Financing is harder to come by, too. As cash from DVDs poured in, Hollywood was able to lure money from outside investors, such as banks and hedge funds. It now sits on an estimated $10 billion of other people's money. But many of the outsiders' films have disappointed at the box office, leaving them with poor returns. Anyway, banks and hedge funds have other things on their minds just now. ①(sentence)

In the circumstances you would have thought the studios would be falling over themselves to find new sources of revenue online. The success of a film like “Cloverfield”, which found its audience through marketing almost entirely on the internet, points to how the ②(phrase)for Hollywood—teenagers and young adults—is fascinated by all things web-related. In private, even Hollywood studio executives admit that their children don't buy CDs or DVDs: they download.

Although the studios spend millions on websites for every film, none sells the product itself. It is partly because the DVD business relies on big retailers such as Wal-Mart and Best Buy. To keep them happy, Hollywood is holding back most of its films from the web. In fact, DVDs get people into shops: the stores need the studios as much as the studios need the stores.

In addition, Hollywood is terrified of piracy, which is already costing it billions a year in lost revenue. ③(sentence)As people get used to getting films on the internet, Hollywood needs to persuade them to choose legal routes by providing top-class movie-download services.

Log on, camera, action

Every time Hollywood has offered people a more convenient way to get its films, sales have leapt. Bringing movies into the home via television, VHS and DVD built the industry into what it is today. The internet may look unfamiliar and dangerous, but it could be the④(phrase). No trip to a thinly stocked retailer, no late fees, no waiting for a package in the post; instead, on-demand access to any film you want, from the latest blockbuster to the most obscure art-housetear-jerker. Because distribution costs mostly go away, online sales are more profitable too. The internet is the industry's best hope for future revenue growth. The rightful successor to the DVD is not Blu-ray or anything else. It is the web.