NYSE:HAS) has likewise been a relentless acquirer as well.
The Bottom Line
More and more, media is starting to resemble a barbell. There is plenty of room for independent artists to do whatever they please, so long as they don't have especially strong ambitions to really strike it rich. If you want to play the music you want to play, write the graphic novel you want to write, or make the movie you want to make, you can - and the internet means there's a decent chance that somebody will find it.
Better still, if you're willing to hustle and really market yourself, you can make a living doing it. But if an artist wants to make it big, they have to be willing to surrender a sizable cut to the likes of Disney, News Corp, or Time Warner - George Lucas may still be independent and get to do what he wants, but Joss Whedon largely cannot (or Firefly would still be on the air), and that may simply be because Lucas made some bold and insightful (albeit risky) choices early in his career.
Oddly enough, then, the internet and the spread of "independent" creativity may actually serve the media titans better than the old system - it creates a "farm system" of talent that Big Media can monitor and selectively approach, without having to spend the money to hire a bunch of prospective talent, pay them, and eventually winnow out those that don't make the grade. And while it's true that distribution is increasingly available to everyone, the marketing power to fully exploit it is not. Consequently, there may be never be another Disney - a company that builds itself up from humble beginnings to be a world leader in entertainment brands and franchises - and the existing media giants may be able to just keep buying up whatever they need to advance their growth. (For related reading, see Top-Earning Superhero Movies.)
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