Marc Andreessen has a thought provoking post about Hollywood's latest power struggle and the potentially drastic changes it could lead to. As you've probably heard by now, the writer's guild is on strike, bringing with it the scourge of re-runs and even more reality TV. Andreessen theorizes about the effects of a long strike: an Industry wide shake-up, where fed-up consumers are driven to other forms of entertainment. Made-for-YouTube webisodes like Chad Vader will increase in popularity, as will video games, and online forms of socializing. This shift in taste will kick-start an entrepreneurial push into independent comedy and drama for new media. The creators (artists, actors) will become the content owners for a change. In other words, they have more control and an equity stake. This is not unlike Silicon Valley, Andreessen argues, where programmers develop IP, take ownership, and reap the high rewards upon success.

Patrick Ftizgerald at the LA Times picks up on this theme and challenges the writers to become hyphenated writer-entrepreneurs. Private equity in Hollywood is not a new thing, however. Entrepreneurial filmmakers exist: Lucas; Peter Jackson; actors with stakes in their own production companies like George Clooney and Brad Pitt . Tony Gilroy wrote and directed Michael Clayton after being bankrolled by a real estate developer. But all these examples are movie based, where more freedom exists with respect to owning your own content. Television has a very different framework. It's monopolized by the big networks who act as gatekeepers of the airwaves. If you are a production house, you work on contract, taking orders for a sitcom or drama. You don't necessarily own the copyright of your production, they buy the rights. The royalty and residual system may pay the bills for some of the creatives, but in general, it's not lucrative. This, and the exclusiveness of the TV "biz", are barriers to entry for entrepreneurs. The internet, however, represents a more level playing ground.
The internet has its disadvantages. First and foremost, watching TV in your living room is a very different experience than watching YouTube clips. The living room experience is hi-def, hi-fidelity, easily enjoyed with friends and a cultural tradition. Web-TV, by contrast, is low-res and low-fi. It's usually enjoyed alone on small screens. Bridging that divide between the web and the living room experience is a big deal, and the race for a dominant solution is well under way. But as we've seen with AppleTV, nothing has really caught on yet. And while I think Andreessen is certainly right about entertainment-entrepreneurship, until the web-TV experience can equal that of our living room experience, old Hollywood models of production will hang around, for better or worse. It'll be interesting to see it play out.
So what are the economics of episodic TV? I was curious and did a little digging.