It really was just two months ago that we pointed to yet another study saying that the problem that Hollywood was facing with infringement was almost entirely its own fault for creating stupid "release windows" that make it harder for consumers to view what they want, when they want it. It's that point alone that is driving significant amounts of infringement. It doesn't add much new, but a new report suggests that if the studios got rid of the windows, they would actually make more money. In aggregate, people would end up spending more money on movies. Of course, we've made this argument for years.

To be fair, a big part of the reason this doesn't happen is because of the theaters themselves. Any time the studios seek to take away the box office window by releasing something elsewhere earlier or at the same time, the theaters throw a complete hissy fit -- effectively admitting that they're so bad at the service they provide, that they can't compete with home theaters. Of course, it's not all the theaters' fault. As we've seen with studios like Warner Bros., they're so obsessed with the ability to price differentiate through windows, that they keep seeking to add new windows, which only serve to drive more consumers to infringe.

Honestly, I'm at a loss as to why Hollywood can't do the math here, in terms of how much they'd gain from doing day-and-date release for everything (even if it meant fighting the theaters). It seems like a clear win, with multiple studies supporting that, including this new one. They seem to think the only way to price differentiate is through windows -- but, as lots of others have discovered, you can launch a variety of differentiated offerings at the same time and offer them at different prices, and the market self-segregates. Sooner or later, someone at a movie studio is going to figure this out, and make that studio a lot of money.

This is fascinating and unexpected. We've discussed the research firm Envisional a few times here at Techdirt. The company is NBC Universal's preferred research firm for coming up with stats that NBC Universal then uses to insist that it needs new laws like SOPA/PIPA. Some have certainly called into question Envisional's research as a paid vendor. However, a year ago, we noted that if you actually looked at the details of the research Envisional did for NBC Universal, it actually showed that piracy was Hollywood's own fault. NBC Universal and the MPAA twisted those results to say that piracy was a huge problem, but the data certainly suggested the real problem was Hollywood's failure to release what people wanted in formats that they wanted.

Still, we never expected Envisional to come out and actually make that same point (even if that's what the data said). Yet, as this recent Ars Technica article notes, at CES, Envisional's "head of piracy intelligence," David Price, didn't mince words in saying that infringement was, in fact, Hollywood's own fault for not offering products in the way customers wanted and that SOPA/PIPA were the wrong approach to fixing its business model problems:

"The content owners are really fighting the tide of the Internet," Price said. "They're trying to fight the flow of the Internet which is all about making content as widely available as possible, as easily as possible, as quickly as possible. They're trying to hold back the 1.4 billon users of the Internet from doing what the Internet wants them to do."

In discussing SOPA/PIPA:

Price does not like the way the bills are drafted, potentially causing major technical and free speech issues. "When I talk to content owners I try to tell them this is not the way to go," he remarked. "You don't want to hurt people. You want to try and go with a compete approach, put the content out there and hope people will come to you."

Again, none of this is surprising. We've been saying the same thing for ages -- and we get dismissed as "piracy apologists." Yet this is the research firm that NBC Universal has relied on and regularly quotes in making its arguments about just how "big" a problem infringement is. That says something. And that something is that NBC Universal (yet again) is unwilling to face reality.

A bunch of folks have been submitting variations on two stories from last week that show -- yet again -- that the big legacy entertainment industry companies suck at economics. AdamR was the first to send over the news that Warner Bros. studio was increasing the "delay" period for rentals. If you don't recall, WB has been at the forefront of this braindead idea that, if it forbids Netflix, Redbox and Blockbuster from renting videos, maybe more people will buy the DVDs they release for sale. Of course, other studios took the time to study the matter and found that such a delay in rentals doesn't increase sales. Meanwhile, a separate study showed that such windows do increase infringement, as those who are perfectly willing to pay the price to rent, find the price to buy ridiculous... and seek alternatives.

It appears that WB is implicitly admitting that the strategy of delaying the rental period of a movie by 28 days has been a total failure, in the decision to increase the delay to 56 days. They're basically admitting that not enough people were "buying" in those 28 days... so they somehow think that doubling the wait will increase the purchases. It won't. If people really want to pay the extra money to buy the DVD, they're likely to do so pretty early on. It's not like they're waiting 50 days in and then saying "gee, I can't rent the movie, so I'll just pay a lot more money than necessary to own an obsolete piece of plastic."

Meanwhile, HBO, coming out of the same corporate lineage as WB, has decided to stop selling Netflix the DVDs of its shows. Netflix, of course, notes that it can get these DVDs from other sources, but it makes you wonder what HBO thinks it's accomplishing here. Pissing off its fans on Netflix by trying to force them into HBO's own annoying walled garden doesn't help build fans. And if it does actually lead to Netflix not offering HBO shows, then as plenty of commentators quickly noted, all they're really doing is encouraging more infringement.

This is basic stuff at this point. Not offering your content in simple, legitimate formats that the customers want doesn't help you at all. It just drives people to infringe. How does that help in any way, shape or form?

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.

