'Inventing the Movies': The Epic Battle between Innovation and the Status Quo in HollywoodPublished: August 20, 2008 in Knowledge@Wharton
Thomas Edison, whose laboratory created some of the technology that made movies possible, apparently had a blind spot about the potential of motion pictures. The Wizard of Menlo Park was convinced that movies should be viewed by people individually peering into boxes known as Kinetoscopes rather than projected onto a large screen where a mass audience could watch the film. Edison's view was influenced, one suspects, by the fact that he hoped to build a profitable business manufacturing and selling Kinetoscopes. Scott Kirsner, in his book Inventing the Movies, cites Edison as saying:
We are making these peep show machines and selling a lot of them at a good profit.... If we put out a screen machine there will be a use for maybe about ten of them in the whole United States. With that many screen machines, you could show the pictures to everyone in the country -- and then it would be done. Let's not kill the goose that lays the golden egg.
Edison was hardly alone. While many companies are scrambling to gain competitive advantage by finding ways to innovate using technology, one industry -- as characterized in Kirsner's book -- has had a century-long history of shunning innovation and eschewing technological progress. Subtitled, Hollywood's Epic Battle Between Innovation and the Status Quo, from Thomas Edison to Steve Jobs, the book is a case study in the difficulties of introducing technological change in an industry that carefully guards its well-entrenched business models.
Kirsner writes frequently about technology's impact on the movie industry in his CinemaTech blog as well as that venerable Hollywood vehicle, Variety, and elsewhere. Inventing the Movies was largely spurred by an invitation Kirsner received to a one-day confab organized by director George Lucas. Kirsner recounts:
As I drove through the gates to Lucas' 4,700-acre homestead on a brilliantly sunny Saturday in late April, I wasn't sure who else would be there, but I'd been told that for the first conference Lucas had organized, two years earlier, Steven Spielberg, Martin Scorsese, and Francis Ford Coppola had all made the trip. I was nervous, and I had no idea about the dress code ("Auteur casual"?).
For this meeting, Lucas -- himself a "die-hard innovator" -- brought together a number of other like minds to explore new ways of making motion pictures:
Ed Catmull and John Lasseter, two of the founders of the pioneering computer animation company Pixar; Robert Zemeckis, the director who'd overseen the Back to the Future trilogy and won an Oscar for Forrest Gump; Robert Rodriguez, the fiercely independent director, cameraman, composer, and editor from Texas who'd totally abandoned film cameras for digital cameras with movies like Sin City and Once Upon a Time in Mexico; and James Cameron, director of the top-earning movie of all time, Titanic.
As Kirsner tells the tale, Lucas conveyed the frustrations that "innovators feel in any industry when they try to introduce a new idea. Instead of being thrown a ticker-tape parade, they're often met with hostility or indifference. Sometimes, the status quo defeats the innovative concept, or at least delays its introduction."
Kirsner's history of Hollywood echoes this pattern at every stage of the evolution of the technology to create, distribute and display motion pictures.
Inventing the Movies isn't a "how to" (or "how not to") guide -- it doesn't provide practical recipes for defying the resistance to change that characterized much of the history of the cinema. But the historical overview of the technological advance of cinema is instructive for anyone interested in the history of the movies or in understanding how technological change can get bogged down by the fear of undermining the entrenched business models in any industry.
Innovators vs. Preservationists
Kirsner categorizes those who confront technological change into three groups:
- Innovators who view new technologies as an opportunity,
- Preservationists who view change as a threat, and
- Sideline-sitters who are "content to wait to see how things pan out."
The book posits that much of the history of technical progress consists of the struggle between the innovators who want to move forward and the preservationists who want to protect the status quo. While this pattern repeats itself throughout the evolution of the cinema, a more nuanced view of history emerges from reading Kirsner's detailed chronicle. As compelling as are Kirsner's tales of resistance to change at every turn, one can think of examples where a new invention -- such as the Steadicam camera stabilization device -- was adopted by Hollywood filmmakers without much turmoil. The true enemy of progress may not be fear of technological change per se but, rather, the apprehension of undermining a successful business model. It's often more about the way the money flows than the particular technologies used in movie production and distribution.
While the motion picture industry provides a wealth of examples of this tension between technological progress and business stasis, as Kirsner points out, this conflict is not unique to the movie business: "Although it may have a slightly higher glam factor than, say, the insurance business, Hollywood is a perfect case study for the way that any big, successful, well-established industry responds to new ideas."
Indeed, one can think of many other industries with similar aversions to technological change -- from manufacturers of photographic film refusing to recognize the impact of digital photography, to the recording industry fighting against digital distribution of music. But the motion picture industry is a particularly revealing case study. A myriad of technologies sustains the creation and distribution of movies. Yet the economics of the motion picture industry make it particularly reticent to try new things. The amount of money riding on each major studio release tends to tilt the scales in favor of those who want to preserve the status quo. The fear that a new technology will upset the (very profitable) apple cart runs throughout Kirsner's book, which spans the entire history of the cinema -- from its origins in the late 19th century up to the present.
