Although not very fresh by its cases used (Napster), the chapter on the affects of the Internet on media economics by Doyle was rather interesting to read, as I have not seen yet many academic writings which forwardly suggest/implement that Internet is destroying the revenue streams for the media enterprises.
This “shocking” knowledge was not new then (2002), nor is it now 8 years later. In the middle of this ongoing recession, the media in Estonia and elsewhere is more and more raising the issue of whether or not information produced by the old media should be free as the consumers are used to until now.
As stated by Ken Berry on the chapter (156), “[...] it will affect every area of the entertainment industry”, the affects being the loss of revenue for the producers and owners of the industry.
In an effort to support and yet justify the outcome of what Berry was warning people from at the year 2000, I will look at three cases, where the new media (Internet based) has altered or even extinguished the old media.
YouTube and MTV
One of the interesting lectures I have had the pleasure of attending to was called “International Media & Media Management”. At one of the seminars held, the faculty raised the question whether or not the appearance of MTV in Estonia (in 2006 entered the market as “MTV Eesti”) was a positive or a negative sight to our youth culture. At the time all of the students agreed that although shallow in its message, the channel’s entry to our media sphere should be greeted as it closeness us to the European media environment.
What the faculty said after that, is now a good example of what the new media is doing to the old channels.
MTV has over the time been trying to capture the attention and affection of the youth. In this new era of youth it is apparent, that the ways to capture the youth’s attention need methods born together with them. MTV with its old ways of promoting and distributing media would not work for their young audience, was the statement made by the faculty.
Today this is imminent, as MTV Eesti closed down at the end of year 2009 and it is clear, that they will never return. Why did this happen? Management blamed the recession and the decrease of marketing throughout the country.
I myself (and many more) would rather look at the way our children are consuming the products MTV had to offer. My 16 year old brother has never seen a music video (at least knowingly waited for it) through the television. He consumes his music through YouTube, having his favourite songs generated to playlists and then listening them when wanting to. The value of YouTube raises more when the freshness and interactivity are brought in. YouTube has a great system of generating recommended content based on the current playlists my brother has and also the site is constantly filled with fresh updates on new music and its remixes.
With the PC being linked to my brother’s TV set, there is now no reason my brother to want to watch MTV again.
So the classical way of collecting revenue (doing business) for MTV is over. And maybe the time for MTV is over all together.
DVD’s and Torrenting
By the wide acquaintances I have with many teenagers I interact through the youth-work I do occasionally, I have reached to a conclusion that the most wide-spread type of illegal copyright material (“pirated”) the kids have on their computers, are movies.
The reasons behind that are clear because of two reasons. Firstly – the increase of connection speeds to home users have left only movies to be inconvenient to “buffer-view” over the internet. Texts, music, video-clips – these types of copyright material are easily streamed over the internet, therefore not putting the threat of breaking the law on children.
The other reason, why children pirate movies, is that the speed of premieres reaching Estonia is relatively low. It has improved over the years but it hasn’t still reached the excellence. When a kid browses through the internet and sees suddenly a trailer of eg. “Star Trek” – loaded with his favourite actors and colourful CGI, the urge to see that movie raises immediately. Now the first place the kid accumulates info about that movie is the home-page of the local cinema. Sadly – almost all of the times, when a trailer is published over the internet, the actual premiere date will be half a year (or maybe a year) later. Now when the kid sees that date on the cinema’s homepage, the curiosity to still see the movie will force him to search though the rest of the internet, effectively using the Torrent search engines. And almost all of the times, a sort of screener (watermarked DVD) can be found on these types of sources.
For some time, the third reason why the movie companies lost revenue in Estonia, was the monopoly of the market-leader (only modern movie-theatre in Estonia), which raised the movie tickets to levels not comparable to the living standard of the nation. With the increase of competition however this is not the case anymore.
So what is the outcome of Torrenting for the movie industry? Of course the children do not visit the cinemas as much as they should or would by the hopes of eg. Sony. This lowers the return rate of the large investment the companies make by producing films.
The solution can come from two ways. The time-line between a premiere marketing campaign and the premiere itself should be as short as possible. Nobody wants to get info on something that “comes next summer”. It angers the consumers and forces them to use illegal channels to satisfy their curiosity.
The other thing which Hollywood is more and more affectively using is amplifying the movie theatre experience. This includes 3D movies, IMAX cinemas and elaborate sound systems. This will create the “concert-phenomenon” for the audience as it is possible for a person interested in to simply download the movie, but rather she or he attends the cinema to see it.
The extension of this type of thinking is the introduction of BluRay movies, which offer the amount of data/quality that is ill to publish over the internet (at least today).
In conclusion
It is apparent that the new media is changing the ways traditional media collects their revenue. Enterprises active in the industry must more and more prove and work in effort to collect profit from the consumers.
It seems most easily done for the movie industry as the movies are seen by many as an act and nobody pirates an opera or a drama on Broadway.
However I see no justification for the music and news industry to use the revenue model that worked for them the last century. In a situation where anybody can be an artist using his or her home office to produce it, I see no point in studio time and marketing campaigns or CD productions.
Recording Industry should rather transform to an user-oriented platform where they help deliver the music most suitable for the listener. Revenues should and could be gained rather by live concerts, integrated marketing (Britney: “Drink Pepsi!”), fan-merchandize and music publishing (iTunes). But it should not be forgotten, that as in economics – the raise of competition (in this case artists) always lowers the prices (in this case profit per artist/song etc).
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