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Disney: "piracy is a business model"

Written by Ben Reid @ 10 Oct 2006 2:08 User comments (29)

Disney: "piracy is a business model" After 15 minutes of viewing the ABC network premiere of Despearate Housewives - a high-quality, commercial-free cap that had appeared on filesharing networks, Disney co-chair Anne Sweeney began to recognize piracy as a business model to compete with as opposed to just an illegal threat to be fought - whether the company likes it or not.
"We understand now that piracy is a business model," said Sweeney. "It exists to serve a need in the market for consumers who want TV content on demand. Pirates compete the same way we do - through quality, price and availability. We we don't like the model but we realise it’s competitive enough to make it a major competitor going forward."

Disney has enjoyed a decent amount of success with online distribution of its motion picture. For example, 12.8 million downloads of Disney-owned shows have been made via the iTunes Store since it struck an agreement with Apple Corp. last year.

Giving the Keynote address at Mipcom, she also underlined the importance of consumer needs. Before the times of p2p networks, media distribution was controlled mainly by the motion picture studios. However, filesharing capabilities have changed this and now, she believes, Disney need to aswell. "The digital revolution has unleashed a consumer coup - we have to not only make in-demand content but make it on-demand" she said. "This power shift changes the way we think about our business, industry and our viewers. We have to build our businesses around their behaviour and their interests.

"All of us have to continually renew our business in order to renew our brands because audiences have upper hand and show no sign of giving it back."


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29 user comments

110.10.2006 14:55


210.10.2006 14:56

Sounds pretty logical to me....lets see what happens. Lets see how much. I'd pay a $1 per episode to watch a high quality vid. I'm not sure what "High Quality" your talking about, but something along the line of XviD or DivX at about 350 Meg per 40 min episodes. Imagine that...the whole world could see a broadcasted show at the same time. Certain shows would last longer and not be axed...cause you could wait...until a quota was sold...perhaps then go to season 2. It could work out for both sides. I think if the cards are played right...and there's not too much corporate greed, this could play out very well

310.10.2006 14:57

Anne Sweeney states, "We have to build our businesses around their [our customer's] behaviour and their interests". WHAT A FRIGGIN" CONCEPT!!! That she (Sweeny) even needs to state this is smoking gun eveidence of how little regard is given to "the customer" by the status quo Big Media corps. Are they really that out of touch with who actually pays their bills, or is it more about open contempt for us?

410.10.2006 15:24

Regardless of what happens, the format will be DRM'd in the end.

510.10.2006 17:38

regaurdless of whatever the fuck they do, ill download free shit of p2p till the day i die. the time for huge, ultra greedy, government manipulating media monopolies is over.

610.10.2006 23:39

Agreed with "Gray Area", it's amazing the disregard. But remember it's only to their own detriment, the innovators will prevail in the end. At least some are starting to recognize piracy is a legitimate force to contend with that's filling a need heretofore unmet. A need that's driven by users who expect "on-demand" content. I'm not sure if "spiesfan" was referring to this, but if so, I ditto the "duh."

711.10.2006 04:24

At least someone over there is close to reality and realizes changes have to be made.

811.10.2006 07:37

Its about time the whole point of piracy has always been to get media and programs to people that cant afford to sell their soul...or at least to lop off a arm or a leg. the 2nd point of piracy an the thing that always got it in trouble was people selling masses of copied stuff *L* 0_o

911.10.2006 08:02

Anne Sweeney is pretty dim witted for a corporate leader but then what’s new and Disney is amongst the worst companies out there. How is piracy a business model unless you take the stance that Gate’s and Jobb’s have which is steal as much as you can from other companies and resell it, which they have done so well at. Trust me it Disney tries a new approach no matter how good their intent is it will be botched horribly. I like how she blames P2P when Southeast Asia has been high production pirating for a very long time way before P2P became popular. Wake up and get a clue Anne or better yet Disney’s board of directors should fire her for being an idiot.

1011.10.2006 08:15

Mr-Movies so you would rather have corporations ban piracy(including backing up stuff yourself) every chance they get or treat it like a rival corporation and out sell them by selling cheaper and such. She might be dim but sht the truth has never rang clearer from a suits mouth!

1111.10.2006 09:50

I say, try and ban P2P networks altogether! We don't need them!

