Yankee Group: Finding Digital Gold When the Seas Are Awash with Pirates

Executive Summary

Ubiquitous connectivity and the digitization of media have given rise to Anywhere Consumers that look to access music, movies, TV shows and games regardless of device, network, time of day or geographic location. These Anywhere Consumers will maintain their insatiable appetite for music, movies and entertainment, but that appetite will be increasingly personalized toward the particular media that moves them. They will continue to find ways to enjoy the content they like on the devices they own and carry. As such, many will select the best service offering available to them, whether it is legal or not. This insatiable appetite that has no regard for artificial barriers has led to significant problems with digital content piracy. Exhibit 1 shows how Anywhere Consumers will obtain content from whatever source best suits their needs, independent of traditional consumption value chains.

This behavior, in turn, is challenging media and entertainment companies to establish new business models as consumers slowly but inexorably shift from physical media to digital media and dictate the terms of their consumption. For their part, content producers have made the piracy problems worse by failing to understand the titanic changes ubiquitous connectivity has created in the marketplace. Moreover, studios and record labels have relied on an “interdiction” strategy that seeks to stop piracy without addressing the growing needs of consumers, and have suffered because of it.

Keywords

Digital, piracy, subscription, DRM, P2P

Pages
Publish Date & Author(s)

David Vorhaus, Analyst
11 pages
November 2008