I am sick of happy endings.

From entertainment point of view, this is great news, as I believe this will let everyone to be a lot more creative. Unfortunately, studios have too much power and control, and not that many directors get the final cut on their movies. As a result, there are many unhappy artists, as their works are greatly influenced, and changed by those in power. Most studios have no respect for the art work and merely look at it as a business opportunity and will change the creative work to whatever that will potentially sell more and make them more money. Therefore, this transition could be the end of all those "Hollywood endings." (Blade Runner, Apocalypse Now, Once Upon a Time in America, American History X, are just a few examples).

I have to mention though that this problem will not be even completely solved with Mark's proposition either. Rebuilding Hollywood in Silicon Valley's image will have its disadvantaged too. I believe doing so will not build Hollywood as today's image of Silicon Valley but rather an image of the Valley in the mid 90's, and the dot-com era. (I am not suggesting there will be a bubble, but its possible, and I don't think it'll ever be as bad as the tech one, since the industry is already mature and the players are very experienced, so the chances of failure are a lot less.) But in terms of the structure of the companies and the process there will be similarities. As we have seen over and over, startups that end up doing whats to the best interest of the VCs (or at least what the VCs believe is to their best interest) instead of doing what the founders would like to do (there are thousands of these stories but my favorites are Jim Clark and Silicon Graphics, and to some extend Steve Jobs and Apple, which proves this could have happened to anyone at any level!). But as there will be a lot more producers compared to the few currently available studios there will be better chances to find investors that think like you, so there will still be improvements.

Hollywood 2.0
But this transition will be a lot faster. As the technology improves and all costs of production, marketing, distribution go down, eventually a lot less capital would be needed to put together a movie, which will lessen the power of the producers and set the creative minds free. (similar to what we are experiencing in Silicon Valley today!).

I can't wait to see three different versions of the same story and movie coming out during the same year. Or the redone of older movies with similar plots but different themes and endings. I can't wait to see the personal touch of many creative people that never had a chance to offer their talents before. And maybe one day in the future I'll be sharing movies with my friends that they have previously seen or know about, but can now see it with my touch on top of it, and from my point of view. Maybe one day critics instead of pointing out what they like or don't like, they can modify the movies themselves and offer their own versions to their viewers (I might be getting really ahead of myself but I get excited when I think like this.) And instead of movie guide you'll check digg.com to see what you should watch today.

But last time anything close to this happened (but not even close to the potentials here) some great talents came out of Hollywood. We saw movies like Easy Rider, and great directors like Scorsese, Coppola, Spielberg, Lucas changing the way we think about movies.

Side Notes:
What I mention above does not apply to all categories of movies, as many of them (such as most of TV shows, and reality shows) can be produced today for very little capital. But for the feature length movies, and mostly those that are produced for theaters, you will still need a huge capital for production.