Monday, May 28, 2012
The entertainment equivalent of the buggy whip industry?
Dish Network recently launched its new 'Hopper' digital video recorder (DVR), which allows commercial-free viewing of recorded TV programming. Needless to say, the major networks are apoplectic about this, as their revenue stream relies upon advertising - and if advertisers know that consumers can simply cut out their advertisements without even knowing they were there in the first place, why should they pay such high advertising prices to the networks? Lawsuits are pending.
My concern is this. All Dish Network has done by introducing the 'Hopper' is to acknowledge and automate what millions of DVR users are already doing, using their remote control units - skipping past the advertisements. Therefore, instead of desperately trying to shore up, fortify and defend an old, outdated business and revenue model by fighting such modern technology, why aren't the networks looking for a new business and revenue model that will take advantage of modern technology? They're not going to succeed in putting the genie of technology back in the bottle. Nor are they alone in fighting a losing battle. Publishers of books, music and other forms of entertainment are in precisely the same (sinking) boat as the TV and movie business.
Once information is digitized, it moves beyond the narrow, restrictive boundaries that publishers, distributors and networks could once place around it. If a single electronic copy gets out, it'll be copied, duplicated, circulated, folded, spindled and mutilated before you can say 'Jack Robinson'. Any revenue model that relies on stopping that process is doomed to failure. Unless the networks 'go with the flow' and update their business models, they're going to become extinct, just like the buggy whip industry did when automobiles arrived.