Mark Sarfaty is the CEO of the Independent Cinemas Association of Australia (ICAA) and co-chair of the Australian Cinema Exhibitors Coalition (ACEC). He considers the market dominance of Apple.
I love technology. In fact I’m just a little, embarrassingly, obsessive about it.
I confess to lusting after new tech products in glossy magazines with a slightly inappropriate level of desire and my friends and neighbours are the happy recipients of a constant flow of superseded routers, PDAs, phones, monitors and laptops.
There is one great omission in my tech inventory however; the only Apple device I own is an iPod which, in an industry besotted with Apple products, makes me something of a pariah.
It’s not that I don’t like Apple products; I think they’re gorgeous and sexy and the current Apple Air laptop and indeed iPad has me reaching reflexively for my credit card but I resist the urge.
My issue with Apple is that owning an iPod (or iPhone or iPad ) makes me a slave to iTunes and if I want new music or video online, I am pushed to download from the iTunes Store.
It’s great for the consumer but apparently, not so great for the musicians and the music industry – an industry that’s taken its share of hard knocks in the past decade as it struggled to find a new business model for a digital environment.
Notoriously, the advent of digital piracy and unfettered file sharing in music blew a hole so large and so far below the waterline in the music industry that for a while there it seemed as if the entire ship might sink.
The rise of online piracy was made possible by the relatively small size of mp3 files which were ripe for ripping and sharing, a process which had high octane gasoline poured on it by the canny marketing of the ubiquitous iPod.
A few years ago a digital guru friend of mine put it to me that the iPod, despite the coos and clucks that accompany an examination of anything small enough to fit in the palm of your hand, is in reality the most gigantic Trojan horse built in human history.
The theory suggests that Apple’s primary goal was not to put an iPod in the pocket of everyone on the planet but to use the rigid control imposed by iTunes to create an unassailable beachhead in content distribution.
Whether by accident or design, that’s exactly what Apple have done in the music business. With the launch of the iPad, they are looking to take on the print publishing and film/TV businesses as well.
Of course not everyone is a fan of the iTunes model, which is predicated on the long tail theory of sales – a tiny margin on a huge aggregate of sales.
In music , artists as diverse and as big as Eminem, Madonna and the Red Hot Chilli Peppers all held out from putting their work on iTunes, complaining that the return to the content creator offered by Apple was not sufficient, but crumbled in the face of its domination of the business.
The potential problem for the film and TV industry in having to deal with a behemoth online portal like the iTunes Store is acute and is one that the Hollywood studios are grappling with right now.
If the price point for online sale is forced too low by the weight of Apple’s negotiating position, then there is less of the profit pie to go around and of course, less ability to finance new production.
The owners of the major US film and TV companies are so concerned by their lack of negotiating power that Fox, Disney and Universal formed a consortium to create their own film and TV download portal, www.hulu.com and recent news is that the studios are being very coy about supplying their movies to the iPad.
For smaller independent producers/distributors, the issue of how to compete in globally rationalised online distribution looms large and the ability of independent filmmakers to make a reasonable return from Video On Demand remains completely untested.
In the meantime, while we wait for more competition to enter the online marketplace, I’m continuing to resist the siren call of that sexy, sparkling Apple store and keeping my credit card firmly in my pocket.
This is an updated version of the story that originally appeared in the April issue of INSIDEFILM.
Disclaimer – The views expressed in this column are Mark Sarfaty’s personal views only and do not reflect the views, position or policy of ICAA ACEC or any other entity that he is affiliated with.