How to kill movie piracy: charge $1 for movies, and 50c for episodes

How to kill movie piracy: charge $1 for movies, and 50c for episodes


Movie piracy is the next big thing. The RIAA is quickly realising that their reputation is nearly beyond unrecoverable, after taking to court single mums, dead people, and children. In the meantime, in Australia they are having secret meetings to try and work out a way to prevent movie privacy. The solution is simple: to kill movie privacy, allow people to download movies, make it cheap, and make it easy. Yes it's hard. But yes, it's rewarding.

A look at the past (and the present)

The music industry has been trying to prevent people from copying things from day 1. At the beginning, there were vinyl records. Yes, there were tapes -- but copying them was less than ideal (did you ever try to make a copy of a copy of a copy?). Technology moved on, and the music industry timely tried their best to kill them. How many people know that Mini disks and Digital cassettes were available in the early nineties, and you could digitally record your music using them? Yes, there was a war of technologies trying to become the "next big thing", and the winner was... the music industry: both standards died, succumbing a tactical attack from the music industry. The entertainment industry won.

When CDs became famous, the price of an vinyl LP was around $8. Even in 1995 to 1998, when LPs were still anything but rare, the price was around $12. When CDs came around their prices was much higher: around $30 (the current price is $35-$45). They justified it with "investment costs" needed for buying the equipment to print CDs. But, prices never went down -- at all. The entertainment industry won.

When copying a CD became easy, in a lot of countries the music industry managed to pass laws where the cost of a CD would go up immensely. It's called Private Copying Levy. I was in Italy at the time, and the price of an empty CD went from 4 cents to 80 cents. It's not without horror that I see that when you buy a hard drive in Finland, you might be paying up to 10 Euros as a Private Copy Levy -- and probably have no music on the hard disk at all. The entertainment industry won.

The Internet came. It was 1995 when it became popular, and it was slow. It was however fast enough for people to get multimedia contents online, if it were available (and that was a big if). It was impossible to buy songs online (impossible!). A lot of people wanted to download music, wanted to do it easily, and wanted to do it now. They couldn't. The same applied to movies: it was impossible to buy movies online (impossible!). A lot of people wanted to download movies, easily, and now. They couldn't. The entertainment industry won.

Steve Jobs came along. It played hardball with the music industry, created iTunes. He made sure there was a cheap, easy, universal way to buy music, legally, free of DRM (copying restrictions). He opened up a world where people could pick a song, pay 99c for it, and have the full quality MP3 available -- and even download it again if they needed to. The entertainment industry was forced to discover a huge revenue model it had ignored for so many years. They had to win for the world to win. The entertainment industry won.

The Internet became fast. And yes, welcome to today. You can buy music online, but good luck if you are after a movie. Renting a movie online from bigpond is complicated, expensive, and it even requires the installation of an obscure program in order to download and watch movies (Windows is definitely supported, I am not sure about OS X, forget about anything else). The range is poor at best. Getting one from Quickflix is a joke (they post you the DVD? Plus, most of the more interesting things are not available as streaming). People today still want movies, want them easily, want them now. When a lot of people want something, and cannot get it, then you get a lot of people with an objective. That's the key ingredient for what you call a revolution. The revolution happened. The music industry lost.

An army of illegal downloaders

The problem is that most people don't want to spend hours looking for a specific song on peer-to-peer networks. Most people would rather pay a little bit, and have the song available in seconds. And, in the meantime, also have it available again if they lose their iPods or music players. They might not have the skills to do it, the time, or the inclination.

The same applies to movies: finding a good copy of a movie on peer to peer networks can be, and in fact often is, a pain in the neck. It's possible, but it's hardly a good solution.

As far as music is concerned, people had to learn to do that. Until rather recently, there was no way to buy a song online. As clunky and inconvenient it might be, inexperienced users had to learn the tricks and the sometimes intricate ways to get music online. Since there was so many of them, the music pool soon reached what I like to call a critical mass: the whole world became a sort of a virtual community of people who got together to solve a problem. These weren't people who could get something for free, and wanted to pay for it instead. It was people who had no other way to get what they wanted (and that's music online, rather than by using CDs). Eventually, the iTune store appeared; so did the Amazon store; so, all those customers who hadn't yet discovered the world of free online music started buying songs from music store. A multi-million dollar market was created -- a market which was, in my unbacked and unverifiable opinion, crippled by the fact that many people had already learned how to get free music when there was still no choice.

The same thing happened with movies. In fact, you can read the whole section above, and apply it to movies and TV series. With a difference: it's 2012, and it's still impossible to download movies legally, cheaply and easily. The movie industry seems to be going bananas: tired of being the villain of the situation, suing single mum and children, they are now threatening governments and ISPs. The more time goes by, the more people turn to BitTorrent and other "illegal" ways of downloading movies. All those people are non-returning customers: they learned the convoluted ways of finding a movie, and are not going to be convinced to pay for them again. Not even if it's $1. The entertainment industry is losing customers every single day, and they seem to be doing absolutely nothing about it.

Music and movies: how much should they cost?

I want to make a point here: music and movies are inherently different. A song is something you will tend to enjoy multiple times. (If you are obsessive compulsive like me, you will end up listening to the same songs over and over again!) Movies are different: once you have watched them from your computer, they tend to be put into a folder, until they rot and deleted to make space for the next backup.

We now have a market where the established price of a song is about $1 and a movie costs $20 (whereas having it in streaming is around $4, give or take).

