p2pnet - rss feed: Hollywood’s new goldmine
p2p news / p2pnet: Now it mistakenly thinks it’s getting a handle on file sharing because it’s bought BitTorrent, Hollywood has a vexing new problem to worry about.
No, it’s not where to stash the billions of dollars it’s raking in. It’s how to have its cake and eat it.
Where once the movie business was about making movies, "Nowadays, it is about creating intellectual property that can be licensed in a raft of different markets," says Edward Jay Epstein on Slate.
By 2005, only 14.2% of Hollywood’s revenues came from movie ticket sales, "while 85.8 percent came from licensing or selling their products for use in the home," he stesses. So what to do about the "huge audience" willing to pay for downloads?
"Unlike DVDs, which require manufacturing, warehousing, distribution, and disposing of returns," movie downloads are virtually free because, "all the costs would be born by the cable operator (or a site like the Apple Music Store), whose cut would be less, under present arrangements, than retailers get on DVDs," says Epstein.
"So, if a movie were a huge hit, such as Shrek, and millions of orders flooded in, the marginal cost of filling them would be zero. The consumer, once he bought the download, could watch it where and when he chose to just as he once watched a DVD." [Are you paying attention, Organized Music?]
Cool. What’s the problem?
Well, how can Hollywood "dig into this potential gold mine without undermining their existing revenue streams?"
The studios have until now released product though "windows" opening to different markets, says the story. But, damn it, "giant retailers, to spur their seasonal sales, have been demanding their DVD delivery earlier and earlier, and they’ve thrown this system into turmoil," it goes on.
Now, "With the possibility of costlessly providing millions of downloads to consumers of both their older and new films, the studio heads, including Disney’s Robert Iger, are openly discussing radically revamping the window system. Obviously, if a home download of a movie were available at the same time (and price) as its DVD release, the download option might replace retail sales. To avoid that outcome, and a potentially dangerous confrontation with Wal-Mart, the studios would have to delay the download release until well after the DVD release. But while the studios may find this embarrassment of choices somewhat paralyzing at present, as more and more consumers get digital recorders or video iPods, downloading for dollars may prove irresistible - even if it means doing away with the windowing system.
"Hollywood’s downloading option, by whatever device it may be realized, is just one more part of the transformation of movies from a big- to a small-screen experience and from a theatrical to a home - or even mobile - product."
And then along came Star Wreck: In the Pirkinning.
Also read:-
bought BitTorrent - BitTorrent, Hollywood team up, November 23, 2005
Slate - Downloading for Dollars, November 28, 2005
Star Wreck: In the Pirkinning - Top Finland movie online, November 23, 2005
November 29th, 2005 at 4:27 pm
Well, how can Hollywood “dig into this potential gold mine without undermining their existing revenue streams?”
it’s a new medium. the answer is simple. Walmart, Bestbuy etc all have websites right? all they have to do is set up servers to store the digital copys and when the studios release them then the stores can offer them for digital sales. just like when the cassette replaced the 8 track and the CD replaced the Cassettee. all it takes is a willingness to embrace a new medium.
November 29th, 2005 at 5:55 pm
Why would the studio’s even care about Wal-marts demands? It isn’t like there is another source that Wal-mart and other retailers can go to for the DVDs. Further, if Wal-mart tried to strong arm the studios all that the studios have to do is say “don’t sell it”. There are loads of other outlets. I don’t get it.
November 29th, 2005 at 8:46 pm
Walmart is the #1 retailer in the world. If you dont have your product there, you are denying a large portion of your customer base.
November 29th, 2005 at 9:36 pm
There are several pitfalls here.
One is that if they go the route of selling to chains at discount for volume, then they wind up just like what happened to the music cartels.
What happened to the music cartels is this. They made these deals for better pricing (read cheaper) than any other nonchain store could get. This means that no matter what the price, the nonchain store can’t get the product to put on the shelves at the same price. No one in their right minds will pay $18 for what they can get for $12 somewhere else. Instead they will wait till the next time they go to that store that sells it for the $12 bucks. The chains then use that item as a loss leader. They sell it for less than they bought to attract customers into the store, expecting them to buy something else while they are there. Mom and pop can’t do that as the product is what they expect to keep them in business. Since mom and pop can’t compete, they go out of business.
Mom and pop stores carried far more product than the chains ever offered. So there is less product to be seen. You can’t buy what isn’t on the shelves. That means that a ton of delievery men, warehousers, employees across the spectrum don’t have work anymore and are laid off as a results. Since the cartels had that easy whipping boy, the p2p to blame instead of what really happened, pirates did it.
