Movies Are Just Content
Sony Pictures CEO Michael Lynton was recently quoted as saying "I'm a guy who doesn't see anything good having come from the Internet, period." He explained the Internet has "created this notion that anyone can have whatever they want at any given time. It's as if the stores on Madison Avenue were open 24 hours a day. They feel entitled. They say, 'Give it to me now,' and if you don't give it to them for free, they'll steal it."
Now clearly there are positive aspects to the Internet and the head of a major motion picture studio is understandably somewhat jaded. I think, however, his explanation uncovers a more significant misunderstanding. Anyone having whatever they want at any given time is perfectly fine, that's why Home Depot is open 24 hours a day. But "if you don't give it to them for free, they'll steal it" is off the mark. People still go to the movies, pay for premium movie channels and rent DVDs all the time. If there is a reasonable delivery method with a reasonable price, people will use it. Maybe the store is too inconvenient or the price of a movie is too high.
Most content industries are bumping up against a new reality in the world. Rather than people going without your product if your price is too high, they just go around the market and get the content for free. So as a content producer, you are faced with the choice of doing what the customer wants, such as lowering your price and providing better delivery mediums, or go out of business. (That's not to say every download is a lost sale though.)
The music industry was brought to its knees over this years ago. Once a healthy industry, they started seeing people download MP3 files from the Internet. They started to go after the downloaders legally (as they should be defending their copyright) but missed the fact that the world had changed around them and the customer wanted some newer options. No longer would a CD store that closed at 9:00 PM be the way people bought music. Why can't the music store be open all the time? And why do we have to buy the whole album if we really only wanted one song? Rather than realize that the customer wanted options more in tune with their portable music player, the music industry started advertising campaigns pleading with customers not to download music. This went on until the music industry was almost completely gutted. With few options left and not seeing any significant decline in illegal downloading, they had to look outward for an answer.
It took a bunch of geeks at a computer company to walk in and literally school the music industry on the way the world now worked. Apple dragged the music industry, kicking and screaming, back to the money tree with the iTunes Store. If you don't really think about it, what possible sense does it make that Apple is in the music business?! They now rule the music industry because they understood what the customer wanted given what the new technology offered, and they gave it to them. Of course the music industry had their list of demands before coming to the money tree such as an insistence on copy protection. What customer actually wanted to limit the players their music played on? By now, of course, rationality has set in and copy protection has fallen by the wayside as well.
The movie industry is in a similar predicament. As technology advances, movie downloading becomes more and more realistic for the average consumer. The DVD market is going the same way the CD market went. I haven't met anyone that likes the fact that you can't skip over some of the advertisements on a DVD they purchased before getting access to the content. They just want to watch the movie! Can you believe people are still renting DVDs from Blockbuster and NetFlix? Like music, movies are just content that can be downloaded. That this isn't the norm for the average family household with a broadband connection is almost unfathomable!
Yet we still have the CEO of a major motion picture company missing the whole point of the Internet. Command and control using proprietary systems is out, the customer has options now. However tempting it might be to call the Internet just a den of thieves, the reality is that movies are just content and the rules for content companies have been rewritten. Ask any newspaper company. If you don't give consumers what they want, you will go out of business! The sooner Mr. Lynton realizes this, the more of the pie Sony Pictures will retain.
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