Bloomberg to Hollywood: Why not compete on price and service?

Bloomberg knows business, if they do say so themselves:

Bloomberg is the leader in global business and financial information. We give influential decision makers the data, analytics, news and insight to give them a critical edge.

A Bloomberg editorial thus commands some attention, and we have here an Oscar Sunday eye-popper called “Hollywood Should Beat Digital Pirates at Their Own Game“.

The editors start by riffing on “The Artist”, a silent movie up for best picture 85 years after the dawn of talkies. The lesson held up by Bloomberg: Once technical barriers are broken, they can never be rebuilt. Hollywood (Bloomberg says) should rethink its antiquated business model, and in particular its distribution system.

Bloomberg dismisses Hollywood’s failed (but still not abandoned) attempt to get Washington to rescue the sinking Titanic with a SOPA lifesaver. Instead, Hollywood should take a lesson from Megaupload, formerly one of the top 100 Web sites in the world, whose elimination would be seen by any rational industry as a business opportunity:

Megaupload claimed 150 million registered users with an average of 50 million visitors a day. Over seven years, a U.S. Justice Department complaint says, it pulled in $175 million (with just 30 employees) distributing mostly stolen films. Clearly, there are millions of film buffs eager to watch movies when and where they desire, not when a studio dictates.

Studios should abandon their tightly controlled distribution system, in which a film is released serially to U.S. movie theaters, overseas theaters, pay-per-view television, DVDs and network TV. The industry now makes most of its money from overseas releases and DVD sales, and is fearful that simultaneous digital releases on all platforms in all markets will kill the golden goose that produces blockbuster hits — and profits.

They summarize in a simple question, one that many of us have been asking for a long time: “Why can’t the film industry compete on the basis of price and service?” Perhaps hearing these ideas from a stalwart of the business community will lead Hollywood (and, not incidentally, Congress) to adapt to the new digital world and stop fighting it.


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