Disney Co-Chair recognises 'piracy is a business model'

"Pirates compete the same way we do - through quality, price and availability."

Giving the Keynote address at Mipcom, Disney co-chair Anne Sweeney has broken with studio convention and recognised piracy as a business model to compete with, as opposed to simply an illegal threat to be battled. Sweeney's pragmatic conversion came after seing - within 15 minutes of the ABC network premiere of Despearate Housewives - a high-quality, ad-free version that had appeared on P2P networks.

“We understand now that piracy is a business model,” said Sweeney, twice voted Hollywood's most powerful woman by the Hollywood Reporter. “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.”

In the year since the iTunes deal was first done with Apple, Disney has sold 12.8 million episodes via iTunes and 51 of the 272 TV series available on the service are Disney products.

"audiences have the upper hand and show no sign of giving it back.”

As reported on PaidContent.org, Sweeney's address also pointed out:

- Eighty-four percent of those that used the on-demand service said that it was a “good deal” to get a free episode in return for watching an ad and, significantly for advertisers, 87 percent of those could recall the advertiser that sponsored the programme.

- Sweeney outlined Disney’s strategy as: being primarily about content because it drives everything else; being about maximising new platforms for both content and advertisers; and sharpening its brands, because consumers choose brands they know and trust.

- Partnership, she said, is critical because Disney needs “compatible brands” to focus on its core aims of: a quality user experience; growth on delivering consumer value; content valuation and protection; and a commitment to market products and services.

- “The digital revolution has unleashed a consumer coup. We have to not only make in-demand content but make it on-demand. 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.”

- “The most powerful creativity comes in response to a challenge - as long as you know who you are and where you want to go.”

- “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.”



0 # Friends ARE the content!Guest 2006-10-10 14:19
Content IS king. You only choose your friends over the movies because people are an unending source of fresh content (although I am making some general assumptions about the quality of your friends).
0 # Guest 2006-10-10 14:57
;-) ;-) :sad: :-x :cry: :-? :roll:
0 # Music ProducerGuest 2006-10-10 15:02
If you are in the media business, YES Content is King. A bunch of friends on a desert island can\\\'t sell your product. I\\\'ve seen sooo many artist with incredible talent who decided that content isn\\\'t King. And what are they doing now??? Bearly making ends meat!! If you\\\'re not in the media business, sure...friends can be in place of content. But when you run a business that strives from original content.... it is KING!!
Piracy hurts all the content creators out there who are trying to make a living from their original, hard work. Could you imagine working at a job where you worked & didn\\\'t get paid for the work you did because there is another person doing the same job illegally??? (That\\\'s called \\\"Out-Sourcing.. LOL)

Anne Sweeney is a business woman who understands that without content, there would be a lot of unemployed Disney workers....
YES.... CONTENT IN KING in the media industry

0 # FINALLY.Guest 2006-10-10 15:53
Finally someone realizes that the only way to compete with free is to offer something worth paying for. The way the market works right now is totally flawed. Nobody wants to download a 640x480 version of a show from iTunes when a high res HD ac3-5.1 version is available through the torrent networks for free, with no DRM.
0 # Disney Treats Caribbean like PiratesGuest 2006-10-10 16:53
Folks - this news isn\'t liable to make it big anytime, ever, but those of you interested in the Disney comment may be interested to know that people in the Bahamas and in other areas where they have resorts consider them the true Pirates of the Caribbean. Here is a story on a current event in the Bahamas that involves Disney\'s history on a small island, which they ravaged in an environmental disaster. The after-effects of this are currently top news in the Bahamas:
0 # Content is NOT kingGuest 2006-10-11 01:26
Content is NOT king. You can churn out whatever lousy content you want with the help of hyping up the market, advertising, bribing, payola and so on. But with file sharing (e.g bittorrent) the situation is at least more levelled in favour of the user, because now, for the first time in history, the user can really choose what they want (to file share), and when. And this shakes up the media industry, because their plans (when and where and how content should be consumed) are bypassed by the users. The media industry is loosing control, and they are scared, and they should be.
0 # The CONSUMER is KingGuest 2006-10-11 03:38
Logically, its is the consumer, not the content that is king, because the consumer exercises personal choice in the market - to buy or not to buy, to download or not to download.

