fredag 16 januari 2009

Why the Movie industry will fail on file-sharing

The subject is hotter then ever. Most I-countries are making laws to protect the business-model the movie industry has used for the last 70 years but will it succeed?

Top 5 problems of making laws against file-sharing:
  • The likelihood of connecting an action conducted by a specific IP at an specific time with a person is extremely hard. The loophole will always be IP hijacking and anonymous networks like TOR. Will we have personal ip-numbers in response?
  • The motivation of not paying full price will always be very high. Therefore the people creating the file-sharing networks will be just as smart as the ones against them(?).
  • The difference in information is not defined. A certain combination of bits can mean different things depending on the coding used. Therefore a certain stream of information cannot be banned or blocked.
  • The traffic of file-sharing websites produce a huge income in form of advertising.
  • BitTorrent is a very robust and stable protocol, information can be encrypted and routed without any limits. The use of BitTorrent in other areas like digital television and cellphones will secure it's future.
My point is really that it's inevitable that file-sharing is here to stay. So how is it possible for the movie industry to adapt their business-model? From a few assumptions I will suggest my conclusion:
  • The computation power of PCs will always increase, in a few years most PCs will have enough to render movies like Shrek on the fly. Don't think so? Then take a look at CUDA.
  • In addition to the increase in computation power available it will be easier for smaller companies and even private persons creating advanced computer animated movies, just like people now are making maps for games or music. This will lead to an increase in the supply of movies. The need for studios, cameras and expensive crews in 50 years from now can therefore be questioned.
  • The business model of Google and YouTube does obviously work so why can't it be used in other areas were the product is in any form digital information.
  • With the Internet as a marketing and distribution channel good stuff will always come through. When everyone is plugged in 24/7 you can hit millions of people within your premiere hour!
My conclusion:
  • We will have very few large movie companies in the future. Corporations? Don't think so.
  • Internet is superior to any other distribution-system, every movie must be digital for it to be seen.
  • If you putout $5,000 making a movie, you will need 5,000,000 pageviews with a eCPM of $1.00 to break-even. Plausible when India and China is hooked up properly? Yes! The model will work when enough people get Internet.
  • The market for movie theaters, merchandise, product placements and premiere events will remain.
  • Movies will be free or pirated!

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