Only it didn’t stop there. These chains realised that they are toting more than 75% of national sales. One by one they tell the cartels, sell to us at less or we are dropping your product to put dvd’s in their place that have a higher profit margin. Since there is no where else now to sell as mom and pop are out of business, they either comply or lose that % of national market. As a result, you the customer can now buy the music cheaper. But the chains have other requirements that you are going to have to accept with this. One is that you don’t mind censorship. Mostly either a cleaner version has to be recorded to meet the chains requirements or the offending language must be removed. Another is that you only want the most popular. Since there is far less shelf space, only the hot items that are going to sell quickly are going to be there. Forget the major hits of 20 years ago, unless it is still a hot seller, it isn’t there.
This is the driver behind the cartels wanting virtual shelf space. There is no end to the shelf. Stack as many as you wish in a list and add as you will. Overhead of store employees and the benefits to be paid such as insurance, workmans compensation, and stock options are gone and those paid are a pittance compared to the national load that existed before mom and pop stores went under. Almost all of the money that fed the infrastructure to distribute the physical product now goes to the major cartel members.
Who looses? You do. That’s why this business of Sony and the like that is being played out across the band of music lovers is so important. Just like when Wallyworld came to your town and put out of business all the local stores, the cartels are eliminating your choices. Soon you will only be able to buy from them, pay them direct, and accept whatever they deem the way to do business or not deal with them. You won’t have the choice of going next door to a competing business.
December 1st, 2005 at 4:09 am
true true,
But why watch Hollybird Crap when Foreign Films are of much more higher quality, originality, and entertainment?! Heck, I gave up on Hollyberg a decade ago!!!
December 1st, 2005 at 7:13 am
So yeah, Walmart is important. That’s why there has been so much bad talk coming from the Zionists lately. It you pay attention to the news, you’ll notice it. And no, the Zionists do not have a firm control of Walmart, as they do the RIAA & MPAA (afterall they formed it, initialized it, mold it, and direct it) — so that is why there is so much hoopla.
Interesting times ahead, indeed!!!
December 2nd, 2005 at 3:07 pm
The movie industry (a much bigger thing than Hollywood) has many new , bigger by the day, problems as a result of digitalization, file sharing, file copying, high definition television, new storage technologies, and a more knowledgeable population.
Then there is the new movie making technologies such as cheaper professional cameras, editing, graphics and animation software.
What it all boils down to is that movie making will be cheaper, the distribution costs will be close to zero, the movie options will be far greater. Shortly instead of having the option of 10 worthless American movies at theater (with an occasional good one or a European one), the people will have the option of watching anyone of hundreds of movies from all continents from many sources. One of these sources will be the increasing collection of copies of movies not in the hands of or controlled by the movie studies. These are copies that are in homes, public libraries, schools, etc. At one point this out of control copies will be so vast and accessible that few people will actually have to buy anything. The few will be the ones that want to see films as soon as they are release. Those that do not care if the are entertained or educated with new releases will not buy anything.
Then there is the issue of whether the people will continue to be entertained with newly released films once film promotion is eliminated as a result of dwindling sales.
What can those in the movie industry do to survive?
- One is to reduce the salaries of the so called super stars and staff and executives. Sure, a great actor should earn more than an actor trainee, but the Hollywood companies were able to pay those huge salaries in the past, but the past has ended. Cost cutting is the way to survive.
- Improving quality is another way. Most films that reach theaters are awful. I imagine that this is due to the fact that at one time movie going entertainment had little competition. But that has all changed.
- Stop the making of gory movies full of violence. When you see that most actors on the movie posters have a gun on their hands you know that the movie moguls have run out of imagination.
- Bring back clean comedy and musicals, with real comedians and real music. Remember Charlie Chaplin? Rodgers and Hammerstein?
- Make movies that appeal internationally. Too many movies are made for a strictly national audience, with national actors.
- Make historically correct movies, even if the presented views go against what was propaganda in school in school, the press and elsewhere. In the past big sectors (perhaps all) of the population were alienated from the movies because of the way they were portrayed. Remeber the American Indians?
- Do not fight file copying or sharing. The people have more power that the laws Hollywood or MPPA can get approved and far more power than the few people that work in the movie industry and the even fewer that in the past have made fortune with little work.
- Stop paying press payola to promote movies. Just make good movies. Word of moth publicity is the best publicity for good movies.
Yes, more hard work will be required. The economic rewards will inevitably shrink, but no so the spiritual rewards… potentially. Think of movies as an art to entertain and no so much a business.
If you are a Hollywood shareholder and all you want out of life is money, sell your movie company shares before it gets too late.
Rafael Venegas
http://www,gvenegas.com