Towards the end of 2005, the UK distribution and exhibition sectors were starting to move towards digital distribution and exhibition. For exhibitors, digital projection, especially when married to the increasing use digital formats in production, can now replicate - if not surpass - the image quality of conventional 35mm cinema presentation. And, of course, digital sound systems have been used in cinemas for some time.
In distribution terms, the advantages of digital technology are even clearer, though perhaps longer term. Digital technology is seen to offer a more cost effective and logistics-light alternative to the tried and trusted, but unwieldy model of 35mm print distribution described above. It will, eventually, be cheaper and much less stressful to send films as computer files to cinemas across the UK, than to transport 20-25kg tins of film in the back of a van.
Digital distribution and exhibition on a large scale has started to appear in certain parts of the world, notably China and Brazil, where conventional logistics cannot, for one reason or another, efficiently bring together supply and demand. In the UK, digital technology has been embraced by the non-theatrical sector, in film societies and schools, where the use of DVD and mid-range digital projection has replaced 16mm.
For most of the 80s and 90s, NBC dominated US television: Miami Vice, The Cosby Show, Cheers, Seinfeld, Friends. The network earned its ratings by pushing boundaries – Miami Vice stylised the police drama, while Hill Street Blues gave it gritty realism. These shows also brought in big money – NBC was once one of the most profitable divisions of General Electric. But when the parent company
NBC isn't the only major media business that has fallen on hard times. EMI, home of the Beatles and Pink Floyd, has trimmed its roster and cut thousands of jobs. The Washington Post, which set a high-water mark for US journalism with its Watergate reporting, has reduced its newsroom staff, closed its national bureaux, and declared: "We are not a national news organisation of record." MGM, with its roaring lion logo, was recently acquired for less than half its 2005 value.
All of these companies faced the same problem: they weren't collecting enough of the revenue being generated by their work. The public hasn't lost its appetite for television, journalism or film; shows, articles and movies reach more consumers than ever online. The problem is that, although the internet
has expanded the audience for media, it has all but destroyed the market for it.
Over the past decade, much of the value created by music, films, and newspapers has benefited other companies – pirates and respected technology firms alike. The Pirate Bay website made money by illegally offering major-label albums, even as music sales declined to less than half of what they were 10 years ago. YouTube used clips from shows such as NBC's Saturday Night Live to build a business that Google bought for $1.65bn. And the Huffington Post became one of the most popular news sites online largely by rewriting newspaper articles. This isn't the inevitable result of technology. Traditionally, the companies that invested in music and film also controlled their distribution – EMI, for example, owned recording studios, pressing plants, and the infrastructure that delivered CDs to stores. Piracy was always a nuisance, but never a serious threat. The same was true of other media businesses: the easiest place to get a newspaper story was from a newspaper.
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