is web video really hurting tv?
09Nov07
Please take a look at the paper linked below.
As Koleman Strumpf showed in his paper “The Effect of File Sharing on Record Sales,” the deleterious effects of the Internet on entertainment industry models have a tendency to be overblown.
Downloads have an effect on sales which is statistically
indistinguishable from zero, despite rather precise estimates. Moreover, these estimates
are of moderate economic significance and are inconsistent with claims that file sharing
is the primary reason for the recent decline in music sales.
I just killed the TV - now we download the five of six things we care to watch via BitTorrent.
I hope your not using Comcastis seems they have been hit with a FCC complaint for blocking things like bit torrent.
Web video doesn’t really pose a huge threat, especially if the content providers are smart enough to upload their own superior product, then they get some ad revenue.
I think DVRs pose a greater threat, as they completely neutralize the revenue stream. I have heard that Tivo is working on a way to insert targeted ads into the time when you are skipping the traditional ads.
I’ve got my resident statistician breaking down the formulas for verification, but it appears that the crux of the issue comes from the Conclusion of the “paper”:
“We find that file sharing has no statistically significant effect on purchases of the average album in our sample. Moreover, the estimates are of rather modest size when compared to the drastic reduction in sales in the music industry. At most, file sharing can explain a tiny fraction of this decline. This result is plausible given that movies, software, and video games are actively downloaded, and yet these industries have continued to grow since the advent of file sharing. While a full explanation for the recent decline in record sales are beyond the scope of this analysis, several plausible candidates exist. These alternative factors include poor macroeconomic conditions, a reduction in the number of album releases, growing competition from other forms of entertainment such as video games and DVDs (video game graphics have improved and the price of DVD players or movies have sharply fallen), a reduction in music variety stemming from the large consolidation in radio along with the rise of independent promoter fees to gain airplay, and possibly a consumer backlash against record industry tactics.26 It is also important to note that a similar drop in record sales occurred in the late 1970s and early 1980s, and that record sales in the 1990s may have been abnormally high as individuals replaced older formats with CDs (Liebowitz, 2003).”
While Web TV hasn’t had any relevant affect on TV yet and will certainly be a tougher nut to crack than the crippled music industry, I parallel the Web and TV to the Cable invasion of the late 70’s. Back then, Network TV was king and no-one envisioned 200 channels, DVR, PPV, etc., etc. While Network TV has survived they are much diminished and a dying breed.
Personally, I think there’s just way too much to choose from. My head can only hold so much in a short period of time. Of the 200 channels I have, I likely watch 4-5 TV shows and usually after they were DVR’d. For me, the Web provides an opportunity for INTEGRATING channels of TV and Radio. It’s the one portal that can deliver it all.
Shouter, you are an Early Adopter. It will take a generation to get little old ladies in Buffalo fully utilizing the Web….unless it’s integrated into TV and available through the remote. Bit Torrent is still a little to complicated for the general public.
Got to agree with MM on this one.
“Bit Torrent is still a little to complicated for the general public.”
My friend at Cajun Boy in the City includes this YouTube as part of his Friday post regarding the Writers’ Guild Strike.
Because of all the “residual” concerns pertaining to “artists” in writing and music, there will continue to be quite a fight to change the existing model. However, my prediction is that attempts to resist will ultimately prove futile. At some point, all roads lead to the Internet and Web delivery.
What I don’t understand is why writers or musicians aren’t simply paid a price for their works ONCE….just like everyone else. Even visual artists like painters get paid for their works once or if they “rent them out” for exhibit. Photographers generally get paid for specific photographs, once. They may sell multiple copies of a photo, like musicians do with songs or CDs, but most photographers aren’t paid on “residuals”.
In my job, I’m paid for my output or my “art”. I’m paid a salary and whether my idea is used once of 1,000 times, I’m only paid for it ONCE.
As technology and delivery evolve, so too shall the way people are paid for their work concerning the Entertainment business. If I were a professional writer, I’d be demanding more for my product upfront rather than relying on “residuals” to pay the rent and health insurance. As a musician, I’d look for tangible income from touring and merchandise to pay the bills.
To me, the convergence of music, TV, video games and movies, i.e., “entertainment” is inevitable. All in one 52″ High Def screen and console “controller”. Why do I need an iPod, a TV, a DVD player, a Cable box, AND an X-box, when all could be delivered via the TV? And, where ARE those flying cars and metric only signs I was promised in 5th grade?
It is quite simply a matter of gambling. The system uses residuals as a payout for successful work. The studios prefer it because it allows them to get into a project with a lower front end. This also benefits the studios if it doesn’t pan out.
Writer’s like this model because it gives them a chance to sell their products in the first place, with a hope of writing the next Star Wars, and making some real money.