Funny How Sensitive Hollywood Gets When You Threaten To Mess With Its 'Fundamental' Structure

from the but-the-internet?-bah... dept

One of the key points in the SOPA/PIPA debate involved Hollywood — and the MPAA’s Chris Dodd and Michael O’Leary in particular — dismissing the worries of folks in the tech industry about the rather fundamental changes that these laws would make to both the technological and legal frameworks of the internet. Anytime such a thing was brought up, it was dismissed out of hand. This was most noticeable during the original SOPA hearings in November, where a number of experts were pointing out their concerns with how SOPA would undermine basic internet security principles… and O’Leary dismissed them with a simple statement about how he just didn’t believe those concerns to be true.

What shocked many folks in the tech community was just how easily the MPAA sought to dismiss some pretty massive fundamental changes to both the internet and the legal framework around the internet. However, apparently if you dare touch the “fundamental” parts of Hollywood’s business, the same MPAA throws a hissy fit. The EU recently had a public consultation on a variety of copyright-related topics, some of which were more interesting than others. One of the topics was on the question of movie release windows, and whether or not they made sense any more. As we’ve noted there have been many, many studies that suggest that these release windows are actually a big part of the problem for Hollywood, and they’re leaving a ton of money on the table by not making movies available in as many convenient ways as possible.

In fact, many of the (non-Hollywood) respondents to the consultation made this point. There’s BEUC (a consumers’ group) that sees (pdf) “both platform and territorial release windows as outdated.” GSMA called for (pdf) support for “flexible and shorter release windows.” And EuroISPA was the most stringent (pdf), pointing out that:


the current windowing system is obsolete and seriously damaging
the objective of the Digital Agenda, because it hampers the circulation of digital
works and discriminate amongst platforms, to the detriment of more innovative
technologies and business models

But you get a totally different story when you hear the MPAA’s international arm, the MPA, tell its story (pdf). You see, to Hollywood, release windows are a “fundamental” part of its business model, and how dare anyone think of touching it.


The MPA
submits that the freedom to set the exact timing for the release of films in various media and
various countries is a fundamental feature of the film industry’s business model

Perhaps Hollywood is right, even if so many studies disagree. But, really, if it thinks it can just claim a certain feature is a “fundamental feature of the industry’s business model,” why does it then feel that there’s absolutely no problem to leap into a totally different industry, and muck around with the “fundamental features” of that “industry’s business model”? What an incredible sense of entitlement. The MPAA wants the law to keep its business model in place permanently… but if anyone else even dares to ask why Hollywood is trying to muck with their own business model, everyone gets attacked as being misinformed shills.

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Companies: mpa, mpaa

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Comments on “Funny How Sensitive Hollywood Gets When You Threaten To Mess With Its 'Fundamental' Structure”

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144 Comments
fairusefriendlysays:

Release windows are an abuse of copyright law
The concept of a fair use voiding it makes perfect sense.

If copyright holders don’t have a right to force consumers to watch tv shows at a specific time and date (as the timeshifting rules prove)

Then there is no logical reason why they should have a right to force consumer to watch movies in a specific location. Similarly to time shifting if they try and enforce such a business model, they should lose the right to restrict competitors who want to provide unauthorized “access shifting”

Anonymoussays:

Re: Re:

They are not an abuse of copyright law. What a crock!

No business shall ever be forced to do business in a manner that they don’t want to. If a restaurant won’t serve you a steak, because they a vegetarian place, can you force them to make a steak? No. Can you force them to serve you in your living room, and not at their business establishments? no.

Making a product available in a limited manner (theatrical distribution only) is what Mike would refer to as “selling the scarce”. At each level of “windowing”, the amount of the scarce good is increased, until finally it is released for general sale (as a DVD). It’s exactly the selling the scarce concept that is at the root of Techdirt, but Mike doesn’t like it because it doesn’t match up with his agenda on copyright.

The movie companies don’t force you to do anything. They offer movies in certain ways at certain times, and you the consumer gets to choose if you will or will not pay to view it under those conditions. You aren’t forced at all.

fairusefriendlysays:

Re: Re: Re: Re:

  1. The fact that something is a fair use doesn’t force any business to do anything.

    Look at the time shifting and the VCR, copyright holders were not forced to provide on demand distribution of TV shows

    They however were prevented from stopping a company (sony)who wanted to sell a device (betamax) that provided such service.

    The same principle would apply if access shifting became a fair use.

    A company (the pirate bay) would not be prevented from providing a service (torrents) that allowed access shifting.

    If the copyright holder choose not to compete by offering something within that window, that their option.

    Just like it was there option not to provide on demand services when the vcr first came out.

fairusefriendlysays:

Re: Re: Re: Re: Re: Re:

  1. they could choose to compete against all offering in medium and maintain their copyright control.

    For example producing high quality (6 spectrum color movie broadcasts) or Glassesless 3D.

    Quality so good that the crappy cam version found on torrents would not be a good enough substitute.

    Of course if such technology percolated down from the theaters to the home market, the entire economy would benefit with the creation of all those new devices.

    And if they did not, theaters would have a permanent competitive advantage which would technologically stop piracy by making an always inferior substitute.

