Right now, the various motion picture studios are debating the various issues surrounding mobile and digital media. They are trying to slot new distribution streams into existing boxes. At first glance, this is a fairly simple process. It’s not. Trust me. The New Media Wars are just starting to heat up in Hollywood and they’re going to be very expensive for the studios, but I think there’s another war a’ brewin’: consumers versus content providers.
What? You’re saying this is an old war? Au contraire, mon frere. The consumer wars have barely begun.
Old media — your television, your CDs, your DVDs — was largely service-provider independent. Once you purchased a CD, you could play it on any device. Any old television set plays basic television; if you want premium stuff, you pay a subscription, but that comes with the pre-TiVo understanding that access is fleeting. Sure, we once had a Beta versus DVD scuffle, and even if there’s a desperate-sounding rematch in the form of Blu-Ray versus the confusingly-named HD-DVD, the format wars aren’t going to matter. Consumers are increasingly asking why they need physical media.
The real battles are ahead. V-Cast subscribers who switch to Cingular. Napster users who decide to move to Rhapsody. Microsoft Media (or whatever in hell it’s called these days) consumers who switch to Macs. iTunes consumers who think the new PrismDurosport model is hipper and bigger.
In short, people who are paying for a lot of media that can’t be ported to their system or device of choice.
Within the next few years, we’re even going to see a battle with people who own perfectly fine television sets versus television manufacturers. There are a lot of consumers who get by just fine with plain vanilla television. Mandated switches may have them rethinking their need for a television set at all.
Last week, I talked about nickling and diming consumers to death, but it’s a bit more than all those small charges adding up. It’s about the fact that consumers are being told they own media — and, frankly, that’s the position the studios are taking when they define certain markets as sell-through — yet they cannot access their purchases. Jim talked about licensing versus traditional record sales, but it goes beyond that. At some point, the consumer either has control over the product or doesn’t. And if the consumer only “rents” the media, pricing needs to represent this fact. Especially when it comes to accessing media that has traditionally come for free — at least from the end-use perspective.
Right now, consumers are paying ownership prices for media they might not be able to access tomorrow. In the eight-track era, you could still find a device to play your songs for many years after the format went out of vogue. In the new-Napster era, you pay for something that you can’t really take with you.
This is where the Consumer Wars will begin: when the cost of repurchasing media for upgraded devices exceeds combined service provider costs. People will wonder what they’re paying for. And something tells me that they won’t like the answers.