July 19, 2005 4:00 AM PDT
Perspective: Imagining Hollywood's postdigital future
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The entertainment conglomerates that create most of the films and television shows in the U.S. are clearly worried about the prospect of the industry being "Napster-ized." DVDs have as much protection against mass copying as CD--which is none at all. Growing numbers of people are starting to share movies just as they did songs, though at nowhere near the same frequency.
But the studios shouldn't be lulled into complacency. Indeed, the only reason video file-sharing hasn't yet become as widespread as song-swapping in the U.S. is because of the second-world broadband infrastructure our communications industry is so curiously proud of.
In fact, the obsolete technology that the telephone and cable companies deploy is so slow that it could take hours to download a movie on a computer, while tying up the connection for even longer periods. But Hollywood shouldn't count on the incompetence of American broadband providers forever. They will eventually catch up to technology superpowers such as Korea and Singapore. And when consumers do actually have fiber connections running at 100 megabits per second, then even a high-definition movie will take only minutes to download, and at that point nobody is going to care whether it's in Blu-Ray or DVD-HD format.
I can envision a future that doesn't include movie-sharing, but it requires a different distribution system for entertainment. It's a future that involves using copper wire and fiber optics instead of plastic discs with trucks and stores to deliver the product to customers.
Even if entertainment providers and retailers don't want to provide EOD, there are digital delivery systems that are far more attractive to consumers than DVDs. Apple Computer has revolutionized the digital music world with the iPod and iTunes, and similar products and services could be (and have been) offered for movies and TV shows.
Both delivery systems are superior to DVDs and current cable TV and would result in consumers voluntarily abandoning the plastic discs (like they have with vinyl records, VHS tapes and film cameras). And when DVDs aren't available, file-traders won't be able to rent a movie and then share it with the world.
Since the technology to give us instant video gratification is ready now and is cheap, does this mean you should expect to start seeing video catalogs on your TV screen instead of electronic program guides?
If the studios are any smarter than the music industry, then maybe they won't wait until we all have fiber connections and can swap HD movies in a few minutes before they leap into the 21st century. But don't delay that PVR purchase while you wait for EOD, because the entertainment industry, just like the rest of corporate America, doesn't like to make changes to their business model until after the model has failed miserably. Most likely, they'll depend on the courts and politicians to protect their cash flow at the expense of the rest of society.
Rather than fight with consumers and technology partners, Hollywood can make them both happy (cutting distribution costs and increasing revenues at the same time.) Instant availability, access to entire libraries, and portability will resonate with consumers, who will gladly trade their stack of DVDs for a couple of disk drives or a new set-top box. Higher profits, wider availability, and the elimination of inventory (no 7 million unwanted copies of Shrek 2) make retailers and content owners happy. Technology vendors get to sell a new generation of equipment.
All in all, it has the making of a Hollywood ending to a bad drug problem.
Biography
Ken Goldsholl is CEO of Prismiq. The company's networking products include the Prismiq Media Player, designed to connect TVs, stereos and the like to the Internet and to media files stored on home PCs.
22 comments
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Next idea, please....
Next idea, please....
The situation for the Hollywood establishment is as follows: No matter what they try to do, the distribution of content through broadcasting is going away.
After over a hundred years, its done its job and now they have to come up with a new way of collecting money. Many of them won't figure out how to do it and the multimedia equivalent of the dot-bust that's coming will challenge everybody in Hollywood.
The implications of this are manyfold.
For advertisers, they had better launch a web presence because the age of forced watching of ads, which really never worked anyway for several reasons, is coming to an end. Soon, it will be more important to have a clean interesting site and a high Google rating.
For the major studios, the rise of digital video editing suites means that the producers don't really need them. Its still early steps yet but the handwriting is on that wall too.
For the producers, the rise of digital video editing suites means that they can produce their vision of the content without needing the money that the major studios can provide. That money comes with a price: the studios need executive control, which interferes with creative control, because they need to make a great deal of money. That ability will be undercut by direct payment for content and, more importantly, by the destruction of their advertising revenues.
