Richard Metzger was the co-founder and creative director of Disinfo. He’s now the online editor at the LA Times’ alt weekly Brand X and the host of his own online talk show Dangerous Minds. He talked to me by phone on May 24th from his home in LA about the end of Hollywood as we know it, the future of advertising, and the circus that is the right-wing media.

You co-wrote a book treatment, which was originally called Hollywood Ending and then you renamed it Free for All, on the subject of digital piracy. Could you tell us about the research you did and the conclusions you came to?

This was written in the beginning of 2007 and I co-wrote this extended treatment, which ended up reading like a mini-book, with my old friend Steven Daly, who is a long-time contributing editor at Vanity Fair*. It was taken from what I had seen as someone who was working in the DVD distribution business and also as someone who was downloading quite a number of things myself , true for Steven as well and so seeing it from that insider’s perspective and as someone who was also doing a lot of downloading. We looked around and that story wasn’t really being told. Parts of the story were being told in a lot of different places, but it had never been told in one place with a narrative arc. Since the time we wrote that treatment, a number of books have come out on the topic, but nothing exactly like what we wrote about.

What we attemtped to do was trace the very beginnings of the home video revolution with VHS tapes and then sort of move forward and to say how the genie had gotten out of the bottle and how it would never go back in. When we presented the book, Harper Collins was interested in the book, so we gave it to them and then we had this follow-up meeting with where they were saying “Well, the title’s really a drag” and this guy was saying “You know, I’m convinced. The numbers stop adding up after a certain point, and the businesses won’t be able to sustain themselves, you’re right. But you take the reader right up to the cliff. What happens next? What’s the prescription? How do they turn it around and change things?”

Which, as we both know, is a completely ridiculous question to ask. If I knew the answer to that question we wouldn’t have been sitting there talking to Harper Collins, We’d be the highest paid consultants in Hollywood. No one knows the answer to this, obviously, and we are still some time away from seeing what the fallout from this will be.

Yeah. I’m trying to figure it out, but obviously I don’t have the answer either.

I don’t believe it will be pretty for the current Hollywood business model.

So your position is that piracy is going to completely undermine these businesses models?

Well, it’s not just piracy. It’s also changing consumer habits and what consumers will put up with. Price points that make sense and are viable in the consumer’s mind are not going to be the same sorts of numbers that sustain big Hollywood blockbusters. Shrek 4 was just released this weekend and in New York City the ticket prices edged north of $20. And it didn’t do that well. Because I think what the found is that there’s a pain threshold above which the consumer is saying “Fuck it!” Who the fuck is going to pay that much to see a Shrek movie instead of something else? It’s utterly ridiculous.

And then the other news, which shows that the Hollywood studios are ready to throw the theatrical distribution industry under a bus, is that they’re going to shorten the distribution window between theatrical release and DVDs in stores. To allow distributors to day-and-date things is something that Steven Soderbergh and Mark Cuban have done with their movies, but they got a lot of push-back. Hollywood studios are embracing this now. What does this do effectively? It’s like burning down the only grocery store in town. It doesn’t make any sense to do this from a selfish point of view –or an accounting, cash flow viewpoint–given current business realities. Yet they can’t not do it either!

There was one really compelling thing we found that stood out amongst all the facts about where the entertainment business is inevitably headed. Domestic box office basically pays for 15% towards what is goes to make tentpole motion pictures profitable these days. 85% is home viewing, including 59% for DVD sales. Hollywood is doomed, or at least the current way of business is doomed. That much is certain.

If they’re moving towards day-and-date releasing, with these outrageous price points, they’ll kill their business model. They need to go much lower of on demand/PPV stuff, not higher. They’re saying you could rent a first-run film for $40. Who the fuck is going to do that? When even 30 days later you could pay half that for a BluRay version and keep it forever. There’s idiocy and cognitive dissonence in everything they do.

And if they’re going to start renting out first-run movies, then everyone’s going to have pirated copies instantly!

Of course! Everyone’s going to feel totally ripped off. They could get it for $1 at a Red Box. They’ll just wait. Do you NEED to see Shrek 4 so damned bad TODAY that you’ll shell out $40 bucks for it? I sure as hell won’t be.

They’ll just wait, or they’ll download it, because one person will pay for it and then everyone will have it. There won’t be any reason to pay $40 for it anymore because you can just download it.