The movie studios' short-sightedness knows no bounds, apparently. Warner Bros., which has been the most aggressive of the big movie studios in getting companies like Netflix and Redbox not to rent its movies until 28-days after they go on sale, has now decided to do the same thing for libraries, putting in place a 28-day embargo on all DVD sales to libraries, from the time of the DVD release. To make it even more obnoxious, they're removing bonus features and extras from movies sold to libraries.

Here's the thing, though. What's to stop a library from just buying an official version and lending it out? The whole thing is pretty silly anyway. Is Warner Bros. really thinking that if someone can't take out one of its movies from the library, that they'll really go buy the DVD from WB? Also, doesn't this seem like a form of price fixing?

In the end, though, it's unlikely to actually help. Slightly more enlightened studios, such as Paramount, actually tested such 28-delays and looked at the data, which said Netflix and Redbox don't cannibalize sales, and appear to "expand" the movie business. Too bad Warner Bros. hasn't seen that movie yet. Perhaps they're still waiting for the 28-day delay to pass.

The latest in a long line of ridiculous lawsuits from an entertainment industry that refuses to adapt and loves to put up artificial barriers, is the case of Disney suing Dish Network. Dish's infraction? Apparently a promotional decision to offer the Starz movie network for "free" to its subscribers (of course, it's not really free, since you have to pay to subscribe...). Disney claims that it has specific licensing deals with premium channels like Starz, which say that the films it licenses can only be shown on "premium" pay-TV tiers rather than basic tiers. The idea (of course) is that Disney wants to extend the ridiculous and outdated "windowing" efforts of Hollywood.

But, here's the thing: Dish Network is not a party to that contract. Dish should be free to offer whatever channels it wants in whatever tiers it wants, so long as it has the appropriate agreement with those channels. I can't see how Disney has a claim on Dish here, since it's a third party, which is simply making a reasonable business decision that it wanted to offer Starz as a part of a lower tier. Disney is claiming in the lawsuit that this "devalues" its movies. No, it does not. What "devalues" the movies is the silly windowing plans of the studios that make those movies less valuable to consumers.

Of course, Disney is claiming that this isn't a contractual issue, but a copyright one, but even that makes no sense. Dish's license with Starz clearly includes a license to display the content. And Dish is clearly paying to carry Starz, so everyone's getting paid. The only issue is that Dish decided, for promotional reasons, to include Starz in lower tiers for no additional cost for a year (Disney, falsely, repeatedly claims this is "free.") It seems that Dish should be free to offer whatever promotion it wants to its consumers, seeing as all the other terms of the license are the same and everyone's getting paid.

I could see how Disney might have a complaint against Starz for the way it licensed content to Dish, in which Dish was allowed to offer this kind of promotion to consumers, but going after Dish for copyright infringement, just seems silly. If anything, saying that downstream providers can't set their own pricing seems like Disney is opening itself up to a price fixing claim. It made its deal with Starz. Dish then did its deal with Starz. Dish should then be free to determine how much it charges consumers.

We recently wrote about how various theater owners were freaking out about new plans by studios to release movies for video on demand ten weeks after they went into the theaters... though for the astoundingly ridiculous price of $30. We noted that the complaining theater owners were more or less admitting that their theaters and the theater-going experience they provided sucked. If you can't compete with a home theater, you don't really know what business you're in. It would be like restaurant owners complaining that people can buy fresh food to cook in their own kitchen, so they'll never go out to restaurants again. Going out to the movies is a social experience, and theaters can easily compete by providing a better experience. The only ones who have anything to fear are those who know they provide a terrible experience and therefore can't compete.

Thankfully, some theater owners who do provide a good experience recognize this. Carlo points us to some comments from the owner of the famed Alamo Drafthouse theater in Austin, Texas, Tim League, in a blog post written by Caitlin Stevens (who, it should be noted, works for Tim):

He's not terribly worried. He's taking very much a wait and see attitude. "I think some of the charges that have been made [about premium VOD] are invalid and reactionary," he said. "It remains to be seen if this does impact theatrical. If you look back historically all the way to the 1950s everytime there has been a challenge -- from TV to VHS to DVD -- there has always been a component of the theatrical community that has said this will be the death of cinema."

Tim's also really skeptical of the claim that this VOD system will hurt smaller films that have platform releases, and points to distributors like Magnet, who have had great success with films they release on VOD before even hitting theaters. Those films tend to do well at the Alamo as well. "We've had good successes with those films even when they're playing VOD at the same time they're in the theater," he said.

Ultimately a lot of this comes down to the theatrical experience. Not to be a total shill here, but part of the reason people go to the Alamo is for the complete experience, which includes food and drink, high quality projection and a firm policy against talking and texting in movies. The big chains simply don't offer that -- not even protection from noisy patrons. "It's an industry that's vulnerable because if you give people the choice they won't choose a flawed option," Tim explained.

Exactly. Furthermore, he notes the key point that these complaining theater owners don't seem to grasp, despite their jobs running theaters:

"People -- especially on a Friday and a Saturday -- inherently want to get out of the house," he said. If theater owners can offer them a good option for getting out of the house at the movies, they'll take it.