Then there's distribution. I suspect that BlockBuster (amongst many others,) will become a huge digital warehouse, connected to fibre, renting or selling the content to the consumer, without any need for their (forceably and foreseably dwindling) current stores.
That will greatly reduce the physical need for MultiPlexes and going out to the mall but the psychic need for the mall as a place of communion will remain, and so will the mall. It just probably have a BlockBuster store in it.
The situation for the Hollywood establishment is as follows: No matter what they try to do, the distribution of content through broadcasting is going away.
After over a hundred years, its done its job and now they have to come up with a new way of collecting money. Many of them won't figure out how to do it and the multimedia equivalent of the dot-bust that's coming will challenge everybody in Hollywood.
The implications of this are manyfold.
For advertisers, they had better launch a web presence because the age of forced watching of ads, which really never worked anyway for several reasons, is coming to an end. Soon, it will be more important to have a clean interesting site and a high Google rating.
For the major studios, the rise of digital video editing suites means that the producers don't really need them. Its still early steps yet but the handwriting is on that wall too.
For the producers, the rise of digital video editing suites means that they can produce their vision of the content without needing the money that the major studios can provide. That money comes with a price: the studios need executive control, which interferes with creative control, because they need to make a great deal of money. That ability will be undercut by direct payment for content and, more importantly, by the destruction of their advertising revenues.
Then there's distribution. I suspect that BlockBuster (amongst many others,) will become a huge digital warehouse, connected to fibre, renting or selling the content to the consumer, without any need for their (forceably and foreseably dwindling) current stores.
That will greatly reduce the physical need for MultiPlexes and going out to the mall but the psychic need for the mall as a place of communion will remain, and so will the mall. It just probably have a BlockBuster store in it.
I am not giving away my rights to nobody, less then ever to companies with such a poor records for accountability and Customer-oriented attitude.
If I can buy a movie, store it, back-up it and sharewithin my home-network I will buy movies online otherwise I will stop buying them and guess what? I can live witout buying movies, there are millions of books to read; movie industries on the other hand cannot survive one month without sales, less then ever they will able to keep sponsoring politicians who forgot that they aare supposed to serve the Citizens and not their "sponsors".
oh did I mention that I am also entitled to move all my media on my new computers when I replace the aging one and also move them to my house in the mountain, the one on the sea-side etc.
than today's Hollywood executives do. People
most certainly don't want to "rent" or
"pay-per-view" their music, video, books, etc.
Nickel-and-diming the consumer, obliterating
convenience, and encumbering everything with
rules, regulations, limitations, and nonsensical
fees will only serve to torpedo the system that
tries to implement it. The author would have you
believe that "virtual" posession will be
acceptable as posessing actual goods or
receiving actual services -- and it won't.
It doesn't help Hollywood either. The notion
you're going to stop distribution of materials
with a business model is almost as absurd as
trying to do so with a technical measure. It
makes too many assumptions about behaviors and
motivations for the consumer (which are
constantly in flux).
This doesn't address Hollywood's biggest fear:
that they will simply become obsolete.
Hollywood's product has been a cash cow because
only Hollywood could conjure up glitzy
entertainment, bottle it, and ship it out for
consumption. Fat pipes and increasingly
sophisticated low-price consumer electronics are
making it possible for individuals to produce
high quality music and video and distribute it
globally. There are a number of fantastic
examples of amateur cinematography you can
stream or fetch via BitTorrent out there --
commercial free and without plot retreads.
Hollywood's still going to have a lock on
real-life pyrotechnics for some time to come,
but they are loosing their grip on the medium as
a whole. If they really want to survive, they'll
need to begin with the premise that any public
release of something is effectively a global
broadcast of it, and that advertisements
attached to any release should not be expected
to reach anyone (they will be removed or skipped
over). This is a very pragmatic way of looking
at things since, if you can develop a business
model that works given those two presumptions,
then you've utterly side-stepped the concern of
copying and the legal and technical morrass they
build up trying to combat it.
