December 3, 2007 4:00 AM PST
Perspective: Flailing the latest digital whipping boy
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They'll tell you they share because they love. File sharers claim they want people to watch the television shows, see the movies, go to concerts, or otherwise compensate the creators.
Of course evidence suggests that file sharing cannibalizes the economic value of the movies, television shows, and music distributed illegally on peer-to-peer networks. Being able to obtain content on peer to peer networks negates the need for consumers to buy DVDs, watch television, or go to the movie theater.
It costs money to produce films and television shows. Though ticket sales primarily have been the method of financing films, producers now rely on a blend of ticket sales, broadcast rights, DVD sales and the ever popular merchandise rights. Television shows continue to rely on advertising, though DVD sales have provided a new and lucrative revenue stream, as has merchandise where applicable. Yet, ticket sales and advertising revenue continue to provide the bulk of the funds used to finance production.
Unlike the music industry, film studios and television producers have actively been developing new revenue streams resulting from the Internet. One could say that television producers and movie studios are leaving no stone unturned as they look to replace revenue lost to illegal distribution on the Internet.
Recently, Michael Eisner placed the economic woes of the entertainment industry at the feet of Steve Jobs and iTunes. According to Eisner, Apple has forced movie studios and television producers to execute deals that do not fairly compensate them for their content. Though Eisner has essentially called Jobs a bully, it is likely a case of seller's remorse. Eisner and his cohorts may have undervalued their content to participate in what, at the time, was the iTunes juggernaut.
The movie studios and television producers are to blame for the economic woes of their industry, not Jobs or Apple. When iTunes expanded to include video, the studios and producers were thrilled to have a means to deliver content on demand over the Internet to consumers and be able to be paid.
Hindsight is 20/20, but in Eisner's case he may be looking back through cracked glasses. Some could argue that being able to deliver content through iTunes stemmed the tides, or at least slowed the currents, of BitTorrent and peer-to-peer delivery streams.
In the past two years, studios and producers have focused on developing new means to deliver content and be compensated over the Internet. Broadcasters are streaming their content, with advertising, on their Web sites and through partner sites. Film studios are delivering content on demand--for a fee--to television sets around the country through services from Amazon.com and others.
Even individual shows like The Daily Show with Jon Stewart are experimenting with making their shows available, with advertising, on the Internet. And of course, consumers are able to buy both physical and digital copies of films and television shows for their permanent collections from retailers ranging from iTunes to Wal-Mart Stores.
The members of the Writers Guild of America have something in common with Eisner and his cronies: they know what it is to sign a bad deal. In 1988, on the eve of the home entertainment revolution, the writers agreed to a limited royalty for home entertainment sales of their works because the market was "unproven." Hindsight provides empirical evidence that the writers missed the boat, as more than three-quarters of American households have at least one DVD player, and spending on home entertainment increases every year.
Nearly 20 years later, the Writers Guild of America is on strike at the cusp of another home entertainment revolution, the Internet and content delivery on demand. The primary issue of the strike is the share of revenue that writers will receive from the monetization of new delivery models.
As the producers and studios scramble to monetize the Internet, they argue that the writers should not participate in new revenue streams because the Internet is a promotional vehicle. The producers' argument is specious for a number of reasons. Movie studios and producers are pursuing multiple avenues for delivery of content where they get paid on the Internet. Additionally, they are pursuing those who distribute content without permission even though the distribution is claimed to be for promotional purposes.
Without their words, the producers and studios would have no content to deliver to consumers and the Internet would be a pretty boring place. Like Eisner with Apple, the writers have regret over the 1988 contract and now they intend to participate in the revenue generated from new media streams.
Biography
Nancy Prager, an intellectual property and corporate attorney, represents technology and entertainment clients on matters from privacy to music licensing. She maintains a blog at NancyPrager.wordpress.com and can be reached at nprager@pragerlaw.us.
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internal eating factor, what I find even more interesting, having
pursued music-on-demand since the late 80's is how the Quick-n-
Giant Searcher folks "take-out" the real small achievers. I mean,
follow the rules of paperwork, society bodies and govt agencies,
and they freeze the kicker with a timeout! Then they do it again!
What exactly is fair enough? Is Control now the #1 priority for the
Internet? Shame, shame...
live in fear.
ENJOY FOX-NEWS AND CNN
What EVIDENCE? What slanted RIAA/MPAA study are you quoting from? What is your source of this empirical EVIDENCE?
Of course evidence suggests that file sharing does not cannibalize the economic value of the movies, television shows, and music distributed on peer-to-peer networks. Most people who obtain content from peer-to-peer networks would not otherwise purchase the DVDs, watch the TV shows or go to see the movies that they acquire.
See what I did there?
While it's easy to blame others for the studio failures, it's not nearly as easy to figure out what people would pay for and sell it to them at a price they are willing to pay.
Take online movies. A lot of people thik 2.00 is ok for a price. It's high. I can buy a season for 20.00 at Walmart. That's 1.66 an episode and I own the DVD. I can also put that movie on my PVP. Watch it on my TV, in the car, on my computer. It's more versitle and costs less.
They have not found the online market. They are to blame. They have the content after all. The market is theirs to lose.