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3/17/2010
08:45 PM
Bob Evans
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Global CIO: Will Cisco's Revolutionary Router Torpedo Tinseltown?

Technology is roiling short-sighted Hollywood, and the business-model implications and opportunities for CIOs in every industry are enormous.

Throughout its brief but dazzling history, the video/movie/film industry has created a well-deserved reputation for exquisite creativity in its artistic expression, excruciating short-sightedness in its business models, and near-existential blindness to technological advancements. Two quick examples:

Exhibit A: in 1927, dismissing what some would call a rather obvious technology-driven opportunity for the business, legendary Hollywood pioneer Harry M. Warner of Warner Brothers squawked, "Who the hell wants to hear actors talk?"

Exhibit B: in 1946, another Hollywood kingpin, 20th Century Fox head Darryl F. Zanuck, dismissed a nascent competitor with this infamous brush-off: "Television won't be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night."

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And comes now onto the scene an externally bland and low-brow chunk of metal, plastic, and silicon bearing not only the prodigiously unsexy moniker "CRS-3" but also and much more importantly the very real potential to demolish the film industry and the business models the big studios are clinging to so desperately.

So IT doesn't matter, huh? Try telling that to some studio big-shot who's just had his CIO verify what that geeky little CRS-3 router-thingy can do: in just 240 seconds, it can stream not just one movie, and not just a double feature. No, in 240 seconds, the CRS-3 can stream every single movie ever made. Every move ever made. In four minutes.

Think about what that almost-unfathomable performance boost will mean in terms of the film industry's traditional business models, under which the big studios controlled the making, packaging, and distribution of the overwhelming majority of films available to the public. Will the blazing speed of the CRS-3 and the new wave of ridiculously rapid routers to follow render the whole packaging and distribution side of the equation obsolete? (For additional technology and competitive insight, be sure to check out my colleague Alex Wolfe's excellent analyses on the CRS-3 announcement and the reaction from Juniper.)

What about DVDs? Why buy the chunk of plastic when it's much simpler for you to just zap the digital file into your home theater or laptop or smartphone or your car?

This tech innovation has the potential to be to stuffy business models what wrecking balls have long been to condemned buildings: the very last thing they see, hear, and feel before being transformed into rubble that might or might not ever be used again. Here's how an engaging article from time.com describes the industry's dilemma:

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