I don't know about "can't" but the reason why the studios won't innovate alternate business models is simple and is another example of the classic Innovator's Dilemma. The studios are huge companies embedded in other, even bigger companies, so there's a large amount of inertia. The MPAA is just the symptom of this. Go through the list Blank mentions: none, I repeat , none of those advances came from the industry itself, it was always some outside influence that the movie business resisted and then had to eventually deal with.
But the inertia of the studios is only part of the story. Large actor's unions, e.g. SAG, also oppose drastic changes, because they understand the current model and don't want it to be disrupted too much. This is similar to how teacher's unions are generally against efforts like the Khan Academy. Remember that many actors (e.g. Charlie Chaplin) in the 20s were against the introduction to sound to movies due to precisely the same kind of intellectual and business inertia.
One of my favorite quotes: "Institutions will try to preserve the problem to which they are the solution."
This is why I think Apple is more or less behaving the same as the movie institutions.
I think it's strange because Apple can be innovative. But lately they try to sue everyone to preserve there dominant position.
Maybe large companies do this because they fear change because change is much harder for large companies.
But the inertia of the studios is only part of the story. Large actor's unions, e.g. SAG, also oppose drastic changes, because they understand the current model and don't want it to be disrupted too much. This is similar to how teacher's unions are generally against efforts like the Khan Academy. Remember that many actors (e.g. Charlie Chaplin) in the 20s were against the introduction to sound to movies due to precisely the same kind of intellectual and business inertia.
One of my favorite quotes: "Institutions will try to preserve the problem to which they are the solution."