 |
| BitTorrent |
How The Music Industry Failed:
Compare this to the music industry. To this day they can't get it right. They are so stuck in their ways that they refuse to wake up to the reality that the world has moved on. Customers no longer want to pay $20 for a CD that contains mostly crap music, problematic and cumbersome Digital Rights Management systems, and rampaging lawyers suing the bejesus out of little old ladies.
Take for example Sony Music's latest fiasco, which I mentioned in a previous post. Today it came out that they are being sued by the Texas Attorney General for their nasty little XPC software that they snuck into new music disks. Rather than embrace technology, they are doing everything they can to make their customers suffer.
It took Apple Computer Company to show the music industry how to sell music on the web, and make money, with the Apple iTunes Store. Apple sells many times more music per month than all the other "stores" combined. They proved the people are willing to pay for music, at the right price. If you make your product too expensive and difficult to use, then your customers are going to look to alternatives, or not even bother.
The music industry still doesn't get it. They are raving mad that they can't demand that Apple raise the prices of music. They are still withholding the music of popular artists in a futile attempt to launch their own over-priced and over-regulated Internet sales site. In the meantime, their customers flock in droves to iTunes and to free pirated copies of songs.
We have been through this before:
Before the music industry found itself in the mess that it is in, the PC software industry went through the whole pirate-paranoia phase. Back in the 1980's when PC's fist became popular, copies of popular software were everywhere. The software industry fought back. They started installing copy-protection schemes on their product, which started an arms-race with the pirates. Every trick that the software companies would come out with would be defeated within days, if not hours, by hackers.
By the late 1980's it got so bad that copy-protection systems were seriously impacting the functionality of their products. Some vendors went as far as requiring users to buy a "dongle", a piece of hardware that you attached to your PC to authenticate yourself. The copy-protection schemes were hurting the paying customers, but doing nothing to stop the pirated versions.
Then something amazing happened. The software companies gave up. They realized that their paying customers didn't want to deal with cumbersome protection systems. Given a choice, the customer would buy the simpler product that didn't make them jump to hoops to prove they were legit. They just wanted it to work.
And the software industry realized that someone who is going to get a pirated version will do so anyhow. They were not loosing customers because of pirates because they never had the customer to begin with. Putting locks on their products was not going to turn a pirate into a paying customer. Nor was not putting locks on the product going to turn a paying customer into a pirate.
So they stopped wasting time and money on elaborate copy protection schemes and instead focused their efforts on building better products, that paying customers were willing to pay for. They focused their customer service and support to their paying customers, and let the pirates do what they are going to do anyhow.
The companies that gave up and moved on, such as Microsoft, survived, and now are highly profitable industry leaders. Other companies that were industry leaders at the time couldn't come to grips with reality and are now gone. In particular, Ashton-Tate owned the early word-processing industry, until they gave it to Microsoft by focusing on pirates rather than their product. Same for Borland, a leading developer of database and compiler software. They too gave up the lead to Microsoft by spending too much effort copy-protecting their product.
Hollywood is learning!:
Now the movie industry has been watching all of this with keen interest. They know that it simply a matter of time before the technology gets the point where pirated copies of movies can be distributed over the internet with the same ease as music.
Now they could take the same approach as the music industry and fight it tooth and nail. They could hire an army of lawyers to bombard the public with lawsuits, like the music industry has done. They could start sneaking in nasty software in their product, like Sony has done. They could cling to their old pricing system and ways, despite the fact that the customers don't want it.
Yesterday, the MPAA (Motion Picture Association of America) announced that they have struck a deal with 30 year old Bram Cohen, the developer of BitTorrent. Read about it here.
Hollywood's worst nightmare:
For those who do not know, BitTorrent is the peer-to-peer technology developed by Coehn that allows people to share files across the Internet in an extremely efficient manner, and without a centralized server. Unlike the first generation of massively popular peer-to-peer file sharing, Napster, BitTorrent is not centralized. The industry shut down Napster by suing the hell out of it. With BitTorrent, it is everywhere, and no where. Trying to sue it to death it like punching at fog. Also, unlike Napster, BitTorrent uses a swarming approach to file sharing. People who share music and videos online only have to share a small part of their file. BitTorrent collects the file from all over the Internet in small pieces and assembles it on your machine.
How Stuff Works has an excellent tutorial on how BitTorrent works so you can understand how it is so efficient.
In a nutshell, BitTorrent is the movie industry's worst nightmare come true. An untraceable and extremely efficient method to distribute large files across the Internet. So rather than try to beat them, they will join them. Using BitTorrent technology, Hollywood can distribute their films to end users for pennies. Better something than nothing!
No comments:
Post a Comment