01/26/2009 11:03 am ET Updated May 25, 2011

Can Hollywood Make Like Obama -- and Change?

Sharon Waxman is Editor in Chief of TheWrap.Com, which launches today

LOS ANGELES - The ground has shifted beneath the foundations of what for the better part of the century has been one of America's most reliable and desirable products: movies and television shows.

Since this thing called the Internet came along, anyone, anywhere in the industry will tell you this: Hollywood must adapt in order to survive.

The entertainment industry exuberantly embraced the change offered by Barack Obama. Will it be able to embrace the necessary change for it to adapt in the age of the web?

Cracks have formed in the hard earth that has been the bedrock of the popular culture and media consumed by people around the world., evidenced in the broad changes in consumer behavior set in motion by Google, Facebook, YouTube, Digg and a host of other new companies that for the most part did not even exist a decade ago.

Millennial-generation digital entrepreneurs like Mark Zuckerberg of Facebook and Kevin Rose of Digg are displacing once-omnipotent Hollywood players such as DreamWorks' David Geffen, who has just retired, or Michael Eisner, the former Disney mogul who has remade himself and is now a minor figure in the world of new media.

Thus far, attempts to figure out exactly what a successful digital-era Hollywood venture will look like have been met with scant success.

"People truly do not understand the extent to which new media is not a business," said Marshall Herskovitz, the veteran television producer who last year declared his independence from the networks and created "quarterlife," a web series and social media hub. "It's remarkably not a business. I'm speaking from painful experience."

Herskovitz managed to make money from a single episode of the series that ended up airing on NBC before the show was canceled. But he lost money on the 36 episodes that were streamed on MySpace and the show's own site.

The Kansas State University anthropologist Michael Wesch has found that the amount of video content created by YouTube users, for free, in six months is more than the broadcast networks produced in 60 years of paid, professional programming.

YouTube produces some 9,232 hours of new video every day. (Feel free to re-read that sentence a few times.) It's not mass programming. But as an aggregate, it creates a smorgasbord of satisfying entertainment and the opportunity to take part in "participatory culture."

Therein lies the shift that will determine Hollywood's fate in the age of the Internet. Web culture, and the businesses connected to it, are all about transparency and collaboration and adaptive improvisation. Companies share and connect in a spirit of "competition." It is additive, and iterative in nature. Failure is seen as merely a necessary prelude to success.

All that makes the web a very different environment than the cutthroat entertainment industry familiar to the world from countless novels and movies -- "Day of the Locust," "The Player," or "Swimming With Sharks."

It's a subject The Wrap will explore continually as Hollywood embarks on this great new adventure. Please comment. Contribute. Give us feedback. Above all, make yourself at home in our community -- today and every day going forward. Read the full story here, and at