Fascinating report out from Kagan Research earlier today. The report notes that even though cinema is the text book definition of a mature industry, private equity money keeps pouring in to the industry.
“This volatile business, amazingly, never seems to be short of investment capital,” notes Wade Holden, analyst with Kagan Research. “One big reason is that the major studios have a knack for turning every new technology that, at first glance, is threatening into a source of money. That goes back to the VCR and before that broadcast TV itself.”
True enough. Coupled with the steady cash flow still generated by old media, the sector’s a pretty good hedge against the inevitable burst of the social networking bubble. Think about it. How much money is there behind a social network? According to Fast Company’s hype machine, a lot.
It’s a tough read without a Web 2.0 jargon dictionary. The article focuses on the work of a 28-year-old “internet anthropologst.” Enough said?
Personal connections–forged through words, pictures, video, and audio posted just for the hell of it–are the life of the new Web, bringing together the estimated 60 million bloggers, those 72 million MySpace users, and millions more on single-use social networks where people share one category of stuff, like Flickr (photos), Del.icio.us (links), Digg (news stories), Wikipedia (encyclopedia articles), and YouTube (video).
Gotta love that 60 million bloggers quote. Let’s assume that about a third of the world’s bloggers are Americans – a conservative guess. That means that about one in ten American adults are bloggers according to FC. I think not.
It gets better.
“Social networking isn’t a product or, God forbid, a company, but a feature that lives in service of some other mission,” says Bradley Horowitz, head of technology development for Yahoo. “The spirit of social computing is the concept of leaving value in your wake.” That value starts with expression. Users of social-networking sites are producing and freely sharing a whole universe of content for others to consume. Some of it approaches journalism in quality, some approaches art, or advertising, and a great deal of it is more fun and appealing to the 18-to-34 target demographic than whatever is on TV. Why watch fake “reality” shows when you can connect with actual reality?
Yeah, every 18-34 year-old’s all about leaving value in his or her wake. Where do they come up with this stuff? Oh, and by the way, 18-34 year olds aren’t the demographic they used to be. They don’t represent the proportion of disposable income in the economy they used to.
Why watch that fake reality? Because that fake reality is edited by a professional. It’s fun to watch passively. I understand Horowitz’s point… to a point. This social networking stuff might eat into old media consumption, but what it’s really going to eat into is good, old-fashioned face to face social networking. Our personal social networks will become broader, but also shallower. That will be social networking’s legacy.