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Hollywood versus the Internet: the media and entertainment industries in a digital and networked economy

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  • Andrew Currah

Abstract

The behaviour of oligopolistic firms is a source of considerable debate and concern, given their market power and ability to shape the development of new markets. A key area of debate concerns the scope for strategic adaptation in oligopolies; and in particular, the extent to which such large and otherwise successful firms ignore or marginalize important shifts in the marketplace. In this article, I critically evaluate these general theoretical issues through the lens of a specific, geographically bounded case study: the collision between Hollywood, a mature oligopoly comprising six studios, and the Internet, a decentralized architecture that has made possible peer-to-peer (P2P) file sharing between networked computers. I argue that in a secure form (enforced by 'digital rights management' software), file sharing has considerable promise for all copyright owners, including the studios. I examine the oligopolistic behaviour of the studios in response to the Internet, and in particular, their response to an alternative mode of peer-based film distribution, oriented around legal, paid-for file sharing. I argue that the studios are trying to preserve the oligopolistic structure of the industry in a digital age by promoting an inefficient and restrictive 'design' for Internet distribution, oriented around centralized server-client architectures, which provides tight control over digital commodities and minimizes the disruptive impact of the Internet. This behaviour must be understood in light of the social and economic incentives that influence executives, as well as the context in which decision-making takes place. Nonetheless, their response also raises some worrying questions about the future shape of creativity, distribution and consumption in the film industry (and in the broader realm of media and entertainment) in a digital and networked economy. The article is based on over 150 interviews with elites in the studios and other related firms in the Los Angeles region. Copyright 2006, Oxford University Press.

Suggested Citation

  • Andrew Currah, 2006. "Hollywood versus the Internet: the media and entertainment industries in a digital and networked economy," Journal of Economic Geography, Oxford University Press, vol. 6(4), pages 439-468, August.
  • Handle: RePEc:oup:jecgeo:v:6:y:2006:i:4:p:439-468
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    Cited by:

    1. Bart Cammaerts, 2011. "Disruptive sharing in a digital age: rejecting neoliberalism?," LSE Research Online Documents on Economics 32857, London School of Economics and Political Science, LSE Library.
    2. Aspers, Patrik & Kohl, Sebastian & Power, Dominic, 2008. "Economic sociology discovering economic geography," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 9(3), pages 3-16.
    3. Jennifer Johns, 2010. "Manchester’s Film and Television Industry: Project Ecologies and Network Hierarchies," Urban Studies, Urban Studies Journal Limited, vol. 47(5), pages 1059-1077, May.
    4. Andrew Leyshon, 2009. "The Software Slump?: Digital Music, the Democratisation of Technology, and the Decline of the Recording Studio Sector within the Musical Economy," Environment and Planning A, , vol. 41(6), pages 1309-1331, June.
    5. Dolata, Ulrich, 2008. "Das Internet und die Transformation der Musikindustrie: Rekonstruktion und Erklärung eines unkontrollierten sektoralen Wandels," MPIfG Discussion Paper 08/7, Max Planck Institute for the Study of Societies.
    6. Øiestad, Sara & Bugge, Markus M., 2014. "Digitisation of publishing: Exploration based on existing business models," Technological Forecasting and Social Change, Elsevier, vol. 83(C), pages 54-65.
    7. Xuliang Zhang & Chenxiang Elaine Ji & Haixia Zhang & Yuchen Wei & Jianwei Jin, 2023. "On the Role of the Digital Industry in Reshaping Urban Economic Structure: the Case of Hangzhou, China," Journal of Economic Analysis, Anser Press, vol. 2(4), pages 123-139, July.
    8. Wang Yijie & Ke Yanyan & Ma Xianrui & Ren Yitian, 2020. "What is the Industrial Structure Changes of China?," Journal of Systems Science and Information, De Gruyter, vol. 8(6), pages 487-503, December.
    9. Leona Achtenhagen & Robert Picard, 2014. "Challenges and success factors in media cluster development: a review of contemporary knowledge," Chapters, in: Charlie Karlsson & Börje Johansson & Roger R. Stough (ed.), Agglomeration, Clusters and Entrepreneurship, chapter 10, pages 221-251, Edward Elgar Publishing.
    10. Leona Achtenhagen & Robert G. Picard, 2011. "Media Clusters: Development Paths and Core Issues," Chapters, in: Charlie Karlsson & Robert G. Picard (ed.), Media Clusters, chapter 3, Edward Elgar Publishing.
    11. Dolata, Ulrich, 2011. "Radical change as gradual transformation: Characteristics and variants of socio-technical transitions," Research Contributions to Organizational Sociology and Innovation Studies, SOI Discussion Papers 2011-03, University of Stuttgart, Institute for Social Sciences, Department of Organizational Sociology and Innovation Studies.

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