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Is Piracy In the Consumers' Best Interests? 574

Posted by CowboyNeal
from the cheap-dates dept.
moviemodel writes "Warner Home Video in China are beginning trials of 'simple pack' DVD releases at $1.50. They state they are doing this as a test to see if they can recover a market lost to pirate DVD's at 75c each. They also sell higher priced and more complete DVD sets as 'silver' and 'gold' packs. Maybe this marks the beginning of movie industry realism and long hoped for shift in business models, forced by piracy. Perhaps they can take it on as a better model for movie downloads worldwide, facing the same problem of competition from pirated movies. Is such a model viable in the long term?"
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Is Piracy In the Consumers' Best Interests?

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  • Less risk. (Score:5, Insightful)

    by Threni (635302) on Saturday April 22, 2006 @09:53AM (#15180230)
    They have less of my money at $1.50, which is good. When they get what they're currently charging there's a risk they'll make more crap films starring clueless overpaid actors, and that's not a risk I'm prepared to take. I only watch a film once, so why pay more for a DVD than it costs to watch in the theater?
    • Re:Less risk. (Score:3, Insightful)

      I only watch a film once, so why pay more for a DVD than it costs to watch in the theater?

      Why would you even buy the movie in the first place then? Just go rent it for $3.50 (or whatever) at your video store. You're certainly not the market they're aiming for if you don't collect movies and watch them multiple times... or do you use that excuse to justify pirating them via BitTorrent or Usenet?

    • Re:Less risk. (Score:4, Insightful)

      by Ryz0r (849412) on Saturday April 22, 2006 @10:11AM (#15180302)
      >>I only watch a film once, so why pay more for a DVD than it costs to watch in the theater?

      Because of the bonus features, of course!

      Who doesnt want to see mind numbingly repetitive out-takes and deleted scenes that no one wants to see? what about the countless hours of commentry by random nobodies.. "oh yeah this is the bit where i was in the back doing nothing important and i dropped my pen, so if you turn up the volume REALLY LOUD you can just about hear it hit the floor!"

      Hell, i'd pay twice what you pay in the theatre for that..!

      • Don't forget the mind-numbingly repetitive scences salvaged
        from the cutting room recycle bin that find their way into
        the "director's cut."

        (Perhaps "40-year-old virgin" could be cut to an amusing movie;
        I'll never know because I saw the director's cut and I'm certainly
        not going to invest *another* couple of hours of my time to see.)
  • by Metabolife (961249) on Saturday April 22, 2006 @09:55AM (#15180239)
    At least they can make some money now selling cheap DVDs instead of nothing selling overpriced ones.
    • by kfg (145172) on Saturday April 22, 2006 @10:21AM (#15180340)
      At least they can make some money now selling cheap DVDs

      Which just goes to show ya exactly how overpriced DVDs are. CDs as well.

      Think about stuff from the catalog too, say Chaplin's City Lights ($22) or Badfinger's No Dice ($17), whose costs were paid off decades ago and so aren't relevant in justifying the cost of the disk. In fact, under the copyright laws that were in effect the first time I ever saw/heard most of the stuff in the catalog they should be in the public domain already. As far as I'm concerned Congress has breached their contract with me when it comes to these.

      KFG
      • by ScrewMaster (602015) on Saturday April 22, 2006 @11:18AM (#15180562)
        Congress has breached a lot of such contracts with the public in the past fifty years or so. But thats only because they've made some new ones. Thank Disney and that little bastardo Mickey for a good part what's been lost to the public domain. I have to ask: what would old Walt think now?

        On a similar note, a friend once mentioned that our local Wal-Mart has a $5 bin of DVDs. I don't shop Wal-Mart ordinarily (for oh, so many reasons) but this brought me in. Older stuff, but since I don't go to the theater very often (or watch much TV) they're all new to me. So for five bucks each I bought a few "new" movies. I know, it's still going to a bad cause (two bad causes in this case) but at least it wasn't $17 or $22.

        Probably took Wal-Mart's considerable clout to get the studios to release even their old stuff that cheap. Concerns of true piracy and illegal downloading aside, I think some market realities are catching up to the movie people. Besides, here in the U.S. with gas fast approaching four bucks a gallon (with five on the horizon), heating bills through the roof, and everything else getting more expensive by leaps and bounds I know that I, for one, have less disposable income to blow on $22 movies (over twice what our local iMax charges!)

        As another poster pointed out, how many movies are just so good that you'll watch them multiple times, justifying the expense of buying the disc? Not many. There are some, to be sure, but not many. The vast majority of new releases sold are crap. The studios know they're crap before the first scene is shot, which is why so many movies go direct to disc nowadays. They'd never make it in the theaters. Heck, if the gross rake-in figures you hear are anywhere near correct, I don't think a lot of theater releases are in the black either.

        But that's okay. At seventeen bucks a disc, they'll just make it up in the DVD market.
        • P.S. (Score:5, Informative)

          by kfg (145172) on Saturday April 22, 2006 @12:12PM (#15180798)
          Congress has breached a lot of such contracts with the public in the past fifty years or so.