Michaelsays:

Re: Re: Re:2 Re: Re: Re: Re:

Newsflash: Most people don’t care about 3D technology. As a matter of fact, most people don’t even care about Blu-ray, at least not enough to go through the rather expensive task of replacing their film collection. Only the most die-hard, avid movie buff would care enough to do such a thing. Just how much disposable income does Hollywood believe people have?

fairusefriendlysays:

Re: Re: Re:3 Re: Re: Re: Re: Re:

  1. if that were actually true , non 3d movies would outsell 3d movies. Rereleases in 3d would be epic failures that would not cover the cost of conversion. Both of those conditions have not happen yet
  2. 3d that you have in the theater now is a pathetic subset of what could be there if best 3d technology were implemented.

    The reason you have crappy 3d is because theaters are not forced to compete against dvd/pvr etc.

    If they were forced to compete, then they would use the best technology available to maximize their competitive advantage.

Michaelsays:

Re: Re: Re:4 Re: Re: Re: Re: Re: Re:

“1. if that were actually true , non 3d movies would outsell 3d movies.”

And so they do, at least outside of theatres.

“Rereleases in 3d would be epic failures that would not cover the cost of conversion. Both of those conditions have not happen yet”

Actually, less people go to see 3D movies — it’s just that the the price is jacked up.

“2. 3d that you have in the theater now is a pathetic subset of what could be there if best 3d technology were implemented.”

Whatever. 3D is a fad which will eventually die out. Standard HD TVs still outsell 3D ones by a considerable margin.

“The reason you have crappy 3d is because theaters are not forced to compete against dvd/pvr etc.”

Again, most people don’t care. If there’s a film they want to watch, they’ll go see it, regardless of whether or not it’s in 3D.

fairusefriendlysays:

Re: Re: Re:7 Re: Re: Re: Re: Re: Re: Re: Re: Re:

and that your opinion, under access shifting you could by the non autoscopic 3d version on DVD for $20, or stream the non autoscopic 3d version on your TV thru net flix.

You would not be forced to choose between not having it at all and paying $15 for it.

of course people who would want to see it in 3d would pay that market defined price. ($15 or whatever it would be after competition against other mediums were taken into account).

Michaelsays:

Re: Re: Re:8 Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

Look, 3D or no 3D, Hollywood is still turning in huge profits. They don’t HAVE to charge less for their products but us, the consumers, have a right to speak up against what we feel is unfair pricing. If Hollywood is looking to “revolutionize” the makret in order to gain a competitive advantage, they need to invest more in R&D and less in political bribery/legal retaliatory efforts. They can fix this mess — if and when they decide to stop looking for easy handouts.

John Fendersonsays:

Re: Re: Re:4 Re: Re: Re: Re: Re: Re:

1. if that were actually true , non 3d movies would outsell 3d movies.

Around my parts, they do, consistently. I don’t know about profits, but in terms of butts-in-seats. I can tell because whenever a new 3D movie comes out, there are at least 3 times as many screens showing the 2D version as the 3D version.

The reason you have crappy 3d is because theaters are not forced to compete against dvd/pvr etc.

I disagree. I think the reason you have crappy 3D is because they couldn’t make money on it if they went to the expense of making it high-quality 3D. Not enough people really care if a movie is 3D (even for action movies, which are the only ones where 3D can actually improve the experience), and lots prefer 2D regardless of quality.

BigKeithOsays:

Re: Re: Re:3 Re: Re: Re: Re: Re:

I don’t know if that is entirely true. Gamers seem to care about 3D, there is a fairly steady uptake in 3D monitors and TV’s in the gaming space.

I feel the problem with 3D is simply the quality of the releases. I’ve got a 3D TV (didn’t go looking for one, just happened to upgrade the TV and they come with 3D now) and the problem is the lack of content. Hell you still can’t buy Avatar in 3D. Talk about windowing, how does making the most popular 3D movie of all time unavailable for purchase make any sense?

The Pirate Bay has copies available in 3D. Just saying.

Chargonesays:

Re: Re: Re:4 Re: Re: Re: Re: Re: Re:

personally, i care about 3D, in that i hate it and wish it would go die in a fire.

glasses or no, if you have eye problems that cause your stereoscpic vision to be non-standard, it simply renders the product in question unuseable.

i don’t give a damn about movies because i haven’t bothered with them since i was a kid (they priced themselves way out of what i could justify spending on them long ago, and the effort of going isn’t worth it either.) but the push to use it as the ‘next big thing’ in Gaming is… aggravating.

(basically, my depth perception is significantly based on mental tricks with peripheral vision and shadows. which isn’t going to help me on a Screen, so all the illusion of 3D does is stuff up my ability to see the 2D image. i’m actually on an even field in this reguard on a computer or tv screen using standard 2D)

i mean, i’m already screwed in any game that assumes an ability to tell the direction a sound is coming from (even if only L/R rather than surround) due to having lost all hearing in my left ear…

I’d rather not have my hobbies impinged upon by More tech that leaves me out in the cold

fairusefriendlysays:

Re: Re: Re:4 Re: Re: Re: Re: Re: Re:

  1. there is no way shape or form you can claim what i am arguing for is “any use” by definition the copyright holder has to choose to exclude a medium completely for access shifting to kick in.

  2. there is only one definition of fair use (the legal one)

    for you to claim that it not fair use you would have to document exactly which one of the 4 conditions that interpretation violates in the context of the currently established fair uses.

    simply saying that it doesn’t qualify does cut it.

    So which one of the 4 principles is violated so severely that it completely invalidates the status of fair use.

