Friday, June 28, 2002

Okay, in summary, I think one of the key points in all that was this. Music is a product where our consumption has in the past been seriously restricted by the way it was sold to us. Ideally we would all like a universal jukebox where we could listen to any music we want whenever we want, rather than the relatively small collection of songs in our CD collection. Napster gave us this, and someone else is going to give us this in the future. Our consumption (total number of songs we have the right to listen to) is going to go up dramatically. That means the unit price is going to have to go down dramatically. It doesn't mean the total amount of money we pay has to go down dramatically, but it does mean that the business model is going to have to change dramatically.

As far as movies and television are concerned, the total amount we watch isn't likely to change much. Most movies we watch once and once only, and those that we watch more than once we do so a relatively small number of times. We already have the opportunity to watch a large selection of movies on demand. (It's called going to the video store). Technology is going to mean that we have a much larger selection of programming to choose from. Obtaining it might be easier. It will be easier to watch television programming exactly when we want it rather than when the networks put it on. But the total number of programs we consume isn't going to change much. There may be some sligh changes to the business model. (Do you want to watch it once now or pay for the right to watch it as many times as possible? We already have both options with existing media but the balance may shift). But the consumption level will remain much the same and so the per unit pricing can remain much the same. Therefore I don't think Hollywood is especially threatened in the short term. It will find ways to make money out of new technology, as it always has. Unless the industry manages to make copyright law so restrictive and so punitive that it strangles itself. As it might.

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