          Perhaps the difference between me and most Slashdotters is that I have actually been alive through those 50 years.

          To me these breaches are not historical breaches of contract with the public, but actual breaches with me.

          I was made specific promises that specific works would enter the public domain at a specific time.

          They did not.

          This is the breach, not merely that copyright law was modified.

          KFG
          • Spot on (Score:4, Interesting)

            by Migraineman (632203) on Saturday April 22, 2006 @02:46PM (#15181501)
            Man, you're making me feel old ... I've witnessed 40 of those 50 years. BTW, your description of the situaiton as Breach of Contract is very well worded.

            That said, I feel like I'm in the same exact situation. I've expressed my dissatisfaction with the Sonny Bono Indefinite Copyright Extension nastiness. [wikipedia.org] The retro-active part makes me particularly furious ... that's the piece I consider to be the material breach. More specifically, the original copyright terms formed a valid contract - the three requisite parts were satisfied (offer, acceptance, and consideration.) The "consideration" in this case is an exchange of a short-term monopoly for public-domain status at the end of that term. Disregarding the offer and acceptance aspects of the retroactive extension, there's only benefit for the copyright holders and none for the public. The copyright extension act therefore fails the consideration test, and is not a valid contract. The public already had the "revert to public-domain" element in the original contract. The extension offers benefit to the copyright holder in exchange for ... what? (hint: nothing.)

            I've used the term "breach of contract" in many discussions. Is it possible to file a class-action lawsuit against Congress for Breach of Contract?

            I'm quite certain that the lawyers would have a field day with that. The original contract was negotiated by representatives of the people, and I'm also quite certain that they'd argue that the terms of said contract were re-negotiated by representatives of the people. The whole "representation" thing creates a nasty grey area - we citizens aren't allowed to opt-out of laws we don't like.

            In the words of Ed Howdershelt: [mauricereeves.com] "There are four boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order."

            Looks like we're exhausted the first two ... are we up to number three already?
          • by zogger (617870) on Saturday April 22, 2006 @04:31PM (#15181840) Homepage Journal
            ...gives you a unique perspective and brings home reality over their BS they spew. I'm in a similar half a century + change personally screwed by those bozos. A couple of my pet peeves are them continuuing to muck about with gun rights after they promised the 68 act would be "it", no more after that, and later on with the huge illegals amnesty during the reagan years (I think, don't remember, 84??), then they said they would "crack down" and "enforce the laws on the books".

            Oh ya, my all time *favorite* "random courtesy roadblocks". WTF is up with that?? Remember back in school we were taught only supremely evil and totalitarian bad places like east germany and whatnot had those sorts of roadblocks (Your papers please!) and how wrong and illegal it would be here?

            Man, there's a bunch. You are right, people of a younger age don't have any frame of reference on some of these subjects outside of an academic one.

            Now here's one I keep trying to maintain a frame of reference on, the great depression. It's hard, but I try, I keep it in the back of my mind when I look at economic news andd geopolitical events. I wasn't around then, but my parents and aunts and uncles, etc, were, and I distinctly remember the stories they told me about it and how amazingly fast things can change and how utterly bogus the stock market/government currency manipulators are when it comes to hosing the population with their congames. Keep promising them just this huge something for nothing deal until they are all sucked in, then WHAMO, drop the hammer and walk off with all the REAL wealth leaving the peons holding the bag with worthless paper. Seems they pull this stunt on a big scale every other generation or something, because it takes that long for people to "forget" those "leaders" main skill set is *lying*. They are professional grifters.
  • by Opportunist (166417) on Saturday April 22, 2006 @09:56AM (#15180241)
    1.50? You don't even have to go that low. Make them 5 bucks and you already have a deal. 5 bucks, no DRM and, hell, why should anyone DL movies anymore? Wait for a day to DL stuff, only to find out that instead of Ice Age 2 you get a cheap copy of Sally does Houston. AND you find out when li'l Jimmy starts the film.

    Why is the IPod so popular? Affordable tracks and ... well, there is DRM, but so far nobody noticed it yet 'cause the IPods didn't break down yet.

    But for some reason I expect this to be some PR stunt, showing that in China you can't even get the market back when you go down to 1.50 bucks. One reason COULD be that the average Chinese doesn't have those 1.5 bucks to spend on DVDs. Why do you try it in China, why not in the US? Or Europe? Or some other country where people actually (still) have the money to actually buy content?
    • by deep44 (891922) on Saturday April 22, 2006 @10:02AM (#15180260)
      Try reading the entire article summary next time. It mentions that they are trying to compete with $0.75 pirated copies.
    • by gEvil (beta) (945888) on Saturday April 22, 2006 @10:09AM (#15180286)
      1.50? You don't even have to go that low. Make them 5 bucks and you already have a deal.

      Your plan would work in the US. Unfortunately, the article is talking about China. These are two very different markets. And as deep44 mentioned, when you're competing with 75 cent versions, 5 bucks is still too much. $1.50 seems like a very reasonable number for this trial run.
      • 75 cents!?! (Score:5, Informative)

        by ihatewinXP (638000) on Saturday April 22, 2006 @12:31PM (#15180884)
        I think the contributor needs to check his sources....

