Physical Media is Dead. Long Live the App?

On April 17th, 2012, tech journalist Om Malik posted an insightful piece on how apps are at the center of the current disruption in content (e.g., motion pictures, music, mail, advertising, etc.) delivery:

"For the longest time, physical media was the container that moved content. Records became compact discs. Movie film became VHS tapes and then DVD." Today, in the post-broadband world, we are living through "the slow and steady decay of physical media as a container for content... We need to rethink these containers for a brand new always-on world, and apps are the right metaphor."

For the uninitiated, "app" is an abbreviation for "application," which is a term used to refer to virtually any type of computer program (from spreadsheets to media players to virtual reality games). In short, any program that is added to run on top of your device's control software (the operating system) can rightly be called an app.

Om Malik identifies app stores as the new newsstands and book store. Experts see the market for online content (and the apps that deliver that content) continuing to build, as new apps emerge to compete with established brands like iTunes - where video is set to become "a much bigger mini-revenue stream for Apple within the iTunes business."

Already apps with brand names like Spotify, Deezer and iTunes Match are changing how early-adopters get their music. In a report released in January 2012, the chief executive of the International Federation of the Phonographic Industry ("IFPI") wrote: "The number of paying subscribers to services such as Spotify and Deezer has leapt in the last twelve months, from an estimated eight to more than 13 million. At the same time, cloud- based services, such as iTunes Match, have become a reality in the marketplace, helping drive the popularity of music downloading." The report goes on to site "a healthy 8 per cent increase in our digital revenues in 2011 – the first time the annual growth rate has risen since records began in 2004."

In other words, the death of the market for physical copies (like CDs) does not mean that the music business has died. Instead, new sources of revenue are being developed as consumers move away from physical copies and toward a world of apps that access content from the cloud. While the head of the IFPI cautions against "complacency" - it seems that record companies that adapt (away from physical records and toward apps) are indeed becoming a part of "building a successful digital music business."

Broadband internet and the use of tablets and mobile devices is exploding. We are living through a fundamental paradigm shift. Yes, physical copies are dead. But a new paradigm is rising. The music business is showing filmmakers the way. For most of us, relying on physical copies (like DVDs) as a revenue source is a trap. Like musicians (beginning to make money from the new delivery opportunities provided by apps), 21st Century filmmakers must adapt to the new ways.

No comments:

Randy Finch's Film Blog:

Thoughts from a film producer about making and distributing films.