Yeah, that reason will be removed. MacGruber will never be worth $40 to me. It’s not even worth $1 to me, I’m sort immune to the charms of that kind of thing. But for fuck’s sake what person who is an active movie goer would put up with that shit? But anyway, they found the pain threshold for the audience with Shrek 4 and that movie didn’t do as well as they thought it was going to do. Now they know. It was an experiment that failed, clearly.

So was that book pretty focused on Hollywood film the or would you extrapolate that over to music and books and other media?

No, we wrote about the music industry. We kept it focused on digital media. I was actually interested in talking about other media, the newspaper industry and periodicals and that sort of thing. But Steven felt strongly that it needed to be focused on things that basically were sold on little silver disks. But I work in the bowels of the LA Times these days so I definitely know what sort of problems there are these days in publishing. But the treatment pretty much focused on Hollywood and television and the home entertainment industry and music. Things that you could hold in your hand and were wrapped in cellophane.

And your research lead you to believe that the business models for all of that is collapsing?

Yeah, that’s true, it’s been completely abrogated. I think what you have is a situation where everything is going to be a lot smaller and a lot more diffuse. There have been articles in recent days saying that Conan O’Brian’s Twitter following is as powerful in many ways as any kind of marketing that could have been done for him at NBC when he was there. And they’re expecting in 10 years people won’t care about critics or even so much about TV listings. There will probably be a propensity for the public to ignore all forms of advertising and marketing, it will be all word of mouth and crowd sourcing. My wife swears by the NetFlix stars. Less than 3.5 stars, forget it. The stars never lie!

Yeah, I already don’t read any professional film critics or anything like that myself. If I wanna see something, it’s almost entirely a word of mouth thing for me. And I use ad-blockers on the Internet. I do everything I can to shield myself from advertising anymore. Which is kind of too bad. I mean, I’m also creating media content and would like to profit from advertising myself. But it’s gotten so crazy – I don’t know if you read the interview I did with Ashley Crawford. He talked about going to the New York Times site and he couldn’t focus on reading the article because the ad had this crazy animation. And someone said in the comments that he’d gone to a Salon article that Ashley had mentioned in the interview and they were just greated with, of all things, a giant ad for a print subscription to The Economist.

So yeah, it’s just another example of an industry slitting its own throat. Instead of having any sort of advertising that would be in any way acceptable, it’s all to such an extreme that I feel compelled to just completely block it.

I have my own ad-blocker in my mind, I just don’t see them any more.

Well, that’s how I was for a long time, I just ignored it. But it seems like so many sites are just getting so bad with road-blocks and screen hogging ads. It’s getting like it was in the late 90s and early 2000s, with pop-ups. You’d go to a page and you’d get 3 or 4 pop-ups. And now pop-up blockers are built into all browsers, basically. So that’s not even a viable form of advertising any more. So I expect ad-blockers will become a standard part of browsers – I just don’t know how companies are going to expect to profit from advertising in the future.

Well, I’ll tell you one way it’s going to happen. If you look at what sites AOL was interested in acquiring last year, they were only interested in sites that had video. There’s this whole convergence thing that will happen, where it will be all about social media and Google TV.

I just don’t see how it’s possible that the public will still put up with paying for sports channels that they don’t watch and Spanish channels that they don’t understand, and so forth. Congress will tell you it’s because if they unbundle those things the industry won’t be able to pay for itself anymore and it will fall apart very quickly. That can’t continue forever. It just can’t.

It will be a smaller industry. They will make smaller shows with lesser production values. And that would just be the way that it is. It’s like if you look at television that was made in the 60s and 70s or a talk show like Dick Cavett used to do, I find those shows completely compelling. You don’t necessarily need spectacle to entertain people or have an audince.

Trailer Park Boys is a show that I love, and that could not have cost much to make… especially compared to the amount that they made from it.

Yeah, exactly. I’m a huge fan, too. I interviewed them over email.

You’re right, there’s no reason that movies or TV need to be these insanely expensive productions.

I’ve looked at copies of budgets, from people who worked for agencies and management companies out here, for network television shows. There are people who are so many people on the corporate teat, who are just pigs at a trough. There are people who are drawing $4,000 or $5,000 a week salaries for network television shows who don’t do anything. They were “attached” to it. Yeah, attached like a blood sucker! I mean, it’s unbelievable. They don’t provide any value. They’re not there. They don’t do anything at all or contribute. That’s just the way system works, I won’t go on a tirade about it. But my point is, they don’t do anything, they’re not providing any value to the programmer, to the advertiser, to the public, or to anyone else all along the food chain. They’re just jacking the price up of this stuff, without adding anything of value, or indeed anything at all.

