Major Hollywood movie studios have recently launched a public relations offensive against internet “piracy” of their movies and television programming, making their case before Congress, the FCC and even on "60 Minutes."
But much of what Hollywood calls “piracy” may actually be consumer demand going unmet by legitimate supply. All too frequently, it is Hollywood’s own stubborn unwillingness to give law-abiding customers what they want that drives many of them to search out unauthorized alternatives.
Consider Hollywood’s attitude toward DVDs. With billions sold, the DVD is the dominant consumer medium for accessing digital video. Of course, many of the most popular movies on DVD are also available for downloading and viewing from unauthorized sources on the internet, a fact that is not likely to change.
Logic suggests that the best way to compete with these unauthorized alternatives is make the legitimate DVD alternative more attractive to customers, just as Apple’s iTunes has been successfully doing with digital music. Instead, Hollywood has been working overtime to make the DVD less attractive, less convenient and more expensive for law-abiding customers.
Consider three examples.
First, instead of catering to customers who want an inexpensive, convenient way to watch new DVD releases at home, Hollywood wants to force them to wait. Three major motion picture studios have declared war on Redbox, the company that is behind the red, automated DVD rental kiosks popping up in front of Walmart, McDonald’s and other retail destinations and around the country.
The price is right (99 cents per night) and the locations convenient (no separate trip to Blockbuster). Yet the studios have attacked Redbox because they do not want to see 99 cent rentals for at least a month after a DVD goes on sale (and many months after the movie was in theaters).
Copyright law does not give movie studios the power to delay DVD rentals, so these studios have resorted to pressuring wholesalers to cut off Redbox’s supply, a tactic that has landed the studios in court. The fight may be between Redbox and the studios, but the losers are consumers who may turn to unauthorized sources rather than wait patiently for movie studios to maximize their revenues.
Second, Hollywood has repeatedly attacked DVD owners’ ability to copy their DVDs onto a home media server or portable video player.
Even the music industry admits that when customers buy CDs, they are entitled to copy them onto personal computers and iPods. In contrast, Hollywood has steadfastly maintained that the same copying of DVDs is illegal. As a result, companies that have tried to offer new ways to enjoy the DVDs you already own have been sued.
Real Networks, for example, wanted to build a DVD player with a hard drive in it, so that DVD owners could have a TiVo-like experience when browsing their movie libraries from any TV in the house. Another company called Kaleidescape, already selling a luxury-oriented version of the same idea, is also under attack.