        Walking into the supermarket tonight I bought "V for Vendetta" for five RMB, currently thats about 60 cents. He's obviously a tourist.

        It really is that bad here - but ive noticed that some studios are already doing this. Ive seen 60 RMB ($7) movie packs that are what we would see in the states - but who the hell would think of buying that when the best movies are not only cheaper but on every corner and more convenient. That said I have seen some maor releases (Harry Potter for one IIRC) that were on sale for only 20 kuai ($3) but still - when I can get it for 60 cents and its just around the corner.....

        Its funny, a few weeks ago there were (almost) no bootleg DVD's for sale in Beijing. Apparently the government randomly declares "No Illegal Wares" weeks like twice a year. Who knows. The more I stay here the more it makes sense - and that is the scary part ;)

    • oh come on, that doesn't happen. Even if it did happen, you're a horrible parent if you download copys of children's movies on the interweb.

      also, there is an excessive market for $0.75 pirated DVDs in China. i.e. people buy lots of them.
      2 x .75 = ?

      thats right, for the cost of 2 questionably well done pirated copies you can have one authentic copy.

      It reminds me of a couple chinese pirated movies I got in China. . .
      The Tahor of Panama
      Goideneye 007
      Regally Blonde
      I kid you not, those were the names on the discs.
    • 5 bucks, no DRM and, hell, why should anyone DL movies anymore?
      Forget about the software protection - I'll be happy if they don't have eight layers of shrinkwrap followed by "SECURITY DEVICE ENCLOSED" in three places. Not dealing with that every time would almost be worth building a new computer to get all rootkitted up that I'd use to rip my backup copies.
    • by Opportunist (166417) on Saturday April 22, 2006 @10:08AM (#15180281)
      Copyright has its right to exist. When someone creates something, he puts time and money behind it, develops it and he should have a chance to earn money that way. If you take this possibility away, the looser would be the artist who is already getting ripped by the studios. Studios wouldn't sign contracts with him anymore. They'd wait for him to perform, tape it and distribute the song that way, without giving him a cent. Or they wait for him to spend his own money to press a few CDs, rip those CDs, hype it, and sell it as their own.

      And we all know how much they know about marketing and hyping, and how little about art.

      In fact, killing copyrights would even put those artists out of business who still create art. They're few, they're well hidden on the 'net and you have to search them, the studios won't throw them at you.

      And as a bottom line, we, the ones who enjoy their art, would be the loosers on this one.

      Copyright isn't the problem. The problem is that the balance is off. Copyright came into existance to create a balance between those who produce, those who distribute and those who consume content. The balance is way off. But that doesn't mean we have to throw the right out, we just have to put it back into balance.
      • by argoff (142580) on Saturday April 22, 2006 @10:29AM (#15180370)

        Copyright has its right to exist. When someone creates something, he puts time and money behind it, develops it and he should have a chance to earn money that way.

        What? Copyrights don't have rights, individuals have rights. Anyhow, if someone wants to make money from a creation, try giving a concert - not monopolizing the distribution channel and microregulating how every individual on the planet copys information at their disposal. If you want balance, then let content flow freely and charge for content related services. Content doesn't have a natural limit in supply vs demand, content related services do.

        • That's no good. This puts a very hard cap on what even the top, most "succesful" content creators can earn. When you sell services, you are selling your time. You only have so many hours in a day, and you can only reasonably charge so much for an hour of your time. The musician can't go perform a concert every time someone somewhere in the world wants to hear his song. But why shouldn't he receive some compensation when they do? He created it with his own time, energy, and risk. He had the opportunity c
        • The problem is, as stated before, the balance. Please realize that removing the copyright altogether would hurt the artist by far more than the distributor.

          As you say, the amount of service you can provide behind some content is limited. You can only make so many appearances, you can only give so many concerts. What would keep a studio from ripping me off?

          Let's say I write THE song of the century and go on tour as "The Opportunist". Now, Phony Records puts up some studio gang and has them go on tour as "The
          • > Next scenario: Software. Without copyrights, what would keep MS from taking Linux and running with it?

            Dang good point, need to remember that one. It's interesting seeing the same community that _screams_ with outrage at the very thought that some company may have GPLed code in their product without releasing the source (which is bad, and all, but I think there is too much assumption it's some sort of company policy, rather than a lazy programmer who's about to be fired. From a cannon, into the sun), de
      • Well said. Vote for the Pirate Party [piratpartiet.se] on the upcoming elections (if you are in Sweden)!
      • Copyright has its right to exist. When someone creates something, he puts time and money behind it, develops it and he should have a chance to earn money that way.

        Why?

        If I build a shed in my garden, I put a lot of time and money behind it. Should I have some inherent right to earn money as a result?

        Just because something takes time and effort, doesn't necessarily mean you have a right to earn money from doing it, or even a chance to earn money from it.

