Case3 - case 3: YouTube, the Internet, and the Future of Movies PDF

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case 3: YouTube, the Internet, and the Future of Movies...

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CSIS 2500 – Management Info Systems

Case #3: YouTube, the Internet, and the Future of Movies

1) Substitute products (watching movies online instead of buying physical DVD) and new market entrants like YouTube, online video/movie streaming sites and other online sources where people can download and watch videos and movies, are the competitive forces that have challenged the movie industry in the 21st century. The major problem it has caused is illegal video downloading. With so many sites and sources available to download and watch movies, it is almost impossible for the movie industry to control those downloads. Hence, the copyright owners cannot ensure if they are getting money and credits for all the content they produce or not. Illegal video downloads surpass paid video downloads by four to one. Moreover, video clips of copyrighted materials are illegally all over YouTube, which costs the studios millions of dollars. People on YouTube often post clips from famous movies and TV shows on their channels. To tackle these problems, the major movie and television studios like NBC Universal, Universal Pictures and Warner Bros. started negotiations with YouTube to build licensing agreements to make their copyright content available legally. Likewise, the music industry, they decided to use movie downloads to generate revenues rather than fighting against piracy. YouTube also helped them with Video ID technology, which allows the copyright owners to track their content on YouTube. In this way, they can give copyright strikes on the channels (which upload their copyright content) and claim their videos to make revenue out of it.

2) The disruptive technology has a significant impact on the music industry and the movie industry. With the advent of YouTube and other websites where one can download songs and movies, DVD sales of many major studios went down even though they were still good products. Illegal downloads have become a major issue for companies. Sites like Torrent boosts the piracy of many films and digital content. Though the companies earn huge revenues from theatres, distributions, iTunes, and other online stores, they face a significant profit loss due to these illegal practices. Since the production firms cannot keep an eye on every possible website, they often don't get full credit and the profit they deserve for the content they made. Many firms tried to fight against these illegal practices, but they all lost the battle. However, now, instead of fighting against illicit video and music downloading, studios have invented many other ways like new licensing agreements to create new sources of the revenues and new ways to promote their content. 3) YouTube was started in 2005 as a platform to promote amateur and individual content creators. Initially, the movie studios saw YouTube as a threat. Viacom even filed a lawsuit against YouTube claiming that the site had more than 150,000 illegitimate video clips of their copyrighted content and asked for $1.25 billion in compensation. However, they lost the case. Eventually, the studios decided to collab with YouTube to build licensing agreements to make their copyrighted content legally available for use. The goal was to curb the illegal use of their content with the help of features like Video ID. The other goal was to make some profit by claiming videos illegally available on YouTube without their consent. YouTube and the copyright owner share the revenue. What movie industry can learn from the music industry is that they can not win the war against these illegal practices. Instead, they need to go with the flow and invent new approaches to promote their content and generate revenues as they did with the help of YouTube. 4) Motion picture companies should continue to use YouTube to promote their new films. YouTube is the most popular video-sharing website in the world. And with the help of Google, there is no stopping for them. Daily, millions of people visit YouTube, and millions of videos are uploaded on YouTube. Google operates YouTube in more than 50

countries and 60 languages, which can help the studios to attract more audiences from all over the world. YouTube is a more convenient and effective way to make your content reach the general audience than any other way. Billions visit YouTube regularly to watch trailers, looks, and teasers of the upcoming movies. YouTube also pay their creators according to pay-per-view that helps studios to earn some more profit. The studios can use YouTube to promote their films through ads, which is quite cheaper than big billboards and other methods. Google 's vast database (that contains information regarding their users' choices) can help the companies to target a specific audience. Disney has used YouTube to reach audiences from all over the world. The massive success of the Marvel Industry is an example of that. By remaining active on YouTube and taking proactive measures, the studios can counter the illegal use of their content.

REFERENCES: Laudon, K. C., Laudon, J. P., & Brabston, M. E. (2015). Management information systems: Managing the digital firm. Toronto: Pearson. Page 96-97...