The future of advertising, as companies like Google and Facebook see it, is mining your data and presenting advertisments that are heavily targeted specifically towards you, if they can get away with and people go along with it. It’s been interesting to watch the past couple weeks the Facebook backlash, I have no idea if it’s going to come to anything or if people are just going to accept this.

I think they will accept it. I honestly don’t have a problem with having that demographic information collected about myself. First off, I don’t know what value it would be to them. I would think my consumer habits are all over the place. Maybe not. But if they could come up with something that was similar to Amazon recommendations, I’m all for that. If there’s some new CD by some band that I’ve bought before and I haven’t heard about it and there’s some algorithm that can tell me about a thing that I might actually like, why the fuck wouldn’t I want that advertising instead of something like Tide?

That’s part of the frusteration of advertising for me, especially on bigger media where it’s all advertisements for things I will never have any interst in at all. I’ll never buy CocaCola, there’s no reason for them to advertise to me. Now, Twitter’s got an interesting idea for advertising that doesn’t necessarily mine a whole lot of data from you, but they’ll just see if you’re retweeting their advertisement tweets and then show you more like that if you are. It would be interesting if it works. I haven’t seen any of their sponsored tweets or whatever they’ll calling that yet. It’s also interesting because as far as I can tell they won’t be blockable because they’re just going to be piping it through the normal interface, so you won’t be able to download an ad-blocker that will block those tweets. I don’t know, maybe someone will be able to figure it out, but it will make it more difficult. But I don’t know if that’s even going to support Twitter, the revenue from that, let alone any other company.

How is Twitter going to target people? If someone chooses to forward it?

Yeah, I think that was the idea. If you retweet the ads, then it’s successful and they’ll try to target more like that to you. And they’ll probably be in some ways like Google where they’ll look at your hashtags and stuff to target ads to you.

What kind of a moron would retweet an ad to their Twitter followers? You’re asking them to do something that would have them ostracized in the very ecosystem that they’re swimming in. I think that’s a terrible idea. I don’t understand why they don’t just put up banner ads.

Why would you ever retweet an ad? It seems really ridiculous to me. Not a business.

I can’t think of anything. We’ll see what they come up with, but it’s hard for me to imagine that they’ll come up with much that I’d want to retweet and that that will end up being profitable.

I can tell you now there’s probably no advertising I would retweet under any circumstance.

As a content creator yourself, if it all goes south and no one’s making a living making content anymore, what will you do? Do you have
a backup plan?

[Laughs] No. Dangerous Minds sort of is my backup plan. I have a day job, I’m an editor at the LA Times. I pay the bills that way. I’ve been around long enough, and I’ve seen what’s happened over the past couple years, so I don’t want to depend on someone else’s enterprise to keep a roof over my head. I’m a pretty entrepreneurial person by nature and I did not want to be in the so called “finished goods” business anymore. I didn’t want to cause books and DVDs to be produced and stored in warehouses and shipped to Barnes and Noble and so forth, anymore, it just wasn’t something I was interested in doing. And you’ve always got to be investing in the future for that sort of thing so your profits are sort of weirdly never realized in the publishing industry, you’re always investing a future thing. It’s hard to get rich that way. So I became interested in doing a soley digital play.

The reasons that I’m doing a talk show is because, one is it’s fun and I have a nice, free studio to do it in and I get to meet interesting people every week. But I have hopes that it will be like what happened before with the Infinity Factory show that I did in the 90s, which led me to getting onto Channel 4 in the UK in a timeslot after Ally McBeal. So I’d like to get back on television. That’s the thing, I’m using it as a vehicle to get sales and move towards higher production values.

Or maybe an agent can line up several small sales. I could sell it to Book TV in Canada. Maybe it could work for late night on Arte. You never know. But because it costs so little to make, the idea is to have something where I own the whole thing, not some production company. So if I can get small International TV deals –there different prices for different markets from a few hundred to tens of thousands of dollars– that would add up. It’s an experiment at creating a cottage industry, I meet fun people and it doesn’t coast anything to produce, so why not?

Charles Johnson: Why I Parted Ways with the Right from DANGEROUS MINDS on Vimeo.