        Art existed before copyright.

      • That's correct. I'm fine with copyrights, they serve some good. I don't like copyrights that last as long as the do now a days, especially when congress is pretty much legislating perpetual copyrights these days (Eldred v Ashcroft has some opinions attesting to that). A copyright should last for lets say 40/50 years or the life of the author plus maybe 5, maybe 10 years - whichever comes first. I'm sorry, the children and spouses don't really have a right to that creation - that's ridiculous, where does
      • Like the artists who get paid several millions of dollars for a few months work on a film? Yea, right.
  • Why not here? (Score:3, Interesting)

    by guruevi (827432) <evi@@@smokingcube...be> on Saturday April 22, 2006 @09:59AM (#15180252) Homepage
    Apparently it IS possible to sell them for such a price. Why not here? This just proves that they CAN sell for less but do not WANT to.
    • Content is interesting, as a commodity. It has HUGE fixed costs and almost ZERO variable costs. I.e., studios have to pay a LOT to create some song, but the cost per CD to make is very close to zero.

      Now, to make a CD costs, say, 10 cents. That's the difference between pressing this single CD and not pressing it. Material cost, if you want. Because the artist played, whether the CD exists or not, the hype runs, the pressing machine is standing there with the master ready to press, the workers are there, all
    • Apparently it IS possible to sell them for such a price. Why not here? This just proves that they CAN sell for less but do not WANT to.

      Ummm, DUH! Of course they could sell DVDs for $1.50 here in the USA, but they can also sell them for $19.95. If people stopped buying $20 DVDs they'd quickly start falling in price to the point where people started buying them. The trouble is, there are enough people out there with enough disposable income that a $20 DVD isn't a big deal to them, thus the market prices

      • but they can also sell them for $19.95.

        Except that they can't. If they could, they wouldn't be sobbing about piracy and using the government as a club to beat down their customers.
    • Not at all true.

      Let's consider a situation where it actually matters: pharmaceuticals. Drugs, if you will.

      Say a drug company has invested five billion in a successful bid to find an AIDS vaccine, which they can make for $5/vaccination. Now, if they release it only in the U.S., they figure they can charge $300/vaccination, and quickly recoup their investment. But if they also sell it to Nigeria, they'll find very few people who can afford it.

      So, what's the solution here? Obviously, lower the price in Ni
  • by m2bord (781676) on Saturday April 22, 2006 @10:00AM (#15180257) Homepage Journal
    Geeks installing Windows 3.1 and 3.11 on their work computers on top of DOS, is the flagship operating system/GUI made its initial foothold. Wordperfect was originally the dominant tool for word processing and when people started pirating MS Word in the same offices, it gave MS an addition line into each office. Finally...look at the MP3 device industry. There wouldn't be a demand for Ipods and other MP3 players if it weren't for piracy. Piracy helps more than it hurts. But copyright holders issue these exaggerated claims about how much piracy hurts them and how much money it costs them. The truth is those claims are exaggerated because many of the installations of pirated software or music are things that most would never buy anyway. So piracy does have its plusses. It's just that intellectual property rights holders know that if they do not actively protect their intellectual assets, US law will not be on their side.
    • by gEvil (beta) (945888) on Saturday April 22, 2006 @10:20AM (#15180332)
      I think the important thing to note here is that piracy *can* be beneficial in some circumstances. It doesn't mean that it always is.
    • If you take the example of the creative software from Adobe & Adobe-formerly-macromedia. Both companies could have made it much harder to pirate their software a long time ago- the only thing you need to go from Demo to Product with Flash 8 and Dreamweaver 8 is a serial number (though things are now tougher with the CS2 suite- d'oh).

      This means that people who want to use Dreamweaver and Flash to learn whilst in univeristy or during their spare time can do so with the demo and a quick search on Usenet
  • How about quality? (Score:2, Interesting)

    by AusIV (950840)
    It's getting to the point where one advantage of pirating a movie instead of paying for it is that you can actually get a better quality product by pirating it. In an era when the high quality movie players downgrade the quality to older sources, and you can only play your DVD in certain parts of the world, a pirated DVD offers more flexibility.

    The same goes for music. If you're limited as to where you can play your music for buying at an online music store, it suddenly seems more advantageous to start pir

    • by Baron_Yam (643147) on Saturday April 22, 2006 @10:09AM (#15180284)
      If I BUY a DVD, I get warnings, ads and stupid menus that I can't bypass on my standard DVD player.

      If I download a ripped movie, I get the movie I want without the crap. It starts the moment I put it in the player.

      Right now, I prefer downloaded movies over pressed copies because I'm actually getting a superior product.
      • I hate how they lock up my DVD player like that.

        In the past I rented 3-5 movies a week, now I barely rent 2 a month. I tend to watch my vhs collection more and more because it is easier to start and stop, I simply push play and stop.

        The DVD's you have to put it in and wait, and get a splash screen, then if you miss it you get ads, and warnings and a menu.

