The demise of Blockbuster
The closure of 146 Canadian Blockbuster stores should not have been a surprise to anyone after Hollywood movie studios called in $70 million in debt securitized by its Canadian operations but racked up by its parent company. In both countries, many good people are now out of work and no one wants that to happen.
In addition to eliminating much needed jobs, the store closures also created a void in the big screen to DVD rental and sales value chain. The formerly lucrative movie rental business had apparently become a money losing proposition. Many people attribute the decline to an increased access movies on-line; downloading a movie is arguably easier than driving to the store plus downloaded movies don't have the dreaded late fees. Undoubtably, access to movies on-demand from cable providers and services like NetFlix also eroded the rental market.Downloads of pirated movies also contributed to the demise of the stores. Research from the NPD Group in 2006 shows that 8 percent of all U.S. households (6 million) had broken copyright law and downloaded at least one copyrighted video from a P2P network over a period of three months, whereas only two percent of U.S. households purchased a video legally. 60 percent of the pirated content is adult oriented, however 20 percent is TV show content and five percent percent mainstream movies.Note that the research is from 2006. In December 2010 The Guardian reported that according to TorrentFreak, Avatar was downloaded 16.6M times, That figure is up 50% on last year's leader, Star Trek, which was downloaded a mere 11M times.The Guardian article goes on: "Torrent sites are among factors credited with prompting falls in DVD sales, but Cameron's film does not seem to have suffered. It took more than $1B at the global box office and its home video release earlier this year broke sales records.The same cannot, perhaps, be said, for the No 2 film on the list, UK production Kick-Ass, which was self-funded by director Matthew Vaughn. Despite 11.4m illegal torrent downloads, it has yet to break the $100M mark at the global box office, suggesting that more people may have watched it as an illegal download than paid for it." http://www.guardian.co.uk/film/2010/dec/22/avatar-illegal-downloads-torrent-c...The numbers speak for themselves; millions of people have illegally downloaded movies in the past and will continue to in the future. The same goes for music and software downloads.
The rationale for breaking copyright law with illegal downloads often focuses on how the movie studios or record labels are making too much money, or that copyright laws in Canada and elsewhere are flawed.
We've all broken the law. Whether it's speeding, munching on a few nuts from the bulk food section while wandering the grocery store aisles or photocopying a journal article for your co-workers, we've all stepped over the lawful line at some point in our lives.
Illegal downloads of movies, music and downloads create a perplexing ethical situation. Downloading an illegal copy of the newest album of your favourite artist is somehow completely acceptable, in fact in some circles is the default choice. Yet, if the same artist were to perform live, these same people willingly pay to see the performance.
If it is acceptable to pay to see the artist perform, why deprive the artist of album sales royalties? No matter how bad an artists' contract may be, the artist receives something.
Perhaps a different model is necessary. After the expiry of their recording contract in 2007, Radiohead went directly to their fans. For a minimum price of $1 USD, fans could download the album. The offer of fast, high quality downloads from the band site were expected to lure fans away frm P2P and file-shares.
This is an interesting approach and potentially positive if the band makes more for their artistic efforts. And it certainly cuts the profit to the label, whose lop-sided artists recording contracts are oft cited as a reason P2P file sharing is popular.
Radiohead's approach also has means that everyone associated with making, shipping, and selling the album have less work. Multiply this effect across many artists and there will be a lot of people with less work. Perhaps no work at all.
But is it a sustainable model? For everyone? Because it's not just about the artists.