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.

What do you think? I value your feedback. Please comment by clicking here.

The first question my publisher asked me was why a book and not a blog? Three years ago when I started working on Futuretainment, that was already a tough question to answer. With eBooks now on the crest of critical mass, it hasn't got any easier. Last week, my book hit the shelves. Although you can buy it on Amazon, you can't read it on a Kindle. In fact, with 300 pages of illustrations, original photographs and custom designed typography - it is about as Kindle friendly as a bathtub. That was a deliberate decision on my part, but it comes at a time when the very concept of a book is changing.

This Christmas, a very large number of people will recieve their first eReader. I have no doubts it will kickstart a transformation of the publishing industry. It happened with DVD players, digital cameras and MP3 players. Now, it is going to happen to books. Amazon have finally released a global edition of their Kindle which allows wireless book delivery in over 100 countries. Sony has been busy too - introducing a sexy eReader integrated with Google's book platform, while Apple's long awaited messiah tablet is mere months away. If nothing else, there will soon be a generation of school children who get to grow up without being disabled by weightlifting a satchel of text books to class every day.

None of this spells the end of books and book writing. Quite the contrary. There are two aspects to any book. First, there is the book as an informational construct. Put simply - an arrangement of words, sentences, paragraphs and chapters. However in our attention drained world of 140 characters, this construct increasingly boils down to a simple image - the long tail, the tipping point or the black swan. Despite fervent claims to the contrary, the vast majority of people don't actually read books. They consume metaphors and debate in status updates.

Fortunately, there is also a second aspect of books - 'thingness'. Whether a Sumerian stone tablet, an Egyptian papyrus, an illuminated Medieval manuscript or just a pulp paperback - there is a physical side of books which has its own life. Here is where eReaders will attack. Dead trees are an inefficient form of information transmission. From now on, to survive as an object, books will need to serve a greater function than communication. In times past, the wealthy lined their houses with leather bound rare editions. Expedient booksellers would literally sell knowledge by the metre. After all, a library of physical books was part of the symbology of money and power. We may soon come full circle.

For all of these reasons, I embarked on the journey of trying to create my own book. While writing a blog can give you influence and notoriety, a book has a sense of completeness which a series of online posts can never achieve. Moreover to write about the digital revolution required some distance from the immediacy of online chatter in order to make sense. I knew from both my days at Jupiter Research, and also working for the Murdochs at Newscorp that the Internet was changing every aspect of how lived. But as much as I liked gadgets, the revolution was not being led by computer innovation. In fact, the most profound changes were taking place because consumers were changing the way they behaved. That meant thinking less like a technologist, and more like an anthropologist.

I had encounted the first glimpses of these disruptive forces while advising media companies in Asia - savvy and socially networked teenagers in China, Japan and Korea armed with advanced mobile phones, fast wireless broadband, multiple virtual avatars and a cavalier approach to copyright - they were the forerunners of entirely new type of consumer. As tough as it was for traditional businesses to understand - anyone born after the introduction of the first web browser in 1994 was quite simply unlike any generation before it. They had never known a world without the Web, and so never knew a world where they couldn't get any piece of content, on any device, at any time. And importantly, with a hat tip to the Mayan's for predicting a civilisation changing event taking place in the next few years - in 2012 that generation would all turn 18.

Of course, if I had known just how hard it would be to create a visual book - I might have indeed stuck to blogging. But as they say, there is a certain boldness in naiveté. With a first draft of my manuscript, I approached the iconic designer Vince Frost. Vince had recently opened a studio in Australia, after a successful career in the UK where he had been one of the youngest ever directors at the legendary design powerhouse Pentagram. One of the first aesthetic challenges we hit when planning the book was creating a future forward look that wouldn't date.

The solution lay in the past. The design of the fifties and sixties had a clean, directional look that was at once futuristic and yet, being nearly a half century old, dislocated from contemporary views of tomorrow. Some of our sources of inspiration included the little known Swiss designer Hans Hartmann, Giovanni Pintori's designs for Olivetti, the Latvian literary magazine Jauna Gaita, and the iconography of the 1968 Mexico Olympics. Vince and his team did an incredible job on the visual look of the project, right down to the imposing f cut out of book's front cover and a website which integrated social media in mesmerising melange of animation and video. As the project went forward, we used the Web to colloborate. I scanned and uploaded photos taken with my old school Leica M6 on 35mm film, and on the other side of the world, Vince's designers accessed the high resolution photos from Flickr.

