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Why the internet is a game changer - music, movies, books, newspapers

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April 15, 2009 – Comments (3)

We have already seen the impact of the internet on the music industry.  As technology continues to improve we are starting to see the same impact on the movie industry.

Content creators no longer need to rely upon traditional distribution channels to get their work to consumers.  Let's examine the impact this will have on the music, movie, book and newspaper industries.

MUSIC - Musicians can now get payed directly for their work and do not need a middleman to distribute their product to clients.  Look for the big music companies to become irrelevant as artists switch to a plan in which the hire agents and pay them 10% of royalties.

INVESTMENT: SHORT BIG MUSIC LABELS - Hedge risk by going long SP-500 index fund

Newspapers - Newspapers used to benefit from having huge barriers to entry.  The cost of printing equipment and real estate are not faced by their small nimble online competitors.  Look for authors to syndicate their work directly to various news aggregator websites with authors being payed either aa percentage of advertising revenue on their articles or a flat fee per article.  Superstar writers can look to signing exclusivity contracts with the top websites.

INVESTMENT - SHORT NEWSPAPER PUBLISHERS

Books - Book stores will go the way of record stores.

Movies - Once again content is king.  However due to the coordination required to produce blockbuster films, hollywood companies will benefit from the internet and it will help to increase profis.  Also look for margins to improve as the cost of special effects decrease.

INVESTMENT - Long MOVIE STUDIOS

3 Comments – Post Your Own

#1) On April 15, 2009 at 7:39 AM, Varchild2008 (84.50) wrote:

Also an impact on video games.

"QUAKE" has now become  Web Based Game.  It's in beta but it is meant to be the better version of Quake Arena and a test trial for ID Software producing more of their games through Cloud Computing.

If the Internet is powerful enough.... Game Boxes at Retail Shelves may be a thing of the past.  Game Developers don't want to keep forking over the cash to pay Rent for Shelf Space for their titles + Shipping + Fuel for the trucks + Mastering & Printing of Manuals and Game Boxes + etc.

The amount of money a game developer saves by being an Internet or "Downloadable to Game Console" game developer is tremendously attractive.

Company's like Activision, Konami, and Koeii have all recently jumped on board the Wii / DSi Bandwagon of Selling Downloadable Content of their older game titles.

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#2) On April 15, 2009 at 7:41 AM, Bupp (28.74) wrote:

True EB Games is going to go the way of tower records.

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#3) On April 15, 2009 at 9:06 AM, Gemini846 (46.06) wrote:

Be careful so you don't get squeezed by companies that are forward looking. Artists still sign with big labels because those labels have always been about promotions. People respect thier oppinion on who is good and who's not. It will be 10 years at least before people think CD's are obsolete as a distribution medium.

Why do I say this? Cars. As more and more people retrofit thier cars to accept MP3's and new car producers are putting ipod jacks out standard the modicum is changing.

Storage and backup are also an issue and of course there is always the piracy issue.

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