LAS VEGAS -- Software piracy in the form of online file sharing is the greatest threat to the video industry's future, said Bo Andersen, president, Video Software Dealers Association, Encino, Calif., speaking at the association's Home Entertainment 2003 show here late last month.
The prevalence of video rental may limit the file sharing of movies because of its low cost and convenience, Andersen noted, adding that the industry cannot expect the courts to provide a full answer.
However, he said, "what must happen is consumers must come to accept that not everything on the Internet is or should be free. We all must accept that morality, the rule of law, and commercial fairness are as integral to online communication and commerce as to face-to-face commerce."
Beyond legal action and public relations campaigns, Andersen advocated fighting back with false files that appear to be new release movies, but instead are public service announcements "about this commercial immorality... In the long run, this 'spoofing' and the message it delivers will ring true with young consumers," he said.
"Our industry must not find itself in decline five years from now because it has given a generation of youths empty reasons to justify file sharing of movies," he said.
Andersen also said the industry needs to provide online alternatives for downloading movies. "It really is self-evident that the consumer should be able to choose from among a multitude of business models for online access to movies," he said.
Yet retailers also have a role in this future, "not as a matter of right, but because it is simply good business for studios to leverage retailers' knowledge of their customers into satisfying consumers," he said.
While the video industry cannot afford to turn the Web over to a "subculture of immorality," retailers must take advantage of the opportunities that the Internet presents. "No retailer can afford not to devote hours of every week to drive their marketing message or their commerce on the Web," Andersen said.
Also in the state-of-the-industry report, Andersen praised the advances made by DVD and its "incredible staying power. Even as DVD player penetration exceeds 50% of U.S. TV households, the thirst for buying DVDs among these more latent entertainment purchasers has not declined. "This is extraordinarily good news for the sell-through side of our industry," he said.