A weekend in LA is a panacea for most ills, and a perpetrator of many more. It's also a great vantage point to consider the thorny question - what next for Hollywood? Earlier this millennium the humble DVD saved the Studios from a fate worse than box office. However as consumers shift to new forms of digital consumption - that is no longer the case. Many remain divided on whether the Web represents the future or end of entertainment as we know it. In truth, the answer may be both.

A few weeks ago, the Economist had a fascinating piece on the changing business of show business. In short, box office is back. In 2009, global theatre revenues increased by 7.6%, even though total revenue for the biggest Hollywood studios fell by 4.3%. The longer term trend is even more encouraging. Since 2005, US box office receipts have risen by 20%, while global revenues rose 35%. Better multiplexes, digital projection and the advent of 3D are all drivers of the rebirth of cinema. The bad news is that the DVD and its slow cousin BluRay, are looking increasingly perilous - falling 17% in 2009. And in some broadband piracy ridden markets like China and Korea, the DVD market is entirely dead.

So, should we pin our hopes on 3D? I hope not. I'm already bored of gratuitous depth effects on otherwise dull, blue-skinned fare. Look closely. There is a bigger dynamic at play. Hollywood itself is a metonym for a complex web of suppliers, production houses, guild members, retail distributors, agents and talent. And despite the rebound in ticket sales - as consumers move digital, it will increasingly be an ecosystem in crisis. But Tinsel Town has a few more tricks up its sleeve.

Forget distribution for a moment and consider Hollywood's real value. In my view, Hollywood is a machine for the creation and commercialisation of celebrity. It is unmatched in its capacity to accelerate the visibility of talent brands onto a world stage. That is important, because there is a symbiotic relationship between content, talent and gossip that fuels entertainment markets - whether it be box office, merchandise or commercial endorsements.

And in a social media obsessed world, achieving cut-through is more valuable than ever. On Facebook, everyone thinks they are famous - even when they are not. Not even nearly. But it is enough to create a lot of noise, and for both brands and content creators alike, the scarce resource today is attention. We simply have too many options for entertainment and too few filters to make informed choices with. At its most simple level, true fame is a form of attention aggregation. In the broadcast age, it was enough to get millions to watch a piece of content at the same time - hence the power of the Superbowl ad. In the audience network age, simultaneity is not as important as collective awareness. Consumer data is the prize. Matching the right brand stories with the right buyer segments will be the future of marketing, not billboards or generic TV advertisements. Forget selling tickets, merchandise, popcorn or DVD box sets - cashing in on audience insights will be Hollywood's main act in the future.

To understand why that is the case, you need to rethink the relationship between brands and content. While in LA, I caught up with Gunther Sonnenfeld, a digital strategist in the emerging field of transmedia. Gunther, who had spoken with me at the Gulltaggen conference in Oslo last month, explained his idea that media products should exist seamlessly across multiple platforms, using the strengths of each rather simply porting broadcast content mindlessly to mobile and the Web. At the heart of his theory is the power of storytelling. Stories, for Gunther, represent the creation and re-organisation of information through experiences we can relate to and interact with. And there is no reason that shouldn't be a commercially profitable experience for brands as well.

Strangely in China, that's a process that is already starting to happen due to savvy web audiences and a culture of grassroot celebrity. Many of the most famous entertainment personalities in China are not produced by a studio system but are 'netstars', discovered after they bubble out of the mass of online Chinese networks - famous for a homemade song, a viral blog post or some other social oddity. Brand managers scour the Chinese web looking for emerging celebrity, script ideas, and digital memes to exploit. And so, when campaigns for major brands launch, they are often just an extension of an existing community generated seed.

That is starting to happen in the West as well. Consider the significance of the moment when the funny and very human Twitter account ShitMyDaySays got a CBS deal and the creators of 'Will & Grace' stepped in to executive produce the concept into a comedy series.

Early days, yes, But eventually Hollywood will co-opt the web fully - as both a platform for distribution of content and more importantly, as an networked amplifier for celebrity. Today's internet star will be tomorrow's superstar. But don't get too excited just yet. You might have half a million people following you on Twitter, but no one has explained that to the gorilla with the door list, the attitude and the half mile of velvet rope.

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