Michaelsays:

Re: Re: Re:3 Re: Re: Re: Re: Re:

“and copyright holders have a right to control the distribution of their content as long as those restrictions don’t violate fair use.

Same principle if access shifting becomes a recognized fair use.”

Whatever the case may be, that’s the way Hollywood traditionally works. It’s their chosen business model — so be it. I take exception to them assuming that they can dictate how everybody else is supposed to run their websites, businesses and even what they can/cannot do with their computers/products. Hollywood does not = law.

John Fendersonsays:

Re: Re: Re:2 Re: Re: Re: Re:

Actually, it’s totally on point to this: “No business shall ever be forced to do business in a manner that they don’t want to.”

Of course businesses should, in some cases, be forced to do business in a manner they don’t want to. Anti-discrimination, minimum ages for tobacco, booze, and porn, etc.

saulgoodesays:

Re: Re: Re:2 Re: Re: Re: Re:

Umm, Richard, let’s be fair here. Private business has the right to refuse business to anyone, provided they do not violate the laws of discrimination.

But copyright is not a “private business”, it is a government-granted monopoly and therefore inheres obligations and duties. Just as other government-granted monopolies (such as radio & TV stations, cable services, power companies, and utilities) sacrifice many of their free market options in exchange for that monopoly, so should copyright holders.

Michaelsays:

Re: Re: Re: Re: Re: Re:

“So why is Hollywood attempting to do exactly THAT to the Internet?”

That’s essentially the question I posted earlier. Why should everybody else be held responsible to protect their products and their business model? What, is the internet powered by Hollywood? What gives them the right to go around other people’s websites (technically someone else’s property) and dictate the terms of service?

Anonymoussays:

Re: Re: Re:2 Re: Re: Re: Re:

What would the internet be without content? A network. Ultimately what people are doing is accessing content (words, pictures, music, games, video). It really isn’t a symbiotic relationship; it is a parasitic relationship, in which the internet companies use content owned by someone else for their gain. If the internet companies want control over the content (not using DRM, free distribution, etc..) they need to create their own content. In fact, this is happening right now. Companies like Google (through YouTube), Netflix, and Amazon are all creating original content for their services. Production is currently limited, and these companies may soon discover how expensive and unprofitable it really is to create content.

Anonymoussays:

Re: Re: Re:3 The question is...

The question is why has the story that Google, Amazon and Netflix have all been producing original content been ignored by TechDirt? I have submitted acticles numerous times to this site but this news is never reported. I predicted that it would happen, and I was mocked with comments like, “Google will never get into content creation, it’s not in their business model”.

Michaelsays:

Re: Re: Re:3 Re: Re: Re: Re: Re:

The internet is the people and the people enjoy sharing culture. You consider the relationship between the people who utilize content distributed by corporations to be “parasitic,” yet what you fail to mention is that once somebody releases content for public consumption, the content becomes a part of the culture and thus people can and will utilize it to that end. You cannot regulate the internet without censoring the culutre that cultivates it because it is the buying public that enables them to continue to profit and produce.

Besides, what is more parasitic than when corporations write legislation & treaties in secrecy in order to change the laws to fatten their wallets?

Anonymoussays:

Re: Re: Re:4 Re: Re: Re: Re: Re: Re:

“The internet” is not the people. It is a communication network that is used to receive content. Internet companies are the companies that create content for the internet. Internet users are those people who utilize internet services to access content (Facebook, YouTube, Amazon, etc…) Defining people as “the internet” is like defining drivers as the highway system.

Anonymoussays:

Re: Re: Re:5 Re: Re: Re: Re: Re: Re: Re:

Most of the sites you listed and many others get their content from the people. They are just hosts that allow the people to share their content. e.g. facebook, youtube, reddit, thechive ect ect. Alot of other sites that create their own content still gain value from users, like techdirt and these very comments.

Not to mention the open access and power of instant connection that has lead to things like OWS and the Arab Spring and millions of other similar events in which the internet empowered people.

Sure the internet is not the people but without the people the internet is just cable tv. In much the same way that the without people the highway system is just giant useless slabs of concrete it is a codependent relationship. The internet gives us power and we give it meaning.

John Fendersonsays:

Re: Re: Re:3 Re: Re: Re: Re: Re:

If the internet companies want control over the content (not using DRM, free distribution, etc..) they need to create their own content.

Wow, this one sentence encapsulates everything that is wrong with how content companies view the internet. The internet does not need commercial content at all. Internet companies don’t need to make it any more than content companies do. People make content when they use the internet.

The internet is about communication, not consumption. The thing the internet needs to survive is not commercial content, but people talking to each other.

Anonymoussays:

Re: Re: Re:3 Re: Re: Re: Re: Re:

The only parasitic relationship is a government granted monopoly that excludes the rights of people and criminalizes them for things that were perfectly legal just 10 years ago.

The only parasites are the ones trying to impose a monopoly onto others and don’t expecting a backlash.

The real parasites are the ones trying to destroy democracy so they can make a buck.

Laurielsays:

Re: Re: Re:3 Re: Re: Re: Re: Re:

What would the internet be without content? A network.

What is the internet with content? A network.

Ultimately what people are doing is accessing content (words, pictures, music, games, video).

You say that like it’s a bad thing.

It really isn’t a symbiotic relationship; it is a parasitic relationship, in which the internet companies use content owned by someone else for their gain.