Attempts at legislating behavioral standards or
technical standards that might eliminate the
need to rethink the business will ultimately
fail -- so why hemhorrage cash trying to do so?
I am not giving away my rights to nobody, less then ever to companies with such a poor records for accountability and Customer-oriented attitude.
If I can buy a movie, store it, back-up it and sharewithin my home-network I will buy movies online otherwise I will stop buying them and guess what? I can live witout buying movies, there are millions of books to read; movie industries on the other hand cannot survive one month without sales, less then ever they will able to keep sponsoring politicians who forgot that they aare supposed to serve the Citizens and not their "sponsors".
oh did I mention that I am also entitled to move all my media on my new computers when I replace the aging one and also move them to my house in the mountain, the one on the sea-side etc.
than today's Hollywood executives do. People
most certainly don't want to "rent" or
"pay-per-view" their music, video, books, etc.
Nickel-and-diming the consumer, obliterating
convenience, and encumbering everything with
rules, regulations, limitations, and nonsensical
fees will only serve to torpedo the system that
tries to implement it. The author would have you
believe that "virtual" posession will be
acceptable as posessing actual goods or
receiving actual services -- and it won't.
It doesn't help Hollywood either. The notion
you're going to stop distribution of materials
with a business model is almost as absurd as
trying to do so with a technical measure. It
makes too many assumptions about behaviors and
motivations for the consumer (which are
constantly in flux).
This doesn't address Hollywood's biggest fear:
that they will simply become obsolete.
Hollywood's product has been a cash cow because
only Hollywood could conjure up glitzy
entertainment, bottle it, and ship it out for
consumption. Fat pipes and increasingly
sophisticated low-price consumer electronics are
making it possible for individuals to produce
high quality music and video and distribute it
globally. There are a number of fantastic
examples of amateur cinematography you can
stream or fetch via BitTorrent out there --
commercial free and without plot retreads.
Hollywood's still going to have a lock on
real-life pyrotechnics for some time to come,
but they are loosing their grip on the medium as
a whole. If they really want to survive, they'll
need to begin with the premise that any public
release of something is effectively a global
broadcast of it, and that advertisements
attached to any release should not be expected
to reach anyone (they will be removed or skipped
over). This is a very pragmatic way of looking
at things since, if you can develop a business
model that works given those two presumptions,
then you've utterly side-stepped the concern of
copying and the legal and technical morrass they
build up trying to combat it.
Attempts at legislating behavioral standards or
technical standards that might eliminate the
need to rethink the business will ultimately
fail -- so why hemhorrage cash trying to do so?
Pirating a movie is not THAT easy. Requires finding a decent copy, verifying it's quality, format, language etc., downloading it, downloading subtitles (if it's not on your primary language), moving it around and playing it on the appropriate device. I think the industry will have to implement a system that's easier, faster, simpler (that excludes any type of activation or verification that requires interaction), of better quality and CHEAP. Technically, that's perfectly feasible today, since most of those steps mentioned before are related with not having uniform and systematic access to all the original media by the same source. Of course, it will never be as cheap as free, but it doesn't need to. It just needs to be cheap enough, and lazyness will do the rest. Maybe a dollar a movie or so. At that price pirating is not worth the effort.
Obviously, this might imply reducing present profits (75% of piracy is better than reducing profits by 90%), and the companies might be tempted to go that way at the last time, when piracy is so high the loss looks reasonable. But if they don't do it now, the P2P technologies and networks will keep improving the experience to a point that, by the time the industry reacts, it will be a lost battle.
Pirating a movie is not THAT easy. Requires finding a decent copy, verifying it's quality, format, language etc., downloading it, downloading subtitles (if it's not on your primary language), moving it around and playing it on the appropriate device. I think the industry will have to implement a system that's easier, faster, simpler (that excludes any type of activation or verification that requires interaction), of better quality and CHEAP. Technically, that's perfectly feasible today, since most of those steps mentioned before are related with not having uniform and systematic access to all the original media by the same source. Of course, it will never be as cheap as free, but it doesn't need to. It just needs to be cheap enough, and lazyness will do the rest. Maybe a dollar a movie or so. At that price pirating is not worth the effort.
