Why the Grokster decision may hurt the entertainment industry

Amidst all the rejoicing over the Grokster decision, now old news, the entertainment industry may have overlooked an issue… and issue that should now be staring them boldly in the face. Control.

Online media networks will grow to a scale that will make traditional music and video outlets look like decent-sized corner stores. Apple iTunes is just the beginning, as one outlet apparently accounts for 70% of digital download sales. Complaints are made about ClearChannel today… what if ClearChannel reached 250 million ears each day?,,The wide spread of media to which the consumer wants access will be so diverse, the differentiation among products so minimal, and the margins so thin, that portals will happily ding a demanding supplier, or simply push access to their content to the far reaches of the navigation interface. Remember, the copyright holder is the already legislated monopoly provider- most favored nation clauses will face some heat.

The ability to filter the content available through peer networks, one one hand, sounds like a noble cause. People should not be able to share copyrighted works without the permission of the copyright holder. But stop and think for a minute… if I can filter out works you don’t want me to share, I can also filter out works you want me to share. I can limit your access to my network of customers, legally. As a web portal or peer network, I hold no monopoly and no obligation for access. I can quite easiliy begin to limit what content is available and that which is not, at an impressive scale.

Unfiltered, decentralized P2P networks provide the entertainment industry with a distribution platform sans gatekeeper, sans distribution fees, and sans social limitations. While the threat of piracy is high, so is the potential for unfettered access to customers. Music and film would trade at a lower unit price, but a great volume more would be sold. Most importantly, music and film would flow upon the platform of social interaction – a less expensive and more powerful means by which to sell media products.

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