(FM) "I'm not Blockbuster Boy"*

I'd like to discuss a news story that particularly annoys me. The story proclaims that Blockbuster is to close as many as 960 of its stores in the US as a means of streamlining their operations. That's up to 960 stores worth of employees that are going to be unemployed.

The reason that I am so irate is that the biggest reason for the closures is bad business management. The board of Blockbuster can't just blame their failures on the lousy economy. Sure they've been hit, but what happened to escapist industries supposedly thriving during a recession. Instead Blockbuster is limping along. The real reason for their poor performance is that they have clung to a traditional business model for too long and only attempted to jump on the bandwagon of new ideas when they had already passed them by.

I am of course talking the rise of internet television, and mail-DVD renting services, i.e. Netflix, DVD vending machines, e.g. Redbox and on Demand cable television services. Numerous other companies providing services that Blockbuster should have been in a prime position to come up with years in advance. How did Blockbuster miss all of these opportunities? Why aren't they coming up with something new/better, not just carbon copying the aformentioned other companies' ideas?

This is indicative of a wider failing of traditional industries to refuse to progress with the times, e.g. the copyright industry's unwillingness to welcome advances in technology. And the results speak for themselves.

Source

Blockbuster to close up to 960 stores

(LINK)

(*Quote from Johnny Depp)

Thinking Outside the Goggle Box

A recurring theme of this blog is that with the rise of the internet, the increasing availability of high speed connections and the lower cost of digital technology new business models are required to ensure that traditional entertainment companies survive.

To date the approach has been to rely on strengthening and widening the scope of copyright laws. This approach is ineffective and inefficient.

One example of a new business model is the iTunes model. Details of which can be found in the second link below.

Source

TV Everywhere: (Almost) everyone is at least trying it
(LINK)
Analyst: Apple to offer iPhone on U.S. carriers within a year; replace cable with iTunes subscriptions
(LINK)

A Call for Some Imagination

“If you have ten thousand regulations you destroy all respect for the law”(1)

Old media industries are facing a tough time because they are simply unwilling to adapt to survive. The arrival of the internet has meant that news and entertainment are virtually instantaneous with the result that traditional forms of the media are struggling to keep up and maintain a healthy profit level. The reaction has not been to call for progress, but instead to demand an increase in copyright protection through over-reaching legislation. Which is great for the lawyers involved, but does nothing for the end-user of the copyright material.

“The best way to destroy an enemy is to make him a friend”(2)

Traditional media has been forced to evolve because of new technology before. When television arrived with its ability to relay the most up to date news to a large population, print media adapted and began to focus on providing commentary to the days events rather than the facts. Being unwilling to change will not prevent the change from occurring, instead copyright holders will be unable to tap into the growing market and will lose valuable potential revenue. This has been recognised by internet service providers in Ireland when they said: “The ISPAI is disappointed that the great potential of the internet, to provide opportunities to connect with users in new ways and develop new business models, is being missed by the music recording industry.”(3)

My suggestion would be to embrace the progress that the internet is bringing, both in terms of lowering distribution/production costs and in terms of the wider audience that can be reached. Forget drafting laws and treaties which are ineffective and inefficient. After all, the law is not designed to keep pace with new technologies. Instead, adapt your approach to doing business in the digital age, and then the government can draft laws that compliment the new era, not just try to impede its arrival.

Footnotes

(1) Winston Churchill quotes (thinkexist.com/quotation/if_you_have_ten_thousand_regulations_you_destroy/150122.html)
(2) Abraham Lincoln quotes (thinkexist.com/quotation/the_best_way_to_destroy_an_enemy_is_to_make_him_a/12577.html)
(3) Internet body labels IRMA legal threat ‘spurious’ (www.siliconrepublic.com/news/article/12506/comms/internet-body-labels-irma-legal-threat-spurious)

Source

Disney, YouTube forge video distribution pact
(LINK)
CD sales drop, digital downloads on the rise
(LINK)
When the Internet and TV take on print media, it’s a global battle
(LINK)

UPDATE - 22 August 2009

Traditional media producers are being forced to reevaluate their current business models in light of the effectiveness of online advertising.

Source

Bad news for TV as studies show online ads are more effective
(LINK)