Back in the day, you said that Disinformation was about presenting, like, 30 different points of view while the mainstream media was about presenting only two. I might be misunderstanding what your actual position was, but you thought that the ideological fracturing that the Internet was precipitating was a good thing because people would maybe think for themselves more and be more critical or see the world in a different way.

Mmm hmmm.

And I that’s what I thought also in the late 90s and early 2000s and everything was coming together and it was so exciting. But now looking at things I don’t see that having happened. It seems like everyone’s gotten more entrenched into their reality tunnels. I saw this thing on TechCrunch the other day by this guy who read a report that said that people who get their media online get a more balanced news diet or whatever. They get stuff from both the left and the right. The report thought this was a really good thing but this TechCrunch writer said it was actually just people going out to “the other side” and being like “Oh, what a bunch of morons.” And I’m sure that’s what it is. I’m as guilty of that as anyone. So what I’m asking is: do you still have the same view you had when you were starting up Disinfo about media democratization and idealogical fracturing?

Well, things certainly have fractured. I don’t know if it’s a good thing. It’s not so much fracturing any more, it’s really already dividing up between two lines, for lack of better terms “the right” and “the left.” And it’s not even that far left- certainly not a European definition of what “the left” is. But this whole right-wing weirdness that’s happening right now in this country is I think a good example of where it’s not fracturing it’s cohering into something else. And you have people who are becoming very doctrinaire in their ways of thinking and it’s kind of fascinating to watch it but it’s very very alarming to think of the high percentage of the population who are susceptible to authoritarian group-think. The “Nanananana! I can’t hear you!” know-nothingness of it is so alarming.

In that way, no, it seems to have fractured and then re-formed, as it were. All these different conspiracy theories people believe. And why does someone who wants to put America back on the gold standard like, say, a Ron Paul-type person, why would they be so anti-abortion at the same time? You have this very long checklist of things that have nothing to do with each other, but somehow Fox News and these other right-wing operators have convinced and manipulated people into seeing this disparate list as a roadmap of how they should live their lives and how other people should live their lives and it’s very odd. It’s a very odd time in history. I don’t know where it will all go. I don’t think it will all go too poorly because I think there’s just enough people who live in this country who aren’t going to let that happen, but I could be proven wrong on that.

Well, one encouraging thing I’ve seen is that opinion polls show that the American public in general doesn’t share the values and opinions of the tea party movement. So they’re actually a lot more marginal than they seem to someone who’s following them in the media a lot. They’re much less popular and influential than they seem to be.

The more the public sees of them, the more people are revolted by them. The more Sarah Palin is seen with her lips flapping the more people come to the conclusion “This bitch is stupid!” Or Rand Paul – shine a bright light on these people, please, actually give them so much attention that people’s stomachs are turned. That’s the process that’s going on right now.

It seems like it’s also a big distraction from any real issues, or any solutions. It seems like maybe that’s part of – well, I guess now I’m sounding conspiracy theory-ish, but that’s why they’re getting so much attention. Because it’s easy to point the camera there and not talk about continued engagement in Afghantistan or the fact that our country’s economy is so fucked and no one knows what to do to fix it.

Well, it’s cheaper than pointing a camera anywhere on the ground in Afghanistan, for one, because it’s domestic news. And it gets big ratings. I mean, love her or hate her any time Sarah Palin open her mouth, people watch.

Yeah, I do too.

Yeah, exactly, I’m guilty too. So you can’t fault people who don’t want to mess with their ratings. Fox is a giant authoritarian propaganda machine, but as a business it’s undeniably run quite brilliantly. But I don’t think it’s any kind of nefarious distraction. It is what it is. It’s a bunch of people who are older, they’re cranky. I think this is the very last gasp and last hurrah of these older white people who are about to be demographically outnumbered – and fuck it, they should be. Look at what they’ve done to this country when they’ve been in charge. I mean, to hell with them. All this bullshit in Arizona – with their demographics what does this mean? It means that in Arizona, the Republican party is going to be anathema. They’re going to be pariahs with the up and coming demographic. I’m old enough to have seen tons of shit change. Rachel Maddow used to be an organizer at ACT UP. ACT UP was a very extreme thing in the 80s. And she’s a major cable news star now. Things change. People who are younger get into positions of power, push the old farts out to pasture and things change. You know, hopefully they’ll change for the better.

*Richard plays a bit part in Daly’s article “Pirates of the Multiplex” in Vanity Fair