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The Web Could Cure Ailing Hollywood

Hollywood, which is preparing for the 80th annual Academy Awards this weekend, has largely ignored the looming threat/opportunity of the Internet. This is a mistake, the mag says, because media is slowly being assumed by the Internet. Hollywood, whether it wants to or not, will be required to embrace the digital revolution.

Once upon a time, Tinseltown worried that TV would destroy the movie business. It did not. That said, DVD sales are down 3 percent year over year, while box-office revenues are flat. But production costs keep going up as writers, directors and actors demand more money from each film. These trends make financing harder to come by.

Meanwhile, Millennials, or those raised during the digital revolution, aren't buying DVDs or CDs; they're downloading, often times illegally. Hollywood is ignoring the trend while trying desperately to cling onto decaying DVD sales. The problem of illegal downloading will eventually be sorted out. But in the meantime, instead of turning away, Hollywood needs to recognize that on-demand entertainment is the future, so they should be renting and selling films over the Web.

Read the whole story at The Economist »

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