        Sheesh, I put the DVD in, I hit play, now PLAY the FREAKING MOVIE.
      • by torokun (148213)
        And I would prefer to have a house for free rather than pay for it, because I'd get a better deal! News flash: it's against the law. If you want to change the law, fine. If you fail to do so, have the decency to follow it.

        This is all ridiculous. Ever heard of supply and demand? OF COURSE piracy is beneficial to consumers. It vastly increases the supply and reduces the real demand, so that companies have to reduce their price to compete with free illegal copies.

        This is only half of the story though. W
    • It doesn't matter.. you'll just find some other obscure justification for pirating the movie. Let me ask you this- do you purchase the so-called low quality movie, and then download a better quality "backup" copy? Or is the movie industry just S.O.L. because they didn't bring their A-game with the original DVD distribution?
      • It's a balance of values, each person has their own weighing system.
        1. Convienence to obtain, how easy is it? Do I have to drive to the store, wait a week for it to come in the mail, etc. Or find it on a file sharing program and mark it for download
        2. Price: Free vs. $
        3. Quality: MP3's vary in quality, even DVD's to
        4. Legitamancy: For many people, legality is a good thing. If nothing else, you don't have to worry about being sued/prosecuted if you keep it legal.
        5. Annoyance: As what many people have
      • I'm not a pirate. I haven't illegally downloaded anything in at least 6 years, and at that time the quality of pirated media was lower than what you can get for money. Consequently, everything I pirated in middle school has either been replaced by legitimate copies, or discarded.

        As I say, I'm not a pirate. I'm a legitimate consumer whose pissed because I can't legally play DVDs on my Linux box, and the $350 I have invested in content from the iTunes music store keeps me tied to Windows. My family falls in

    • Actually, with HDDVD/BluRay this could get worse. If a pirated HDDVD offers HD, whether or not all your equipment is "safe" from you, you could even see those pirate DVDs being sold more expensively than the originals. :)
    • The DVDs you buy on the street in Shanghai for $1.25 (9 Yuan) are exact copies of the commercial ones, so the fidelity is the same. The packaging is crappy and you have to waste a bit of your time insisting the vendor show it to you before buying. Perhaps that's why I never saw one for $0.75 -- I only bought from people who were prepared to give me a demo.

      But seriously a $1.25 street price in Shanghai would probably map to $5.00 in New York and maybe $0.75 in less travelled parts of China.

      And in both plac
  • There is NO way they will lower the prices in the rest of the world. If they did then all video rental stores would go out of business - or start moving a lot more merchandise. Likewise, direct-to-DVD releases cannot be priced very low; DVD sales are their only form of revenue.

    As much as I would like to see movies for $1.50. It will never happen.
  • Of Course (Score:3, Funny)

    by RedHatLinux (453603) on Saturday April 22, 2006 @10:07AM (#15180279) Homepage
    Free stuff is always in the consumer interest.
  • Of course (Score:5, Interesting)

    by OpenSourced (323149) on Saturday April 22, 2006 @10:08AM (#15180280) Journal
    s such a model viable in the long term?
    Of course is viable. You just profit less. And even that perhaps is not true. I've been in China, where you can get absolutely anything in DVD for about 1 dollar each. In fact, it would be difficult for you to try and get a properly licensed film in China. I know I didn't found any. And there was another difference. I had friends there that had more that two thousand DVDs at home, many of which they hadn't had time to see. They simply bought on impulse, because spending 1 dollar is not something you think a lot about. Of course my friends had higher than average (for China) earnings, but in time more and more chinese families will approach that income level.

    My bet is that if you had DVDs priced at 1.5$, film copyright infringement would end as we know it, and the amount of dollars spent in DVDs by the average family would grow. I cannot guess if that increase would be enough to compensate for the much-reduced margin on each DVD, but I would bet it would be better bussiness in the long term.

    Add to that the release of DVDs on the same day of first screening (sell the things as people exits the cinema), and you have the film distribution model of the future. Big-screen film watching is a fundamentally different experience than DVD watching, and there is but little market cannibalising between the two of them. Film distributors should start to know that.

    • by xiphoris (839465)
      My bet is that if you had DVDs priced at 1.5$, film copyright infringement would end as we know it, and the amount of dollars spent in DVDs by the average family would grow.

      That sounds good when you first hear it, until you realize that this is actually going to give the MPAA and their like even more power.

      The industry globally adopts such a model, there is even less chance of independent films making decent money. Everyone has to sign with the "big labels" and take a cut of the mass-produced cookie c
  • This may not be such a deal for the average Chinese person.

    This article http://www.business-in-asia.com/china_wages.html [business-in-asia.com] states: "To give an example of the spread in salaries in a foreign firm in China, a professional employee could earn an annual salary of approximately 100,000 RMB (approx. US$12,000) while a factory worker or an ordinary employee could expect about 36,000 RMB (approx US$4,340).

    So, one "cheap" DVD costs 12RMB, or 1/362nd of their yearly salary. In our terms, say with a salary of $30,

    • I'd have to say that you'd also have to figure in that the expenses for the workers are much less as well. Most of them don't own a motor vehicle. I pay 14% of my net for my car alone, and I don't have anywhere near the car that many do.

