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What is Really Killing The Movie Industry

Posted by: , 13:45 AEDT, Thu February 25, 2010

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Movie studios are making record profits, but their refusal to adopt online business opportunities, such as streaming, in fear of piracy, are holding back the movement of the digital movement

At the box-office the major movie studios are raking in record profits, but their continuing refusal to widely adopt online business opportunities are hindering progress. According to the head of the Blockbuster video chain, the movie industry’s greed is to blame for holding back innovation.

First off, we have to make it clear that the major movie studios are doing great at the box-office, despite movie piracy riding at an all-time high. Other parts of the movie industry, such as video rental outlets, do seem to struggle and they have the studios to thank for this, not piracy.

In January of this year Warner Bros. announced that new DVDs will not be available at online rental outlet Netflix for the first month after they are released in stores. Warner Bros. hoped that this would increase DVD sales. However, the most likely side effect is an increase in piracy and a loss of income to Netflix.

It is a step back in a time where consumers are screaming for on-demand access and the flexibility to choose the option they want for their video consumption. The studios are clearly skeptical of all these ‘new’ technologies and are frantically adding restrictions to maximize their revenues, ignoring all market signals.

The greed of the music studios hasn’t gone unnoticed by Paul Uniacke, head of the Video Ezy and Blockbuster video rental chains. “Studio greed is what’s holding back video-on-demand,” he said in response to the studios demands to pay huge sums of money upfront if they want to offer on-demand streams.


“Movie studios are still as arrogant as the music moguls were before digital downloads and piracy destroyed them. The only thing that’s protecting the movie studios (from more widespread illegal downloading) now is file size,” Uniacke added.

Much like the big music labels, the studios are trying to control how people consume media to an extent where it becomes impossible for innovative retailers to offer a product that can compete with piracy. By this process they are killing their own business and that of many retailers, while blaming piracy for the damages.

Consumers demand convenience, availability and a high quality product for a fair price. Still, the decisions of the music labels and movie studios are mostly heading in the opposite direction as they cling to their old business of trying to safeguard their monopolies.

Credit: TorrentFreak


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