It’s Free And Killing Business Everywhere
That’s right, if it’s free it’s killing business.
We are in the technology era, we run the world from our computer desk and some of us just love the fact we don’t even need to use the phone to order pizza anymore. Heck, nowadays we don’t even pay for some of the programs on our computers at all, and this my friends is why every recession is prolonged, even if it is human nature.
Let me start by explaining myself. Just think of this, between you, reader, and your friends, one of you probably likes music, a lot. Now if you like music your probably the owner of an ipod of some kind, or at least an mp3. Since there a lot of ipod sales lets stick with that one for now. Like I was saying, chances are one of you out there likes music, and to get your fix of some new, or old tunes, you have to find a way to download them, since it’s the new “in” way to do it. Now if you have an ipod, you have itunes, but I bet you didn’t go that way, did you. From my personal mini-research i found that less than 30% of students actually pay for their downloaded music, and from that 30% about half of them have their parents paying for them. So how much money does the music industry make off this? Well if your music genre is classic rock, the sales for records has already come and gone, so every new medium just gives an extra sales boost, but for any up and coming artist, he or she is being robbed blind of maybe half their deserved profits. Not to mention that what most of the students are doing to get their music, is pirating it. So lets look at this from a more business point of view.
Ok so lets say I put out a song. It’s a hit. We make some CD sales but of course CD’s are becoming less and less popular. We decide to release the song to itunes for extra sales and things go well, considering only about 30% of the people with their ipods actually paid to hear our song, which barely covers any cost on what could be a tour. Now we cancel a bunch of dates because of “complications” within the band (we are broke). Next thing you know rumors of us splitting up, of us being egotistic jerks, saying we wont “make” enough money with the tour so we are canceling dates, when the reality is that we just don’t have the money to transport the gig to a show unless the other ones kill, and even then its a stretch… Seems a little farfetched? Maybe, but luckily there are still some CD sales left.
Lets try another entertainment business, movies. This is becoming an even greater problem, as people are not just downloading, but copying the films and selling them for cheap to their friends. Have you ever seen the warnings just before the starting credits? 5 years and 250000$ for such an offense and it is being done daily. A lot of movies that will pass through theaters will not even break even in profit versus cost. Some actors have agreements to make 10 or 15 million if not more guaranteed for one movie. So the flick will look to do a killing on DVD sales just to make a few bucks, but wait, slowly declining are the sales, people can see it for free on their bloody computers!
Now I can understand a lot of people for doing this, not everyone has the money to buy tons of music or movies. Its still 15$ for a new CD and around 15-20$ for a DVD so if you wanted a 1000 song or 500 movie library, the cost is well, steep. Which is why a while back they considered putting an “ipod tax” because music was going to be shared via free distribution anyways, so they had better get some money off us to pay for the licensing and everything else. Although the courts wouldn’t hear it, or the plan was cancelled, it did raise some eyebrows and kind of cast a shadow on our society of stolen digital goods. Unfortunately there is no real solution to the problem unless they can ban all the free downloading websites or start making them charge for the downloading too.
Now I’m not trying to pick on the entertainment business, because they don’t have the biggest problem right now. Can you say GM or Chrysler? They are going through some rough patches right now, granted its mostly their own fault for having way to much stock in way too many same class brands, taking their own profit away. Hopefully that’s the past, but they are still asking 10 billion from the canadian government just to stay afloat. The more you look into it though, the more it looks like they are just delaying their own death. And Chrysler well, recently stated that if they didn’t get more help from the government they would move to another country, pretty bold statement from a company that also said they would be bankrupt somewhere around summer time… I thought beggars couldn’t be choosers, specially not broke beggars. So where would they go? To the United States? Is their economic position really that much better than Canada’s? In any case these car companies are in trouble, the saddest part of all though is that we don’t even help them. Once they said they would be bring down the prices we started waiting to see how low they could go so that we will be able to buy cars extra cheap with all kinds of “free” bonuses to go along with them. This from some of the same people who pulled out their invested money and only helped the stock plunge created by the credit crunch and everything else. If everything is cheap, why aren’t we buying more? Are we that stupid? Or just that greedy. We took out all that money to watch it sit in a bank account… that we can control online… right next to our downloaded music, movies and programs. If we don’t buy more we will force these companies to close, and if they do, the economy can only get worst. So spend furiously, buy a truck and fill the bed with CDs and DVDs go home and watch the economy come back. Or don’t, and pay the full price when it does, but whatever you do don’t try and save money, because that’s free, and it’s killing business everywhere.
Photo : Flickr 1