Abstract
This chapter describes the far-reaching effects of broadband Internet access on the motion picture industry. It first provides a summary of the effects on the industry’s business model: the Internet (particularly when combined with broadband connections) provides a new window for the movie studios to utilize in releasing their product. It next examines the ways that legal, political, and cultural environments are already influencing the industry’s search for a new business model to replace the old. Finally, we draw on lessons from the music industry to predict how the industry will ultimately incorporate broadband technology into a new business model. The authors believe that the motion picture industry provides an excellent case study of broadband’s effects on a mature industry.
Key Terms in this Chapter
Free broadcast television (Free TV): Television programs that are broadcast over the air and require no subscription fee.
Digital Millennium Copyright Act: A 1998 U.S. law that governs the copying of materials, including books, music, and video. It specifies circumstances under which online providers can seek a safe harbor from copyright infringement claims by copyright holders.
Price discrimination: A system where a firm charges a higher price to those consumers who most desire the good or service. Price discrimination is often accomplished by offering the good or service first to customers who pay the most.
Motion Picture Association of America (MPAA): An industry trade group composed of the major motion picture companies operating in the U.S. (so-called “studios”).
Peer-to-peer Network: A group of users utilizing common software (and perhaps an Internet site) to share files over the Internet.
Piracy: The unauthorized used of another party’s private property.
Distribution window: The time period during which a movie is made available in particular form (i.e., movie theaters, DVD, PPV).
Recording Industry Association of America (RCIAA): An industry group composed of major recording companies operating in the US (so-called “labels”).
Video-on-Demand (VOD): A system where home viewers pay an extra fee to a cable or Internet company to have a movie shown on their television or computer. The viewer selects the time (as opposed to pay-per-view).
Pay-per-view (PPV): A system where home viewers pay an extra fee to a cable company to have a movie shown on their television. The times are pre-set by the cable companies (as opposed to video on demand).