Tweet
ZDNet's latest blog says that innovation, not lawsuits, may be the best cure for online piracy. The blog is based on a report by Lightspeed Research which shows that online streaming services, like Hulu, has been effectively combating piracy as people see less need to download illegally when they can stream freely.
The report argues that what drives people to piracy may not only be the fact that things are available for free, but also because downloads are fast, and enjoyment can be had quicker than traditional models which the music and movie industries have been trying to protect. But streaming offers even more "instantaneous gratification", and so it is winning the war against downloads.
An issue that I haven't seen mentioned in too many places is these new distribution models, legal downloads or streaming, and the effect they have on the traditional retail channels. For a physical item such as a DVD or Blu-ray movie, there are higher costs, but the money goes towards various supporting players in the industry, from printers, to shipping companies to distributors, sub-distributors and then the main player, the retailer. With online distribution, there is less business for these supporting players and retailers, because when iTunes sell a song, the music label and Apple gets a share of the profits, but there is none for retailers directly unless they sell iTunes vouchers. While digital distribution is the future, one argument against it is that it may destroy the retail trade as we know it, as the profits are going towards fewer and fewer people, and if the studios get smarter, they can even cut out the likes of Apple from the loop and sell music or movies directly to consumers. This is good for the studios, but bad for retailers, and the recent Black Friday sales where store retail numbers were flat while online sales were up, perhaps provide a glimpse into the future of the business.
Perhaps digital content can be sold wholesale to retailers, who can run their own digital stores, or interactive kiosks to replace shelves full of music and movies in stores, with the stores getting a cut of the profit. But printers and shipping companies may still suffer as we move from the physical to the digital.
So innovation may bring more profit for studios in the long term, even if they are bitterly against it now, but there needs to also be consideration for the retail trade, or the economy may suffer as a result.
More:
The report argues that what drives people to piracy may not only be the fact that things are available for free, but also because downloads are fast, and enjoyment can be had quicker than traditional models which the music and movie industries have been trying to protect. But streaming offers even more "instantaneous gratification", and so it is winning the war against downloads.
An issue that I haven't seen mentioned in too many places is these new distribution models, legal downloads or streaming, and the effect they have on the traditional retail channels. For a physical item such as a DVD or Blu-ray movie, there are higher costs, but the money goes towards various supporting players in the industry, from printers, to shipping companies to distributors, sub-distributors and then the main player, the retailer. With online distribution, there is less business for these supporting players and retailers, because when iTunes sell a song, the music label and Apple gets a share of the profits, but there is none for retailers directly unless they sell iTunes vouchers. While digital distribution is the future, one argument against it is that it may destroy the retail trade as we know it, as the profits are going towards fewer and fewer people, and if the studios get smarter, they can even cut out the likes of Apple from the loop and sell music or movies directly to consumers. This is good for the studios, but bad for retailers, and the recent Black Friday sales where store retail numbers were flat while online sales were up, perhaps provide a glimpse into the future of the business.
Perhaps digital content can be sold wholesale to retailers, who can run their own digital stores, or interactive kiosks to replace shelves full of music and movies in stores, with the stores getting a cut of the profit. But printers and shipping companies may still suffer as we move from the physical to the digital.
So innovation may bring more profit for studios in the long term, even if they are bitterly against it now, but there needs to also be consideration for the retail trade, or the economy may suffer as a result.
More:
