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Movies Won't Face Same Fate as Music

10 Feb, 2008 By: Thomas K. Arnold

How many times have we heard the warning that the home entertainment industry had better watch out, that we're headed toward the same future as the music industry? Ultimately electronic delivery will triumph; it's merely a matter of time before packaged media is obsolete.

Hooey.

The music industry effectively committed suicide due to its own shortsightedness. First, the record companies killed off the single, which traditionally had been the cheap entry point for a new artist or an established artist's new record. Then Napster emerged as a way for consumers to swap songs, which they no longer could buy individually in packaged-media form. The music industry reacted by hiking up the list price of new CDs to more than $20.

This, of course, led to further sales declines — and more consumers migrating to the Web, where they could easily snag a song or two, which is all they wanted in the first place.

Ultimately the record companies realized their folly and developed their own download model, while dramatically cutting back the price of a new CD. But by then the damage had been done, and the whole portability trend only further hurt CD sales since iPods and other mobile devices rely completely on digital music files.

Parallels between this business and our business are beyond me. For starters, the way the public consumes music and movies is completely different. There is no equivalent to the single; we don't watch individual chapters, or scenes. We watch the whole movie.

Secondly, DVDs have remained affordable; movies can generally be had for less than $15 at any big retailer the day they are released.

So instead of being faced with the choice of a cheap electronic “single” or a $20 CD, the movie consumer can buy a packaged or digital version of the same movie for roughly the same price — a value proposition that's hardly out of whack.

Then there's the quality issue. A digital download of a song sounds as good as a CD. But a downloaded movie is “near-DVD quality,” hardly something you want to hear when you've plunked down $10,000 for a high-definition home theater system.

Sure, we are moving more toward portability, with laptops and iPods, but the studios have come up with a solution: including a digital copy on a physical disc, which I predict will become the norm.

Music and movies may be close cousins, but they're definitely not singing the same tune.

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