1211.10.2006 09:54

gogochar No thanks I rather like them :P

1311.10.2006 11:34

I recently missed a show and I went to the various networks to see if I could watch it online. What I noticed is that ABC had all there major shows available from the start of the season. CBS and NBC seem to only think that I might want to watch the current week and nothing previous to that week. If you are watching a show online they force you to watch approximately 3 - 25 second commercials broken up by segment. I am willing to put up with this inconvience to catch a show that I missed as a result of screwing up with my VCR. I also realize that this is how the networks make money. Hats off to ABC online and I hope NBC, FOX (has nothing available), CBS follow in their footsteps. This is television of the future. No missed shows, no VCR screw-ups, etc. It is even possible that someday if NBC, CBS, etc. keep their shows online from previous years that you might become a fan of a show in its fourth season and be able to start at the beginning of the series and work your way forward. Just to give an example, I missed the season finale of FRAISER because of a VCR screw-up on my part and after becoming a member of NETFLIX, I ordered the last disc of the last season of FRAISER and watched it. I sat their in amazement thinking that I missed this show two or three years ago and hear I am sitting down and finally getting to see the last show. Now, extend that to the future where if I miss the show, I just go to the network's server and watch the show the next day, next week, or next month maybe on my TV as if I was watching it normally.

1411.10.2006 15:45

pa104inf don't forget heavily DRMs media so they can annoy you to death with something new :P

1511.10.2006 18:59

Piracy developed because money-hungry companies were overcharging for their movies/music/software. It came about because of their greedy marketing, and now they finally are recognizing what it cost them. They should have known that they couldn't hold a monopoly for long. Hopefully, they'll get a clue and make a better chioce next time...if they get the chance. Personally, I wouldn't mind if piracy made these companies lose 99% of their cash, because it would take that long for them to realize that the people are not going to submit to their crooked, greedy marketing. Unfortunately, I don't think they'll ever p2p FTW against big-business crooks! They're doing it to themselves, so give em what they deserve.

1612.10.2006 20:32

CiDaemon, that's a bit extreme. Hollywood is a wonder of the whole world. That takes money. You make it sound as if it was some mass conspiracy to rip people off. It's just business, supply and demand sets the prices. What Anne Sweeney realized is that piracy operates on some of the same principles as current businesses. "Quality, price, and availability." Just from those three words we can tell that she sees oportunity here. She's not as stupid as Mr-Movies thinks. I can see she plans to "renew the business and the brands" to compete in quality and availability so hopefully people will want to pay a little price. Like them or not, it IS the businesses that give us what we want. Not the pirates.

1712.10.2006 20:45

cart0181 When dose "supply and demand " cross the line to simply "getting away with it",..and well...corporations have been getting away with to damn much lately.

1813.10.2006 10:03

Sorry ZIppyDSM but she is dim witted and this is just an example of how far out the corporate world has gotten. I suppose you like to listen to Madden when watching football, Anne and John would probably get along well together. I'm for pricing things right and spending less on copy protection but businesses these days thinks differently they feel the need to gouge us and wonder why everyone wants to pirate. A good example is $17usd for a music CD a couple of session in the studio and WaLa we produced a CD. A movie takes much more money and effort to produce and they cost about the same at the retail store, what a scam. We should also be able to back up our investments with out becoming a criminal but that's not the world we live in, big money has taken over most definitely and our government is a part of it.

1913.10.2006 10:11

Mr-Movies she might be one of thos blond savants ! pretty much the pricing scheme they have is just a scheme to get as much money as inhumanly passable....

2014.10.2006 21:10

Wow... I wonder why Disney (one of the World's largest studios) would give such an important role to what many here have called a dim whit?? The answer is simple... There is no way she is a dim whit! It took a lot of courage to come out and make a comment like that. How else could Anne have worded it without offending p2p users, and potential future customers? As far as I know every other company is pouring mass amounts of money into piracy prevention that it's inflating production costs thus further compounding the problem they are fighting in the first place. To me, Anne's words have hit just the right spot. Consumers are the business, if they are downloading video via p2p, then there's a message to be heard. Anne wants to give the public exactly what they want! So... Sorry... How does that equal dim whit status?

