(Note from the blogger: this post is less legal in nature and more my reflection on a business solution to the legal problem of copyright infringement in the entertainment industry and in particular movies)
While much of the focus in the entertainment world seems to be on minimizing pirating of content there has been little focus on what the entertainment industry can do to make pirated content less appealing than legal content. This is something that every industry other than the entertainment industry has had to deal with for years.
Let me explain. People can buy electronics anywhere. This has become even more apparent as the number of electronics stores online increases exponentially. As a result local brick and mortar stores have had to compete with infinite competitors when they used to have to deal with only a handful (or perhaps even none). As a result stores have had to refocus their efforts to retain customers or risk going out of business. Since most of these stores cannot compete with the prices of online electronics stores, they have instead focused on adding value by offering good customer service and expertise. The largest examples of this are Best Buy and Circuit City. Best Buy has a reputation of having good customer service, advertises its expertise, and provides a geek squad to aid consumers who need additional help. These are all services online stores have difficulty offering. Thus while Best Buy cannot compete with online prices (as evidenced by their unwillingness to offer their price match guarantee to online prices), they continue to attract customers. Conversely Circuit City had built up a reputation of poor customer service. Thus it was unable to retain as many customers as Best Buy and has gone out of business.
Perhaps a simpler example is hotels. This past weekend I paid $90 to stay at the Marriot rather than $55 to stay at a cheap nearby motel. Why? Because Marriott provides services I value above and beyond a place to sleep. Marriott has a reputation for great customer services, clean rooms, and fancy hotels whereas I suspected the $55 hotel might not maintain the same level of cleanliness or service.
How does this relate to the entertainment industry? The entertainment industry has held a monopoly on content for a long time. As a result consumers had a choice between the entertainment industry’s offering or nothing. Now however there is a plethora of cheap or free content available to the consumers as well as pirate content. As a result the entertainment industries is seeing a reduction in profits. In response to this reduction the industries has fought to limit/eliminate the pirated content. While nobody should argue that the industries should not try to prevent piracy. The fact is that entertainment piracy is a reality in the world today. Thus the entertainment industry should focus on how it can provide value added service like Best Buy and Marriott which entice consumers to pay more for something. Marriott and Best Buy continue to succeed despite lower priced alternative, and I believe the entertainment industry can do the same thing.
Monday evening I saw my first 3-D movie, Up. While watching animated movies is usually something I relegate to my Netflix list rather than paying $10+ dollars in a movie theater, I was curious to see the 3-D technology up close and in person. I was impressed. In my opinion the movie was good not great, but the subtleties of depth on the screen were incredible. Some of the people in our group felt that the movie did not have much 3-D and were disappointed with the lack of a large difference. I on the other hand felt that the depth of the movie was fantastic and part of the beauty of the 3-D was that it was so realistic and well done that it wasn’t in your face.
The point of all this is that 3-D movies are something I will likely pay to see in a theater again. Recently my movie going experience has dropped to a handful of movies a year with the rest relegated to my wonderfully cheap Netflix account. However by adding something above and beyond what I can get at home for cheap (or free if I wanted to download a pirated version), the studies have enticed me to go to the theater and spend more money. By adding a feature (3-D) studios have enticed me to pay more for something that I can get for less just as other industries have and do. I believe the entertainment industry can flourish despite piracy by providing value added services unavailable with pirated content.