Apr 20
FIGHTING FIRE WITH FIRE by Alex J. Socorro  |  Posted in Articles  |  on Fri, Apr 20, 2012

First victim was the music industry. Second victim was the movies. Third victim was television shows. It appears that everything has a downside, even technology.

Before the millennium, while the email was getting introduced to the Philippines, one wouldn’t imagine that technology would grow by leaps and bounds. From the plain text in the monitor, graphics has become an ordinary thing.

With digital files, the scanned image was precious despite the undesirable resolution. Considering that the standard storage was the 1.2 megabyte diskette, computing in those days looked miraculous compared to computing these days.

During the changing of the millennium, hard disks with larger capacities became affordable. This led to the popularity of the image files with better resolutions. Music files followed suit and later on the video clips.

In the free online market, www.napster.com was at the forefront of music file exchange in the internet. The website popularized the mp3 format, not thinking that the free trading of songs would greatly affect the music industry.

Together with the pirated musical CDs, the online music swapping were blamed for the worldwide bankruptcy of the music industry. As a positive move, producers and publishers got their act together to fight the piracy and online swapping.

After countless of suits and countersuits, www.napster.com relented. But the damage has been done to the music industry because some websites followed in its footsteps. It became more difficult to restrict when the mp3 swapping has gone underground.

After a decade, downloading of music has become legal thru www.iTunes.com. A department of Apple computers dedicated to the online selling of copyrighted songs specifically thru their products, iTunes had hit a high note lately.

In 2011, a record low in movie attendance was registered together with the dwindling sales of dvd movies. But all is not lost because America’s movie industry is hopeful for a rebound with online media sales.

The music and movie industries are trying to get back at technology with the adage “fight fire with fire.” Since technology was one of the factors that brought down the industry to its knees so why not use it to make the industry stand up?

Online media is slowly getting a foothold in the market of movies. Not a few companies are experimenting in online streaming services. Google is also joining the fray with its home entertainment device.

It’s not only movies that will be sold online but also tv shows. And the market is not confined to America but worldwide. The bigger the market, the greater the sales and the cost of the service would be lower.

In the forefront of the war is Netflix.com. Since a few years ago, it has already been marketing dvd movies by mail and providing movie streaming services. Netflix has been in a rampage of purchasing hollywood movies to boost their stocks.

In 2011, Netflix was estimated to have spent almost a billion dollars in securing the streaming rights of movies and television shows. This year of 2012, the estimated figure is almost double.

The big slice of the deal was from Weinstein Company which owns the rights to The Artist, a picture contender for the Oscars. Dreamworks is also getting $30 million in revenues for streaming rights.

However, movie studios are careful in their dealings. Cable channels like HBO and Cinemax are their elite clientelle. And those clients are explicit on their rights, i.e. no streaming rights while the movies are being shown on their cable channel.

Verizon and Redbox are teaming up to put up a worthy competition to the dominance of Netflix. It is a clear sign that online movie streaming of hollywood films is profitable and will be the standard medium in the near future.

Amazon is joining in when it bought episodes of Viacom-owned programs. Jersey Shore and SpongeBob Square Pants will soon be available via stand-alone streaming service to be offered soon.

The success of YouTube is actually the inspiration to it all. Google, the owner of YouTube, is planning to extend their services from rentals into sales of contents (movie and television shows).

Others in the field are Vudu, owned by Walmart, Cinema Now of Best Buy, and, of course, Apple’s iTunes and Hulu. Clearly, movie and television rights for online marketing is on the rise.

But do these statistics tell the real story of profitability? If streaming is indeed profitable, why did Netflix increase the price of their services last year? That move caused them to lose 800,000 subscribers.

Online video streaming is not simple marketing because it all depends on the bandwidth. Music, as successfully marketed by iTunes, is tiny compared to a movie file. And with the hi-definition resolution, the space and bandwidth requirement is considerably higher.

In a sense, online streaming of movies and television shows is a direct competition to DVD. So if DVD becomes passe, online streaming may probably be the standard. But with the rapid advance of technology, we never can tell.

Comments to this article can be sent to ajsocorro@yahoo.com

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