[thaumaturgy]

I think Avatar, and other popular films like it, make the best counterpoint to this article.

It seems obvious to me that as more and more users find more content online, there will be a "thinning of the herd". Some shows and networks will simply fail to find a way to adapt to the new market; others will survive, or even thrive. It's not really happening yet because traditional television viewership still eclipses its online counterparts, but it's coming.

Anybody could have downloaded and watched Avatar while it was still in theaters; yet, people paid to see it because it offered a unique in-theater experience. Other movies get expensively produced only to get meager box office results. They don't offer a modern theater experience, and customers aren't motivated to do anything other than download it or wait for the DVD. There must be at least a few entertainment executives that realize this, and it's likely to affect what they're willing to produce.

[barrkel]

I don't think it's a counterpoint. Avatar relies on a whole infrastructure to amortize its costs, specialisms that make it feasible to create. But that infrastructure wasn't built to make Avatar. It gets by on regular fare - and the profitability of that regular fare is fading.

[thaumaturgy]

Well, much of what made Avatar special was actually built just to make Avatar; that's what Cameron does. But I get your point.

It's complicated, though, because while the budgets for movies continues to climb, the individual production costs continues to go down. Businesses like Industrial Light & Magic keep building blockbuster special-effects laden movies, and the techniques that they use to accomplish that become a less expensive foundation for future projects.

So, so far, I don't see that the profitability there is fading. Pixar is certainly doing fine, and I suspect that Cameron can pretty much work on whatever he wants after this.

And, as the technology continues to progress, the need for other aspects of costly production will go down: movies will require less actor time, fewer cuts, fewer sets, less props, fewer models...

[chipsy]

My thoughts concur. To restate it in my own words:

As digital technology becomes more complex it tends to commoditize.

You can see the phenomenon across both software and hardware. For example, in music:

The Fairlight and Synclavier were monumentally expensive(priced in six-digits during the late 70s thru early 80s), being the earliest commercial computer-based synthesizers. By the late 80s multiple options existed to get similar functionality at a fraction of the cost(new hardware synths, MIDI, and 16-bit computers). And in the two decades after that, computer-based solutions grew better and started dominating. Now you can do all your synthesis, sampling, and processing "in the box" - and solutions with more flexibility than anything in the 80s are available for free. If you want to produce professionally and do things as quickly and reliably as possible, you can splash out for the cutting-edge commercial software, but it absolutely isn't necessary for amateur use. The most expensive stuff now is the analog bits: the guitars and microphones and monitors and preamps. But for a fraction of the old Synclavier's cost, you can now bury yourself in the top-of-the-line equipment of 2010. Apart from a few artisan works and rare vintage pieces, there's almost no "multi-millionare" grade equipment left to buy. Music-making doesn't need capital anymore, just talent.

[robryan]

Once technology catches up to the Avatar level in the home, coupled with ever increasing bandwidth downloading, the same people which pirate their movies now will go back to the same thing.

I think movies do to an extent go the other way, with higher production costs leading to the epic blockbuster perception the public gets which drive them to the cinemas. As long as the big budget is spent wisely on a great concept.

Innovations such as the Red camera technology and mostly green screen filming continue to drive down TV costs for those using this tech. For example I'd imagine Sanctuary is a better investment for SYFY at the moment over Stargate Universe even with low ratings just because it's production costs would be so much lower for similar effect.