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  Piracy is Progressive Taxation, and Other Thoughts on the Evolution of Online Distribution
Subject:   Why the suits are unconvinced
Date:   2002-12-16 06:50:13
From:   dave2

Not to break up the party, but let me play the devil's advocate and speak for a moment for the suits. I agree with most of your major points, especially that online exploration generates paid sales & services, and that given a viable legal alternative most customers (well, enough to make the difference) would opt for it.

But amidst all this back-slapping, it seems to me like we're missing an obvious point. You're a better businessman than I am, so check me on this, but I don't think the money guys in Hollywood are going to "let go and trust" until they see a business plan that offers a real chance at profitability. They can't; unlike a privately held company, which can take risks based on the instincts of a smaller group of owners, media giants are publicly held. They have a legal responsibility to try to improve profitability and preserve the share price. Letting go and trusting is a good personal philosophy, but it'll get you sued in the board room, since that's not why thousands of investors are trusting them with their money.

We offer Hollywood no more assurance than our good wishes, and maybe the example that it worked out once before with VHS. We preach to them, starry-eyed, about the wonders of the web, explaining the power of eBay, Google and Napster. They scratch their head and look at the billions of dollars lost in web ventures over the past few years, and think, "Gee, I dunno..."

Until we can offer them something better, can we blame them as business people for taking a course of caution?

Wandering in the Land of Suits,

- Dave Sims

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Showing messages 1 through 4 of 4.

  • Why the suits are unconvinced
    2003-03-27 12:23:49  soopahman [View]

    dave of Suits wrote:

    unlike a privately held company, which can take risks based on the instincts of a smaller group of owners, media giants are publicly held. They have a legal responsibility...

    There are 2 angles to this. First, if this threat of legal repercussion is in fact enough to impede any member of Hollywood and the RIAA to enter a premium Kazaa into the market, then it will indeed be up to private companies - like Kazaa - to dominate this market until buying a company like Kazaa is no longer too scary for media giants to realize the potential profits of leveraging such a product.
  • Why the suits are unconvinced
    2002-12-16 17:01:35  tschmidt [View]

    I'll bet incumbents will never change, just like vacuum tube manufactures were not successful making transistors. It is very hard for an incumbent to embrace disruptive technology.

    The same digital technology that threatens incumbents with peer-to-peer distribution is also a production threat, by lowering cost. Digital technologies threaten all scarcity driven business models. New artists will create and drive the new distribution model. Eventually incumbents will embrace it after someone else proves it works, and they can no longer ignore it. Don't expect leadership from folks invested in the status quo it has to come from elsewhere.
  • Tim O'Reilly photo Why the suits are unconvinced
    2002-12-16 15:58:22  Tim O'Reilly | O'Reilly AuthorO'Reilly Blogger [View]

    Dave, I agree that there's a real problem here. It's clear to me that the change will happen when, as my friend (and business consultant)
    • Error in previous post
      2003-03-27 12:17:17  soopahman [View]

      Tim, you missed a " at the end of your href attribute in your link tag, so the end of your post

      (says, "the pain of changing is less than the pain of not changing. A transition to new markets isn't without pain, but it's also not without opportunity.)

      got lost. May wanna edit that fix in :o)