Indeed. What stuns me is that theater owners who are complaining don't even recognize what they're telegraphing: that their theater experiences suck and they know you'd be better off staying at home. If that's the case, it's easy to decide to stay home, creating a self-fulfilling prophecy of sorts. However, for theater owners who really do provide a great experience, they have nothing to worry about. Many years ago, theater owner Marcus Loew famously stated: "We sell tickets to theaters, not movies." It's really unfortunate that so few theater owners recognize that today, but it's always nice to be reminded of the few that do... such as Tim League and the Alamo Drafthouse.

A few weeks back, we noted the rumors that a bunch of studios were getting ready to offer $30 video-on-demand movie rentals, in an attempt to create a new tiered "window" much closer to the original theatrical release date. It appears those stories are now confirmed, as DirecTV has said that it will, indeed, be offering $30 film rentals for movies just 10-weeks after their theatrical release. Of course, before we discuss how bad an idea this is from the studio's perspective, let's look at the even more braindead response from movie theaters:

Regency Theatres, based in Calabasas, California, will pull "Just Go With It" from its second-run theaters, where it was among the top two titles last weekend, said President Lyndon Golin.

"We don't want to show movies that are on TV," Golin said in a telephone interview. "We want to protect the movie-going experience."

Protect the movie-going experience? Huh? Does Golin even hear what he's saying. First off, how does pulling the movie out of the theaters protect the movie-going experience? It seems to do the opposite. It seems to tell people "we don't want you to enjoy the movie-going experience" with this movie. Golin seems to be flat-out admitting that his movie theaters suck. After all, if he can't provide a better movie-going experience than a TV at home, then apparently his theaters really aren't worth going to, right?

I've pointed this out in the past, but I can never understand theater owners who complain about competition from rentals or video streaming. The whole point of a movie theater is that it's a social experience. It's "going out" to the theaters. It's enjoying the overall event on a giant screen. Obviously with home theater systems, there is some competition, but theater owners can certainly provide an overall excellent theater experience, if they put some effort into it. What Golin's statement here says is that he's not interested in trying, and he doesn't think his theater's experience can compete. That's really more of a statement about problems with his own theaters than about this new rental window.

As for the rental window, it'll be interesting to see who actually pays $30. I understand the studios' logic. They think they're providing extra value by making a movie available earlier. But that's not -- at all -- how consumers are likely to view this. They're going to compare it to Netflix or other PPV/rental options and have no idea why the studios and DirecTV think they can get away with charging many multiples higher.

Of course, going back to the theaters' response, it seems even more ridiculous when you realize that Regency doesn't even think it can compete with a ridiculously overprice home rental option that very few people are going to choose.

btr1701 points us to a report from Thursday's (not April Fool's Day) Variety, which claims that the movie studios are getting ready to offer $30 dollar per movie Video On Demand (VOD) offerings. This is a classically short-sighted Hollywood-type of solution. Over the past few years, the big movie studios have become even more enamored than ever with the concept of release "windows," in which they offer movies on different platforms/formats at different times. Rather than moving in the other direction, towards so-called "day and date" releases that offer up movies on all platforms at once, they're trying to make the whole thing more frustrating and annoying for customers by spreading things out and offering more windows.

This explains the recent efforts to delay various movie rental releases and the whole plan to break your DVR/TV so that you can't actually record certain VOD showings. Now that they have these in place, apparently they think the answer is to offer this new window, between theater showings and when you can rent from Netflix or your video store of choice, in which they somehow think people will be okay paying $30 per movie.

It kind of makes me wonder what they're pumping into the air down in Hollywood.

I'm sure their argument is that since a "whole family" or a group of folks can watch the film, it's more cost reasonable, and they'll argue that the release -- closer to the theater release -- makes it worth the extra money. This, however, assumes that consumers are stupid, and I think Hollywood may quickly discover that consumers aren't quite as stupid as the studio execs think. Of course, even more amusing is that the theater owners -- who have always fought any attempt to do releases close to the theatrical release, are freaking out about this. I doubt they have much to worry about.

The report notes that Paramount has chosen not to join in this scheme, suggesting that it's worried about how this might increase piracy. I'm not sure if that's true. After all, Paramount is the one studio that has publicly said that those 28 day rental delays didn't make any sense and that it didn't drive customers to buy DVDs. So maybe the folks at Paramount actually realize that consumers don't want more windows and more ridiculous price points...

Of course, at the very same time that Hollywood is going down this ridiculous path, others are urging them to go in the other direction. TorrentFreak has a post about a UK movie reviewer's simple and clear explanation for why the studios should offer day and date releases:

Kurata points us to the news that French politicians are debating extending the "you must be a criminal" private copying levy to tablet computers -- but, oddly, the new levy would not apply to tablets running Windows (Google translation from the original French). The tax would apply to any iPad or Android-based device, but apparently Windows tablets won't be counted, since they'll be classified as full computers, while the other tablets are in this new taxable category. Not surprisingly, this has some companies up in arms, with the French-based Archos particularly steamed, since it's producing Android-based tablets, and doesn't like the fact that its government seems to be giving preferential treatment to an American company.