      If they have a TV & DVD player, I can also see them doing what I did in my youth: Trade. We'd trade our computer & video games around, effectivly increasing our entertainment on the dollar.
    • by balloonhead (589759) <doncuan.yahoo@com> on Saturday April 22, 2006 @10:42AM (#15180423)
      12 of 36 000 is 1/3000 = so your math is out by a factor of around 10.

      $8 for a DVD isn't so bad (assuming the rest of your calcs are correct - I didn't check)
    • But take it one step further. If pirated DVD's indeed sell at $0.75 then that still would be a whopping 40 bucks in the west.

      What is probably the case here that china has a large spread in incomes and that the new middle class does have more money to spend then a factory worker. In a country of a billion plus the middle class even if it is just emerging must be a gigantic market.

      Still yeah, your math shows the real problem. In western terms the difference between $0.75 and $1.50 doesn't seem much but tran

  • Great, so the next time I travel to China I can stock up on DVDs cheaply and actually get a receipt for them so I won't have to worry about being searched at customs. A few dozens of DVDs are always a bit tricky to explain in those situations.

    Can't see how this will make a difference for the Chinese consumers, though, unless there is a massive anti-piracy campaign sometime in the near future.
  • by Vadim Makarov (529622) <makarov@vad1.com> on Saturday April 22, 2006 @10:19AM (#15180330) Homepage
    Okay, I am not in China, but...

    If they sell discs where the main feature (i.e. the movie itself) is crippled, for example by lower bitrate than on premium edition, by having no English language track, or by having forced subtitles to go with, this won't beat pirates.

    If they sell discs with high-bitrate main feature (DVD-9 filled to the brink please), original-language soundtrack available and no UOP gimmicks, they win. Hell, if they do it consistently, they could sell such discs for a whopping $4.30 in Russia and I would gladly buy them over pirated ones [vad1.com]. Besides I throw the box away, anyway, and pack the discs into a wallet to save space right away. Just give me the properly mastered stuff, no frills.

    To bad I suspect the cheap licensed edition would be crippled. Then pirates, who care about customers more, get my business.

  • by MindPrison (864299) on Saturday April 22, 2006 @10:20AM (#15180336) Journal
    What's really going on is the effect of the public community.

    OpenSource, GPL, Musicians and Bands offering their music for free MP3 download, Linux - free OS, Blender, Gimp, OpenOffice...all free software that are comparable to commercial versions are a part of a HUGE new revolution that have literally SNEAKED upon the commercial industry, and because of their own onslaught on people...threatening legal users with DRM, SpyWare and restrictions....haunting people down for just being "people" - have brought fire to this revolution.

    Because of this revolution, more and more people will witch to free alternatives, and the "biggies" didnt even see it coming for all their own greed and hysteria.

    The way we exchange services - will change forever.
  • monopoly vs piracy (Score:5, Insightful)

    by pintomp3 (882811) on Saturday April 22, 2006 @10:23AM (#15180350)
    when you abuse your monopoly position by price gauging, piracy becomes your competition.
  • And face it, the software and entertainment industry have been gouging the public for so long, they think that the situation is normal.

    Does anyone else remember $85 movies on VHS? In 1985!

    All piracy is doing is forcing the software and entertainment industry to price their products into the affordable range.

    $200+ dollars for an operating system? Why? There is something seriously wrong when a peice of easily replicated digital information (ie. ludicrously cheap) costs as much or more than full system hardwar
  • by thunderpaws (199100) on Saturday April 22, 2006 @10:36AM (#15180403)
    All they need to do now is package advertising for cheap drugs / medications, low interst mortgages, genitalia enhancement, etc. Good for the consumer, eh?
  • it the economics (Score:5, Interesting)

    by fermion (181285) on Saturday April 22, 2006 @10:38AM (#15180411) Homepage Journal
    It seems to me that the price of a DVD is not set by the intrinsic value of the product, but the economics of the markets. I mean it used to be a movie cost $50 or more retail. It was not that the movie was worth that much. After all, a movie is a stale product. My the time it is released to home video it has been in the theater, pay TV, free TV, and god knows where else. The vlaue to the consumer is merely wanting a good copy of it to watch when one wants.

    I think video rental changed that by showing that alot of people would buy a video if it were sold at a lower price, and the studios would reap the profit instead of the people who rented the video. In many ways the video rentals places were stealing money from the studios in the same want online piracy is, and video became priced to compete with that grey area of acquisition.

    Now, when we got DVDs the studios got greedy. They jacked the price, but that was somewhat defesible becuase of the added value. What they did do is put unskippable ads, warning, etc that made the DVD less valuable. In most cases, one cannot just put a DVD in and have it play. In addition, if one just wants a movie, it can't be had. The consumer is forced to pay for the extra content. And if the consumer wants to keep the original for backup and watch a compressed version in a more convinent format, for instant putting an entire series of one DVD, that cannot be easily done.

