This is Why You Fail
From an Ars Technica piece that has the recording industry comparing music piracy to global warming (I wish I were joking):
… the music business has now tried its hand at being “innovative” and “customer focused.” It disaggregated albums, it allowed music to go up on everything from Amazon to iTunes to Spotify to Last.fm. It sued users, it launched education campaigns.
Because suing users is totally innovative and customer-focused… what planet are these people from?! (Also, I’m surprised that none of the commenters on the Ars piece have picked up on this little nugget of stupid.)
The RIAA, the MPAA, and the rest of the audio/visual media industry (TV studios, film companies, etc.) need to get it into their heads that the world today is not the same as it was in 1990. 20 years ago, it was perhaps maybe somehow acceptable (or at least, possible) to release a movie or TV show in Australia 6-12 months later than in the United States without negatively impacting the product’s performance, because the ability to openly connect Australia to the US was largely limited to phones, post, airplanes, and boats. Now, with the internet and high-speed connections to it, films can be read about, reviewed, and even posted online (albeit illegally) for advance consumption by people who haven’t been deemed worthy enough to get the product locally. The industries’ own refusal to accept that the world is more connected, and that staggering releases internationally is likely having a huge impact on their revenue in those countries because rather than wait for the studio to get around to releasing content in their area, people will go and get it wherever it’s available, and in most cases, it’s illegally obtained on the internet in a matter of hours (or even minutes, if you’re in a country that actually values its communications infrastructure, unlike the US).
The music industry can hardly be said to be behaving in an innovative manner by any stretch of the imagination. They’re reacting defensively to the encroachment of a new content distribution platform and its resulting global connectivity, doing only the bare minimum of what is necessary to appease the demands of their customers. It’s hardly surprising that their revenues and profits have shrunk in the past 10 years. When given the choice between buying a CD for $18.99 at Barnes & Noble and buying the same album on iTunes for $9.99, or even just buying the tracks I really want for 99¢ (which may be only one or two songs), I’m going to go with the cheaper option, especially now that music from the iTunes store is DRM free.
Further, the industry seems to be doing a pretty good job of colluding with one another to set prices at different levels for different online distributors (iTunes: 99¢/song, Amazon MP3: 79¢/song. Um, what?) in an attempt to try and force the market into the shape it prefers, rather than going where their customers are and catering to them there. They also fought with every fiber of their being against internet radio stations like Pandora by trying to bury them with drastically more expensive licensing fees than what they require of broadcast radio. These are hardly innovative behaviors, unless you define “innovative” as “acting like an asshole”…
Similarly, the TV and film industries are also failing to get out ahead of the needs of their customers, instead only choosing to do the least amount possible to not lose a portion of their revenue stream (which is selling viewers to advertisers). Efforts like Hulu are interesting, but ultimately disappointing, because while the Hulu team seems to understand the importance of their service to viewers, industry execs who are still fearful of time-shifted content distribution are stifling its ability to really flourish in a way that would please the people who are most willing to use the service and thus generate additional revenue for the industry.
Case in point: both the Hulu website and the Hulu Desktop application prohibit users from interacting with the service or installing the software on a device that is connected to your television, and Hulu has gone out of their way, at the request of the industry, to block applications like Boxee from accessing the service. The problem is, most people don’t want to watch time-shifted television on their computer. They want to watch it on their television, where they have a big screen, a really nice sound system, and a comfortable couch to sit on. Despite the sometimes horrific performance of Hulu’s Flash player in the Boxee builds for the Apple TV, I watched a considerable amount of content on Hulu, and sat patiently and understandingly through the 2-3 minutes of ads inserted into each show (though like many of the ads on TV, I ignored them as much as possible because they’re annoying). Since they blocked Boxee, I’ve watched two things on Hulu: an episode of Family Guy, and the Cosmos series from PBS. By trying to artificially restrict their content to specific platforms, the industry has lost revenue from ads it would have gained by showing them to me. Since often I watch time-shifted content because I missed watching it on the air, they’re also already not getting ad revenue from me looking at the TV when their show is on, so it’s a double loss on their part.
I also continue to be annoyed at the fact that I can’t rent a movie through iTunes on the day and date of the DVD release. I can go to Blockbuster, sure, but that’s often more expensive, and even has additional costs associated with it (gas, time, uncertainty about whether the movie is even available [which results in wasted gas and time], dealing with people [you'd be surprised how much this factors into my decision-making sometimes...], etc.). Warner Brothers has even successfully convinced Netflix not to allow the rental of WB films through their mail-order service for a month after the DVD release, so as to not negatively impact retail sales. That’s bullshit, plain and simple.
As an example, I’ve seen @ddfreyne post several times on Twitter about Moon, and decided that I should probably look into watching it since it sounded interesting, and the trailer piqued my interest. Lo and behold, it came out on DVD recently and is even available for purchase in iTunes for $14.99. However, not knowing if I’ll actually like the movie, dropping $14.99 on it seems like a bit of an outlay for me. I’d much rather rent it for $3.99 (or hey, $4.99 in HD! You hear me movie industry?) and see if it’s something I like, and then spend $14.99 on it (and yes, ultimately, I’ve spent more on it if I end up liking it, but I’ve saved money if I don’t). But I can’t rent the movie until some time in February (I forget when), and knowing me, I’ll have forgotten about it by then, which means the movie industry gets nothing from me.
The internet is a serious came-changer, and as it matures, it continues to impact industries in ways that seemed impossible (or at least, unlikely to happen outside of Star Trek) just a few years before. Music, TV, film, and even print media are all struggling to compete with each other and themselves in this space, but are hampered by obligations to older content distribution channels and an apparent desire to legislate the future away rather than embrace it. The media landscape is evolving at an astonishing pace these days, and the major stakeholders are doing a pretty poor job of keeping up. Maybe they’ll catch on, or maybe not. All I know for sure is that the one thing that isn’t going to work is shouting at the ocean as the time comes in. Standing still is irresponsible simply from a business standpoint, and it amazes me that the shareholders of these companies aren’t boggling at how ineptly their interests are being handled by those in charge as we march (or, in the media’s case, are dragged kicking and screaming) into the future.