Archive for January 15th, 2012
I am sure there was a time when scarcity was a good business model for the film industry. And I am sure that many of the leaders of the film industry came of age during that time. I understand their muscle memory in terms of the scarcity business model. But restricting access to content is a bad business model in the age of a global network that costs practically nothing to distribute on.
I’ve argued this point many times with film executives. They insist that they need their windows. They argue they need to manage access to their films to extract every last dollar from the market. That just doesn’t make sense to me. If they went direct to their customers, offered their films at a reasonable price (say $5/view net to them), and if they made their films available day one everywhere in the world, I can’t see how they wouldn’t make more money.
[For some things it is, but for others it simply the nature of how things are produced. The decisions come when demand exceeds current production. Can you maintain the essence of your product if you remove yourself from each step of production? If so, do you wish to? If your item becomes less scarce does it lose something? But I agree about the film business. It’s nuts.]
Source: A VC