    So the economics is this. People who want the DVD product tend to pay for it. People who merely want to watch the film once tend to rent it. People who do not want the DVD product, but want the film, are just out of luck. There is simply no legal way to aquire the film without the baggage.

    And so we back to the dawn of video rental. There is no legal way to acquire the product, but there are many grey areas in which the product can be aquired. So the studios are either going to ignore this demand and perhpas not maximize profit, or find a way to tap at least some of the sales. There are limits. DVD DRM is not going away, so person who do not want to deal with 10 DVD for a season are still going to download, but a $1-5 basic edition goes a long way to satisifying the basic market.

  • by 91degrees (207121) on Saturday April 22, 2006 @10:39AM (#15180413) Journal
    Every time you pirate a movie, the studios lose the cost of that movie. If the movie costs $20 then they lose $20, and if it costs $30, then they lose $30. They know they can't possibly compete with free, so they're doing the best they possibly can to reduce their losses. By only charging $1.50 for each copy, this will cut their piracy losses considerably even if they don't sell any.
  • Stealing or not? (Score:5, Insightful)

    by gameforge (965493) on Saturday April 22, 2006 @10:50AM (#15180456) Journal
    I've seen several people refer to pirating as "stealing". Keep in mind, it's only stealing when you would have gone out to purchase it in the first place! At least that's how most justify it.

    If I clone something (like a nice stereo, for instance - impossible, but for the sake of our conversation), it's not really stealing it. If I make it available to other people (i.e. like sharing my stuff on P2P), that's almost worse than stealing... but if I clone something that I wouldn't have purchased to begin with, that's incredibly easy to justify, because there's no money lost. Again, I wouldn't have gone out to purchase a $25 DVD, whether it could be had for free or not, just like I wouldn't have gone out and purchased a $1200 stereo when my $150 Aiwa that I already bought works great. There's no physical product missing somewhere... I cloned it. Now if I could only clone a Viper...

    The ultimate question in my mind is, what is the actual cost of manufacturing and distributing? It's like a $0.03 piece of plastic, the disc that is. Generic packaging like they talk of here can't cost very much. If it gets 15x the people to start buying movies again IN ADDITION to the people who currently pirate them, well... for $3 or $4 per release like some have suggested, I bet they stand to make their money back.

    Certainly the music industry won't be far behind in this little "experiment".
    • by Tim C (15259) on Saturday April 22, 2006 @11:25AM (#15180598)
      Keep in mind, it's only stealing when you would have gone out to purchase it in the first place! At least that's how most justify it.

      That's certainly an argument that I've used myself; however, it's still illegal, and so if you do indulge in copyright infringement, you have to accept the risk of getting caught and being punished for it.

      Just becaues you personally disagree with a law doesn't mean it doesn't apply to you.

      The ultimate question in my mind is, what is the actual cost of manufacturing and distributing? It's like a $0.03 piece of plastic, the disc that is. Generic packaging like they talk of here can't cost very much.

      Cost of manufacture and distribution of the disc is peanuts. Don't forget, however, that the film on it wasn't free to make. For old films and those that have already recopued their costs the production cost is immaterial, but for newer ones that have yet to break even (they don't all manage to at the box office) it's definitely a factor.
  • This smacks of hypocrisy to me. If online piracy is also such a massive problem in the US and Europe, why aren't they drastically slashing prices on DVDs here to help people come into compliance with the law?

  • It worked in Poland (Score:5, Informative)

    by poszi (698272) on Saturday April 22, 2006 @10:57AM (#15180487)
    A few years ago Polish magazines started to include DVD movies. I'm not sure how the deal with the distributors worked but essentially you could buy a magazine without a movie for $1-$2 or with a movie for $3-$4. With some less popular movies you could even get 2 or 3 movies in one magazine so one movie could cost you $1 (I got 3 excellent Almodovar's movies this way). The magazines were doing it for the promotion and probably didn't earn anything extra (but got more circulation). The movies were indeed basic, in a paper envelope, without extras, without other language versions but they were just fine. The movies were not new but you could buy good movies that were a few years old or sometimes last year's movies. I don't know how the deal worked for the distributors but I bought several movies that I would never purchased for a full price so they got a profit from me. The only drawback was that the selection was limited (essentially with several magazines on sale at a time you could choose among several titles). But you also got the magazine (ussually a stupid one, though) free. The movies are still sold this way so it seems it is profitable.
  • by Gadzinka (256729) <rrw@hell.pl> on Saturday April 22, 2006 @11:08AM (#15180529) Journal
    That's funny... They claim, that they will start doing this in China, but in Poland, for years now, you can buy legal DVDs with papers and magazines for $2-$3, and normal commercial releases of not-so-fresh movies for $5-$6. When you factor in costs and risks associated, many people see no incentive in pirating dvds.

