It is pretty much accepted on all sides now that Digital Rights Management (DRM) for Music is over. We will have the freedom to play downloaded content on any device. However, the war on Video is only just starting to hot up. Lets look at a few early skirmishes.
A major development in this area is the following. See TechCrunch and Hollywood Reporter.
NBC was a major seller on iTunes in the Video area. They have some of the most loved shows, especially by computer users, been made today. The recent departure from iTunes by them as well as many other media-gateway companies is an interesting and telling sign of the struggle to come.
Lets first look at the difference between Music and Video on the Web. I would like to focus on costs of production.
A typical song, depending on who makes it, can cost between $10,000 and $100,000 dollars to make. This is a little extreme and I would slant towards the lower value. This does not count promotion, as promotion usually follows a track making money to help it make even more money. Note: a Track can be made for far less these days. Home studios are very common.
A Movie can cost, typically, 25million to 200million to make. The average is more like 40million I expect. (Hollywood prices) In terms of making a film on the smell of an oily rag. To go to cinema, that is still 1.5 to 2 million. No one makes a Movie in his bedroom.
Looking at the averages. If a music track cost $1, if you equate the same return on a Movie, that would make a movie on Itunes cost. umm.. about $1000. These are based on my general estimates, I do work in the film industry, but it should give you the idea.
This is why no one is talking about DRM free Video. Steve Jobs and his historic “I want to sell DRM free Music” letter specifically avoided the Video content area.
But considering all this and the fact that we are getting the taste for DRM free music now. How can we expect to not also expect DRM free Video?
In my opinion its going like this. In general, big media Gateway companies like NBC, any of the film distributors etc, are run by older gentlemen, who I can relate with (I’m not that young any more), are a little stuck in their ways. They look at how we consume media today, and expect that is how we will consume media in the future. And really, they are mostly correct. However, the new mobile generation are likely to disagree. And they also have the knowledge to bypass DRM.
Looking at how we consume media today, Moves and TV shows are mostly view in what is called the lean back experience. For example, in a purpose build room where many can watch, sitting back on a couch. No interactivity apart from play, pause, or change channel(show). This is not a consume media anywhere type of experience. A major requirement for MUSIC. As such, many think that GateKeeper controlled Set Top Boxes will be a viable option. (AppleTV, TiVo, Xbox360, PS3)
The typical reasons sprouted for making media free like you “make it on touring”, simply do not apply to making a Movie. And ad the fact that it cost 100 (very conservative) times more in investment. The real question is. Can the quality of the movie industry survive in this new media age?
There is one other issue I would like to point out here. Recently there was a study done in the LA area focusing on those involved in content production. (Ie people who work in Hollywood) The general message was that, even those who’s career depends on it, a substantial portion admitted to that for which they claim is destroying the industry. (A note here, the numbers where high and that was for those who were willing to admit it, so is much likely much higher).
The story (For which I have lost the link to at the moment) then went on to explain how the difference between purchasing and pirating is price driven. If people feel they can afford it, they will buy. If they cannot afford it, they will pirate. It’s a convenience factor.
The point being here is that, the success of content in the new age of media is greatly effected by price. The current GateKeepers, jumping ship from Itunes, claiming that they prices are too low, is simply a sign of a downfall waiting to happen.
In regards to Video and DRM. I think is going to be a two way street. Unlike music, which is going to be all DRM, Video is most likely to be a mixture of DRM free and some DRM. And most likely to take the path of the typical Video Release chain. For example.. Cinema, Cable and DRM, DVD and NO DRM, TV.
2 responses so far ↓
1 Philip Hodgetts // Sep 1, 2007 at 11:38 am
People are making movies in their bedroom and on budgets well under $5000 US – we interview them all the time on the Digital Production BuZZ. “We are the Strange” was literally made in a bedroom; “Mojave Phone Booth” was made for under $5K, for example.
The prices on iTunes are already artificially high, way too high in fact, compared with any other means of getting Television. An episode at $1.99 when a broadcaster expects 35c in advertising revenue per viewer? Daily show and Colbert Report $19.95 on iTunes, yet Comedy Central gets about 60c a month for all the month’s programming from a cable or satellite subscriber.
When pricing reaches the right level (a cent a minute or less, with limited shows carrying a premium) then the need for artificial controls will disappear.
As for the claims that piracy is “ruining the industry” – they just do not stack up to any actual facts – biggest summer box office ever in the US. My business should be “ruined” like that!
Philip
2 jamieg // Sep 1, 2007 at 1:31 pm
Philip,
Ok, I’ll give you an anomaly here and there. Yes there is the occasional person making video content in there bedroom. However, compared to the number of musicians do the same thing, its a barley mentionable fraction.
If anything, making a film in your bedroom is a three year exercise for which getting a return for the time put in is as likely as winning the lotto. I do not count this as real production. If anything its more Marketing then anything else.
Being a DJ as well as a worker in the Film and TV industry, I know many people from both areas. The quality I have seen by musicians at home productions is quite amazing. “Like you did that in your Bedroom?” Amazing.
Video. it simply cost a lot of money to get a result that does not look like a handycam.
As some one who works in the industry, I do not count making the occasional production for the fun of it as REAL production. If your not making enough money to live, its not real production.
In terms of the business models running on cable channels etc, I fail to see how that business model that has many other factors, can be a apple to apple comparison. I do agree that content like Music at $1 per track is too high. And really, once the GateKeepers are less involved. Ie producers get about 3-8 cents out of $1. (Which is absurd really.) can we reach a more realistic value.
I really do hope your idea of a Cent per minute does eventuate.
I never said Piracy was “ruining the industry”. I mention this as a supporting argument to the fact that current Gatekeepers, and there ideas of how much they can gouge out of consumers, is not even supported by those who make the content. They are the same as us and if they do not set the example, as people who are supposedly directly effected by Piracy, it indicates to me that Piracy is obviously not the issue here.
The issue here is how much can the Gatekeepers make out of us. And as a Gatekeeper, I imagine the change in the playing field is, to them, an opportunity to make more money. When, in my opinion, they are the MagaFouna, and the new digital media era is the ice age.
James
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