I have always loved live entertainment events. Concerts, comedians, music festivals; you name it. But, I have noticed an interesting shift over the past couple of years. I no longer have the patience for large venues. With the increasing quality of home entertainment systems and faster broadband pipelines, the entertainment decision is becoming harder. Do you go out for an event and endure skyrocketing ticket prices, challenging commutes and parking, standing in line, and crowded venues? Or, do you simply stay home and watch an event in HD with surround sound on the comfort of your living room couch?

Last summer, I visited the Mountain Winery in Saratoga, CA to see Brian Regan, one of my favorite comedians. The Mountain Winery is actually a pretty small venue, with incredible views of the Valley (image in this post). And, I had what I thought were pretty decent seats. But, I wasn’t in the first couple of rows directly in front of Brian. He’s a very physical comedian and I came to realize that a great deal of his impact is due to his facial expressions. I was far enough away and to the side that I really couldn’t see his expressions clearly enough. That made all the difference in the performance. After that disappointment, I decided that I would no longer go to large venues for comedy. Another one of my favorite comedians was in San Francisco recently. But, the venue was fairly large and I didn’t get tickets early enough to be in the front rows. So, I passed. Now, I won’t even bother going to a show unless I can get a great seat in a small venue. Just not worth the hassle.

Check out this Huffington Post article from Michael Kaiser, President of the John F. Kennedy Center for the Performing Arts, where he shares his own concerns that live arts will become irrelevant:

For two tickets to an opera you can now buy a computer and watch Leontyne Price and Joan Sutherland on YouTube for free! No wonder so many people have stopped going to performances. A recent study by the NEA showed that a huge number of people are getting their arts exposure on-line and fewer are coming to the theater. No wonder so many arts organizations are suffering. Without audiences we receive no ticket revenue and the audience members we lose cease to donate as well. The claim that the arts are irrelevant is getting difficult to dispute.

A recent NY Times article also highlighted this issue, specifically referring to the financial troubles the Philadelphia Orchestra has been facing. And this isn’t unique. Several orchestras in the US are suffering in this economy.

And, it isn’t just the music industry. It is pretty clear from this LA Times article that sports has been taking a hit too:

Nearly every sport and sports team took hits, from layoffs to dips in ads, attendance and sponsorships. The Arena Football League canceled its 2009 season. The NHL’s Phoenix Coyotes filed for bankruptcy protection in May.

Several sports economists blame the downturn on a trend that started 20 years ago, when many major sports leagues shifted their focus from typical middle-class fans to corporations. That shift led to bigger stadiums and steady increases in prices all around to help pay for them.

Certainly part of the problem is the economy. It is hard to justify spending a lot of money on these events if your job is at risk or you’re struggling to cover the basics. But, part of this change is also due to a faster-moving shift to online entertainment. Improved systems performance, easier online transactions, micropayments, and the ability to interact and engage with others through social models have all created a more engaging and immersive experience. And, I think that is the key. There is a critical element here that is similar to the effect in really small entertainment venues:

You enjoy an interaction with the artist, the performer, and the other audience members that simply isn’t possible in large venues. In some sense, you are creating part of the experience yourself and that is where the new value will be created. As Max Levchin, CEO of Slide, stated in this recent Forbes interview:

The things of value inside these worlds have to be primarily created by the participants. That’s where our plans are. The real open question is whether these virtual worlds are a stepping stone between the shift from real economy to a completely virtual economy.

So, what are the venues going to do to survive? Basically, for large venues, they better start creating new and engaging experiences that offer much more than a consumer can get from the best high-speed, HD, surround-sound experience. Give us a reason to attend. Create an experience that we can only truly enjoy if we are physically there. And, instead of packing larger and larger audiences into mega-venues, I believe they should also focus on expanding into smaller, more intimate venues to acquire broader, more local audiences.

