Buzz is correct in asserting that the future of eBussiness is in selling a service, not a product.
The movie industry to starting to understand. The theaters won't lose revenue from online piracy because no matter what, seeing a movie in the theater is a unique experience. The theaters don't sell a product (the movie) they sell the service and the experience.
But movie stores like blockbuster were in a pickle. Piracy WAS seriously cutting into their profits. There were two options:
1) Stop piracy.
2) Change their business model.
Stopping piracy is a losing battle. It is essentially trying to stop hackers, and anyone with some knowledge in the field know that hackers have the advantage. As long as movies are stored in digital format on computers somewhere in the world, they will be stolen.
Instead, they changed the way they do business. Really it's more accurate to say Neflix forced them to do it. But, whatever. They started offering a service. As many movies as you can watch, for a relatively low price. Shipped right to your door. And since the movie quality is better, for most people, it's better than pirating movies.
But even the movie industry isn't the first place for this to happen! The original hackers were around before there were home computers. They were called phreakers. It's a kind of concatenation of phone and freakers. Essentially they hacked phones and telephone systems to get free calls and such.
But obviously, phreaks don't exist today. How did the telephone companies stop the phreakers? They started selling services. When you have a phone contract today, you also get a wide array of services that you can't pirate. Furthermore, phone calls became so cheap to the point where it was pointless to risk jail time to hack them.
The music industry really needs to do some research. Look at the ways that other industries have successfully warded off hackers from taking their revenue. Let me tell you how not to do it: To continue selling CD's as a product.
The movie industry to starting to understand. The theaters won't lose revenue from online piracy because no matter what, seeing a movie in the theater is a unique experience. The theaters don't sell a product (the movie) they sell the service and the experience.
But movie stores like blockbuster were in a pickle. Piracy WAS seriously cutting into their profits. There were two options:
1) Stop piracy.
2) Change their business model.
Stopping piracy is a losing battle. It is essentially trying to stop hackers, and anyone with some knowledge in the field know that hackers have the advantage. As long as movies are stored in digital format on computers somewhere in the world, they will be stolen.
Instead, they changed the way they do business. Really it's more accurate to say Neflix forced them to do it. But, whatever. They started offering a service. As many movies as you can watch, for a relatively low price. Shipped right to your door. And since the movie quality is better, for most people, it's better than pirating movies.
But even the movie industry isn't the first place for this to happen! The original hackers were around before there were home computers. They were called phreakers. It's a kind of concatenation of phone and freakers. Essentially they hacked phones and telephone systems to get free calls and such.
But obviously, phreaks don't exist today. How did the telephone companies stop the phreakers? They started selling services. When you have a phone contract today, you also get a wide array of services that you can't pirate. Furthermore, phone calls became so cheap to the point where it was pointless to risk jail time to hack them.
The music industry really needs to do some research. Look at the ways that other industries have successfully warded off hackers from taking their revenue. Let me tell you how not to do it: To continue selling CD's as a product.