So boycott the internet. Leave all of us pesky parasites (also known as customers) to wallow in the dark and dismal lands of the intertubes without the guiding light that is your content. Let me know how that goes for you.

If the internet companies want control over the content (not using DRM, free distribution, etc..) they need to create their own content.

Great! Everyone except Hollywood thinks this is awesome. Only those used to being the only game in town feel threatened by this.

In fact, this is happening right now. Companies like Google (through YouTube), Netflix, and Amazon are all creating original content for their services. Production is currently limited, and these companies may soon discover how expensive and unprofitable it really is to create content.

Of course, you are completely right here. Amazon, Google and Netflix obviously have no idea how to make money on the internet. They are destined to fail spectacularly.

rangdasays:

Re: Re: Re: Re:

That’s not “selling the scarce”, that’s FARTS (forced artificial scarcity). You’re just hoping everyone agrees that the emperor is wearing clothes, because the instant they don’t the imagined scarcity is gone.

An example of the selling the scarce would be holding special screenings with the director and actors present; or for readers of techdirt perhaps a water dunking tank with MPAA lobbyists inside.

Bengiesays:

Re: Re: Re: Re:

“No business shall ever be forced to do business in a manner that they don’t want to. If a restaurant won’t serve you a steak, because they a vegetarian place, can you force them to make a steak? No. Can you force them to serve you in your living room, and not at their business establishments? no.”

Except the owner of the restaurant in this case is the public. The copyright holder is just a temp manager who given temporary management control over the restaurant under the sole understanding that it will BENEFIT the owner.

In this case, the public is both the owner and the customer.

Anonymoussays:

Re: Re: Re: Re:

Explain why Red Hat has no monopoly control over their product and it is positioned to become the first open source billion dollar company?

Arduino is a multi million dollar company how did they did it if they can’t stop other from copying and producing their own open source designs?

How was McDonalds able to become a multi billion dollar company when anybody can copy their recepies and sell those?

Anonymoussays:

Windowing is not obsolete, it is still the best business model to extract maximum profits.

Everyone who talks about “this is a dead business model” or brings out the rusty old “buggy whip” scenarios seems to forget that business models die when they are not longer the best way to accomplish the goal, which is bottom line profitability and perpetuating the business itself.

Dropping windowing, which creates huge amounts of income in the movie industry, would be fine IF there was a better, more profitable business model somewhere else. Until you can actually point to that more profitable model, it’s pretty hard to justify just closing down something that makes money, only to satisfy your need to “have it now”.

DCX2says:

Re: Re:

On the one hand, I don’t believe you when you say “dropping windowing creates huge amounts of income in the movie industry”. Sounds like conjecture without evidence.

On the other hand, it’s quite demonstrable that legislatively forcing technology companies to incorporate DRM directly into their products creates a huge burden on those technology companies, making their products less useful, stealing away developer time that’s better spent designing new features and fixing bugs, creating huge headaches for tech support, and reducing the profit margin on each product.

Otherwise known as “the whole point of Mike’s post”

Anonymoussays:

Re: Re: Re: Re: Re: Re:

Part of it is how interconnected these companies are. Like how HBO being exclusive and tightly windowed drives business for Time Warner. If they can keep access down and control all parts of the delivery channel they make money every step of the way, then they charge themselves ridiculous fees so they don’t have to pay the creatives.

Its a wonderful pyramid of lies and corruption and if you start taking out pieces the whole system falls down.

http://articles.latimes.com/2011/feb/02/business/la-fi-0203-time-warner-earns-20110202

http://en.wikipedia.org/wiki/List_of_assets_owned_by_Time_Warner

Anonymoussays:

Re: Re: Re: Re:

It’s intentional – dropping windows, which creates huge amounts of income for the movie industry (according to this story), would be fine IF…

Basically, if they have a billion dollar business model, there is little reason to drop it for “huge amounts of income” if that income is only millions.

Anonymoussays:

Re: Re: Re:2 Re: Re: Re: Re:

You are right Glen. However, someone who was willing to pay $10 at the theater for the movie might turn into a $2 rental if the movie is available right away. That would mean you would need 5 times MORE rentals to make up for the lost income from a single movie ticket.

What you are saying is basic and true: If you can’t get it the way you want it, don’t buy it. Just don’t use this as an excuse to pirate it 10 minutes later.

Anonymoussays:

Re: Re: Re:3 Re: Re: Re: Re: Re:

That’s because there’s no difference in the distribution channels anymore, which is the point making windowing obsolete. You can address this by raising the rental price to $10, dropping the theater price to $2, or offering some other incentive for me to pay an additional $8 to see it in the theater.

Anonymoussays:

Re: Re: Re:4 Re: Re: Re: Re: Re: Re:

Why is your theater charging you so much to see a movie? The theater in my home town charges 4.50 for non-3D movies during matinee times (up until 5pm, seven days a week) and 5.50 for #D movies during that time. After 5pm movies are one dollar more. And these are movies on release date, not old movies. If you have a problem with the price of the ticket, it’s a problem with your local theater, not the movie industry.

Anonymoussays:

Re: Re: Re:5 Re: Re: Re: Re: Re: Re: Re:

“If you have a problem with the price of the ticket, it’s a problem with your local theater, not the movie industry.”

If that was true the movie industry would not care about windowing to prop up the theaters that will not compete on prices. Obviously there are tight ties or Hollywood would be happy to release their product direct to the customer on day 1.

