Monday, February 25, 2008

Movie Pirates

Last week Toshiba pulled out of the hi-def DVD race and conceded to Sony's Blu-Ray format. But tech analysts, (and I) believe neither format would really have "won" the game in the long run anyway. Physical media storage is quickly disappearing and soon will be a distant memory. MP3's have taken music collections completely digital and, with fiber-optic speeds on the horizon, hard-drive storage prices falling rapidly and Comcast releasing movies "on demand" the same day they release on DVD, it stands to reason that movie collections are next in line to be completely digitized. But the complete digitization of movie collections got me thinking... will online piracy crush Hollywood's revenues as much as it ruined recording industry profits?

That's probably a tougher question to answer than I have time to research, but I believe Hollywood, as a whole, has some intrinsic qualities that put it ahead of the music biz when it comes to piracy. First, music makes no aggressive demands of our precious time and rarely monopolizes our attention, like movies do. Our time in a day is finite, and the movie industry has long been battling for a piece of that time against our jobs, schoolwork, spouses, kids, TV, video-games, internet browsing, books, exercising, recreational outings and social events. It takes a serious investment of time and attention to sit down and watch a two- to three-hour movie. Watching a movie is not an activity that lends itself to long, frequent interruptions; it's an activity that usually needs some planning and requires anywhere from a moderate amount of concentration, to a heavy amount, just to follow the plot and remember the characters.

Music, however, is far less taxing on our concentration or time. MP3's fill in the blank spaces of the day when silence is the only alternative we'd have anyway. Music provides a pleasant distraction from the boredom of a commute to-and-from work (or anywhere else for that matter). It fills in the emptiness when we're working out, and supplements perfectly as background noise for any number of other activities; including nearly all of those mentioned above... working, playing video-games, internet browsing, reading and all types of social activities are often given a soundtrack from an MP3 collection. Listening to a song or MP3 also requires miniscule investment of concentration and, unlike most movies, the demand curve for a previously heard MP3 is very nearly flat... for Economics unititiates, a demand curve slopes down for almost all products. After eating a hotdog, for instance, there is little immediate desire for another one (we've just had one, and now we're full). The same cannot be said for music (listening to a song doesn't mean we don't want to listen to the same one over and over again throughout the day... especially when it's a favorite).

Movies, however, are not so easily re-watchable and their demand curve certainly slopes down. I consider Braveheart to be one of the greatest films ever made, and it's in the Top-5 of my all time favorites, but I don't think I've watched it start-to-finish even once in the past five years. Its three-hour duration requires a big investment of my time, and the fact that I've seen it seven times already severely hampers my desire to sit for another three hours and watch it once again. But if you play Pearl Jam's timeless classic Black, I'm almost always willing to invest five minutes listening to it.

What this adds up to, for Hollywood, is a psychological value movie watchers are much more willing to give to movies. Where that psychological value and the price point intersect (and whether that intersection is at $4.99 or lower) remains to be seen, but even so, there is a value we put on movies above that of a song, and it's for this reason I believe there will be less piracy of movies than music. This is not to say Hollywood shouldn't fear the coming, fiber-optic future, nor ignore the mistakes the recording industry has made. The movie industry should still prepare for the worst -- illegal downloading as widespread and revenue-crushing as it's been for the record companies -- but in the back of their minds, they can take comfort in the fact that I don't think that future will come to pass.

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