Steven Spielberg is predicting an "implosion" in the business model for Hollywood.
Like the venture capital business model for new tech companies, Hollywood makes its money from a few blockbusters that also cover the losses of the non-winners. Hollywood gets its revenue from ticket sales, movie rentals, merchandising, and other smaller sources. But movie rentals have plummeted and DVD sales are lower so trying to run Tinsel Town on just ticket sales is hard.
What to do? Currently Hollywood opens a new movie in thousands of theaters for a few weeks at about $10 per ticket. Should Hollywood change its ticketing model to be more like music concerts and poperas -- charge higher prices and have longer runs? Should Hollywood try movies over the web?
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