Entertainment: Is it a rent-to-(never)-own market?
Even as the decline in DVD sales--both in the U.S. and abroad--has accelerated since 2006, DVD rentals through services such as Netflix (adding 25 percent more customers since 2008) and Redbox (adding 500 machines per month) have been booming.
The reason, as The Economist surmises, may be a shifting view on how consumers prefer to consume entertainment:
The real worry (for the movie industry), then, is not that people are abandoning DVDs but that they are abandoning the notion of owning them.
This is perhaps exacerbated by an industry that can't seem to make up its mind by what it means by ownership, as Ogilvy Group U.K.'s Rory Sutherland writes in The Spectator:
(The) piracy debate is far from one-sided. The very same record industry which today bleats on about intellectual property seemed conveniently blind to the concept back in the early 1990s when they charged us 19 pounds (about $31) for every CD they reissued--even when we already owned the very same album on vinyl....
The BBC often commits the same offense. Why should I pay full price for a DVD boxed set of "The Office" when I have already paid for the series through my license fee? Either the value lies in the physical packaging or in the content itself. Publishers try to charge for both; to have their cake and sell it. This is questionable.
Indeed, it is. Whether we're moving to a rental market or finding new ways to apply ownership to digital goods through digital rights management (DRM) and other means, those industries that sell digital content (movies, books, news, software, music, etc.) need to get their story straight. Is the value in the content, or is it in the packaging?
For Apple, it's both. Apple has long insisted that consumers prefer to own rather than rent, and it has sold more than 6 billion songs through its iTunes Store to prove it. But arguably, the value in Apple is in its distribution service (iTunes), more than the bits and bytes of the songs themselves. I can download Bob Marley for free, but I elect to buy through iTunes for a fee. The service justifies the price.
In software, it's increasingly packaging and ancillary services that drive purchasing because the "content" (i.e,. the software) is a free download. That packaging, like Apple's iTunes, is worthless without the content, but together, they're a good deal.
Is this the future?
Trent Reznor seems to think so. You?
Follow me on Twitter @mjasay.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
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I've only ever bought one movie through iTunes...and it was Prince Caspian, a movie I loved...but I've only watched it ONCE since then. ONCE.
It remains on my hard drive...a solemn reminder to never buy again.
I'm most likely typical in that I only buy DVD's of movies I want to keep, to watch again and again as time goes by. I'll also buy the occasional cheapie B-grade SciFi and horror movie out of the dollar-bin (yes, MST3K fan here), but unless the movie is really worth a damn, why bother? I can count on one hand the number of movies that have come out since 2005 (or so) worth keeping, with fingers to spare. OTOH, there were tons of movies previous to that time period that are flat-out awesome, of nearly every genre.
I would much, much rather watch Bruce Campbell's Evil Dead series (e.g. Army of Darkness) repeatedly, than anything with Will Ferrel(sp?) in it. Transformers? Meh - I'd rather buy the DVD box set of the cartoons than bother soiling my retinas with the current CG-gasms that represent recent efforts.
You get the idea... and I suspect that most folks feel the same way, hence the curve.
One positive thing the RIAA has done for me. It has convinced me to explore the world of independent artists. I have found that there is a whole other world of music out there with musicians that can actually sing and play musical instruments. They are much better than those spoon fed to us by the RIAA in some obscure formula designed to make them money rather than to actually entertain us.
Wake up people and vote with your wallet. If it says RIAA anywhere on the case look elsewhere. We the consumer made them and we the consumer can break them. Don't pirate their music, just don't buy it.
On one hand, I still have a (huge) box of reel-to-reel tapes (courtesy of my father) that I can very easily convert to FLAC without much effort... just have to set up and clean the ancient Sony tape player, plug it in, fire up Audacity...
OTOH, why bother going out to buy new stuff if the format just won't play on anything a couple years hence? The days of a living room with an entertainment center stuffed full of components (to play DVD, VHS, CD, audio cassette, game console, satellite/cable, and etc)? They're gone. Most folks want a cleaner living room/family room these days, and are getting picky about what they have and use in there.
These media company companies need to focus more on consumer wants than corporate greed.
