Criticizing Clay Shirky's Collapse of Complex Business ModelsSummary for TLDR types:
Well, some societies don't diversify their resource consumption, so when it goes away (whether they killed it or not), they have to rebase to a different resource mix; and as Diamond says, some don't make it.
One could say video/content corporations failed to diversify enough, that their advertising, product sponsorship, and licensing (domestic and international) revenues weren't broad enough.
I'd argue that it was fairly broad and well-diversified, to get more diversified they would have had to find a new species capable of paying for content. However, content providers only have humans to sell to.
So, yeah, you could say it's a diversification issue, but that seems like saying our universe is a single point of failure.
A more helpful framework is that of competition. Content used to be difficult to make and provide, now it's simple and abundant.
Since us humans can be entertained for hours by user-generated youtube craziness or wikipedia, the advent of these free sites means that content corporations have had the ultimate Wal-Mart of low cost production move in and start undercutting them.
Shirky points out that providers need to lower costs in order to compete. This isn't true.
1) This assumes some reasonably classical down-ward sloping demand function for prices near zero. We don't have working micro-payments yet, so we don't really know what near-zero looks like. It could be one massive step function.
2) Alternatively, the iTunes store has shown music companies the way forward by controlling distribution (back to the early days of movie theatres). The iPad presumably promises the same, but for more content.
3) There are lots of high-profit content niches, e.g. financial news and analysis that people pay lots of money for.
Given the increased competition, providers need to organize some kind of competitive response; lowering prices is only one. They can also form cartels, lock up distribution, specialize into niches, etc.