Hey Content Owners: Deal With It
by Patrick Ruffini :: January 16th, 2007 12:17 amWhen tectonic plates move, they sometimes create giant crevasses that form demarkation points between the old world and the new. (Ok, I don’t know if that really happens, but it sounds cool…) And big industries are left jumping without a net wondering how they can monetize on the other side.
The wave is hitting industry by industry. You don’t see very many One Hour Photo places anymore — since digital photography they’ve been replaced by Shutterfly, Snapfish, and some of the nimbler pharmacies that let you email in your photos for pickup. The wave fully crested in the music industry in 2000 and now CD sales are in long-term decline. Now Hollywood is facing the same dilemma with YouTube and digital media, with only the upteenth New York Times piece profiling this trend.
As we all know, the studios’ relationship with YouTube is love/hate. They love it when users hype their product. They hate it when users cross that fine line into copying the product unedited. Post the key fight scenes from 8 Mile and you’re good to go. Post the whole thing and you’ll get a cease-and-desist — for obvious reasons.
The RIAA’s unlikely success in strangling Napster in the crib shows that fundamentally, most people don’t like to steal music. (For the same reason, I don’t see Torrents being a huge factor.) But enough people like to do it — combined with iTunes being low-margin — that it wreaks havoc with the recording industry’s bottom line. It seems like an intractable problem, one that Hollywood is not eager to relive.
Perhaps the solution is separating content from the experience in entertainment. Content has always been leaky in that consumers have always found ways to get it for free — borrowing your friend’s CD, a Saturday night movie on a network, or the radio. What YouTube represents is a virtual extension of that for the consumer, though it may look different to a content owner. Maybe it’s time to focus less on content leaks and more on bolstering the consumer experience.
Users will pay for experience. Pirated DVDs are no match for the big screen. And movie downloads, free or not, are no match for your plasma, at least not till Apple TV gets here and maybe not even then. Sure, consumers can get the content free, but what they pay for is the experience of the big screen or the convenience of storing your media in plastic disks (a typical TV series is 250 gigs — try storing that on your hard drive).
The music industry which has felt this most acutely could do a lot better. In particular, iTunes is particularly good at providing a low barrier to entry by breaking up albums into per-song chunks. But what about the diehard fans who aren’t happy with just buying every album and the live ones to boot? They aren’t being given any more options than they were when they went to Sam Goody. What about more live recordings? Or concert video? Or discounts on concert tickets if you download the album? Or mashups? Or live streaming of sold-out shows? If released digitally, these shouldn’t be cost-prohibitve to produce, and really allow the industry to run up margins by satiating hardcore fans. Wired had a good piece on Beck a few months ago, and how he’s junked the album paradigm and is focusing more on big-picture experience.
Don’t shed crocodile tears for the YouTube agony gripping Hollywood. Eastman Kodak was forced to adapt. I’m sure the entertainment industry can do the same.
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Tagged: drm 
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