I am glad you live somewhere with what is probably a small independently owned theater but for those of us whose only options are AMC or Loews (which are the same company anyway) the only thing available is a 10$+ ticket. Other than don’t go see the move and forget about it by the time it comes out for rental and maybe find it on netflix in a couple years.

Anonymoussays:

Re: Re: Re:3 Re: Re: Re: Re: Re:

Knowing that the entertainment industry doesn’t even reach 1% in sales globally for any one release I say they have a lot of market to expand, maybe those other 99% of people would start expending more and not just once but multiple times, have you ever thought about recurring expending or that doesn’t factor into in your world?

Marcus Carabsays:

Re: Re:

I love how it’s all doom and gloom and we-can’t-make-money-because-piracy-is-killing-movies, up until someone suggests making some business changes to better compete – then suddenly it’s all “No everything’s peachy! we’re riding a herd of cash-cows. Why would we change anything? But still: please stop piracy, because we’re going out of business…”

Gotta love the cognitive dissonance.

Anonymoussays:

Re: Re: Re: Re:

Marcus, as always, you manage to just not get it.

Even the currently wounded and hurting movie and music industries, facing widespread piracy, are still making more money than any other business model out there.

Why would they hasten their own demise?

If things keep going the way they are, they will be out of business in 20 years or so. If they do it the Techdirt way, they will be out of business next week. The choice is pretty easy, really.

Anonymoussays:

Re: Re: Re: Re: Re: Re:

“Even the currently wounded and hurting movie and music industries, facing widespread piracy, are still making more money than any other business model out there.”

Funny, no one told Fortune 500
http://money.cnn.com/magazines/fortune/fortune500/2011/full_list/101_200.html

Also the pet supplies industry makes about 4 times as much money. But keep sucking that fat hollywood cock, I’m sure it tastes rich and buttery.

Marcus Carabsays:

Re: Re: Re: Re: Re: Re:

Goddamnit, why are you such a fucking sissy? What happened to actually having business ambition? What happened to saying “the market is changing, let’s damn well dominate it!” What happened to taking some risks in order to beat that 20-year countdown and set yourself up for another 100 years of prosperity?

I was talking to Cush the other day about all you pathetic pansy apologists who are too scared to compete, and he summed it up very well: “Take the game to the pirates you gold-plated wusses”

Anonymoussays:

Re: Re: Re: Re: Re: Re:

Is the entertainment industry Apple now?

How many entertainment companies ever passed the $500 billion dollar mark in valuation?

Answer: Zero

How many tech companies passed that mark?

Answer: Microsoft, Cisco, Apple and GE.

Industries that depend on exclusion to survive should all die, cooperation is the way of the future.

Anonymoussays:

Re: Re:

Well, look at the flip-side as well: it’s pretty tough for this to continue to be the most profitable business model if the consumer demands to have it now.

If the demand is not met, then the supply is going to come from other, sometimes less-legal sources. If you think you can have a supply model without taking demand into account, then I have an econ 101 class I’d like you to take.

Anonymoussays:

Re: Re: Re:2 Re: Re: Re: Re:

“Demand: simultaneous, global, multiplatform, drm-free release, super cheap.

business model: can’t do it at that price while paying our top execs 40 million a year and having our sister companies triple charge us so we never have to pay royalties.

If we made X in the 80s we should make X+more now. No matter what happens with technology, market forces or anything ever.”

FTFY

Anonymoussays:

Re: Re: Re:2 Re: Re: Re: Re:

At….what price? I don’t see a single price mentioned anywhere. Free? Of course not. $35+ for a new movie like the industry wants for a lot of new blu rays? Of course not.

There’s most DEFINITELY a fair pricing structure out there where people aren’t being ripped off and the industry can make good money. The only thing is the big studios aren’t going to make as much money in the process. Would you rather be in business, but have less overpaid middlemen, or be completely out of business?

Michaelsays:

Re: Re: Re:3 Re: Re: Re: Re: Re:

“There’s most DEFINITELY a fair pricing structure out there where people aren’t being ripped off and the industry can make good money. The only thing is the big studios aren’t going to make as much money in the process. Would you rather be in business, but have less overpaid middlemen, or be completely out of business?”

You’re operating off the false assumption that if Hollywood were to lower their exorbitant prices, somehow, their business would be put at risk. For one thing, Hollywood is already overcharging to go see a movie, hence one of the major reasons I stopped going. Sorry, $10-15 (plus overpriced appetizers/refreshments) for about two hours simply isn’t worth it; I’d much rather watch something in the comfort of my own home. What is with all this rhetoric about “going out of business”? Hollywood is making BILLIONS of dollars. They’re not going anywhere, so please stop playing the violin. I’ve heard the tune before and it’s always nauseating.

Anonymoussays:

Re: Re: Re:4 Re: Re: Re: Re: Re: Re:

I think you might be reading incorrectly.

“Going out of business” is the eventual ending point if they continue to screw over customers to the point where everyone agrees with you, that it is better to not bother than deal with them.

“Going out of business” doesn’t mean I think they’re losing tons of money and if they don’t change, they can’t operate for the next week, month or year.

The idea in business is to make a change BEFORE it hits that point. Like, now.

John Fendersonsays:

Re: Re: Re:2 Re: Re: Re: Re:

business model: can’t do it at that price.

