Are these folks brain dead?
A very interesting opinion published today by The Diffusion Group (TDG), titled The Problem with Internet-Based Movie Downloads - The Internet Isn't Connected to the TV, Stupid!. Here is a quote that says it all:
Among the primary reasons consumers use the Internet for shopping is price: in most cases you can get the same item online for much less than you would pay at a retail store. Why pay 2X for a book at Barnes & Noble when you can get the same book at Amazon.com for 1X? Why pay $16 for a new CD at Best Buy when you can get the same 10 songs for $.99 each at iTunes? Why pay 30 dollars for a movie download when you can get the same movie on DVD for 15 dollars at Target? Oops, that didn't work out so well...
When you read the article everything sounds so obvious, so why on earth are the studios doing what they are doing, are they really brain dead? I say to the shareholders, fire all the current decision makers and get some capable individuals to run the business or shareholder wealth will just keep getting destroyed.
The decisions made by the studios and the labels with regard to digital media are systematically wrong and irrational that from business perspective I would say they are borderline negligent. I will even dare say that if for each major strategic decision they needed to make in the last five years they would have tossed a coin instead of using their incapable brain then the damage to the business would have been significantly less than the current situation. Of-course if they were replaced with a bunch of chimpanzees then the business would have probably been flourishing compared to the current situation.
If I were a shareholder in one of the major studios or labels, I would say that the top executives should not only be fired but they should also be deprived of their severance packages due to the damage they inflicted upon the business. Of-course shareholders rarely unite to make such a move and boards of directors are too busy covering their butt with regard to accounting practices so there is really no hope for the studios and labels. Ten years from now after they have been displaced by shrewd companies that did things right (Apple anyone?) when they would look back and ask themselves where they went wrong, I would ask where they went right? Is there one thing they did right?
Among the primary reasons consumers use the Internet for shopping is price: in most cases you can get the same item online for much less than you would pay at a retail store. Why pay 2X for a book at Barnes & Noble when you can get the same book at Amazon.com for 1X? Why pay $16 for a new CD at Best Buy when you can get the same 10 songs for $.99 each at iTunes? Why pay 30 dollars for a movie download when you can get the same movie on DVD for 15 dollars at Target? Oops, that didn't work out so well...
When you read the article everything sounds so obvious, so why on earth are the studios doing what they are doing, are they really brain dead? I say to the shareholders, fire all the current decision makers and get some capable individuals to run the business or shareholder wealth will just keep getting destroyed.
The decisions made by the studios and the labels with regard to digital media are systematically wrong and irrational that from business perspective I would say they are borderline negligent. I will even dare say that if for each major strategic decision they needed to make in the last five years they would have tossed a coin instead of using their incapable brain then the damage to the business would have been significantly less than the current situation. Of-course if they were replaced with a bunch of chimpanzees then the business would have probably been flourishing compared to the current situation.
If I were a shareholder in one of the major studios or labels, I would say that the top executives should not only be fired but they should also be deprived of their severance packages due to the damage they inflicted upon the business. Of-course shareholders rarely unite to make such a move and boards of directors are too busy covering their butt with regard to accounting practices so there is really no hope for the studios and labels. Ten years from now after they have been displaced by shrewd companies that did things right (Apple anyone?) when they would look back and ask themselves where they went wrong, I would ask where they went right? Is there one thing they did right?
