In the beginning

Like the World Wide Web, the movie industry was an instant success and grew rapidly (at least, by twentieth century standards). From being a fairground novelty in the first years of the century, the first main street cinema - a nickelodeon, as they were called at the time - opened in 1905. By 1910, there were 10,000 of them.

The first movies were bought outright by these nickelodeons as permanent exhibitions. Very soon, it was realised that to survive, they would have to be constantly changing their shows. This is when middlemen - distributors - appeared on the scene, who leased or bought movies from the movie makers and rented them out to the nickelodeons. This established a three tier system, which has remained a permanent structuring of the industry ever since - content maker; middleman/distributor; customer interface.

As with e-business, major companies came into the game almost immediately with a view to monopolising the industry. They used copyrights, to drive all the smaller producers out of business; culminating in Thomas Edison forming the Motion Picture Patents Company (MPPC), which combined the nine most powerful copyright holders under one umbrella. These nine then pooled their patents and used their combined power to take full control of the industry, not allowing any independents to make, buy or lease any movies.

The independents fought back by uniting to form the Motion Picture Distributing and Sales Company which successfully sued the MPPC under government anti trust laws. The MPPC responded by employing strong arm tactics, using gangs to break equipment and intimidate casts and crews. Despite this, the independents won out and by 1917 most of the MPPC companies had folded with the organisation becoming outlawed by the courts.

We see many similarities to the beginning of the movie business in the beginnings of e-business on the Web. There is a frantic struggle for control through the use of patents. It is not clear how this battle will play itself out but it is almost certain that the millions of players in the world of e-business are not going to stand idly by, while a handful of big time players try to monopolise every aspect of e-business technology. It may not result in physical violence this time but it could easily see the system of patents falling into disrepute.

Although the independents won out in the patents battle, the movie industry was still dominated by the giant corporations for several decades because the showing of movies needed expensive and prominent locations and these, although large in number, could easily be controlled by exclusivity coupled to distribution. This allowed production, distribution and presentation to become dominated by a relatively small number of giant studios (corporations), who ran the industry in a classical, twentieth century industrial management style: involving teams of cooperative employees, producing movies on a production line basis.

It was only when the movie industry was challenged by the rise of television that the small independent movie makers could once again get back into the game in any significant way. With the need for vast amounts of content involving a huge variety of subject matter, even the large companies couldn't cope with the demand. This is when the independents came into their own. Using techniques of collaboration, rather than cooperation, they were far more efficient than the large studios and eventually took over the industry - driving many of the mammoth companies that had previously dominated the industry to the wall.

It is interesting now, to take a more detailed look at the contemporary movie industry to see why the evolved methods of collaboration became so much more successful than the cooperative team efforts of the corporate giants. This may yield the clues we are looking for in determining a suitable strategic approach to creating e-business solutions.