The large Hollywood studios are still unable to deal with the internet, according to a panel of industry players at the Techcrunch50 Conference 2008.
Although there is a much better rapport between Silicon Valley and Hollywood, studio executives are still missing out on valuable opportunities.
"Excitement about the internet exists among the creative people in Hollywood, " said Joss Whedon, creator of TV show Buffy the Vampire Slayer.
"Hollywood is still trying to figure it out. Their approach is how to use it without paying anyone and to control all of it."
There were some positive signs, however. The Hulu free download site is an example of studios understanding internet users but still highlights how traditional studio models will not work.
"When Fox and NBC got together to offer a free download site they called it Hulu," said Chris Henchy, from Gary Sanchez Productions. "This avoided the negative connotations of being involved with studios."
Henchy claimed that his son had asked him about a show called CSI but had no idea it was produced by a studio because he had only ever seen it on YouTube.
"YouTube was a wake-up call for the movie industry," said Michael Yanover, business strategist for the Creative Artists Agency.
"It showed that content was going to get out there whether they liked it or not. It was just like Napster for the music industry."
Overall the panellists were upbeat about the future of the industry, but said that it would take a major change in business practices for Hollywood to accommodate the internet.
"We knew my new show was going to be pirated," said Wheldon. "It appeared on BitTorrent sites; this is how it's done. But the fans also said they wanted to pay for the show."
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