<Image Last Curtain is Falling by Alex//Berlin http://flickr.com/photos/15082599@N08/2710899029/>
Alan Parker, Kenneth Branagh and assorted British film people wrote an open letter to the Times warning that piracy is undermining the creative industries. On the radio yesterday I heard the producer of Quantum of Solace stating how in the far east they don't make any money on DVD sales because everyone watches illegal copies. He bemoaned all the promotion and distribution costs they have to bear.
Sigh. They still really don't get it do they? They have one model which they keep returning to, again and again. They're supposed to be creative, so get creative about your own industry. Interestingly, they put forward the opposite argument back in the 1980s when home video first came on the scene. Then the argument was that it would detract from cinema revenue and result in the collapse of the film industry. Then they realised that they could make as much, if not more, money from video rentals and sales and now they see it as some hallowed right to retain. Just as they were slow to understand the potential for home video so they are being slow to appreciate what the online world offers. Their only response to the internet at the moment is to think of it as another distribution medium - DVD online, for the same fee.
So, if any executives want to hire me on an expensive consultancy, here is my seven stage plan for what they should do.
- Accept the inevitable, don't fight it. When content becomes digital it will be freely distributed online. It's not as if they haven't had enough advance warning from the music industry about this. So don't waste your energy in trying to invent ever more restrictive DRM (which some teenager will hack the following week), or more aggressive legislation (which alienates your audience and can never be fully effective), or putting political pressure on Governments (who understand the issue even less than you do). Instead put your effort into finding a workable solution in the new landscape.
- Look at some of those costs. Distribution? Packaging? They're going to disappear. Marketing? Will need to be redirected. Actors? Well, maybe they are demanding $20million per picture because they know the profits you are making. If you're making less, they'll get less. A lot of your current costs are based on your current model - the model shouldn't exist just to justify these costs.
- Be the iTunes of film. Develop a super- cool, massive bandwidth, good social interaction site with a huge database.
- Make downloads or streaming cheap enough that some people will pay over downloading pirates eg. $1 a film.
- Use advertising. Make downloads free, but with some obligatory, can't be skipped adverts at the start.
- Offer subscription service which gives extra functionality - commentaries, webcasts from the crew, sneak previews, invites to pre-screening, etc.
- Make the cinema the experience - films still have the cinema as their main source of revenue. This is not a zero-sum game: A lot of people who download a film have either already seen it in the cinema, or wouldn't go and see it there anyway. Not every download is a cinema seat lost. Cinema going is still a social activity (what else would teenagers do on first dates?), and they should utilise this even more than they do currently.