Tech inroads in Hollywood.

While 2005 could be described as the year that Hollywood began to dip its toes in the waters of technology, 2006 will likely showcase the industry's full scale immersion.

Much hyped technologies such as video on demand will finally become a major player in the space, as companies rush to produce content capable of being shown at any time at the viewer's discretion. Additionally, the consolidation that took place over 2005 will only continue to occur in 2006, as companies continue to purchase massive libraries of content to leverage these new technologies.

"2006 will be the year of which the world of technology will meet the world of entertainment," Ali Mogharabi, an analyst for B. Riley & Company said. "You're going to really see this trend pick up steam in the second half of the year, but it really started to pick up the pace a couple months ago with the debut of the iPod video. The VOD market hasn't even emerged fully yet and that's a big plus as it gives the content providers a means to more effectively market their content."

In the new year, many expect the traditional old media companies to capitalize on this new technology. Already, Disney through its ABC Network has made "Desperate Housewives," and "Lost" available for download on the iPod. Additionally, Warner Bros. has gotten in on the act as it has teamed up with American Online to launch a broadband video network called In2Tv set to launch next year. The network will feature old Warner Bros. television shows such as "Welcome Back Kotter," and "Growing Pains."

But the major players aren't the only local firms that will likely capitalize on these new ways to leverage content. Chatsworth-based Image Entertainment Inc., has been quietly amassing a vast library of content and building up its subsidiary company Egami Media, which specializes in the distribution of digital content. Additionally, Burbank-based TVN Entertainment has entered into myriad agreements to provide video-on-demand programming for nearly ever major cable provider in the United States.

Expect the levels of local production to remain high. In 2005, Film LA Inc., reported that the levels of local film and television production topped 2004's numbers by five percent. And Steve Macdonald, Film LA's president, has gone on record to say that 2006 also is shaping up to be another solid year.