About Those Hollywood Control Freaks . . .

The same geniuses who gave us “classic” movies like “Stop! Or My Mom Will Shoot,” “Gigli” and “Catwoman” are at it again.  Only this time, their Hollywood flop isn’t just a bad-but-over-hyped movie, but a decision to stifle creativity and the rights of consumers.  

As everyone knows, the music industry allows — and even encourages — us to download songs off of our personal cd and upload a personal copy to our computer and iPod.  As a trade-off, we often purchase songs for $.99 from them.  Millions of Americans do this every day.  But the movie industry is so opposed to the modern notion that consumers should be permitted to take ownership of their own dvds that they actually sued — and were granted a temporary injunction against — an innovative product called RealDVD which would permit consumers to make personal copies of their dvd collection.  

This lawsuit is so bad that even the LA Times authored an editorial this week, titled “Hollywood Control Freaks,” which says:

“RealNetworks’ RealDVD software and Kaleidescape’s home servers drew fire in part because they can make permanent copies of the rented or borrowed discs. But people who are so inclined can do that already with tools that are cheaper and less restrictive. More important to the studios, RealNetworks and Kaleidescape add value to a movie collection by making it easier to manage and watch. In so doing, they increase the incentive to own a movie rather than just rent it.

One lesson from the technology industry is that there is a trade-off between controlling products and unleashing the innovation that spurs growth. Just look at how well the iPhone has fared since Apple invited independent developers to create applications for it. Hollywood should remember the principle underlying the case against China: Centralized control stifles a market. Rather than trying to stop potentially disruptive technologies and business models, Hollywood should find a way to harness them.”  

Hollywood is losing revenue — partly because they no longer make compelling movies that people want to see.  But they are also in trouble because — unlike the movie industry — they have failed to embrace emerging technogies that would allow them to better serve 21st century consumers.