And, what are entertainers going to do? Some are already embracing the shift to online. Rather than bemoan the drops in attendance at physical venues and complaining about digital piracy, they are engaging with the game industry, social sites, etc. to weave themselves into new forms of performance art. And at least one orchestra that I know of is dynamically responding to these shifts in consumer behavior by providing a service where the audience becomes part of the experience. Literally. At a recent Yahoo! offsite, we had a surprise performance from a small orchestra that was seated amongst us. I have never enjoyed classical music in such an up close and personal experience before (well, not since when I used to play). Nothing like standing right next to talented musicians as they pour their souls into their instruments. That was indeed a transformational experience and they accomplished their goal of reminding all of us of the beauty of live music and pulling us back into an intimate venue and off our couches.

Yes, I’m an early adopter. That’s why I bought an Apple TV last year. And, I will admit that it has mostly just been an experimental toy until now. The biggest benefits? Being able to access my iTunes library of music and view my photos all from my living room entertainment system. My kids love going through all of our photos on the big screen HDTV. The YouTube videos were fun for a little while, but that faded quickly.

The 2.0 Upgrade
However, the latest 2.0 software upgrade finally made it a lot more interesting. Now I can instantly rent movies (including a number in high-definition with Dolby Digital 5.1 surround sound), buy TV shows, and browse Flickr photos on my widescreen HDTV (and I love Flickr). The downsides are that it does take a long time to download a movie (especially an HD movie), once you start a movie you have to finish it in 24 hours, and they need more titles.

Instant Movies + Variety
I do already have Pay Per View movies through DirecTV. The instant purchase and instant on do provide instant entertainment gratification. But, the variety is sorely lacking. Way too many PPV channels of the same titles. I am also a Netflix subscriber and a big fan of the service. They have a huge library of titles and a nice recommendations engine. The only drawback is that you have to wait. They do offer a movies download service if you have a Windows PC, but no solution yet if you are an Apple house (unless you’re running Parallels). So, if you feel like a movie right now, you’re out of luck.

Key Highlight
Consumers like instant gratification and the movies entertainment business is shifting rapidly to meet that need. PPV, Netflix, and movie downloads are all competing to be this movies-on-demand solution. The only barrier now seems to be bandwidth. Once that problem is solved, the winners in this space will be the ones who can provide consumers with the largest number of high-definition movie titles instantly available with one click.

Well, it looks like Sony’s Blu-Ray technology has won the high definition DVD format battle. Toshiba is dropping support for the HD DVD format. This is great news for consumers who will no longer have the confusion of the competing high-def formats. Well, except for those consumers who invested in HD DVD systems. Sorry!

High definition DVDs provide dramatic video and audio quality when displayed on an HDTV with a high-quality home theater audio system. Up until now, consumers either had to make a hard choice between the formats when deciding which hi-def DVD player to purchase or pay a premium for a combo player that supports both formats. To make matters worse, sometimes your favorite movies were only available in the the opposing format. This will no longer be a problem.

When Time Warner, Wal-Mart, Best Buy, and Netflix all shifted support to Blu-Ray, the writing was on the wall for HD DVD. As with the old format battle between VHS and Betamax in the late 1970’s, it came down to dominating market share. And for consumers, it really came down to price (of the player and movies) and availability of titles. It certainly didn’t hurt that you could purchase a Playstation 3 and have both a great gaming console and a Blu-Ray DVD player in one device.

It will take several months for the dust to settle on this victory. Over that time, we should expect a renewed focus on the the next generation of Blu-Ray DVD players and a great expansion of movie titles in Blu-Ray format. And that is good news for all of us. Because, once you have watched one of these movies on your HDTV, you will want all of your movies to be high-def format.

It has been a while since I have posted. If you head on over to Yahoo! Search, you will see why I’ve been a little busy lately. We’ve been working on a ton of great new ideas for our Search experience and some of them are now ready for you! It is all about giving consumers a much better experience when they are searching, so that they find exactly what they are looking for faster and are happier with the results. Check out what we’ve been up to and I think you will agree.

A new Travel Destination Shortcut

A new Music Artists Shortcut

A new Audio preview feature

An exciting new Yahoo! Search Assist feature (image from Danny Sullivan on Flickr). Danny has a great article about it on Search Engine Land titled Search Suggestions on Steroids: Yahoo! Search Assist

I’m sorry that I can’t provide you with a link to our new Search Assist technology yet, since it is currently in testing. But, stay tuned!

If you want to read more about Yahoo! Search, you can check out our blog.