Steve Blank’s post on January 6, 2012 entitled “The Movie Industry Can’t Innovate – the Result is SOPA” details how much the movie industry spends on legislation versus using the internet as an opportunity to make money. I completely agree. The movie industry is antiquated in its business strategy. The internet is here to stay and trying to censor it is the wrong path.
The Problem
Here’s how the movie industry currently works – from a customer’s perspective – using “Friends with Benefits” as an example. The movie was released to U.S. theaters on July 22nd, 2011. The DVD wasn’t released until December 2, 2011. Its current cost is $18.49 to $21.99. As of January 15, 2012, it’s still not available on Netflix but is available to rent on Amazon’s Instant Video for $3.99 plus tax. If you live outside of the U.S., you may see it at your local theater for one or two weeks about four months after the box office date, but you’ll never be able to watch it on Netflix or Amazon due to licensing restrictions for movies outside of the U.S.
The Result
Piracy.
The Solution
The movie industry thinks that it is getting more money by stretching out the release of DVDs and release to licensed internet movie sites, but I believe it is losing much more in these efforts. There will always be those who want to see the movie at the theater on opening night. There will always be those who want to buy the DVD, and there will always be those who want to watch it one time and one time only.
The first thing the movie industry can do is to decrease the time between release to the movie theater and release of the DVD. It should not take five months to make, package, and ship DVDs. The sooner the DVDs are out and available to the public, the less likely someone is to tape the movie on their smartphone and make their own pirated DVDs to sell. Second, release the movie on your own company website for a fee. I believe that most people don’t want a pirated copy and would rather pay a fee to watch a high-quality version legally. Third, make the movie available online for a fee WORLDWIDE. True, you probably can’t charge as much in other countries, especially under-developed ones, but the incremental income that you could get from the other 6.6 billion people who don’t live in the United States would be significant.
The bottom line is that the movie industry should be leveraging the internet as an opportunity to make money instead of trying to fight it.