I simply don’t believe that’s true. I do believe it can’t be done at that price while continuing to reap obscene profits, but that’s a different thing.

However, if it really can’t be done at that price, then the companies should, and will, go out of business. They should, and will, be replaced by new companies who can do it at that price. This is good & proper.

The bad thing, and the thing I chafe at, is that while these companies are scrambling to exist (or continue their obscene profits, whichever is true) they are causing a huge amount of collateral damage to society at large and innocent individuals. That’s what needs to stop. I’d prefer that this be fixed by helping the companies into the 21st century, but if it requires they go out of business, well, that works too.

Anonymoussays:

Re: Re: Re: Re:

it’s pretty tough for this to continue to be the most profitable business model if the consumer demands to have it now.

This is a classic WTF moment.

It’s pretty tough to have a profitable business model if the consumer demands to have it now?!?!?!

In ANY other business this would be a gold mine.

Oh well, doesnt matter since you seem to think that the industry is going out of business sooner or later anyway.

Anonymoussays:

Re: Re: Re: Re: Re: Re:

“It’s pretty tough to have a profitable business model if the consumer demands to have it now?!?!?!”

Yes, when it’s “have it now at a price much lower than people are willing to pay for scarce movie theater seats”.

If you sell steak for $0.10 a pound, trust me, you will have consumer demand. But your business will die trying to support it.

Chuck Norris' Enemy (deceased)says:

Re: Re: Re:2 Re: Re: Re: Re:

Too bad it doesn’t cost $0.10 to produce a steak. Copies of digital movie files cost essentially zero to produce. So if you charged $0.10 for a digital file of a movie I am sure you will see a lot of people paying for the movie even if they had never seen it. Now bump that price up until you find the magic number where people are still willing to pay for the convenience but not feel at a risk of wasting their $2. The studio should recoup easily (well, not technically according to studio accounting) and the rest is pure profit.

Berenerdsays:

Re: Re: Re:2 Re: Re: Re: Re:

“If you sell steak for $0.10 a pound, trust me, you will have consumer demand. But your business will die trying to support it.”

Correct because the cost of making the steak, raising the cow, has a cost.

Making digital media, past the cost of production of the movie/song there is no cost. So my option is wait a few months, pay for the cost of CD media, shipping, and a hefty profit to the label, or, see it now, pay nothing for abit lower quality, and then wait for the cost to drop down lower to a price I can more handle to buy the physical media.

But YOU feel give me the following options means the labels will go out of business sooner…

Giving me a great quality digital good that I can watch now, for a smaller price (heck even for the same price) where there is no overhead cost to the label, or download a lower quality copy for free

Your numbers don’t work. I bet they will SELL more digital copies on impulse buys alone than they would have sold with their current business model.

Your belief that everyone that downloads illegal torrents do it so they don’t need to pay for it. I feel that thought process is flawed. I know many “free-tards” that do end up going out and buying that DVD when it comes out especially if they liked it. If they didn’t like it that much, they wait for second hand or when the price is reduced. it costs much less to produce a digital good than a physical good.

Anonymoussays:

Re: Re: Re:2 Re: Re: Re: Re:

…or you use the steak to attract people to spend in something else just like I dunno restaurants have been doing for ages, supermakerts, WalMart, Telcos and just about everybody else.

Not mentioning the fact that those business have recurring costs for producing those things which doesn’t happen with digital content where the only cost to produce it is the initial cost and that is it after that is just a matter of finding ways to get people to pay little by little more and more, so the price can be dropped to $0.001 and still be profitable, that is what people pay for each cable channel today.

Low prices also stimulate shorter time for recurring expending which doesn’t happen with higher prices that increase the time between expendings, so there is that.

There is also the factor that lower prices causes less complains, while if a product is priced high people will complain a lot more about it.

Anonymoussays:

Re: Re: Re: Re:

Then “educate” the customers, sue them to the ground like the music industry did and see what happens.

Millions will learn to respect copyright and create some self control.

Self control may be the best thing that would happen to consumers, they will learn that copyright is just BS and find legal free open alternatives and start to develop their own entertainment leaving behind the schmucks that believe a monopoly is a good idea.

DCX2says:

Re: Re: Re: Re:

If the demand is not met, then the supply is going to come from other, sometimes less-legal sources.

I’m glad you added sometimes.

Personally, I hate the movie theater. Food is over-priced, people don’t shut up, hard to find seats in a good position unless it’s a movie no one cares about.

I don’t even really like TV anymore. Commercials are lame. We pretty much use Netflix exclusively; if it’s not on Netflix or maybe Hulu, I just don’t watch it.

And what do I do to get entertainment then? I go play video games. Left 4 Dead 2 has cost me about 1 cent per hour so far.

Moral of the story: if you don’t provide your customers with what they want, they’ll spend their money elsewhere.

Prisoner 201says:

Re: Re:

There would be better, more profitable business models IF the current one was allowed to die gracefully instead of being kept on life-support by special interest legislation – legislation that incidentally prevent (by lawsuit or risk thereof) the creation of new business models more in sync with reality.

Anonymoussays:

Re: Re: Re: Re:

The business isn’t kept alive by “special interest legislation”, it’s kept in alive by people buying and consuming the product. Worse yet, it is perpetuated by the pirates who seek to destroy it, because according to Techdirt, they are the very ones most likely to buy the product anyway, under the current system.

It’s not legislation that props it up, it’s you.

