The digital content industry is at a crossroads, grappling with format wars, limited on-demand options, and restrictive digital rights management (DRM). This article explores how the industry can adapt to meet consumer demands, offering a roadmap for a more user-friendly future.
The digital content industry is at a crossroads, grappling with format wars, limited on-demand options, and restrictive digital rights management (DRM). This article explores how the industry can adapt to meet consumer demands, offering a roadmap for a more user-friendly future. By standardizing formats, offering flexible consumption models, and leveraging new technologies, the industry can unlock unprecedented growth and customer satisfaction.
The music, television, movie, and consumer electronics industries are struggling to keep pace with rapid technological advancements and the evolving virtual landscape of content. Here are eight key strategies the industry should adopt to harness technology and better serve their customers.
The ongoing battle between Blu-ray and HD DVD is a prime example of how competing formats can confuse consumers and stifle market growth. Similarly, in the digital realm, formats like MP3, AAC, and WMA for audio, and MPEG-4 (H.264) and WMV (VC-1) for video, create unnecessary complexity.
A standards body should be established to oversee the development and adoption of new formats. This body would allow initial competition but ultimately select a single format for market release. Companies would register their formats early, and a winner would be chosen based on investment and innovation levels. Licensing revenue would be shared among all participants, ensuring fair compensation.
All content should be available on-demand, free of charge, but supported by ads. Examples include music videos on MTV and Yahoo Music, and TV shows on AOL's In2TV. Networks should make their entire catalog available for free, using ads to generate revenue.
Consumers should have the option to rent content without ads for a fee. Services like Netflix and Spotify offer ad-free experiences for a monthly subscription. All media stores should adopt this model.
Consumers should be able to purchase content without DRM restrictions. DRM has proven to be a significant barrier to sales, treating paying customers as potential pirates and limiting their ability to enjoy content across multiple devices. The industry should follow the example of EMI, which now sells DRM-free music.
All playback devices, including TVs, cable boxes, disc players, DVRs, game consoles, portables, boom boxes, phones, and car head units, should have built-in wireless internet connectivity. The PlayStation 3 and iPhone/iPod Touch Wi-Fi Music Store are leading examples of this trend.
Moving playlists off client devices and onto servers is a natural extension of on-demand content. Services like Yahoo Music Jukebox allow users to access their favorite playlists from any internet-connected device, eliminating the need for local storage and backup.
Just as consumers can buy individual songs, they should be able to purchase individual chapters of movies. This would allow for lower costs, reduced storage requirements, and the ability to create custom playlists. Players would need to pre-cache chapters to ensure seamless playback.
Consumers should have the option to choose between different bitrates. While highly compressed bitrates were acceptable initially, today's bandwidth and storage capacities allow for higher quality options. Services should offer both low and high bitrate options to cater to different preferences.
The industry should leverage the success of new HD video formats to also support high-quality audio. Albums in uncompressed PCM, both stereo and multi-channel, could be included on video discs, along with HD extras like music videos and concert footage. This approach would avoid the pitfalls of previous HD audio attempts, such as DVD-Audio and Super Audio CD.
Providing URL-addressable, ad-supported content allows for free marketing through links on various websites. More eyeballs mean more ad revenue and increased exposure, leading to eventual purchases of content and related merchandise. Examples include music videos on MTV and Yahoo Music, and TV shows on AOL's In2TV.
By adopting these eight strategies, the digital content industry can overcome its current challenges and unlock unprecedented growth. Standardizing formats, offering flexible consumption models, and leveraging new technologies will not only meet consumer demands but also drive sales and customer satisfaction.
