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A Song of Carrier and Content

There’s a joke about the difference between tech and media that people in Hollywood have been telling in recent years.

A group of entertainment and tech bigwigs are holed up in a cabin during a snowstorm. The power is out and the Hollywood types are huddled together around a crackling fire. They look over to the other side of the house to the techies, who are also in a tight circle, deep in conversation—and freezing.

“Join us,” the agents and studio chiefs beckon. “We’ve got plenty of space by the fire.”

“No thanks,” they say through chattering teeth. “There’s a lot of wasted energy starting a fire. We’re working on a more elegant solution.”

Like most things in entertainment industry, the joke is in the telling. It’s also wrong.

The tech industry isn’t the side that’s shivering. It’s Hollywood.

Year after year, media companies’ old revenue models have been forced to reckon with newly empowered consumers. The shows consumers watch, the music they want and the discussions around them are taking place on platforms built outside Hollywood and by much more highly valued tech companies.

In many respects the conflict is nothing new. Media companies have confronted a changing landscape for decades. Hollywood loudly protested when the VCR was released and viewers could suddenly own, and distribute, physical copies of their products without permission.

Yet this current era and the foreseeable future is when Hollywood’s horse has left the barn. It’s the first time content creators and owners have finally lost control over their distribution model.

That loss of control is fueling fresh tension between tech and media, which the The Information will explore this week in an in-depth series of articles called “Over the Top.” The term refers to the “over-the-top” technologies disrupting legacy media distribution and the broader battles they’re fostering.

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Because there’s another, darker punchline in Hollywood’s joke that goes beyond who knows the best way to start a fire. It’s the recognition both sides are trapped in the same cabin. And they can’t leave anytime soon.

Joe Marchese and Tien Tzuo commented on this article.
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Joe Lonsdale
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Chamath Palihapitiya
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Former NBCUniversal executive Lauren Zalaznick envisions a future much like our present, where media companies continue to purchase tech startups at huge premiums compared to their revenue. Some fail.