Anonymoussays:

Re: Re: Re: Re: Re: Re:

So what you’re saying is, if people say, “I don’t want this the way you’re selling it, I’m going to get it elsewhere,” it’s not up to legislation to fix that, it’s up to you to see that we’re no-longer propping up your system and adjust?

Or, is it up to you to try to spin it that your system is fine and people should not ever change?

frosty840says:

Re: Re:

Seriously, what you’re saying makes no sense at all. You’re saying that Hollywood should refuse to make any changes or to attempt any new business models without knowing in advance that they’re going to be making more money than they are now.

At the same time, they won’t experiment, because experimenting means that they have to try something which doesn’t guarantee their present profit levels.

This is surely the definition of a dinosaur industry, willing itself into extinction by refusing to change.

E. Zachary Knightsays:

Re: Re:

The problem isn’t windowing. It is bad windowing.

Let’s take a look at some good windowing.

1) We have the theatrical release.
2) The movie is made for purchase/viewing on a variety of platforms 3 months later.

Now let’s look at bad windowing:

1) The theatrical release.
2) The pay per view release 3 months later.
3) The DVD release with rental embargo 1 month later.
4) Rental embargo is lifted 2 months later.
5) iTunes release 4 months later.
6) Hulu/Netflix/Whatever streaming release 2 years later.

You will notice the difference here. In the first example we are capturing the vast majority of the market as quickly as possible. In the second example we are stretching out the time it takes for certain segments of the market to get the product. The longer it takes for the streaming market to get the product, the more likely they are to pirate rather than wait or buy.

Add to these windows regional restrictions and you have amplified the problem to a factor of 10.

Anonymoussays:

Re: Re: Re: Re:

PPV and DVD release generally are at the same time.

Beyond that point, it’s subject to agreements in place, and as well as price point. If you paid more at Itunes for the product, it could likely be there sooner (as it would be a good business decision). Making it available at Itunes cheaply makes it harder to sell the DVDs, because you canalization your DVD market.

Look at your 1 step suggest, and now tell me how you would price point each market to avoid killing the larger sources of income.

Anonymoussays:

Re: Re: Re:2 Re: Re: Re: Re:

“The best business models should make the most money.”

This is like saying if all car dealer just started making their cars out of gold and selling them for 2,000,000 a piece they would be better off.

You have to give the market what it wants, it doesn’t matter if its more profitable for you. We don’t care. As long as you can make A profit you have nothing to complain about. Sorry they can’t do business like they did 20 years ago, shit happens.

Home computers used to cost 3,000 a pop. When prices for manufacturing came down so did the consumer’s bill. Would you argue that HP would be better off selling outdated parts that no one wants for 3,000 and have legislation written to make sure its the only legal option while agreeing with all other computer retailers to sell their computers at the same rate? This would be more profitable than selling 250$ laptops.

The best business models should be profitable while providing a valued service or product to a satisfied customer.

David Muirsays:

Re: Re: Re:3 Re: Re: Re: Re: Re:

“The best business models should make the most money.”

There is nothing to dispute in this statement. It is not incorrect. However, as you point out, the thinking behind the statement is flawed.

The most money (sustainable profits) cannot be made by creating artificial scarcity and then legislating or litigating customers into compliance.

The most money cannot be made by refusing to adapt to a changing business environment.

The most money can be made by innovating and being a LEADER in an industry.

The way forward is risky for sure, and we know that today’s Hollywood is somewhat risk averse. But as with all things the big risk can reap a big reward.

What confuses me is that Hollywood does this already: a small fraction of big budget films succeed so wildly that they make up for any failures. Couldn’t they try ten different business models and see which ones consistently make the most money?

Anonymoussays:

Re: Re: Re:2 Re: Re: Re: Re:

Correct, they should. But I think you’re onto something there. Why not try a sliding-scale approach to pricing instead of a timed approach?

1) Theatrical release.
2) When it finishes its’ theatrical run, release for every platform at the same time.

Start off charging a reasonable price for the download (so if a DVD is priced at $20, then maybe start the download at $10-15), then as the actual price for the DVD drops, drop the digital price as well.

On the Netflix front, maybe there needs to be some kind of “premium” service there as well, where subscribers pay a bit more a month if they want day 1 releases available for streaming/disc rental (and yes, they should be streaming day 1 as well). Same for ala carte rentals, charge a premium for day 1 rentals.

The point is, people have made it VERY clear they want it now. Start working your model to make it so.

Anonymoussays:

Re: Re: Re: Re: Re: Re:

How do you know it makes it harder to sell the DVD’s?

From what I seen with Anime’s the piracy is what drove the sales and further expansion of market places for them around the world.

There is this funny thing that people do, that when they like something they want to own a piece and don’t have to walk to the store to rent it, they also start buying every piece of crappy merch that appears on the market, meaning they spend all they can either way so what does it matter that it cannibalizes DVD sales?

Let it die and keep capitalizing on the other forms.
Should we still be using VHS tapes? 8-Track? Wax Cylinders?

David Muirsays:

Re: Re: Re: Re: Re: Bad windowing model

Oh dear. I am usually too naive to think this way. But it is probably the reason that there’s vested interest in staying with the status quo and lobbying to get the world around them to change.

Making any particular production “unprofitable” is a counter-intuitive motivation that I can’t really wrap my head around. Yet we’ve seen enough examples of Hollywood and record company accounting that it is almost certainly at play here.

