The Hollywood Economist: The Hidden Financial Reality Behind the Movies is one of the best books on the business of film (some would say THE best). And earlier this year, author Edward Jay Epstein came out with an updated version of the 2010 original — The Hollywood Economist 2.0. Here’s his take on how the business has shifted in the eventful time between editions:

Hollywonk: What are the three biggest changes you’ve seen since you wrote the first edition of The Hollywood Economist?

Edward Jay Epstein: The three massive changes are:

1) The abandonment of the American adult audience in the major studios’ business plans.

Not only did most studios get rid of their “indie” units (eg. New line, Miramax, Paramount Vantage, Fox Atomic) but they no longer acquire them for distribution. Instead, they have concentrated their resources on movies for teens, children and the foreign audience, which mean movies long on visual effects and short on dialogue.

2)  The huge expansion of broadband.

The increase in broadband in Asia and Europe has doomed DVD — a significant part of Hollywood’s profits, and placed Hollywood in a war with Google, Facebook, Twitter and other tech giants over the issue of the regulation of Internet privacy.

3) The death of video stores, caused by Netflix and Redbox.

This has meant that smaller movies are cut out of a large share of the home entertainment market (Redbox only carries 30 or so movies).

Hollywonk: What do you think the digital Hollywood landscape will look like in 5 years, 10 years? How are theaters a part of it?

Epstein: In 5 years, 80 percent of movies will use digital projection, digital intermediary prints. This will allow Hollywood to open a major movie on 20,000 screens (rather than 4,000). So it will play on five screens at a multiplex every 15 minutes.  This will further hurt smaller movies.  It will also mean studios will rake in 80% of box office in two weeks, and can pull movies out of theaters, and move to DVDs.  It can also allow multiple versions of same movie, G rated, R rated, Spanish-language at different hours.  This shift in distribution will change the content of movies.

In 10 years, all movies [will be digital], from filming to projection, which will lessen visual quality a bit. DVDs will be replaced by cloud ownership.

Read more from Edward Jay Epstein.