Yet Another Study Shows That Hollywood's Own Bad Decisions Are Increasing The Amount Of Infringement

Studies

from the and-again-and-again dept

We’ve pointed out over and over again that the real way to stop infringement is to offer compelling legitimate services that are reasonably priced. Time and time again, throughout history, it’s been shown that the real reason there’s widespread piracy is because the content isn’t available legally at all, or is available in a limited or inconvenient way. Make things easy, not locked down, convenient and reasonably priced, and tons of people pay. Books have been written about this. Studies have been done on this. And just the success of things like Netflix and Spotify show how this works wonders.

Now there’s a new study, once again, showing the same thing. Professors Michael D. Smith and Rahul Telang (from Carnegie Mellon and Heinz College) have added some more evidence — and it again suggests the “problem” isn’t that the law isn’t strong enough or that enforcement isn’t draconian enough. It’s that the industry still refuses to give customers what they want:

Our research suggests that Hollywood is leaving money on the table ? and is in turn failing to address a root cause of piracy ? by preserving its separate release windows. Based on our analysis of seven large nations, we find that in most countries, every week customers have to wait before they can buy a DVD translates into, on average, 1.8 percent lower DVD sales. Given that good-quality pirated versions are available close to 14 weeks before the legal versions, the losses can be in the millions of dollars. Not surprisingly, a 14-week delay also translates to a 70 percent increase in pirated movie downloads in those countries.

The study basically found what many of us have been pointing out for ages: making things not available doesn’t drive sales. It drives infringement. This is such a fundamental point, and it seems so obvious to many of us… but those in the industry still refuse to believe it. Now, some of the problem with the delays come from the theater owners, who flip out at any attempt to shorten windows, even if the “competing” options are priced ridiculously high.

But the studios themselves are frequently guilty of this same self-defeating thinking. Many are really pushing for rental delay windows, such as denying new movies to Netflix or Redbox until 28-days after they go on sale. One studio has broken ranks here: Paramount. That’s the only studio that has made it clear that delaying movies doesn’t increase sales. The other studios, though, still don’t seem to get it, and don’t realize that for people who want to see a movie, but are stymied due to a stupid release window, that they do have a few other options: (1) simply go away and forget the content entirely or (2) go find the content elsewhere. Neither scenario is good for the studios.

But the professors make the key point that the studios are going about this entirely backwards based on the data:

Together these results suggest that delaying content in the presence of digital channels is likely to cause consumers to lose interest in the product at best, and lead consumers to alternate pirated channels at worst. A better strategy would be to do the opposite: Make it easier for consumers to buy the content in physical and electronic channels. For motion picture studios this might mean selling content in theaters, on DVD and on digital services at around the same time, perhaps at different price points.

Shocking. We’ve only been arguing for many years that you should be able to buy the DVD of the movie you just watched as you walk out of the theater (and if you show the ticket, you get a discount). It still amazes me that this is still not really being done — even as the evidence piles up that moves like that would increase, not decrease revenue.

Filed Under: day and date, hollywood, infringement, piracy, windows
Companies: mpaa