Monday, January 23, 2006

King Content

The Economist thinks that old media should chill out. There's life in Hollywood yet:

Some people worry that new media companies may over time shunt old ones aside as producers of content. Certainly, digital media will create new stars and new businesses, but making high-quality video content will always be a daunting and expensive task. Music or a blog can be composed from a bedroom, but not an episode of “Friends”. Just last month DreamWorks, Hollywood's youngest studio, sold itself to Viacom, despite its strong financial backing and the talent of Hollywood luminaries. It made some money, but could not afford a billion-dollar investment in films year-in, year-out. Yahoo! has a media unit, but so far it hasn't had any hits. Responding to the news this week that Yahoo! intends to spend up to $10m on a reality-TV concept called “The Runner”, analysts complained that the investment would damage its margins.

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