Protecting the Goose That Lays the Golden Egg
Thomas Edison was but the first in a long line of industry honchos working diligently to protect "the goose that lays the golden egg."
"Who the hell wants to hear actors talk?" Warner brother Harry is quoted as saying during the heyday of the silent cinema. But the rise of radio spurred sound movies forward -- in part because the audio technology developed for radio improved the techniques for reproducing sound. Moreover, radio provided entertainment delivered directly to the home, and for free! The movies needed to move forward to compete.
Similarly, widescreen formats -- which Hollywood originally explored as early as the 1920s -- didn't generate much enthusiasm among studios or theater owners until television again threatened to keep audiences entertained in their homes in the early 1950s.
As the movie industry became more fragmented (and more complex) once the studios were divested of their theater chains by the Supreme Court in 1948, the conflicting interests of movie producers and theatrical exhibitors created additional impediments to progress. The slow transition toward digital projection, which is still underway, is a case in point.
Movie distributors spend significant amounts of money producing and shipping celluloid prints of their films. For the studios, digital distribution is a huge financial win. But the cost of upgrading theaters to digital projection is estimated to cost $100,000 to $250,000 a screen -- which is not very appealing if you're an exhibitor. Despite various schemes to share the costs of the digital conversion between the studios and the exhibitors, theater owners remained generally unenthusiastic. As Kirsner writes, "Though the technology [for digital projection] was improving, the issue of who would pay for what seemed like it might derail digital cinema."
These are just a few of the colorful examples detailed in Kirsner's book, which explores all the major technological advances in the cinema -- from the introduction of sound, color and widescreen formats, to digital projection, digital cameras ("filming without film") and the new business models ushered in by the worldwide web.
Conflicting Visions of the Future
The increase in broadband Internet access and the adoption of home theater systems now pose new threats to Hollywood's business model. Illegal downloading over file sharing networks threatens to reduce theater and DVD revenues. But even legal downloads present a challenge to Hollywood's traditional business by putting pressure on reducing the "theatrical release window," the interval of time during which a feature film is only available in theaters before it is available as a DVD, online or elsewhere.
While high definition formats like Blu-ray may extend the life of movies on disc-based media, many believe that digital downloads are the future. NetFlix -- whose customers currently pay to receive DVDs sent through the U.S. mail -- chose that name because founder and CEO Reed Hastings believes that movie delivery will eventually take place over the Internet. "We see our future as the downloadable DVD," Hastings said in 2001. "Our ten-year plan is to be the world's leader in that. But the way to win is not to focus on the technology. It's to get the customers -- a couple million subscribers, who are addicted to the Internet for choosing their movies. Those are exactly the people who will do downloading. It's the customer relationship that will be valuable."
And then there is the rise of home theater entertainment systems. Reasonably priced consumer products provide high-resolution, large screen images and multi-channel surround sound that come close to the theatrical experience -- without the sticky floors, high-priced snacks and poorly-behaved audience members. Theatrical audiences are beginning to dwindle. Kirsner cites the following statistic: "In 2005, 1.4 billion movie tickets were sold -- the lowest total since 1997." According to an Associated Press-AOL poll, 73% of adults prefer to watch movies at home.
But in this case, technology may provide the solution to the problems that technology created. Hollywood's growing interest in 3-D movies is, in large part, driven by the desire to offer a theatrical experience that is significantly different than that offered by even a top-of-the-line home theater system. Just as Hollywood's first foray into 3-D and widescreen formats in the 1950s was intended to differentiate the theatrical experience from television, the threat from home entertainment is again spurring Hollywood forward.
Nevertheless, many in Hollywood cling to the notion that there is something inherently magical about the theatrical experience that cannot be duplicated by other means, regardless of the size of one's home theater screen or the number of surround sound channels. Kirsner quotes writer/director M. Night Shyamalan as asserting that there is a "collective soul" that exists among the people in a theater: "The ideal form is the movie theatrical experience.... If they try to convince us otherwise, they are lying."
But, like so many other doubts about evolving technology ("Who the hell wants to hear actors talk?"), this sounds like a reactionary defense of the status quo.
Some innovators, like George Lucas, take a more optimistic view of the current wave of technological change. According to Kirsner, Lucas believes that theaters, rather than vanishing, will become "the cultural center of the future, which means you go there to meet people, to hang out, to be entertained." And Lucas is even sanguine about the elimination of the theatrical release window, believing that eventually new films will be available simultaneously in the home and in the theater. Kirsner writes: "[Lucas] compares it to a football game: fans can choose to go to the stadium to yell and cheer with a group of others, or watch the game at home. Either way, the National Football League and its teams make money."
Whether the public theatrical experience of movies undergoes a rebirth as Lucas suggests or struggles to survive against home-based consumption of entertainment, one suspects Hollywood will, as it has done in the past, find a way to make a profitable business from the creation of cinematic content. But it would be ironic -- some would say tragically so -- if it turns out that Edison wasn't far off the mark after all, and most people wind up viewing movies individually rather than collectively.