Anonymoussays:

Re: Re: Re: Re:

Nobody is doing that, nice strawman. Moreover, you hit the reason why I tend NOT to agree with Mike’s scarcity models in music.

Basically, movie theater tickets average $7.50 – and the average movie rental is about $2-$3. Your hot dog example, scaled to this would suggest that the regular retail price of a hotdog is about $150. Sorry, but you fail.

What they are doing is selling a hotdog for about $4.50, which is similar pricing to what you might pay at an airport, an amusement park, or other area where competition is limited and the product is “scarce”.

If you are going to try to make a point, at least try to be reasonable doing it.

hothmonstersays:

Re: Re: Re: Re: Re: Re:

You argument is: This method worked well in the past when there where logistical and physical reasons it had to be done this way. While doing it we found all kinds of ways and loopholes to maximize our profits. So now even though we no longer need to do it this way we want to continue to do so because we already have the game rigged. We will spend millions legislating against anything that disrupts this system, and millions more spreading false information funding propaganda and smear campaigns. All the while we will accuse our paying customers of being thieves and laugh in the face of hundreds of millions of people asking for something new and better and actually do as much as we can to make what we use to offer worse. We will burn the fucking internet to the ground before we adapt.

And you want me to be reasonable?

Michaelsays:

:/

Funny how it’s just fine and dandy when Hollywood and the other big corps get together and attempt to dictate what everybody else is allowed to do by virtue of them having released content for public consumption, yet when the shoe’s on the other foot they are quick to point out that it’s their business and that they’ll run it however they deem fit.

Keroberossays:

This is what I see as the problem with Hollywood’s business model(s), they’ve leapt from one fundamentally unhealthy, consumer unfriendly business model to the next, but since they have always been profitable in the past (with no competition it’s easy to be profitable–and yes piracy is competition) they see no reason to question the basic reasoning behind them. They fail to realize that any healthy business business model must take consumer wishes into account (price, availability, convenience) in order to be successful. Until this happens they will keep trying to legislate and litigate themselves into their former profitability and reduce competition from those that do want to try to successfully compete with them.

Anonymoussays:

Re: Re: It's been tried before

Hey, 3 movies that were given no advertising budget tried it 6 years ago. No need to even consider it again. I mean look at all the conjecture and fear of change people are quoted saying in this wiki article. Obviously Mike this idea has been fully exhausted lets stop kicking a dead horse. I mean if a documentary and weird Soderbergh picture couldn’t pull it off half a decade ago why are we even talking about it?

Re: Re: It's been tried before

You act like no movies have ever been simultaneously released. This has been tried and it has failed. A wikipedia search resulted in the following out-dated article. I guess when history doesn’t support the argument you have laid out you just ignore it.

Um. First of all that doesn’t say it failed. I followed the Bubble story closely and if it “failed” it failed because the theaters freaked out and refused to show it in theaters, so it wasn’t a true simultaneous release.

Besides, a single film failing in this model isn’t a condemnation of the model. It might just be a condemnation of that movie. I’m sure some movie was released the traditional way last week and made very little money. Is that condemnation of the traditional model?

If DONE RIGHT, simultaneous release would almost certainly make more money.

Anonymoussays:

Even if they do as we say, and remove the release windows, and things get better for them and the revenue increases, they will NEVER admit it that we were right all along. They’ll just say that “this is proof our latest passed laws and stricter enforcement worked”.

They are hopeless. Hollywood simply needs to die, and be replaced by a better system and ecosystem for making movies, cheaper and more innovative.

Anonymoussays:

every part of the entertainment industry is nothing less than self-interested. it still has the impression that the world cannot live without it. given how important the internet is to EVERYONE in EVERY COUNTRY for just about EVERYTHING, i would rather be able to send an email than see it screwed up just so a movie is available to watch on line. as far as i am concerned, the whole entertainment industry can cease to exist as of now!

Overcastsays:

Of course not. $35+ for a new movie like the industry wants for a lot of new blu rays? Of course not.

Yes, lol – why would I pay $35.00 for a single movie?

I pay LESS than that for Cinemax premium on-demand and can watch a ton of movies a month. For $35.00 I could add another movie channel too.

Or just spend $2.00 and buy a used DVD, lol

Maybe not high def, but the wallet stays fatter. Clear easy choice for me.

Anonymoussays:

Response to comment 3.

The answer to commenter number 3 will be available in Asian countries in 2 months, Europe in 3 months, Canada/Mexico in 4 months, and Finally the US after 6 months.

For all you Non-Pirates out there who don’t need to know the answer right now, don’t read any further.

Pirates or Consumers who like On-Demand features: The answer is the internet. Utilize it, Monitize it, Grow richer on a worldwide scale faster, cheaper, and more often.

harrishawksays:

IP Law

IP Law shouldn’t have existed in the first place. It creates unnatural scarcity. Scarcity shouldn’t be created because nobody has a right to the value of ones product, this ought to solely be determined by the free market. If nature decides that an idea isn’t scarce, why do we allow Government to literally create value by creating a monopoly and creating scarcity. Let the free market exclude non-payers and reinforce value, not monopolized force (Government)
Senator Orrin Hatch suggests the Government start blowing up computers without due process- this is where IP Law will lead in this brilliant technological world. http://www.dethronehatch.com/orrin-hatch-is-no-friend-of-the-internet/

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