Trying to Control Your Behavior Because It Can’t Change Its Own
by Timothy Everingham - November 12, 2002 at 03:34:09:
There have been a lot of efforts latterly by the entertainment industry to legislate what you can and cannot do with your computer; including hard coding limitations into hardware and software, preventing some of what they can do now. The courts have agreed that some of these things are legitimate uses, especially via the Betamax case. Such actions could alienate Hollywood’s customers, so why are they taking this line of action?At the Digital Hollywood Conference in Beverly Hills in September, Donald Whiteside, Intel Vice President of Legal and Government Affairs, stated; "consumers expectations evolve as technology evolves". Microsoft Chairman of the Board, Bill Gates stated, on September 5th at the Windows Media 9 Beta Launch Event, that Microsoft has found that now consumers’ expectations are, after they purchase content, that they expect to be able to play that content on any device. There are also indications from many sources that consumers are expecting content to be available in multiple forms and formats sooner after its initial release in its first form (example: movie in a theater) than is currently practiced.
Karen Randall, Executive Vice President of Universal Studios, stated at the Conference that their studio wishes to make adjustments to their distribution methods and schedules to better meet the expectations of their customers. In fact, the move to digital distribution allows simultaneous global release of content, which was not possible before, and now gives the ability to reduce the times between releases of content in different forms. However, they are locked into long-term contracts with their distribution channels that will take 5-7 years to change. Other studios are in a similar bind.
In the past when companies or industries did not make the changes to adjust to consumer expectations, consumers reacted in ways to get around it. One such way is an increase in black and gray markets for such goods. The impediments to black markets in Hollywood’s content are dropping, including for piracy. This reduction of impediments includes the number of people with broadband Internet access increasing and DVD recorders and media becoming affordable to the consumer by the end of 2002. This may be the reason why Hollywood is pressing so react to such restrictions as illegitimate and react as Californians did with the 55 mile an hour speed limit, disobey the law in mass. Another way for consumers to react is to buy substitute goods. This is especially true when a company or industry alienates its customers. In fact, a recent Los Angeles Times article states that there are indications the Hollywood studios may currently be benefiting from the record industry’s alienation of its customers by some shift from buying Music CD toward buying more DVD movies. One shift could be to consume more movies produced by smaller independent companies, which may have more latitude in distribution. Another might be for consumers to produce more videos for viewing by themselves and their friends. However, it is more likely that there would be a shift toward other forms of entertainment. The real beneficiary of these problems may be the computer games industry, which is rapidly growing.
In regards to Hollywood’s trying to legislate against consumers reacting to circumvent Hollywood’s inability to adjust to new consumer expectations, history shows that it only works in the short-term. Market and political forces eventually overwhelm such efforts. However, Hollywood only needs it to work for a few years until they get out from under the distribution contracts that are handcuffing them. So Hollywood is proceeding with trying to get such legislation passed over the objections of computer and consumer electronics industries and groups representing computer users, such as the Electronic Frontier Foundation.
Hollywood right now seems to be trying to prevent the consequences of their mistake in signing contracts of too long duration with their distributors. They are trying to do this via legislation. History has shown that this only works temporally, but they only need it to work for a few years. Meanwhile the computer and consumer electronics industries plus many computer users seem to have the same opinion on Hollywood’s efforts as Donald Whiteside of Intel: "Ridiculous assinying legislation like the Hollings Bill should be recognized as such." As Hollywood tries to make the consumer pay for its mistake, it is going to provide us with an interesting battle for the next few years.
Mr. Everingham is CEO of Timothy Everingham Consulting in Azusa, California. He can be reached at: teveringham@acm.org. Further information can be found at:
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