So, pretend you’re a Hollywood studio executive. You’re trying to prevent your lucrative DVD movie sales business from being overrun by disruptive forces like online piracy, online streaming services like Netflix, and other rental companies. You currently make everyone wait 28 days from the day you put the DVD up for sale until they can “resell”it (rent it or stream it) to their customers. You think that by doing this, you’ll encourage more retail sales of your DVD because customers will want to have the movie RIGHT NOW vs waiting 28 days. Brilliant! Why, it’s such a great idea, why not extend it to 56 days!!!
Warner Brothers Will Make Netflix, Others Wait Longer For Discs – Peter Kafka – Media – AllThingsD.
OK, great. So now if Im a customer that wants to see your movie but I don’t want to own it on a piece of plastic that will sit on my shelf when I’m done with it, I need to wait 56 days instead of 28 until I can see it. That kinda sucks, but I guess there aren’t any other options… Oh, wait… Yes there are…
Ask any music industry executive about what happens to a music CD the minute it releases. It gets ripped to MP3 format, then put up for free pirated distribution on bitorrent channels. The more popular the release, the faster and more viral the spread.
This happens with movies also – people that don’t want to wait the aforementioned 28 days can usually find the movie they want to download for free, with no problem, within a few days of it being released on DVD. By the time that 28 days has run out, the bittorrent users have already downloaded the thing, so they don’t care to rent it or stream it legitimately anymore. At that point you’ve eliminated the “bleeding edge” of your customer base, and are now just trying to sell to the masses behind them. OK, fine – there are a heck of a lot more people out there that don’t know how to use a torrent client vs. those who do, so you’re still going after the majority.
Except now that you’ve extended that artificial “window of unavailability” from 28 days to 56, you’ve just increased the # of people who are likely to download it illegally. The more time passes after the DVD releases, the more it spreads online on the torrent networks, and the more likely it becomes that someone will decide they don’t want to wait to see your movie, and they start looking for other ways. Which they will find.
Kudos, Warner Brothers – you just gave your customers 28 more days to torrent your movies for free. You just gave your pirate enemy 28 more days of competitive advantage.
Good luck with that.