"Licensing deals, merchandise and sponsors are still the only ticket to Tinseltown riches."

I know there's some truth to that, but I'm going to have to give it a [citation needed].

@sample032: Reality is the proof my friend. Nobody,but nobody is making money off YouTube.

This is a real downer if your whole goal is to get rich off your talent and creativity without really trying, and you expected open distribution systems would somehow enable that.

That aside, there are two groups of people that I see benefiting extensively with the new world of online video:

One is the group of people who create for the sake of creating and want to reach a potential global audience simply to share their creation. The barrier to entry is now paper-thin for those creators to share their art, where previously it was near impossible to gain even a local audience. Now you just have to figure out how to find the people who appreciate what you have to say.

Second are those who want to produce content and monetize it. The distribution means are now wide open, and the means to hawk their wares are available for those who want to hustle. Sadly, there will still be work involved to make money, but that is sort of what money is by definition, no?

If you want someone else to do the hustling, then you'll need an agent and PR/marketing people. If you can't keep your own books, you'll need an accountant. And once you have something worth enough that others will want to use legal and illegal means to take it from you, you'll need a lawyer. I don't see any of that changing no matter how the technology evolves.

I think a lot of the problem also stems from people's fear that Hollywood will go to way of the music industry on the internet. People saw the music industry miss the boat in regards to the internet, so no one is taking any chances with video content/entertainment. Hit the internet with it, and hit it hard.

Too bad there's no money there yet.

In the not too distant future, there will not be much of a difference between television and internet video, it'll all be one in the same. So, if you really want to be smart and make money, launch an independent internet television network. Build it out and Hollywood will come to you.

You don't need an agent. Trust me. Why give somebody 10% for what you can do yourself?

Theatrical and DVD sales are the ticket to riches. What kind of nonsense are you talking about? A great example of how to survive in the modern age is Battlestar Galatica. Not only is the production cost effective (shot in Canada with a bunch of no name actors), it also leverages a known brand name and has a really, really great web component to the show. Soon after the show airs they release a DVD, and DVD sales are through the roof.

Compare this approach with your average web video effort. Let's look at the sad case of Julia Allison. While she has low costs and a heavy web presence, she has absolutely no production value and is widely hated. She will never, ever sell a DVD in your local Walmart. And she can't take advantage of the tax breaks in Canada (were she to ever actually see revenue). She is location bound and takes no advantage of other's talent (and is talentless herself).

If web video is ever to make financial sense, the top creators need to get together and make a single, well known production that can be resold at Walmart. For example, if someone were to organize a conference and ONLY invite the top viewed creators from YouTube, and force those folks to produce something over the course of 2 weeks, you might have a fighting chance. There would obviously have to be script work prior to the on-set time. So lets say a 2 month ramp up period, with 2 weeks on-set. That could produce something with a reasonable cost strucutre and adequate production values. But Julia walking around with a camera pointed at her? Dead man walking.

@sample032: its the Canada on Strike (youtube stars die) episode on South Park: [www.southparkzone.com]

Honestly, who is this guy writing the article. He's fricking whining about oh, artists are going to be taken advantage of my the new media. Oh, I want hollywood to die, oh I'm so depressed because I don't understand what's going on.

This guy doesn't get it, youtube is a thing of the past because they didn't adapt, and some of the commenters don't get it either, DVD sales, not anymore. However some of the people like Patricia who commented totally get where everything is going. There is no difference between tv and the internet, their just idiot boxes that you look at to amuse yourself. The problem was that hollywood and big business didn't know how to fully tap the internet until now, look at hulu for christ sakes. They know how to do it now, and that's why the strikes happened, to get the same deal they had for television formatted internet as television formatted television. Obviously the producers didn't want this.

Its going to be a give and take until a happy medium is reached. And its great because some new talent can finally rise up organically now.

