Barry, Michael and New Media

As we note below, new media is roiling old markets. On Thursday a DreamWorks artist showed me how the company is using YouTube to heighten interest in the upcoming "Flushed Away." The animation studio reworked animated bits from "FA" and put it out on one of the major new internet pipes. (You can see the variations people made with the DW clip here.)

Which is kind of what Barry Diller and Michael Eisner were talking about at the opening session of the Forbes Media Electronic Entertainment Technology (MEET)last Tuesday.

Regarding conglomerates' purchases of MySpace or YouTube, Diller maintains that "It doesn't matter who buys what," because the internet is the great equalizer and gatekeeping isn't a viable option.

Mr. Diller might be on to something, but the old forms of distribution haven't gone away (Disney and DreamWorks are still selling a lot of DVDs. "Pirates of the Caribbean" was still huge at the world box office.) What I think could be true is that there has been a steady shift in the way people get their entertainment (and fill their leisure hours), and companies that don't adapt will have trouble surviving. Record companies, to present one pathetic example, have tried to hang on to the failing business model of selling CDs at sixteen bucks a pop to kids who download songs for free and load them onto Ipods and MP3 players. The old price point just isn't going to work when the worldwide web can offer something better.

That's why, I think, smart companies are going with the flow instead of trying to thrash madly against it. DreamWorks knows that it's going to have its images pasted all over the internet, so why not channel those images to promote your latest theatrical release? The dancing slugs are now showing up on lots of computer screens, and the money DreamWorks spent to get them there has been minimal.

There's a lesson here. But it isn't "keep selling recordings and movies in the same old way and prosper."