These prices are insane. I am in no position to lecture about prices, but I can do the maths: I can see a movie for $9; I get a good seat, a big giant screen, and somebody to clean after me when I leave. I could rent 2 movies for $3 from movie rental places (OK, not the new releases, but still). So, why -- please tell me why -- would I pay $4 to get a movie streamed, and $20 to own the file?

Or, why would I pay more than $1, which is a little less of what I used to pay at the video store? (Mind you, no transport necessary with online streaming.)

The solution

The solution is complicated. There are tons of movies out there, owned by different companies in different countries, released at different times. There are several technologies available to see them. And there is evil DRM. This is complicated further by a huge army of angry people who are sick of waiting for the movie industry to get their act together and started doing it themselves (see movies via BitTorrent).

So, where is the solution?

  • Create a multi-tier system where major studios can make movies available to distributors
  • Allow "distributors" to pop up and compete with each other while paying royalties to the copyright holders
  • Make sure that at least one of these distributors is platform-independent (no silly "downloader" to install on Windows, for example)
  • Make sure pricing can be as flexible as possible, so that distributors can charge a recurrent fee or a fee based on watched minutes etc.
  • Make sure it's always possible to download the movies "bought" by paying an extra small fee
  • Spend money in cinemas educating people about this system rather than silly ads against "piracy" which will simply invite more users to download movies for free
  • Make sure that prices are very reasonable: $1 for a movie, 50c for a series episode
  • Create a community around movie downloads: for each movie, allow commenting and discussions.
  • Do all this soon. Like very soon. Before your whole customer based gets used to downloading movies for free.

It's nearly too late. But then again, it's never too late. This is a realistic solution that will get you, the studios, to make millions. It will stop people from learning how to get movies for free. It will create a healthy community of people watching movies.

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Comments

cockatrice_hunter's picture

Historically, televisions shows have made money through advertising, using ratings to gauge the value of shows/time-slots. I wonder how many people would download 'legal' episodes that include commercials. Estimating the number of downloads of a certain file should be more accurate than previous methods. The transaction costs of millions of 50 cent purchases may become prohibitive. Furthermore, with a download, there is a possibility of the episode being re-watched, possibly doubling (or more) the exposure to the commercials. Rather than charging for the shows, would adding commercials not be a more viable option.

As for one dollar movies, perhaps charging a bit more would be acceptable. For a big blockbuster movie to break even under this system the would have to sell ten millions of downloads perhaps extending into the billion dollar range.

sgtrock's picture
Submitted by sgtrock on

Amazon.Com is sort of following the model that you suggest but charging much more for it. I'm certainly not willing to pay $80/year plus an additional $3/month just to watch a 30 year old film! (Look up Romancing the Stone on their site for one such example)

For me, the need to own a copy of a movie or TV show is much less important than it used to be as long as I can stream what I want to watch at any time for a reasonable cost. Several companies here in the U.S. are exploring ways of doing that now. Better yet, you can do so on several different platforms.

Netflix (http://www.netflix.com) has a decent sized and growing repository of movies and TV shows available for streaming for just $8 a month. So far as I can tell, it's roughly 20-30% of their total available library of DVDs.

The only major Hollywood studio that is currently releasing first run movies through Netflix is the Starz! consortium, but that's not Netflix's fault. They're doing the best that they can with the material available. OTOH, Netflix does have a pretty good selection of older movies and foreign films if you're into that kind of thing.

Then there's HuluPlus (http://www.hulu.com). For another $8/month, you can watch first run TV shows (plus a small collection of movies) that most of the major U.S. OTA TV networks own distribution rights for. The only one that refused to join is CBS, which means that first runs of a handful of good shows like the Big Bang Theory aren't available. But guess what? It's available on Neflix one season behind so it's not THAT much of a loss.

Those two services barely begin to scratch the surface of what's available either cheaply or for free, though. Crackle (http://www.crackle.com) has a tiny repository of movies (about 300), but it's free. They use embedded commercials instead of a subscription model. Then there's stuff like all the major news outlets, specialty channels covering outdoor sports, tech, music, public domain archives of old movies and TV shows, you name it available.

Better yet, there's at least one vendor out there who has figured out how to package all of this stuff in one fairly easy to use interface. I'm speaking of Roku (http://www.roku.com). For just $50 (including shipping) you can buy their low end unit, plug it in, and have access to more than 300 online sources playing at 720p. (The list of sources includes everything that I've mentioned above, btw.)

For just $90 you can get their top end unit which includes full 1080p playback (if the source supports it), an Ethernet jack in addition to the wireless b/g/n NIC, USB port, a microSD slot, and a full version of Angry Birds. They've got a couple of intermediate models, too, but I don't think they differentiate all that much.

One way that Roku has grown their channel list so quickly is that they encourage people to create and publish their own, so-called private channels. As Roku verifies that those channels work well and don't infringe any copyright holders' rights or Terms of Service of the online providers, they get added to the list that everyone sees.

To me, this is a much, MUCH better way to consume movies and TV than renting individually. Nor do I have a desire to create a huge collection of DVD ISOs any longer. I can instead just focus my purchases of physical media on the really hard to find stuff that I really like. In the meantime, I can finally sit down and watch the entire run of Stargate SG:1 for the first time since it first started running. (Currently at episode 104 out of 213! :-) )

Roku's not the only player in this space. There's Apple TV, Boxee, and others. Roku is currently the number one provider for a reason, though. I think it has the best combination of price, convenience, ease of use, and selection currently available.

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Tony Mobily's picture

Biography

Tony is the founder and the Editor In Chief of Free Software Magazine