That does make the content pretty important of course, because that is what attracts the consumer in the first place, but its us, the human beings who make personal choices who decide the place of everything else in the hierarchy in the end. People have been known to legitimise piracy because they exercise their choice to consume pirate content. That has been the single most important factor that has demolished the old market model, but it has happened so fast and so subversively (or so it seems to the mainstream) that the mainstream content industries are only just starting to wake up. Now if you are a content industry that traditionally has dominated the consumer market and probably manipulated it to favour your own activities, sometimes for decades past (Did anyone mention Hollwood? - I don\'t think so...) then this turnaround has come as a complete shock.

That is why the first response has been reactionary and protectionist. That\'s just the start though. They will start getting creative next and they are good at creative, so we may well see some very interesting inducements and enticements coming in the try and influence the market.

Ultimately though, it is the individual who exercises personal choice to buy or not to buy (whether money changes hands or not is immaterial here)who influences the market.

0 # Guest 2007-01-11 07:39
:-? :cry: :sad: :-x :sigh: :zzz :eek: :roll: :-) :D ;-) 8) :P
0 # Guest 2008-07-13 17:26
Very interesting article, but what are the proposing to DO about it? An earlier poster suggested that this means they need to provide something worth buying, but then I think he kills his own argument by saying you wouldn't want to buy an inferior version when "... high res HD ac3-5.1 version is available through the torrent networks for free, with no DRM."

Well, what WOULD you want to buy if that is available for free? What is better than that? I would assert nothing but *maybe* convenience (e.g., if iTunes is guaranteed to have it, quickly, then that's worth not searching around for qustionable quality on torrents).

Since the pirate business model has no expenses for content creation in the first place, it is virutally impossible to compete against. You can't say "Content is king," thereby implying that the studios need to make better content to solve this problem, when the pirates can get (by definition) the exact same content as the original producers. Good content, bad content, the pirates have it, for cheaper/free. How do the studios compete? Everybody hates DRM (I do), but what's the solution here??
0 # Nic Wistreich 2008-07-14 13:05
Apple does seem to have cracked the convenience with some 50,000 films a day being purchased now, apparently, on top of 5 billion songs. But the biggest beneficiary is Apple because they own the hardware, software and 'FairPlay' DRM system.

Because of the many-to-many paradigm of tech, platforms and services, DRM demands a monopolistic system. The alternative - the trust model, requires a greater leap, and doubtless a change in industry practice and openness to be something more trustworthy. But people do pay buskers, and supposedly the recent Radiohead pay-what-you-can experiment has earned them more than their previous few albums. (I'm still trying to get the full figures). And of course Clare Sweeney was comparing free-TV with filesharing, so this issue is more one of competing for eyeballs.

It's not so much that there is a simple answer, or even that the best models have all emerged yet, but more that in the face of the impossibility of stopping the free copying of 0s and 1s, a focus on providing legitimate alternatives is a greater priority than trying to find a foolproof DRM system that provides as many freedoms as a DVD or CD.

Even in the totalitarian (doomsday) solution suggested by some such as Virgin Media and the proposed new Anti-counterfeiting Trade Agreement (ACTA) (www.newscientist.com/blog/technology/2008/07/is-drm-dead.html) of closing all filesharing networks, killing off network neutrality and ensuring all new computers have a 'Trusted Computing' chip - which would not only would cost billions and alienate the market (not to mention kill the Internet's founding principles and personal privacy), the quantity of free legitimate 'user-generated' content on YouTube etc, which makes up the majority of video watched online would still exist and surely provides a far bigger - and more unstoppable - competitor.

As she says - audiences have the upper hand, and show no sign of giving it back. But at least right now the majority don't fileshare, and of those who do, such as those researched by Feargal Sharkay for BMR in the above link - 80% would pay.