Direct Distribution Is Hollywood Ideal Online Business Model | Online Business Models |

Fred Wilson writes:

"Making movies is expensive and risky. I totally get that the studios need to make a lot of money on those movies to make their business model work.

But denying customers the films they want, on the devices they want to watch them, when they want to watch them is not a great business model.

It leads to piracy, as we have discussed here many times, but more importantly it also leads to the loss of a transaction to a competing form of entertainment.

...I am sure there was a time when scarcity was a good business model for the film industry.

...I understand their muscle memory in terms of the scarcity business model.

But restricting access to content is a bad business model in the age of a global network that costs practically nothing to distribute on.

I've argued this point many times with film executives. They insist that they need their windows. They argue they need to manage access to their films to extract every last dollar from the market.

That just doesn't make sense to me.

If they went direct to their customers, offered their films at a reasonable price (say $5/view net to them), and if they made their films available day one everywhere in the world, I can't see how they wouldn't make more money."

Rightful. 8/10

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