The Old Better Catch Up With The New
by Michele Christopher
The following content does not necessarily reflect the opinion of the editors of Faster Than The World.
In my blog, I wrote that one of the best things in the tech world in 2006 was the level of competition amongst all the players which has resulted in great products at a lower cost to consumers. While purchasing a 50" plasma HDTV may still be out of range for some consumers, a 37" LCD HDTV or a 40" plasma HDTV is certainly doable. LCD monitors, laptop computers, mp3 players, digital cameras, and other electronic gadgets have all come down in price over the last few years despite the fact the products have improved and have more features. I recently purchased a new Dell computer. For $150 I was able to upgrade from a standard 19" LCD to a 20" wide screen LCD that has USB ports, a DVI input and can be used for the Xbox or Playstation. Four to five years ago, that would have set me back $400-$500. The tech players know the deal, and they're benefiting from providing the public with good products at great prices.
The same cannot be said for the movie and music industry. They are still stuck in the past, losing money and customers as a result. The problem is, they see piracy and users of BitTorrent and P2P file sharing programs as the enemy and as the reason for their failures. Yes, illegal downloading of movies and music as well as pirated DVD's cost the industry money. But the notion that all of their troubles can be put at the feet of those who illegally downloaded the latest Weezer CD or uploaded the gayest video ever made to Youtube is nonsense.
This is not a new tactic from these two industries. Just under 30 years ago, the video cassette recorder and the cassette audio tape were the new inventions that would supposedly bring the movie and music industry crashing down. Jack Valenti, former head of the MPAA said this in 1982:
I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.
The music industry was able to have a royalty tax imposed on every blank audio cassette in the 70's and 80's because the RIAA was convinced all of the music being released would just be copied and handed off instead of purchased. That was also nonsense. One can examine this list to see how many records were produced and released within those years selling tens of millions of copies. So not only did the RIAA makes tons of money, they made more money every time you bought a new blank cassette tape. The RIAA is now convinced that pirated music costs them so much money, that they have asked panel of federal copyright royalty judges to reduce royalties paid to publishers and songwriters. That's in addition to the almost 400 lawsuits they have filed against people who have downloaded music. I wonder which genius decided that the best way to capture the hearts and minds of a younger generation was to hit them with lawsuits demanding $3000 in damages.
There are several ways both industries can make money and appeal to the hearts and minds of a generation that want their music and movies.
1. Put out a better product. How many good artists and bands are left to use self-promotion with their recordings because a record label wants to spend money on a Paris Hilton or Kevin Federline project? What good movies are not getting made because some pinhead at a movie studio gave the green light to a Larry The Cable guy film? Or Deuce Bigalow: European Gigolo? The movie industry does have a tougher battle because HDTV and HD DVD (or Blu-Ray) with surround sound is bringing the theater experience to homes and unless people cannot wait, would rather watch on their 50" HDTV than spend $40 for tickets and snacks at the local theater. The movie industry is going to have to adopt a Moneyball type approach to their business model.
2. Find a better and less expensive way to deliver the product to us. Some people would say that 99 cents is a cheap price to pay to download music from places like iTunes. Others say paying $15 a month for a service such as Rhapsody which allows unlimited downloads to your computer and portable devices is worth it. That may be true, but it could be better and less expensive and they would still make a lot of money. While 99 cents is not a lot of money, it still gives me pause to download and buy a particular song. But if the price were 25 cents, I wouldn't hesitate at all. I tried Rhapsody on a trial basis and I liked it, but not for $15 a month. They could easily offer it for $5 a month and gain that many more subscribers and still make money. I'm a capitalist. It's not as if I don't want people to make money. I do. And they will, despite the lower prices. It's all about the content and how it is delivered.
It is more difficult for the consumer when Hollywood and the music industry are in bed together, but the Internet age has made it easier for the consumer to fight back. Blogs, podcasts, and the immediate free flow of information around the world doesn't allow for back-room deals to made as easily as they used to.
To their credit, Disney is one of the first big companies to recognize that suing people is not the path to victory. They actually recognize piracy as a business model and as such have started to offer episodes of their ABC lineup on the Internet after they air on television. It has been a success for them and shows have not suffered in the ratings as a result.
In the movie 'Wall Street' there is a scene where Gordon Gekko (Michael Douglas) is showing Bud Fox (Charlie Sheen) a hand held color television he bought for his son. He says to Fox, "We're going into a new age, pal." That new age has arrived. People no longer just want their MTV. They want their MTV fast, inexpensive, and want the ability to move it from device to device without having to jump through hoops or make multiple purchases to do so. The technology world and the audio/video world heard what Gekko said and have responded. The result is a bustling industry with people rushing to take it all in. The problem is the content delivery. The movie industry and the music industry haven't heard what Gekko said. And unless they do something about it, they will slowly fade into irrelevance pretty much like the 2 inch color television Gekko was showing off to Bud Fox.
Jay Caruso writes daily at Pop And Sports.
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Reducing royalties to publishers and songwriters has to be the sickest approach I've ever heard them attempt.
Posted by: Dan | January 5, 2007 2:38 PM
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