The Effects of Online Downloads to Movie and Music Industries

by Wasim Ismail on January 1, 2011

It has been a critical debate of whether online downloads decline movie and record sales or not. In a conventional view, we may think that it does really contribute to the decrease of sales. However, looking into deeper context, it helps in the marketing and distribution of products by reaching out to more and more markets to buy online digital movies and audios.      
 
Understanding the effects of online downloads is to comprehend the approach of those businesses doing it and the behavior of its markets.

Understanding the Market Behavior

 To understand the market behavior is to investigate how it works and why the markets are buying the products.

How Online Download Works

There are several ways on how to download online: 
  1. Buying digital files online through authorized sellers or resellers. Itunes and Amazon are some of those websites that offer this service.
  2. Ripping CDs and uploading to different file handlers for sharing. Some transfer their ripped files to other CDs and distribute. Some upload to online websites and are open to download by others.
  3. Peer to peer sharing. Some people are generous enough to share digital files to others whom they are related to in some way.

Why People Download

 Music lovers usually will buy both the CDs and the digital files; however, not all are willing to put money on something that they can get for free. Below are some possible reasons why people download: 
  1. Listening or watching before buying. There are people who like to know first if what they will buy is worth their money. When they love what they have heard or saw, they will buy it.
  2. Availability. Some music or movies are not available to the stores anymore and the only way is to search online and download.
  3. Too Expensive. Some people like students or those from small value currency countries find the prices of albums or movies too expensive. Their resort is to find a copy online or somewhere to download.
  4. Just want a selected songs and not the whole album. There are situations where we do not like all the songs in an album so we would buy single songs rather than the whole album   such as using itunes. 
  5. Portability of digital files. Example of this is the carrying of an Ipod with thousand songs is always better than carrying a bag of CDs that can only sum up into hundreds of song. 

Understanding the Business Approach

 How to Measure Record Sales
Record Sales are normally taken from counted sales based on known or big stores. This principle also applies online. It is a big popularity on artists if they top  the charts on Itunes or Amazon. However, some small retailers or resellers especially those that are not directly authorized are not necessarily recognized, this means that the recorded sales are only approximations and does not determine the true profits of a certain record.

Embracing the Modern Approach
As everything is being modernized, the approach on creating music or films and selling them on markets are also changing. Videos and audios are in different formats already; this is to provide convenience both for the businesses and potential markets. Digital files are easier to carry, easier to sell hence lessens the production costs.
 
These speedy changes open a big opportunity to some small entrepreneurs who are investing on digital downloads. There are so many small businesses that abruptly rise up through these online services. Their name might not be world wide popular like Itunes or Amazon but they are already making big money. This approach just speaks the radicalism of business minds, setting up the business where the potential markets are and where the profits are visible. 

The Effects of Online Downloads

Advantages
  1. The increasing numbers of websites offering digital music, podcast and videos does not mean a big threat to the music and movie industries. They can actually reduce both the marketing costs for the producers and the price costs for the buyers. This also opens the music and movie industries to huge numbers of potential buyersonline .
  2. As bigger markets are being reached, online services can also give opportunities to local or new artists to be known to wider audiences. There are many young stars discovered via uploading videos on Youtube.
  3. By gaining access to international music or videos, people are learning to accept several cultures and races by admiring talents from the other corner of the planet. They are also learning new sounds and way of interpretations.
 
Disadvantages
  1. It opens higher chances to piracy. Putting files online is putting them into possible risks of copyright issues. The businesses also do not have full control of the customers in sharing the files either for free or for illegal downloads.
  2. Online downloads give chances to so many artists and open other talents, markets are being divided into various artists making possible decline to sales of bigger artists. However, this still depends on how the legendary artists market themselves; there are so many loyal fans out there.
  3. It obviously decreases sales on CD stores or retailers.
  4. It opens to higher number of criticisms and comments. People are exposed already to viewing different videos or listening to various sounds, they will always have comments and criticisms based on what they think should be the standards for them.
The number of advantages or disadvantages does not determine a total positive or a total negative effect of online downloading in music and movie industries. Changes always have the good and bad sides, businesses just have to embrace the fact that technology is growing and we need to blend in or make ways to stand out. While on the other hand, audiences should give respects to the hardworks of the artists and producers in music and movie industries.
 

Thank You For Reading

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