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When do you know an industry is in need of an overhaul? When the top shill of your trade press, Variety no less says its in trouble. Not just fringes, but right down to the core as to why things are going so bad. Link.

An observation from the article –

It’s D-Day for the broadcast networks.

They’ve been living on borrowed time for the better part of two decades, thanks to advertisers willing to toss in more cash each year even as ratings slowly trended ever lower.

But with the economy in a tailspin — and the Big Three auto manufacturers, some of TV’s best advertisers, near ruin — the biz may finally have to pull the emergency cord.

The possible cure? —

Fox’s Saturday morning “Weekend Marketplace” will kick off in January with the usual infomercial fare seen latenight on cable or local TV stations. Fox hopes to eventually attract big-name advertisers to produce more network-worthy “long-form informational programming.”

Whatever it’s called, the Fox block reps the first time a broadcast network has devoted a regular block of programming for infomercials.

Meanwhile, should one of the nets decide their hefty broadcast infrastructure no longer makes sense, they could go for the most drastic idea of all, one that then-NBC honcho Bob Wright first dangled more than 10 years ago: Dump the network model entirely and turn your broadcast network into a cable one.

In the 1990s, Wright and others — then battling the affiliates on several fronts — suggested that NBC could exist as a cable network (at least in some markets) if the station model no longer made sense.

Such a move isn’t as far-fetched as you think. In the dying days of the WB, the Warner Bros. brass considered yanking the Frog off stations and launching WB Cable. The networks frequently grouse that cable’s dual-revenue stream (from both MSO sub fees and advertising dollars) gives them an upper hand, not to mention the industry’s more lax content standards.

So how about that! Hour long infomercials. Can you sit through an hour of ‘Tony the Chef’ on 82 ways to cut a tomato? I know I could not. But that is what’s happening. But the other idea, a swing to cable-like distribution would be a viable situation. Problem is it would not be allowed. Cable content is a heck of a lot more voyeuristic. I doubt it would survive the censors. The other is it does not eliminate the one thing that is killing them — infrastructure costs.

It is interesting that Wright at NBC saw what the problem was but only had one tool, cable, to deliver on the promise. Irony now is NBC is oblivious to the problem even though they posses the tools — TVoIP — to get them there. Bypassing the cable operators and going direct.

But there is one other hurdle — quality control. From Victor Hanson –

Hollywood is going the way of Detroit. The actors are programmed and pretty rather than interesting looking and unique. They, of course, are overpaid (they do to films what Lehman Brothers’ execs did to stocks), mediocre, and politicized. The producers and directors are rarely talented, mostly unoriginal—and likewise politicized. A pack-mentality rules. Do one movie on a comic superhero—and suddenly we get ten, all worse than the first. One noble lion cartoon movie earns us eagle, penguin and most of Noah’s Arc sequels. Now see poorer remakes of movies that were never good to begin with. I doubt we will ever see again a Western like Shane, the Searchers, High Noon, or the Wild Bunch. If one wishes to see a fine film, they are now usually foreign, such as Das Boot or Breaker Morant. Watching any recent war movie (e.g., Iraq as the Rape of Nanking) is as if someone put uniforms on student protesters and told them to consult their professors for the impromptu script.

Hollywierd has lost any inkling of the idea of being an entertainment medium. They have become an infomercial to those of a generally left leaning persuasion. Everything is a focus group designed set up with a semi tragic ending. Even Disney has a problem. What beget Lion King as a smash hit, has since run through the entire phyla of the animal kingdom getting less original with each iteration. What next? Tapping exobiology? Oh, sorry I forgot Wall-e.

Like the auto industry, the entertainment field is bloated. We have pointed out that the music industry price floor is about .50¢ a song. Well the same could be applied using NetFlix. A base account is $10/mo. If I watched on average 6 films a month that’s about a $1.50 a film. At that cost structure much of what is Hollywierd would simply disappear. Actors getting $15-20m per film would be unsupportable. Is it where we are headed? Again yes and there is a precursor that points the way.

SciFi channel. Approximately half of their content is contracted by the channel. Very low budget. Actors, directors you have never heard of. Plot set ups that are not too complex. Prop arrangements that can be had from readily available sources typically by leasing. Low cost CGI to fill in the SciFi portion. Not to say that the content can’t be good or even high production value. ‘Battle Star Galactica’ is an example. Occasionally a theme will be tapped that is original yet timeless.

The bottom line problem for the industry is history. A hundred years of film, fifty years of television all the themes of human drama and laughter have been plumbed. All the gadgets and gimmicks have been applied. The fomula, if there is such a thing, that keeps people coming back is a good actor with a good plot. That’s why films like Gone with the Wind,Lion in Winter and Roots seem to fare well.

Bottom line, like the Variety headline, it looks like Hollyweird might try for a bailout? I hope not.