Legal Digital Media : Long term problem for Media companies?

I've been reading a lot about file swapping, legitimate sales figures and growth in iTunes etc, and following a lot of Hexus.Lifestyle which covers a lot of these long term visions.

So i'd thought it be good to throw this over to the main body of hexus and raise the question of Digitial media being a problem for record companies.

For a start the one thing about Digital media, the more and more it gets distributed the more complex and restrictive the Digital Rights Management is becoming. So from one aspect here people are going to simply not buy the product because of the lack of "fair use".

So after we lose a percentage of people to this type of media, i guess we also lose a percentage of people without internet connections/pc's etc.

But last but not least i guess what i'd really say i'm aiming at in this thread is that once you go to digital media you do not get the benefits of selling the media again in a different format. Anyone converting their vhs collection to dvd, or their tape collection to CD, or MD.

So while digital media should be being embraced and i'm sure it will be, does anyone else see that the record companies have got a real issue on their hands in the future from the simple legal use of their media.

To back this up, just look at the headline figures for DVD sales from this BBC news piece
http://news.bbc.co.uk/1/hi/entertainment/4640658.stm

Sales up, turnover down. Its simple economics that once you get a media out there, the costs will be high at the start and begin to drop as more and more people use the media. Not changing the media in the form of digital surely creates a huge problem for the media companies?.

They certainly can't charge for physical production costs, and while i'm sure they might be happy with the extra profit they make from this difference at the start, the pressure they will feel in time to bring prices down must surely start to hurt them in time.

The next thing with digital media is that once this has been turned to mass market, are we still going to see the likes of HMV/Virgin Megastores etc being around, are we going to see people impulse buying the new CD they heard on the radio etc?.

Lots of questions and maybe if i was the media companies, i'd certainly be more interested in looking at these questions than spending time worrying about the illegal side of downloads?.

Thoughts people?

TiG

I'm actually not sure what you are getting at exactly.

The music and film industries are moving to models where you do not own the content you pay for, they are effectively renting it to you. At any time they can remove your right to access that content, so you keep on paying, hence they keep making money for nothing.

Reselling existing content again is one of the major factors being the hi-def disk formats. Most studios will see this as a way to re-package their back catalog for us to buy in higher quality. Granted we are getting higher quality content out of this, but we will pay heavily for it. I can't see HD-DVD or BluRay disks being as heavily discounted as DVDs are, not until DVD is long gone, and that will take longer than VHS i think.

As far as the increase in sales versus the reduction in revenue from DVD sales in concerned, that is probably a simptom on the movie studios wanting as much revenue from a film as quickly as possible. In years gone by it took 9 months for a title to appear on VHS after the cinema release and a couple more years for TV. Now titles are out on DVD well within 3 months and deeply doscounted shortly after that. People realise this and fewer are prepaired to shell out £20 when they can get it for £10 in a couple of months.

I do the same. I was in Fopp (an independant scottish music/dvd/book store) at the weekend and looked at £7 DVDs, decided not to buy any because i know i can get them for £5 in the not too distant future. With such a choice out there, i don't *need* to get anything in particular right away. I don't think i'm the only one who sees this either.

Those are just some of my thoughts on the subject :)