One of the important things in business is being able to be aware enough and flexible enough that you're rarely (if ever) caught by surprise. You can watch for trends and do scenario planning to help with these types of things -- but apparently some folks in the entertainment industry don't believe in that kind of planning ahead (if they'd only contacted us
, we could have helped). So, now, it seems that they're running into all sorts of problems that were easily predictable five years ago. Take the TV industry, for example. Five years ago, they should have paid attention to the various disputes between musicians and the recording industry over digital rights. Contracts had been written in a time before the internet, and no one was exactly sure who got what cut in the royalties and whether or not it was really covered by existing contracts. That, of course, should have been the signal for those in the video business to start looking at their contracts and figuring it all out before it became a problem for them as well. And, of course, not very much happened. So, now, as we hear stories about Google negotiating
to give entertainment companies a nice upfront lump of cash to allow their videos online, writers, directors and actors are suddenly wondering what it all means for them
. They want to know what their cut will be. Considering that the industry execs have a long, long history of figuring out ways to take the money without paying the talent
, they absolutely should be worried.
These are the type of legacy issues that should have been clear from years ago -- and which seem to have been ignored by the execs. Either that or they knew about them and figured they would have the leverage in the end anyway, so there was no reason to negotiate. Of course, these kinds of legacy issues don't just impact the content creation side of the business. Business Week is writing about the difficulties HBO is facing
in designing its own online strategy -- since any such plan routes around the cable TV providers who pay good money (and make nice profits) being the only way to get HBO's sought after content. Again, this should have been clear years ago, but it sounds like everyone's just trying to figure out how to get around the legacy issues now.