Robin Hood complex
People aren’t just looking for a free ride. They’re living in the modern world and expecting business models to keep up with them.
David Crafti, president of Pirate Party Australia, on illegal downloads. But is that ultimately true?
news.com.au has published the results of its survey on piracy and downloading habits, where respondents said they’d be willing to pay for TV programs, films, and music, if they were offered a cheap and legal service.
AFACT director Neil Gane is not so sure, claiming big companies can’t develop flexible business models because they can’t compete with free, illegal services.
I absolutely agree with the final comments made here:
“Perhaps technology and media companies have put out so many devices and so much disposable product that they have raised a generation that does not believe the content they consume is worth anything.”
I believe the market is so saturated that consumers are no longer able to see the value in much of the content which is created. Furthermore, consumers are only willing to pay for extraordinary content.
Last week I paid $17.50 for an adult admission to Iron Man 2, a film I really wanted to see. Other films, such as the Australian ‘I love you too’, ‘Book of Eli’ and ‘Beneath Hill 60’ I would like to see, but at that price I’ve labelled them as ‘DVD movies’. Meaning I will rent them, not purchase them. Many others, would automatically label these films as downloads.
We have so much content competing for our limited dollars that not only do we expect bigger and better all the time, but we are no longer willing to pay for anything less than extraordinary. Avatar did so well because it offered something that could not be seen at home, (no, not 3D), it offered an extraordinary world best experienced in the cinema, something downloads could not offer.
On the note of our cinemas, if tickets were priced at $10 an adult admission, I would roughly quadruple the amount of movies I would see each month. (4-8, rather than 0-2)
Bollocks. David Crafti – along with most of the people who trot out the ‘evolving business models’ line – knows as much about the economics of content production and distribution as I know about building nuclear power plants.
It’s simple arithmetic — add up the cost of creating content with the cost of marketing it, and the logistics costs of physical distribution, plus all of the overheads involved in running the myriad businesses necessary to keep this supply chain going, plus the premiums/royalties/profit splits which create the incentives for financiers to provide capital to an extremely risk-intensive sector… all of the sudden, the token amounts which illegal downloaders are (supposedly) so graciously willing to pay don’t stack up, even en masse.
Certainly, there are ways in which the business can improve. We can find efficiencies, re-evaluate budgets, experiment with pricing strategies and windows/platforms to provide better value for consumers, but ultimately the math is the math, and the margins are finite. Also, in Australia, there are massive, ongoing hurdles in place for anyone looking to distribute content online. The endless infrastructure saga of the NBN and the anti-competitive landscape created by the Telstra/Foxtel telecom&cable oligarchy severely limit the ability of local visual content distributors to pursue the kind of innovation & experimentation in digital platform distribution & VOD that we’re seeing in the US and some European markets.
If Crafti and his ilk had genuine insights and a coherent notion of viable approaches to turn illegal downloaders into paying customers without sacrificing billions by undermining existing revenue models, the industry would be listening and someone would be giving it a shot. This business is fiercely competitive, highly volatile and is ingrained with a healthy respect for boldness — everyone is always looking for an edge, and we’re not afraid to take calculated risks. In reality, the mindset exemplified by Crafti’s soundbite is just pie in the sky nonsense mixed with a bit of self-justification for ripping off artists, not to mention the people who devote their lives to supporting artists & finding ways to help art connect with an audience.
We can debate all we like but in the mean time producers are dropping like flies out the the industry. It is just not possible to make a profit by making films in Australia. In the end we will be left with Super Hero blockbusters from Hollywood and a large quantity of films made for less than $500K that will be dressed up as real films. In the end it will be Google and Yahoo buying directly from the producers that have survived the “restructuring”.