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  • The Entertainment Industry Still Doesn’t Grok Apple

    September 11th, 2007

    It’s sad, really. Apple’s iTunes store has sold billions of songs, millions of TV shows and movies, yet the entertainment industry still resides in the middle of the 20th century, so they can’t appreciate what’s actually happened.

    For those of you who weren’t around in those days, we were saddled with black and white TV, and vinyl records. Of course, we didn’t realize that was any particular disadvantage. Except perhaps in laboratories, digital sound was nowhere in sight, and the prospect of recording a TV show for later viewing with cheap gear in your own home was something confined to science fiction stories.

    You see, in those days, the entertainment industry had full control over what you heard or saw, and when and where the product was exhibited or sold. Sure, there was piracy, I’m sure, but not in the sense that we see it today, where show business representatives and their high-priced attorneys sue their customers — and not just each other.

    Every time the consumer had the chance of gaining control, the industry would fight tooth and nail, without actually thinking of the consequences. Take videotaping your own shows from TV. That was a huge one. How could they let you get away with that? However, when they finally thought it through, they realized they could rent and sell videotapes and make a bundle.

    With the arrival of the compact cassette, and later the CD and DVD, they discovered another scheme to separate you from your money, and that is to make you buy all your favorite tunes and movies all over again.

    The problem with CD and DVD, of course is that, unlike vinyl recordings, they don’t wear out very often, and then usually only if you scratch the living hell out of them.

    So the money-grubbers in Hollywood finally devised a way for you to still buy all new versions of what you already own, by dint of remixing and remastering albums, and providing special “Director’s Cut” editions of movies, sometimes with alternate endings on a separate disc. There were even “collections,” which contained several movies in a series, or even a full season of a TV show.

    In fact, some shows, such as the all-too-quickly-canceled science fiction western, Firefly, got a new lease on life, sort of, and generated more income for the movie studios, because of the DVD versions. All right, I freely admit that this is one collection I actually purchased.

    However, when the world went digital, the entertainment industry went bananas. They couldn’t see the forest from the trees, so rather than embrace the new medium and monetize it, they could only see the physical media that wouldn’t be sold. They sat on their heels and watched people go to Napster and BitTorrent to illegally download the content they wanted.

    In the end, they should bow down before Steve Jobs for showing them what they couldn’t see for themselves, and that was how to make billions from legal downloads. However, rather than thank Jobs and Apple for bringing us the iPod and iTunes, they got the bright idea to try to induce Apple to increase prices. Or just charge extra for hot product, and a little less for older catalog selections that weren’t selling near as well.

    Jobs, however, wanted things to be simple and straightforward, so he said no. Worse, he had the temerity to tell the entertainment industry that they should remove all the DRM that tethered music to a handful of computers.

    So far, only one music company, EMI, has acceded to those demands, at least on iTunes. But they got something in the bargain, which was to sell the DRM-free music for $1.29, rather than 99 cents. Sure, you also get a high-reslution 256K version for the extra cash, but EMI’s costs don’t change one iota. They just have to give Apple two versions of the same music file, and count the money; that is, except for the pittance they pay the artists and song writers in royalties.

    Universal/NBC, of course, couldn’t tolerate operating in an environment that actually succeeds, so they tried to play chicken with Apple. They decided to sell DRM-free songs elsewhere, and move TV shows to Amazon Unboxed, the better to ignore Mac users. Yes, that’s really smart, folks! Exclude millions of potential customers. And for what purpose? To spite Apple? Engage in a power play?

    As I said, the entertainment industry has a golden opportunity to expand their marketplace and reach millions of younger folks who live online almost 24/7. I see lots of potential profits there, and Apple can show them the way. But, typical of Hollywood moguls, they may hear, but they do not see.



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