ScriptMonster.co.uk

I’ve been meaning to write something about the future of the film industry relating to piracy and the internet for a while, but I guess I never did it because to my young, forward thinking brain the outcome is pretty obvious… the current situation of wholesale piracy online is just a short term blip until the dinosaur media companies hot wire a few brain cells together and start offering content how people want it.

What spurred me to finally write this was seeing a news story on TorrentFreak (via Digg)…

Jesse Alexander, the executive producer of the popular TV-shows ‘Heroes’ and ‘Lost’ and Matt Mason, author of ‘The Pirate’s Dilemma’, are working on a new TV-show about piracy. The show will be based on Matt’s book, and will show how important pirates are for today’s society

Included in the story was the following preview video of the show…

As the video suggests, piracy is not something evil that is going to kill off the film industry (or the music industry for that matter). All it is going to do is push forward innovation, because the media companies will have to come up with solutions to bridge the gap between the way people want to consume their media and the way it is being presented to them for consumption (this gap currently being the thing causing piracy).

Luckily for the film industry, they don’t need to be as radical as other forms of media in order to bridge this gap. Music for example is going to need to completely reinvent it’s entire business model where by artists are in control rather than the labels, and perhaps even doing something as radical as releasing music under creative commons licences for free as a loss leader to then get more ticket sales and more fans to suppliment their income in other ways.

Film on the other hand really just needs to keep doing what it has always done, except take advantage of modern technology to do this in a much more efficient way and a way which better suits the way consumers want to watch movies. I’m sure there will be some people on the fringes of the industry who come up with really interesting business models involving giving away films for free or something equally crazy, but like I say, film by and large can keep doing what it has always done.

A few things are going to happen:

Cinemas are going to have to innovate and improve their product if they want to stay in business. Be it more 3D technology, be it seats that wiggle relative to the movie, whatever it is cinemas are going to have to become a fresh experience again that you can’t get anywhere else. But even if piracy didn’t exist the innovations with big screen TVs and surround sound would have meant the same outcome, so I’m gunna skip cinemas and talk about the living room.

The next big step in the evolution of the living room is for the movie studios to embrace the internet as a distribution system to stream movies directly to your big screen TV and in doing so directly compete with piracy. Once they do this they find that people will gladly use the legal solution (if it is any good anyways), but more than simply compete with pirates, it will also introduce several new aspects to the movies experience that will increase the market size beyond the huge cash cow that they currently have with DVD.

Imagine the scenario:

It’s 9pm and I feel like watching a movie. A few years back I would have to rely with what was on the TV and that would probably mean I’d skip my film watching impulse and go do something else instead as I might not wanna see whats on the TV tonight, but now thanks to the internet I have access to hundreds of thousands of films on a huge online network. Result.

Part of the appeal of piracy is the kid in the candy store effect of having access to so much content. In the future by allowing us access to a huge back catalogue of movies it means that whenever I have an impulse to watch something it can be satisfied.

Just as I’m about to watch the film someone phones me. Not a problem. I can start the movie anytime I want. I’ll start it in 10 minutes after this phone call.

See how online distribution starts removing the barriers from watching a movie? This ultimately means the studios get more views of their movies. My Mum would probably watch 5 movies a week if all the barriers were removed from her watching a movie that interests her at the time she wants to use it.

But it goes on..

Because I had to sign up for a free account in order to watch all these movies the studio now has a record of all the movies I’ve seen. They see that I really like action movies and that I like Will Smith movies. So when the advert comes up before the movie it knows not to bother me with the new Tom Hanks romcom instead it shows me the new Will Smith action thriller.

Online distribution allows studios to more effectively advertise and distribute their movies to exactly the sort of people who will like them. This means they reduce advertising costs and basically run a more economical business. By competing directly pirates studios start to get benefits that the tired old systems never allowed them.

But it’s not all about the big studios…

Just as I’m sitting down to watch the movie I get a Ping. My buddy Steve is sending me a movie recommendation. It’s an obscure indie movie I’ve never heard of, but looking at it’s profile online I see that 5 of my friends have seen it and gave it a thumbs up. I’ll add it to my watch later list.

An online community built around the delivery system of these movies can offer a far more effective, automated word of mouth. It means that if you make a good movie it will find an audience regardless of your advertising budget. With online distribution the little guys stand a chance against the bigger guys. And guess what, this will lead to more original movies and better movies. No longer will people moan that all there is these days are dumb action movies with too much CGI or terrible unfunny comedies. The audience wins as well as the indie studios.

But what other side effects do you get from building a social network and reviewing system around the films? Imagine…

Because I can see all the films my friends are watching and what they think of them. Because I can make lists of my favourite movies. Because I can get news in my inbox directly relating to the movies I wanna see. Because of all of this I find myself taking a much bigger interest in films than I used to when I just went to the cinema every few weeks and then came home again.

By giving people more tools to interact with film in general, more ways to talk about it and learn about it, you are going to encourage more consumption of film. If might well be that in the future studios can’t rely on the same large margins they get out of DVDs currently, but if they have 10X as many people taking an active interest in consuming the media then they will probably come out ahead.

I wont bore you!

I could go on and on with little examples like this, but fact is, piracy exists because young people today want to experience media in the modern ways I’m describing above. They want their movies on available 24/7 on a system that is a cross between BBC’s iPlayer and Facebook, which they can log into from their living room or even from their iPhone on the bus to work.

Yes media is a lot more attractive when it is free and this is part of the reason why people pirate stuff, but online distribution is so much cheaper than shipping physical disks in plastic boxes around the world to sell it in physical stores, and building online communities to advertise your media for you with word of mouth is so much cheaper than traditional advertising, that there is no reason why films can’t become very cheap, or even completely free with advertising (…advertising which can be totally tailored to your vital statistics and past viewing habits lets not forget, advertisers will pay a lot more for ads like that).

Also consider from a film makers point of view that by having every film in an online library available to watch 24/7 and having this huge social network of favourite lists and recommended films it basically means that the life time of a movie is extended indefinitely. No longer will a film need to make its money back in the first 6 months to be a good investment. Add to this the cheaper cost of making movies thanks to digital cameras and editing equipment and you begin to see there’s no reason why studios wont be able to make the same amount of money they did before online piracy become the big thing.

This stuff is hardly rocket science. In the last 12 months we have already started to see set top boxes which begin to offer the experience I am describing above. Check out the Netflix set top box, or the AppleTV, both which are taking steps towards offering this service.