Study sez to treat biz as legitimate revenue source
Media and entertainment giants should spend less time worrying about defending themselves from online piracy and more time developing services that are compelling enough to lure consumers away from cyber-thieves.
Not exactly a revelation, until you consider the source: more than 30 high-ranking execs from the media oligarchs themselves, interviewed as part of a study by consulting firm KPMG and Pearson Media research division the Economist Intelligence Unit.
The study — released Wednesday and titled “The Digital Challenge: Are You Prepared?” — asserts that media congloms “need to shift the focus from a circle-the-wagons defense of digital intellectual property to innovative strategies for managing online content as a core revenue source.”
That means treating digital businesses as a legitimate source of revenue, rather than as a stepchild on the profit and loss statement, the report said. Often, the firm argues, companies spend more time guarding their digital assets than they do figuring out how to market them to consumers.
The report recommends shifting business priorities “at the board level” towards exploitation of content in the digital market with more than just piecemeal experimentation. Any other route, they claim, risks alienating the very consumer the congloms are trying to woo.
The film and music industries have expended tens of millions of dollars fighting online pirates such as Napster, Kazaa and Morpheus in the courtroom, so far to mixed success. While Napster is all but dead, Kazaa is still running and has been downloaded more than 100 million times to date.
Congloms have also taken tentative steps toward developing their own digital businesses — including MusicNet and Pressplay on the music side, and Movielink in film — but licensing difficulties and spotty consumer acceptance have hampered their efforts.
More recently, the industry has moved the fight into the legislative arena, backing a controversial bill sponsored by Rep. Howard Berman (D-Calif.) that would give companies broader powers to fight pirates through technological means.
The Berman bill and other issues surrounding peer-to-peer piracy are to be discussed today in Washington, at an oversight hearing in the House Judiciary Committee’s Subcommittee on Courts, the Internet and Intellectual Property.