2114.10.2006 23:54

There is a difference between the true pirates making copies for profit and the P2P person backing up copies for safe keeping or whathaveyou. Whatever we think of this woman, she will doubtless be outshouted by the greed bugs in the stone age... who will continue to over charge and DRM their product to death and little will change...sigh...

2215.10.2006 19:25

Let's get something straight, there is no such thing as over-charging in the US economy. Prices are set by laws of economics. The only time over-charging IS possible is in a monopoly situation, for which the government has safeguards too. If there is a monopoly hiding somewhere in the supply chain of hollywood movies, someone please tell me. Let's see, plenty of competing actors/actresses, check. Plenty of competing studios, check. Directors? Nope, no monopoly there. Editing? Marketing? The recording media itself? If people want to complain about over-charging, they better back it up with some kind of evidence other than the fact that they're too broke to pay $10-15 for a DVD movie. Hey I wish they were cheaper too! I just know it's my own fault if I can't afford them. Till then, I'll just keep getting them the cheapest way I can!

2316.10.2006 00:39

That's right! I still recall the days when VHS tapes were around $80+ (Aus $) to buy the latest titles. These days we're getting higher quality video & audio, more compact, movies that don't lose quality like video cassettes used to etc... at a fraction of the price. Don't forget if you took inflation into the equation what was $80 15-20 years ago, would be at least double now. So we are getting for $25-30 today what we were paying $150 for 15-20 years ago. Look, I'll be the first to admit I don't buy everything the right way.... But if there were a decent way to download the most recent movies etc. at a good price I most certainly would be interested.

2416.10.2006 01:08

The point is, "piracy" is competing too well. People offer content that can't be bought, months before anything anywhere near similar is available from the producer, all for free.

"The only time over-charging IS possible is in a monopoly situation"
There is a monopoly. It's by the distribution companies as a collective. Before trying to educate poeple about "laws of economics" (knowing that economics is only theoretical, there are no laws), learn yourself what price fixing is. Please also take a few moments to realise that this article is not about Hollywood movies (they have their own monopoly, it's official, they call themselves the RIAA), but about television serials.

This message has been edited since its posting. Latest edit was made on 18 Oct 2006 @ 1:01

2516.10.2006 09:27

Ryu77 - apparently you have never heard of the phrase "Sh*t Floats", it does and your assumption that because she holds a position means she is smart is not accurate. Anne's statement about piracy as a business model is not accurate and doesn't make sense unless you’re just trying to rip everyone off and then why would you tip your hand with that sort of business model. I know what she is really trying to say but she has stated it poorly in my opinion and done so amongst a big crowd that doesn’t make her bright. Also you can overcharge for products with out having a monopoly as long as the rest of your competitors are on the same page, doing the same things. Just because the masses are willing to pay for something doesn’t mean you weren’t ripped off, it happens all the time, look at the price of iPods way to expensive for what your getting. As to the government not allowing monopolies, what a joke that is if you can't see what is going on then your part of the problem. Burnable CD’s were $90 when they came out eons ago now there much cheaper does this relate to anything, I don't think so except that quantities, materials, and processes have made them cheaper. Bottom line I’m glad I don’t work for Anne.

2616.10.2006 14:28

So... Who do you work for Mr Movies? The price to own a DVD isn't that expensive when compared to what we used to pay for VHS tapes. If it weren't for the ability to copy/download then I am sure many would be happy to pay this price. What it sounds to me, is that many cry too expensive just to justify the guilt they have for obtaining material illegally.

2716.10.2006 21:51

Ahh well, some people will never understand business. Not my job to explain it to them. At least Ryu77 knows I'm right.

2817.10.2006 08:49

Your reality just propagates the problems but I hope you’re happy together that's all that really matters, isn't it. :D We seem to be dummying down as a society and priding ourselves in doing so. crazy if you ask me.

2917.10.2006 11:22

Quality first (I will not bay 60$ for a crappy game or 15$ for a bad movie) Price 2nd (I will not bay 60$ for a crappy game or 15$ for a bad movie) stupidity of corporate greed last (thinking...thinking...thinking...I will not bay 60$ for a crappy game or 15$ for a bad movie) UUmmmmmmkkkaaaayyyyyyyyyyyyyyyyyyyy!

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