Why the internet is a game changer - music, movies, books, newspapers
We have already seen the impact of the internet on the music industry. As technology continues to improve we are starting to see the same impact on the movie industry.
Content creators no longer need to rely upon traditional distribution channels to get their work to consumers. Let's examine the impact this will have on the music, movie, book and newspaper industries.
MUSIC - Musicians can now get payed directly for their work and do not need a middleman to distribute their product to clients. Look for the big music companies to become irrelevant as artists switch to a plan in which the hire agents and pay them 10% of royalties.
INVESTMENT: SHORT BIG MUSIC LABELS - Hedge risk by going long SP-500 index fund
Newspapers - Newspapers used to benefit from having huge barriers to entry. The cost of printing equipment and real estate are not faced by their small nimble online competitors. Look for authors to syndicate their work directly to various news aggregator websites with authors being payed either aa percentage of advertising revenue on their articles or a flat fee per article. Superstar writers can look to signing exclusivity contracts with the top websites.
INVESTMENT - SHORT NEWSPAPER PUBLISHERS
Books - Book stores will go the way of record stores.
Movies - Once again content is king. However due to the coordination required to produce blockbuster films, hollywood companies will benefit from the internet and it will help to increase profis. Also look for margins to improve as the cost of special effects decrease.
INVESTMENT - Long MOVIE STUDIOS