I really hope that all of the content providers are looking very closely at their options, and making plans for the future.
The article mentions what the music industry went through, and there are parallels here.
Back when the download market was starting to take shape, I remember seeing an interview on either The Screen Savers or Call for Help (how I miss TechTV), with a guy who was involved with the Canadian music industry. At the time, he was hyping a study that was done that would have dramatically dropped the price of digital downloads of music to about $.05 per song. Yes, you read that right, just a nickel per song.
The rational was two fold: 1) It would attract lots of new listeners to lots of new music. When presented with these pricepoints, consumers would eat up all kinds of music from artists and genres that they wouldn't normally purchase. That would increase in revenue for all parties involved. 2) At $.05 per song, the pirated music market would just about dry up. Most people are more than willing to pay for content, up to a certain price. At five cents, almost everyone would see the value in a legitimate copy, if only to avoid the hassle of finding alternative sources, while at the same time knowing that they are obeying the law.
The combination of those two factors were projected to increase revenue.
Unfortunately, the music industry chose to stick with higher download prices. Since that time, it's estimated that only 1 in 40 music downloads is legitimate. That's a huge market that has been lost (maybe forever) to the music industry.
The internet has forever changed how people look at digital content. Movie and video providers need to keep this in mind when determining pricing. Most people will gladly pay to get their content, but the value of that content is diminishing over time. Price it too high, and people will find other methods of getting it. Add to that the absolute glut of content that grows and grows each year, and you have some interesting business decisions to contemplate.
The old distribution and pricing models are dying. Let's hope that the new ones will benefit both the content owners and the customers equally.
Actually, they'll have to.