Hollywood's Unfounded Fear Of New Products

from the be-afraid dept

Mon, Aug 7th 2006 1:39pm — Carlo Longino

The history of the entertainment industry is littered with new products and technologies it has resisted that have later turned out to be money-spinners. For Hollywood's movie studios, nothing illustrates this point better than video tapes and DVDs. Jack Valenti, the onetime head of the MPAA, made the famous quote that VCRs would be the "Boston Strangler of the movie industry" -- but it went on to create a booming new business for the studios, while their claims about the DVD were similarly unfounded. Hollywood has a terminal resistance to new products based on the unrealistic fear that any new product will cannibalize the sales of an existing one. But this isn't the case -- for instance, a new study shows that people who watch movies on video-on-demand services buy just 0.1 fewer DVDs per year now than before they used VOD -- hardly making it out to be a sales killer -- and rent, on average, just 11 percent fewer movies. While the figures aren't totally complete, it sounds as if people who use VOD don't just replace their other movie spending with it, they add to it. Hollywood doesn't want to accept any cannibalization of existing products -- perhaps part of the reason things like their movie download services are so bad -- even if that new product can raise overall sales. The movie industry is caught in a rut, with a strategy of simply trying to maintain its existing sales, rather than trying to grow its business with new and innovative offerings.

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14 Comments

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Yet another Anonymous Coward (profile), 7 Aug 2006 @ 2:17pm

Requirement for MPAA membership
If you can pass a General Math course, you cannot be a member of the MPAA.
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Neumann, 7 Aug 2006 @ 2:20pm

Corporations always freak out when new technologies emerge, but the fact is very rarely does a new technology completely supplant another. Radio did not replace newspaper, TV didn’t replace radio, and Digital video will not replace TV.

btw:1st post
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Jeremy, 7 Aug 2006 @ 2:28pm

What's that about a math course
I think Neumann needs to try a General Math course.
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Anonymous Coward, 7 Aug 2006 @ 3:14pm

1st posting morons
@Neumann

HAHAHAHAHA WHAT a Mor0n!1!!1!

Thats what you id10ts get for thinking you are special for being the first person to post to a new story.

At least you had something to actually say though, better than most losers who think 1st posting is impressive.
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Anonymous Coward, 7 Aug 2006 @ 3:31pm

Re: 1st posting morons
and your comment also had a lot to say about the article ^_^.

ya i doubt this is going to stop anytime soon (hollywood resisting new technologies) but hopefully they dont stop future innovation too much >:(
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rijit (profile), 7 Aug 2006 @ 5:28pm

I find it funny Google AdSense found this topic controversial and posted a Public Service announcement instead of an add. Just goes to show Mike can be controversial sometimes ;) Check it: Is Techdirt article: Google AdSense Destroying Hard-Hitting Investigative Journalism?
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rijit (profile), 7 Aug 2006 @ 5:30pm

I find it funny Google AdSense found this topic controversial and posted a Public Service announcement instead of an add. Just goes to show Mike can be controversial sometimes. ;) Check it: Is Techdirt article: Google AdSense Destroying Hard-Hitting Investigative Journalism? http://www.techdirt.com/articles/20060803/027209.shtml
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Dam, 7 Aug 2006 @ 7:04pm

Grow The Business?
The movie industry is caught in a rut, with a strategy of simply trying to maintain its existing sales, rather than trying to grow its business with new and innovative offerings.

Why do that? Maybe those of us over 30 - way over 30 - might actually want to see movies that appeal to our demographic, not the endless drivel aimed at the 14 - 22 y/o group.

And we might even PAY to see something good. Is this so hard to figure out?
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Daniel (profile), 7 Aug 2006 @ 9:25pm

exceptions proving the rules.
Now the entertainment HAS been burned by technology a couple of times, so on the surface one might think that they have a reason to be scared. That is, of course, until one looks closer.

The two times I can think of when the entertainment industry has been hurt most by tech are Eight Tracks and Betamax - both technologies that FAILED! It seems to me that, since the only time they get hurt is when a new technology DOESN't Succeed, they would try to ENCOURAGE the success of anything that hits the scene with enough force to make a splash.
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tom, 8 Aug 2006 @ 5:14am

shouldn't the mpaa be happy?
After all, VoD is helping to reduce the number of movies rented - and isn't that another market they didn't/don't like?
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Anonymous Coward, 8 Aug 2006 @ 5:37am

Re: exceptions proving the rules.
not even remotely close.

Every time a media format fails, the fans have to buy the media again in the successor format.

A failing media format is murder onmt he companies producing the raw media. But its a godsend to the sellers of the content.

(This is where fair use is supposed to save the consumer by allowing the consumer to platform shift, but drm has banned the consumer from being able to exercise that right)
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Mousky, 8 Aug 2006 @ 1:38pm

Re: Grow The Business?
Ah, the good old "endless drivel" argument. Sorry to burst your bubble but the movie and music studios have always targetted movies and music to that age group. It's nothing new and there is nothing wrong with that. Pop music would not be pop music if it was not popular.
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