I ran into an old friend of mine recently who told me that as an author the best possible moment is when you see your first book in your favourite book store. I smiled, and asked him whether that was really better than, as he has, seeing a royalty check for your ten millionth book sold. He just winked.

In ten years we will still have books, but they will serve a different purpose to what they do today. The Japanese may well invent an eReader which emits the faint smell of paper to soothe those who yearn for the tactile romance of print. Because, as much as I love my Kindle, it is a marriage of convenience. My true mistress will always be books. The smell of print, and the sensual touch of high quality paper will never fail to seduce me. And I can only hope that my book might elicit the same response in you.

Along with Murdoch and Malone, Barry Diller was one of my longtime media mogul matinee idols. So it was with great anticipation that I sat down this week to hear him speak at the CASBAA convention in Hong Kong. It was a slow start, but things got interesting when he was asked what he thought was the future of the industry. This is what he said...

'There is going to a lot of chaos as scarcity is replaced by plenty. This ability to to press a button and publish to the world, which has never existed before, is going to change everything. When there is no barrier between publishing and the consumer, then all of the people in traditional media will have to adapt to a world where the historic methods of financing and distribution are going to change. So, that's what I think.' 



It's a salient observation. Media has long thrived on scarcity; a limited number of people producing a limited amount of content and a limited number of people distributing it. That's no longer the case - but of course, you can't blame everything on the Web. It's easy to forget the appearance of 500 channel subscription television and the VCR had a similar fragmenting effect on the other more established media of the time. Diller himself made his first big career move by pioneering the concept of the 'made for television movie' when he was hired by ABC in 1966. Typically based on a popular book and made for a fraction of the cost of a big budget movie - Diller's telemovies exploited the fact that new mediums create opportunities for new types of content with new cost structures behind them.



Of course, media companies are now faced with an entirely different conundrum. I chatted with Gautam Anand this week, who is Head of Content Partnerships for the Asian region at Google. YouTube have recently been cutting deals with Hollywood Studios and TV Networks like CBS to get long form, professional content shows on their site. So far that merely means more reruns of Star Trek and MacGyver on the Web - but it's a sign of the times. As Hulu proved, your best chance of selling online video advertising is with reliable Studio content rather than random user generated material. 



Still, to Diller's point - you now have millions of consumers spending their media time watching a combination of commercially useless user generated inventory, and professionally produced content which has been financed by a traditional distribution chain that is now under threat. So the real question for everyone now is whether the new business model of online advertising and paltry iTunes sales will ever be able to sustain the cost structures of creating content that we like to watch. The numbers are sobering. Hulu is on track to make about US$90 million in online revenues this year. That's a drop in the pool compared to the US$11 billion dollars that the US networks took in revenues for quarter two of this year alone. You ain't going to make 'The Soprano's' on post-roll video ad dollars, that's for sure. 



Eventually, in my opinion, two things are going to happen. Firstly, there will be more online video advertising dollars around. That will lead to the creation of well established regional video aggregation platforms, financially capable enough to support a true wholesale distribution market for studios and professional content creators. Secondly, making movies and TV shows will get cheaper, Hollywood guild strikes notwithstanding. 



Just take movies as an example. The average cost to make and market a major MPAA member company film was $106.6 million in 2007, and at least $35.9 million of that was pure marketing. Digital distribution doesn't eliminate marketing costs altogether, but tapping into social networks effectively does mean that you don't have to buy expensive TV commercials and billboards anymore. While we are slashing costs, you can also take a red pencil to the expense of producing lots of physical film prints for cinemas. That leaves the last big ticket item - talent costs. As content franchises like James Bond or Marvel Comics action films become more like product and merchandise platforms - leading actors may start to weight their compensation in the form of backend product participation rather than upfront salary. 



Just like what is happening now in the music industry - when everyone makes money on merchandise and commercial endorsements, piracy is not a problem. If anything, it pays.