An complaining about getting a maid or driving, what's up with that attitude. Get out there and produce some quality content, either by writing in it, acting or directing. If you have good material you'll be successful. if you don't, you'll end up complaining on blogs about how things suck. Wake up brother!

Then again, Hollywood spends tens or even hundreds of millions of dollars producing content "on spec". As consumers, we then examine their efforts and, if we think it's worthwhile, spend a miniscule fraction of one percent of those costs to enjoy it.

While there may be a lot to dislike regarding the studio system, there are a few benefits too.

And the day when a few people on YouTube can deliver something like Lord of the Rings is the day I'll begin to consider Hollywood dead. Until then...

This is what all these people wasting their time with online vid don't understand: There is ZERO convergence (a not-so-new buzzword meaning 'circlejerk') between Internet and TV, no matter how much people think that things can be forced through such a prism. People who are Twittering, downloading stuff off Bittorrent, and otherwise wanking off online, "on demand", are NOT WATCHING TV. Even the most trafficked websites don't get even a fraction of the audience that the crappiest rated cable TV show does (I should know, I was on that show).

One medium is completely passive, the other is active - and there's virtually no similarity between the two, aside from the fact that they both involve using your eyes.

The transferability between self-flagellating blogging/vidcasts/podcasts and TV is virtually NIL.

@nethaqr: well put.

@somethingsgottagive: also well put, but with more cyncism next time, please.

LOL!!! Poor Rachel Marsden! Speak for yourself. So maybe your site isn't getting a fraction of viewers that a poor cable show gets, but mine does. LOL! The problem with TV and networks was the fact that you had to pay a cable provider to get a set of limited channels. Now you buy a laptop with wifi, go to a wifi hotspot and you have unlimited "channels." Yes your right its more of on demand online. That screwed the content providers because now they can't syndicate their shows to every single tv station in the world. Finally, "wasting" our time online video??? Wasting my time would be fucking Jimmy Wales! :)

The four word version

BECAUSE IT ALL SUCKS

@Patricia2: stop it

As with anything, it'll be fascinating to see general viewpoints on this 5, 10 years from now. There'll be a lot less humor, and a lot less stress about past events because new marketing problems will have arisen.

Funny thing, tho, I initially misread the title as "Bollywood" and can't quite help but wonder how "indie" Bollywood producers are doing...

@nethaqr: That's a solid analysis. Digital media has changed the world in that creators can now share and become known for their creations, but that doesn't mean it's automatically a goldmine. Not at all; fame and wealth have never been more independent.

I know what I'm talking about.

By the way, a typical return in Hollywood for a production company with several films to spread the risk, is four percent.

FOUR. Percent.

Zero convergence, huh? I can watch South Park off DirecTV or southparkstudios.com. Play any episode on the website. Only play what Tivo caught on the TV, 5 episodes instead of 240. Mad props to Parker and Stone for cutting a good deal for themselves.

We now have will ferrrell crap on tv, film, and the internet. Whoopee !

It would be worth looking at the porn industry for an idea of where things are heading. Over there, you can see new empires that were built with a minimal investment, capitalizing on cheap production and distribution costs. Many of these new media organization are also very agile and change production to fit demand based on trends.

There is no reason why this model would not work in other genres/segments of online video as well. However, while porn producers/distributors are driven by subscriptions and sale of 3rd party products, most other content distributors will need to find a way to make money from eyeballs.

Once they figure that out - and they will, since everyone is trying so hard - then the real party will begin.

you have to dig a little deeper to get a better sense of what's going on.

Hollywood's basic business model is to monetize "windows" of opportunity to view its catalog. This only works in a world where distribution can be controlled(think Disney's time honored re-release of it's classic animated content every seven years).

In a world of unlimited distribution this model doesn't work. No longer is it viable to absorb the upfront risk in hopes that it can be recouped from DVD, cable, tv, foreign etc.

Will Hollywood figure it out? Maybe. Until then it's all about audience aggregation. Without a dedicated audience you are dead in the water.