I miss the old grand classics of Ben Hur or Spartacus. Instead we have these over hyped and paid stars that just don't hold a candle to the old cast of actors. I'm sorry but what we have today is pretty pathetic (only a few would be equivalent).
(1) Don't rush to buy those just-out DVD or CD titles. Wait for a few months for their prices to drop.
(2) Don't own; rent those titles that are unlikely to be watched again.
(3) Since those media companies will eventually release super-deluxe-platinum-gold-premium all-in-one DVD or CDs, the longer you wait, the better deal you get. In the meantime, listening to online streaming radio to satisfy your need.
(4) Refuse to buy any music formats with DRM protection.
I use it...a lot.
I have yet to use Netflix, just because I don't like subscription fees, but I may take the leap, since Redbox has a limited amount of DVDs, and I've watched nearly all of them.
Why is simple? Movies are anywhere from 90 minutes to 3+ hours. You aren't going to watch the same movie over and over again. The same is not true for music.
This isn't rocket science.
This concept is happening with many different industries. Zipcar is doing a great job with cars - especially in city areas where car ownership is expensive and desire is transient. The Library has been renting books for a long time, and now there are convenience based services like BookSwim that work like netflix but for books.
Any media industry that fails to adopt leasing models will ultimately miss out on a great deal of profit (or even die) as it is better to receive $1 every time a person rents a DVD (and have a wider market) than receive $5 for a purchase but have a much smaller market. Plus - production costs are drastically reduced with a rental market which is a positive for the whole distribution chain and the environment.
- by maneeshpan1 July 30, 2009 10:35 AM PDT
- The problem with buyinmg music (assuming your paying for RIAA music) is most artists barely get a dime per track they are so far in debt to their labels the only money they ever make is from tours, promotions, concerts, etc and selling promotional merchandise like T-Shirts, even CDs distributed at a concert; they get such a paltry share even from iTunes which because there is no manufacturing fee makes it possible to sell content more cheaply and still collect a profit -- and the RIAA wants to reduce their existing 9 cents per song to an even lower level thinking artists get too much already -- like 9 cents is a lot -- the typical song on iTunes goes from anywhere between .99 cents to $1.29 or even $1.99. The RIAA gets 60 cents typically per song and Apple gets roughly 30 cents approximately per track lets see 60+30=90 so that's already 90 cents. Then factor in the 9 cents the artists get and you have 99 cents. That leaves 1 cent left over? Who gets that?? Not entirely sure there but the point is the artist gets such a measly share.
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Showing 1 of 2 pages (25 Comments)If you want to support a RIAA artist download their music from a peer 2 peer file sharing service and then try to send the artist as much as you want to give even a buck per track is fine. By cutting out the middleman the artist can get more money than if you paid the RIAA. What's more the RIAA uses the money it earns to hire lawyers and attorneys to sue so called illegal file sharers for piracy and uses the money also for its pay for play payola scandal to bribe radio stations to only play RIAA music.
They have always advocated for DRM in music to screw their customers as well -- screw fair use -- screw the customer (whatever happened to the customer is always right?) they'll take what we give them and like it. if they don't buy our stuff we'll accuse them of piracy even if they aren't pirating (and some are falsely accused) then the RIAA commits extortion blackmailing people to pay a settlement fee of $1000-$5000 dollars or go to court. Few can afford laywers and attorneys so they settle out of court on the RIAA's terms -- if they do go to court and lose they end up owing way more.
As for the value of those tracks here are some calculations to determine them -- I'll use iTunes standard fixing pricing of 99 cents to apply to all calculations. Let's say I downloaded a full album from a p2p file sharing client each track sold on iTunes separately for 99 cents and the entire album went for $10.00 now if I only downloaded that 1 album of 12 songs it would be sensible if such a user were sued to be forced to pay $10.00 that would make sense you pay what you owe and you stole or downloaded for free $10.00 worth of music why then do they charge you $1000-$5000 in settlement fees or over $20000 if you go to court and lose?
Anytime they profit but their profit is not as high as they wanted they say we made a profit but because of darn pirates we didn't make as much as we wanted. We made $50,000 this year for example in profit but if piracy did not exist we would have made $200,000 in profit.
Pure rubbish and garbage on the RIAA's part. They commit extortion. They should be investigated for antitrust violations and harming consumers and their own artists.