When Will Studios Get It?

Music studios and movie studios are all about protecting their intellectual property with DRM and slapping file sharing teenagers and even grand mothers that ended up as inadvertent accomplices. When will these studios get it? My answer on this is probably never. It’s amazing that after all these years the entertainment executives are simply not looking at new ways to monetize their content rather than protect a dying practice.

The main concern of contemporary entertainment business is to capture large segments of the consumer market. They tend to lean towards big stars and large-scale productions because this is not only where the money is but where revenue is more predictable. When a star bombs one too many times, they get cut off. It also requires that they stick their hands in as many cookie jars as possible without investing too much money in artist development as a contingency plan.

Once the entertainment industry gets “quality” content, it’s all about putting it through the marketing machine. This is the reason why artists hire the best agents that money can buy. The more financial commitment they get from the entertainment company, the more the company is motivated to recoup the investment with heavy market promotions thus increasing the chances of success.

While the material is current it will travel from the primary market to the world market, then discounts, then through other formats (like DVDs for movies) well until they end up on the bargain cart in your local Wal-Mart or on late night TV. Companies are kept afloat not only by current offerings but by the massive library or back catalog of material that already recouped its investment many times over.

As this ArsTechnica article rightly points out DRM is not about protecting anybody’s rights but about putting a stop to any user-initiated reuses of purchased content. Splitting what was one into two or more revenue streams. The problem is that these days anybody with a computer can rip any CD or DVD if not find it floating on the net.

What’s puzzling about the entertainment industry’s way of dealing with this is that they essentially screw paying customers by restricting what they can do with content that they bought. You just have to laugh when you see a big fat “Warning from the FBI” for a DVD that you purchased at market price from the local store when an illegally ripped bit torrent of the same movie gives you no such warning. It’s a slippery slope.

The entertainment industry is always triumphantly proclaiming any decline in sales as strong evidence that piracy on the internet is destroying their business. I’m sure if sales didn’t decline they’d say revenues were declining. As for CD sales, there are some studies pointing out that internet downloading helped sales if anything and that the sharp decline in CD sales after the 90s may be due to people finishing their transition from vinyl collection to CDs.

If everyone was so hellbent on pirating, why would iTunes make so many sales of both music and videos? Although I have doubts about Napster’s subscription model I think this is more or less the de facto way we’ll be managing our entertainment collection. The biggest bound on how much content we can keep readily accessible is more or less ruled by the hard drive. Who’s going to buy an external hard drive to keep a ripped copy of a 4GB movie they’ll never watch again (unless they’re one of those crazy collectors). Even then we only have so many hours in a day. Even with music playing in the background a 30GB library can keep you entertained for years if you can overcome internet triggered ADD.

You can sell loads of content online as long as you price it attractively against the cost (in time and effort) of downloading it illegally over a slow torrent connection (not to mention the risk of being arrested).

What really scares the entertainment industry is that the internet and personal computer is a radio, your entertainment collection, and broadcasting station in one. The industry is more or less a highly sophisticated middleman with marketing brawn and physical distribution channels.

I think the best way forward for the entertainment industry is to embrace change rather than let illegal downloads satisfy the public’s latent demand for a more sane business model. There should be a secondary market for digital downloads, like a facility to trade music that you bought on a sanctioned market or trade it back in for another song. The industry is still trying to apply the expired metaphor of physical music or movie recordings to data on a hard drive. Anybody who’s really used a computer knows that there are two types of downloads: keepers and stuff you delete when you need to make way for the next one.

The hip-hop industry really gets it when it comes to using freebies to generate a buzz. Rapper 50 Cent’s debut was fueled by his tireless efforts at releasing mixtapes (more or less sanctioned bootlegs) round the clock until he got noticed by producer Dr. Dre and Eminem. He generated such a buzz that got him a million dollar contract and one of the top selling albums in recent years. What’s more he never stopped releasing mixtapes through various DJs even as he reached platinum. Only years before he was dropped after being literally dropped by gunshots in an attack of vengeance. I think mixtapes and most downloads share one thing: essentially, they are samplers and not considered the real deal. People will still buy physical media for creations that mean something to them but the fact is we’re already overloaded with data, music, movies, and information that it really needs to be good.

What’s mildly amusing is that the entertainment industry’s refusal to keep pace with the times is really the main agent driving Apple’s success with the iPod and iTunes (it’s going to be tough to shake them now).

Privately, Hollywood admits DRM isn’t about piracy

Harvard Gazette: File sharing may boost CD sales

Marshall Kirkpatrick ยป Mix Tape Maker Jailed: History in the Making

The Sound of Young America: DJ Drama and DJ Cannon Arrested in Atlanta via Boing Boing: Two big hip-hop mixtape DJs arrested for bootlegging

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