The Video Revolution: Coming Soon to a PC Near You

Digitally distributed music is here. And it’s not going away. According to Apple’s January 12 earnings release, the company’s sold over 10 million iPods to date, 4.5 million in Q4 2004. I was impressed but figured some of this was the holiday season. A couple weeks ago, Apple announced Q1 2005 results: another 5.3 million iPods.

The momentum is insane. The original iPod was announced on October 23, 2001. Apple sold 10 million in just over three years. Now, in a single quarter, it sold another 5.3 million. Wow. Music sales via the iTunes Music Store are cranking as well.

And that’s only the market leader. The competition is ramping up. Make no mistake: digital music distribution is the future.

Does Hollywood see the writing on the wall? I’m not sure it does, and there’s a technology lesson in there for us all.

I sat down to watch a DVD the other night. The first thing I saw was a lengthy trailer preaching the evils of piracy. I couldn’t agree more, but haven’t we learned anything from the music industry?

Its model was unraveling, but the disruption of the last six years didn’t need to be as chaotic as it was. Were it not for a reluctance to embrace new technology, infighting over standards, and greedy desire to perpetuate an old model in which companies that add little value to the production cycle reaped the majority of profits, MP3 and P2P may never have led to rampant piracy.

True, movies and music aren’t consumed the same way. You don’t play movies repeatedly (often in the background) as you might music. Video compression and broadband speeds have far to go before downloading a near-DVD-quality, feature-length film is as quick and easy as grabbing an album from iTunes. Whether or not video players experience the same explosive growth, digital distribution of video content, including movies, makes a lot of sense. Comcast seems to agree. It’s pumping a ton of cash into its video-on-demand platform.

Consumer desire for convenience and control drove the music revolution. The same things are driving a similar revolution on TV. It’s only a matter of time before it hits other video-based entertainment, such as movies. I’ve written on this topic before, and I still believe if the industry would put as much money and effort into innovation and adaptation as it has into fighting piracy, it could fix most of what’s broken. Then, everyone would be happy.

A small group will always steals stuff. But the music piracy increase was driven by the fact no legitimate digital distribution model was in place. Hollywood has the opportunity to embrace the change, develop the model, and own the outcome. It’s taking baby steps, but it must move more quickly.

Consumers will get what they want, one way or another. Give it to them, or someone else will. As I wrote last time, we marketers must respect the consumer above all else. They aren’t our enemies, even if they use pop-up blockers, delete their cookies twice a day, and skip TV spots. You can listen to your customers, embrace change, and give them what they want. Or, you can fight it and try to protect the status quo.

It’s your choice. I suggest the former. You may even get to keep some level of control.

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