Old media seeks upside of downloads

KAI RYSSDAL: Maybe you caught a couple of these headlines today. The new head of NBC said some nasty things about YouTube. Apple chief Steve Jobs wants the recording industry to lose copy-protection technology And Amazon made a new deal to sell movies using TiVo boxes.

Three separate stories. With a common thread. How old media companies are struggling...even being forced outright...to come to grips with all the new technologies out there.

We asked our Senior Business Correspondent Bob Moon to help us connect the dots. Hey Bob.

BOB MOON: Hello, Kai.

RYSSDAL: Let me start, I suppose, with Jeff Zucker, the brand-new chief at NBC Universal. Took a big swipe at YouTube yesterday. First day on the job.

MOON: That's right. Here you've got a guy who's seen as new blood, kind of a fresh face at NBC Universal. And one of the first pronouncements that he makes as the new chief is sounding a lot like "We've got to stop that interloper, you know, that gate-crasher YouTune." He says Google, which bought YouTube in October, has to make good on its promise to block any file-sharing violations.

Now in some ways, Kai, this is reminiscent of the way that the recording industry ultimately shut down Napster back when there was a lot of music sharing going on for free. It's not that Zucker wants to keep NBC and Universal off the Internet — that's not it. In fact, not long ago Zucker was arguing that every NBC program has to have some broadband content of some kind. He just wants to make sure that the company makes money on it.

But, a lot like the days of Napster, you've got others arguing that there's no time to waste here for Hollywood and the TV industry to get their content out there and available in a way that consumers want. In fact, just a few weeks ago, I was at the Consumer Electronics Show in Las Vegas, and the head of ABC Disney, Bob Iger, was hinting to that gathering that the best way to compete with these file-sharing sites is basically to be fair about giving consumers what they want.

BOB IGER: From my perspective, the best way to combat piracy is to bring content to market on a well-timed, well-priced basis.

In other words, consumers who want this content are going to go out there and find it anyway, if they can. So why not give it to them conveniently, without having to put up the roadblocks that the industry's really been so consumed by up to now.

RYSSDAL: Which is, actually, a perfect segue to this open letter to the music industry that Apple CEO Steve Jobs wrote yesterday -- all about lifting digital copyright protections. Why is he in favor of this since he's been selling so much music on iTunes and so many iPods?

MOON: Yeah, well, you know, Kai, these comments from Jobs probably sounded a bit familiar to you. Back in December, you might remember that you spoke to Josh Bernoff, who's an analyst over at Forrester Research. And he was advancing this idea for the music industry to dump what's known as DRM — or digital rights management. That's a fancy name for anticopying technology. The problem is that CD sales keep falling and you've got the market tied up by Apple's iTunes. There aren't enough stores pushing the product. Here's the way Bernoff explained it:

JOSH BERNOFF: I think there's very little risk in selling unprotected music. Whereas the reward to the music industry would be to get themselves out from under Apple's thumb, have more stores selling this, and potentially attract more consumers not as willing to buy music when they have to live within the restrictions digital rights protections include.

RYSSDAL: Alright, so that's what's in it for the music industry. But I go back to the earlier point. What's in it for Steve Jobs? He's got basically the world on a plate here with iTunes and the iPod.

MOON: Yeah, that's a good question. Probably the most compelling reason right now is that Apple and its iPod and the iTunes seem to have the critical mass to make this a good move. When you think about it, if consumers can buy music that will play on other players, besides the iPod, perhaps there's growth in that. There's a lot of debate today, really, about what motivated these comments from Jobs.

RYSSDAL: Let's go music to television. This deal between Amazon and Tivo that was announced today.

MOON: Yeah, brings us full circle back to the comments from Zucker. This is how the studios and TV networks hope to make their money. This is a deal between Amazon and Tivo that really takes this promise of being able to download movies and it links it straight to your TV set — or at least the Tivo box that's connected to your TV set, as opposed to having to watch movies on your computer screen. They're banking that customers will be willing to pay for the convenience of that.

RYSSDAL: More to come on this, I'm sure. Our senior business correspondent Bob Moon. Thank you, Bob.

MOON: Thanks, Kai.

About the author

Bob Moon is Marketplace’s senior business correspondent, based in Los Angeles.

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