The chicken or the egg?

Following the results of the Australian research mentioned earlier, showing downloaders are willing to pay for easy accessible and affordable media content, a ‘chicken or egg’ debate has arisen.

The boss of the Australian Federation Against Copyright Theft (FACT) claims that the media industry won’t offer such a service until the rampant online offer of music is greatly reduced. People must first stop file sharing before the industry is prepared to compete, says boss Neil Gane of FACT. "Movie industries obviously want to make their content available online, but they can’t compete currently with a free alternative that’s perpetrated through theft. Once there is a level playing field, I think you’ll begin to see a lot more flexible, innovative business models."

TorrentFreak writes that such a ‘level playing field' situation will never come. "There are plenty of people – around 35% according to this survey – that won’t pay anything for their media and that is unlikely to change in the near future. But there are definitely people who will put their hands in their pockets for a good product with good service at the right price. But they have to be available first."

And so there seems to be an impasse.

The truth probably lies in the middle: for the industry there is very little point to offer such a service, if it will only be successful with rock bottom prices. The Australian study showed willingness to prices of 0.35 cents for music (a CD?) and 1.40 euros for a movie. In all probability, with such a revenue making music, films and television won’t be profitable. In addition, a ‘legal’ download system also takes into account the payment of taxes and the remittance of fees to artists and other parties. These are aspect of legal trades a site like The Pirate Bay is withdrawing itself from. As long as free offer is in abundance, downloaders won’t be tempted to pay a more realistic price for downloading movies, music and television. It is therefore understandable that the media industry would want to wait and reduce the amount of free online offerings first, to increase the prices for online content and the competitiveness of an easy accessible and legal download system.

Nevertheless, it is unrealistic to wait for the online offer to completely disappear. This situation will probably not occur since a large group (about 35%) is not willing to pay for legal download at all. In that case it seems wiser to address that part of the downloaders who are willing to pay for accessible and affordable supply of the online media industry. But at a fair price. And that fair price also depends on fair competition with the free content available via BitTorrent.

8 May 2010