Obviously, this might imply reducing present profits (75% of piracy is better than reducing profits by 90%), and the companies might be tempted to go that way at the last time, when piracy is so high the loss looks reasonable. But if they don't do it now, the P2P technologies and networks will keep improving the experience to a point that, by the time the industry reacts, it will be a lost battle.
don't violate copyrights? I suppose I could believe that if you're
including people who tape shows on their VCR, skip
commercials on their Replay, or burn a CD for the car from a CD
they own - but if you're talking about people who download
music and video from the Internet without authorization, I think
your view of how much of that is going on is way skewed.
"intractable".
don't violate copyrights? I suppose I could believe that if you're
including people who tape shows on their VCR, skip
commercials on their Replay, or burn a CD for the car from a CD
they own - but if you're talking about people who download
music and video from the Internet without authorization, I think
your view of how much of that is going on is way skewed.
"intractable".
hour, not a few minutes.
DVDs do have some protection, certainly more than CDs do.
Granted, it's been completely broken, but it still forms an
impediment. I'm not sure why you think that doing an on-line
distribution is going to be more secure.
Frankly, the amount of storage required is still going to swamp
hard drives, and to have the only copy of a movie I've bought be
sitting as an ephemeral copy on a hard drive would scare me -
I'd want a backup of it immediately. Seems to me its easier to
just buy the "backup disk" and copy it to my video server.
What I do think will happen, IF the studios get over their
irrational paranoia, is that Disk-on-demand will become
feasible. That would eliminate the inventory problem (both
ways), and hopefully eliminate the stupidity of titles going out of
print as well.
What it won't solve is the morass of copy rights - such as the
Criterion Collection version of, say, Spinal Tap going out of print
because they lost the rights to it, so a different version comes
out by someone else, losing all the extra material that CC came
out with; or how the only version of some film is available only
as Pan-n-Scan, or has a terrible transfer, or is missing a critical
scene (Madacy version of My Man Godfrey, for example, before
Criterion came out with their version); or the utter travesty of It's
a Wonderful Life falling into and out of the public domain.
hour, not a few minutes.
DVDs do have some protection, certainly more than CDs do.
Granted, it's been completely broken, but it still forms an
impediment. I'm not sure why you think that doing an on-line
distribution is going to be more secure.
Frankly, the amount of storage required is still going to swamp
hard drives, and to have the only copy of a movie I've bought be
sitting as an ephemeral copy on a hard drive would scare me -
I'd want a backup of it immediately. Seems to me its easier to
just buy the "backup disk" and copy it to my video server.
What I do think will happen, IF the studios get over their
irrational paranoia, is that Disk-on-demand will become
feasible. That would eliminate the inventory problem (both
ways), and hopefully eliminate the stupidity of titles going out of
print as well.
What it won't solve is the morass of copy rights - such as the
Criterion Collection version of, say, Spinal Tap going out of print
because they lost the rights to it, so a different version comes
out by someone else, losing all the extra material that CC came
out with; or how the only version of some film is available only
as Pan-n-Scan, or has a terrible transfer, or is missing a critical
scene (Madacy version of My Man Godfrey, for example, before
Criterion came out with their version); or the utter travesty of It's
a Wonderful Life falling into and out of the public domain.
A 90 minute HD movie would not require 40 GB if a new codec (MPEG4, WM9, H.264, etc.) was used, more likely it would be about 7 GBbytes. With a 100 Mbps broadband connection, the time to download would be about 9 minutes. If the file was purchased at a kiosk, the transfer rate could be about 3x faster (USB2.0), taking only about 3 minutes.
A 90 minute HD movie would not require 40 GB if a new codec (MPEG4, WM9, H.264, etc.) was used, more likely it would be about 7 GBbytes. With a 100 Mbps broadband connection, the time to download would be about 9 minutes. If the file was purchased at a kiosk, the transfer rate could be about 3x faster (USB2.0), taking only about 3 minutes.