    Meanwhile CDs with latest crappy pop music start far beyond the $20 point and -- SURPRISE!!! -- no one is buying them ;)

    Robert
  • Whether or not you agree with pirates (who sell the copyrighted material) or simple copyright infringers (who upload it gratis), these media industries need to compete with them in order to survive. If they were to provide services like allofmp3 where the media is unrestricted (because you trust your customers; you can always sue those who pirate later on) and at a competitive price, people would flock to that service. If you can't compete via price with the freebie pirates, then compete via value of what
  • What will happen is that there will still be people buying the 1USD illegal ones instead of the 1.50USD official ones.
    Say that a DVD now costs 10USD and 5 times as many people will buy it. That only brings income to 7.50.

    In both cases their income will be less. It would be a great opportunity to say to everybody: hey you told us to lower the prices and that we would gain more with that. Well, guess what, we tried it and it didn't work.
    We made less money and people still buy illegal copies.
  • yeah friggin' right (Score:3, Informative)

    by binarybum (468664) on Saturday April 22, 2006 @11:58AM (#15180733) Homepage
    I wish I could agree with moviemodel's dreamy idealism, but I've seen enough of the ugliness of the MPAA to believe that it's completely unfounded. The situation in China is desperate, it's not only cheaper, it's often more convenient to purchase pirated movies there, and often you're getting some pretty decent fake packaging and decent quality rips too. The MPAA does not have the power to manipulate the Chinese government as they do in this country and they are finally realizing that they must compete at the basest level - competitive pricing, to survive there. Between lobbying and lawyers, the MPAA will continue their reign of terror in the US at least for years to come.
  • by Radical Rad (138892) on Saturday April 22, 2006 @12:15PM (#15180805) Homepage
    Yes, this model is viable in the long term. My reasoning isn't based on how much they can make on a movie today but on how little it will cost to make a movie tomorrow. Computer generated effects have already cut the cost of making movies by reducing the number of extras, allowing production in settings that would not otherwise be possible, allowing complete "green screen" movies, and allowing completely CG movies. I feel certain that within fifteen years movies will routinely be made without human actors and the cost of production will be quite low. This will bring an explosion of creativity as hordes of amateurs try their hand at movie production.
  • by theonetruekeebler (60888) on Saturday April 22, 2006 @01:40PM (#15181215) Homepage Journal
    The black market always influences the prices on the legitimate market. The question has always been about a price point that's high enough to attract risk-takers to the criminal markets.

    As an example, consider the cost of cigarettes in Canada in the late 1980s. Tax rates were so amazingly high that ordinary people were willing to buy cigarettes smuggled in from the U.S. -- exact duplicates of the "legal" product, sold at a fraction of the price. The black market became ubiquitous and socially accepted. It undercut the legitimate market so badly that the government had to lower taxes so there would be a legal product left to tax.

    Now consider a product like a movie, where the cost of reproduction is absurdly low -- zero, in fact, if you just download the movie from the Internet. DVDs in the U.S. are priced to compete with that, and I do in fact buy DVDs of films I could easily download. In China, movies are burned to DVD then sold for $0.5. Studios, trying to compete with that, hope that a price point of three times the black market rate will attract buyers to their legitimate product, thereby making the production of ripoffs unprofitable.

  • The truth is (Score:3, Insightful)

    by Julian Morrison (5575) on Saturday April 22, 2006 @02:12PM (#15181359)
    ...that every bit of packaging beyond a printed cardboard sleeve and a waterproof plastic wrapper exists solely to convince you on a subliminal level that you're buying something more substantial than data.

    Same goes double and triple for software. One DVD's worth of data, in a fat 6 by 4 by 2 inch box with a half-inch thick printed manual (how quaint!) and some packing peanuts. As unsubtle as a puffer-fish!
  • 75 cents (Score:3, Informative)

    by ShakaUVM (157947) on Saturday April 22, 2006 @05:32PM (#15182009) Homepage Journal
    In China, the price of pirated DVDs in Shanghai (pirated DVD capitol of the world -- they have brick and mortar shops) is firmly set at 8 kaui by the pirated DVD mafia. Whereas you can haggle with Shanghai shops on nearly anything (I got a North Face jacket for 20$ when they wanted $150), I couldn't once budge even a street DVD hustler off the 8 kuai price point (they're people that walk up to you on the sidewalk and sell unsleeved DVDs). The street "Rolex" hustlers, by comparison, would usually haggle down to a 10-to-1 ratio off their starting price.

    8 kuai is right at $1 right now (buying at 7.99, selling at 8.02), not 75 cents. So they're coming in closer to the pirates price point than that. And Chinese people I talked to actually prefer real goods; it's just hard for them to justify when the pirated goods are so much cheaper... sounds like it should work.
  • by Flyboy Connor (741764) on Saturday April 22, 2006 @07:53PM (#15182456)
    So, in China piracy is rampant, and Warner cannot sell any movie at its usual price. Thus, they decrease the price to a considerably more reasonable $1.50. Does that mean that in the US and in Europe, we have been paying too much for these DVDs all along? That we did not pirate enough? It seems consumers should start pirating much more, to get those reasonable prices over here too. Thanks, Warner, for showing us the light.

    Warner is rewarding a country for having a legion of pirates. As a consequence, Warner is punishing us for being legitimate buyers. That really annoys me.

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