There is a recurrent theme among technologists that technology itself can “disrupt” the video entertainment business. Sometimes it is peer-to-peer delivery, at other times mobility, user-generated video, or really-fast broadbaand or local storage or sometimes even search that is believed to set the stage for a disruption of the video entertainment business.
Those viewpoints miss the mark, for a simple reason. The value people seek in professionally-created video and movies is hard to replicate on an amateur basis. And the mere existence of an additional distribution channel (P2P, mobile, Internet) can be helpful, but only when the content owners agree to license the content people want to watch.
Skype co-founder and Atomico investor Niklas Zennstrom now says “peer to peer is not disruptive today.” One might argue it was not necessarily disruptive in the past, either. What was “disruptive” was the “stealing and sharing” of valuable content, not the method of sharing. Take away lawful access and technology by itself cannot disrupt anything.
In fact, that is not likely to be the case even when content owners decide to cooperate with new technology platforms to a greater extent. Content owners will not “disrupt” themselves in the sense of destroying the value of the businesses they now run.
They are more likely to experiment with packaging and retail pricing in ways that augment, rather than disrupt, the existing order of things. For attackers to succeed, they will still need access to the content people want to watch.
What would disrupt the business, though, is a shift in end user demand. Lack of demand for the product (video cord cutting, for example) would open the way for disruption, since declining revenues would trigger more-aggressive moves by the content industry itself. But new technology, by itself, will not disrupt the video entertainment business, unless by “disruption” one only means the adoption of new channels that displace older channels.
Typically, that is not what one means when using the term “disruption,” which implies creation of entirely new “value” and a shift of revenues, often because some new technology is available. That often is the case.
This illustration from Wikipedia shows how a technology can “disrupt” older ways of doing things, for example.
But those examples also suggest why a disruption of the video entertainment business is going to be different. In none of those cited examples was there a controlling “gatekeeper” whose own behavior could cause a newer technology to “fail.” People were free to adopt the substitute product in place of the older product.
In the case of video entertainment, there is no viable “substitute product.” What people want, and will continue to want, is the older product of professionally-created video. The only thing technology might change are the distribution channels. The content owners themselves are gatekeepers who can prevent any substantive change in access, pricing or packaging. And that limits the amount of disruption any underlying technology change can cause, in and of itself.