“Breaking the DVD Window“(6.5 minutes) is another gem of a podcast from Slate.com.
It provides a fascinating discussion of the future of media distribution, including movies, music and books.
Current distribution schemes (Movies come out at the theatre and only later on DVD; Books come out in hardback and only later in paperback.) are designed to exploit market power and price discrimination. The idea is to distribute to those willing to pay the most first, and then later offer the product at a lower price.
Note that this is related to the choice a teacher makes about giving a class lecture, live putting the lecture notes on-line or podcasting the lecture. Are the different media perfect substitutes? Might different students prefer one medium to another? Or might the same student want more than one “version” of the class session?
The current distribution model is clearly inefficient–Compare burning an audio CD, packaging it and selling it in a store with digital downloads. A major problem for the book publishing industry is that they print more books than they end up selling. But recent thinking suggests that the current model may not bring in the most revenues either. Why not provide multiple versions of the product which appeal to more customers all at the same time? Imagine a textbook which is available in hardback, paperback, spiral bound, or on-line, and where the printed versions can be printed on demand. The loss in sales at a higher price may be more than made up by higher volume, for example i-Tunes.