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BOX 25282 LOS ANGELES, CA 90025 TEL/FAX: (310) 444-3189 VIALE ABRUZZI 30 20123 MILAN, ITALY YUKARI MEDIA YMI BLDG. 3-3-4, UCHIHIRANOMACHI CHUO-KU, OSAKA JAPAN TEL: (816) 4790-2222 EDITOR DOM SERAFINI ASSISTANT EDITORS ERIN SOMERS KAREN RUTTNER EDITORIAL CONTRIBUTORS ENZO CHIARULLO (ITALY) MARINA DEL RIVERO (ARGENTINA) CARLOS GUROVICH LEAH HOCHBAUM ROSNER BOB JENKINS (U.K.) AKIKO KOBAYACHI (JAPAN) LEVI SHAPIRO DAVID SHORT (AFRICA) LIANNE STEWART (CANADA) MARIA ZUPPELLO (BRAZIL) CORPORATE AND CIRCULATION OFFICE 216 EAST 75TH STREET NEW YORK, NY 10021 TEL: (212) 288-3933 FAX: (212) 734-9033 PUBLISHER MONICA GORGHETTO BUSINESS OFFICE LEN FINKEL LEGAL OFFICE ROBERT ACKERMANN STEVE SCHIFFMAN WEB MANAGER MIKE FAIVRE DESIGN/LAYOUT CARMINE RASPAOLO ILLUSTRATIONS BOB SHOCHET FOUNDED IN 1981 MEMBER OF NBCA (CIRCULATION) VIDEO AGE INTERNATIONAL (ISSN 0278-5013 USPS 601-230) IS PUBLISHED SEVEN TIMES A YEAR: JANUARY, MARCH/APRIL, MAY, JUNE, JULY, OCTOBER AND NOVEMBER/DECEMBER. PLUS DAILIES BY TV TRADE MEDIA, INC. SINGLE COPY U.S.$9.75. YEARLY SUBSCRIPTION U.S.$45 (U.S., CANADA, MEXICO); U.S.$60 (U.K. AND EUROPE). © TV TRADE MEDIA INC. 2010. THE ENTIRE CONTENTS OF VIDEO AGE INTERNATIONAL ARE PROTECTED BY COPYRIGHT IN THE U.S., U.K., AND ALL COUNTRIES SIGNATORY TO THE BERNE CONVENTIO AND THE PAN-AMERICAN CONVENTION. SEND ADDRESS CHANGES TO VIDEO AGE INTERNATIONAL, 216 EAST 75TH STREET, SUITE PW, NEW YORK, NY 10021, U.S.A. PURSUANT TO THE U.S. COPYRIGHTS ACT OF 1976, THE RIGHTS OF ALL CONTENTDONEONASSIGNMENTFORALLVIDEOAGEPUBLICATIONSARE HELD BY THE PUBLISHER OF VIDEOAGE, WHICH COMMISSIONED THEM. Did you hear the latest? Apparently the recession, combined with free content online, is hurting the porn industry. If one compares this new trend with that experienced by the music industry, you’ve got déjà vu all over again. First the music business and now the porn industry paid the consequences of speedy broadband. Can the film and TV industry draw some conclusions from these outcomes? Digital platforms now account for 20 percent of recorded music sales. For many companies in the porn sector, 98 percent of business is streaming. In music, 95 percent of downloads are illegal. For porn, free streaming caused a drop in revenue estimated at up to 50 percent since 2007. According to Internet traffic ranking service, Alexa.com, six of the 100 top websites in the world are “tube sites,” portals for free pornography (respectively ranking 28, 55, 61, 63, 93 and 98). Compares those to sites such as AOL (ranking 43), BBC (44), CNN (60) and The New York Times (91). However, in the music sector, only one site ranks in the top 100. Even so, there are many similarities between the music and adult entertainment industries. With downloads, music listeners can pick and choose the songs they want, as opposed to paying for the whole album. Because of porn streaming, “customers do not want to watch entire movies,” wrote APC, the Australian PC magazine, “they want to watch scenes.” The average age of music consumers (55 percent) is over 30. According to Forrester Research, the average age of online visitors to adult sites is 41. However, there are also differences. Music listeners like to download tracks because they want to own them. With porn, streaming is preferred because consumers don’t want clips stored on their computers. Music downloads represented $2.7 billion in 2008, out of an industry worth $13.5 billion per year. According to The Los Angeles Times, “none of [the porn streaming sites] appear to be making much money” in an industry valued at up to $13 billion a year (until recently). The porn business spearheaded the growth of video business for film studios, not television. Similarly, the adult programming business provided big spurts for both the growth of Internet and broadband, more so than traditional television. In addition, the adult industry represented a huge profit center for mainstream businesses such as hotel chains, cable and satellite companies, Internet providers and DVD rental stores. The above preamble is meant to summarize how Internet and broadband changed two similar businesses which originally helped the growth of both technologies. Were these industries shortsighted?Did they shoot themselves in the foot? Were the AM radio stations shortsighted by spearheading the development of FM with their all-music programs? Were the TV stations that allowed their programs onto cable systems doing the same? Of course not. The industry should have learned that embracing a new technology can become a new profit center, based on the experiences of U.S. studios that fought the introduction of the VCR. In the music business, while the Internet was eroding its traditional promotion and distribution networks (radio and record stores), the industry refused to empower an entire universe of micro distributors online who could have completely and profitably redefined the mode. The problem, however, wasn’t just with distribution, but also with packaging and content, since consumers did not want to pay for whole albums when they were only interested in select tunes. As far as content is concerned, it has been said that for the recording artists of the 60’s for example, lyrics became more personal, song formats changed and rules were broken. Two years ago a game developer asked a simple question on his blog: Why do you pirate my games? The responses were broken down into several categories. Some people viewed all intellectual property as fair game or were too broke or cheap to buy content (people who will never be convinced to pay), and people who thought his games were too expensive or the demos too short for them to feel confident that they were going to get a reasonable value for their money. Now, what can the TV and film industry learn from these experiences? New media is just re-purposed old media, a de-bundling of programming, and I agree with the statement, “YouTube is a video repository, not an entertainment network.” The Internet has created a new generation of producers who are taking media to a different level. Not necessarily better, just different. The television industry has to be supported by advertising, especially brand advertising, which depends on a close connection with the audience, and TV knows how to create and maintain this connection. Dom Serafini V I D E O • A G E 54 AP R I L 2 0 1 0
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