these torrent sites seem to have a business model that makes them money, even a profit. what prevents larger media companies from adopting this proven(?) business model?
* The torrent sites don't have to spend money producing content. If they had to actually make the content they were promoting, would they be making a profit?
* Even if it were possible to make money under this model, it would be much less than the big media companies are making now. Why would they switch?
You're confusing revenue with profits. There is certainly one revenue stream current media could be exploiting but are ignoring. If they could turn profit from it, after subtracting their costs, is another question. But they're not even trying.
You cannot make sure it would be much less money. What we can be sure is that A) megaupload and others are/were making tons of money that old media wish they were doing instead. And that B) the old media's current business model is decaying, flawed and doomed from existence. They would switch because or else they'll disappear.
> Even if it were possible to make money under this model, it would be much less than the big media companies are making now. Why would they switch?
Well, they're not making money from these people anyway, why not find a way to monetize them? You don't cease your current distribution practices, you are merely creating an alternate way to monetize those people who you viewed as "stealing" in the first place.
There's some obscure home improvement shows from overseas that I really enjoy watching. I'm surprised a local-to-me cable channel doesn't pick it up as cheap content, because it's well produced and pulls in big audiences in it's home market.
I'd happily pay $20 or so to be able to download/stream a season of it. But I suspect there's not enough people like me in the foreign-to-them markets who would pay the money to make it worth their while to get it on to iTunes (or similar), write some press releases, update their website to say it's available, etc.
Because they can't adopt this model without losing another one. The majority of the content we're talking about here is BBC TV shows, which are paid for by the UK TV license. At one point the BBC mentioned opening up their online iPlayer to international audiences- but if they did so, the US cable networks would immediately remove their (profit-generating) BBC America channel from the air.
Because they won't do anything that disrupts their own current cash cow models. Even if you explain that this is the future, that it's what their customers want, and that they will make money from it, the argument will fall on deaf ears. Currently entrenched media companies are not playing to win, they are playing to not lose, which means they inevitably will.
The most readily available example to analogize is Blockbuster/Netflix. BB had to declare bankruptcy and completely reorganize their entire company because they stubbornly refused to adapt to a changing market.
Other media companies will follow similar fates. They will have to be dragged kicking and screaming into the future, and many (jobs) will be hurt in the process.
Since I only have experience working with American broadcaster, my answer will come from that POV.
Realistically, neither of the two biggest reasons involves the protection of the dwindling home video market. Broadcasters make a lot of money off of their local affiliates (who pay them for the privilege of running their programming) and cable providers (who pay a subscriber fee for the ability to carry that network.) Each of these existing revenue pipelines brings in a lot of money - orders of magnitude more than any torrent site would. Now you may say "why would a torrent site disrupt their existing streams?" and the answer is that while it wouldn't, those existing streams are very protective of their domain, and would likely consider it an immediate breach of their exclusivity, and in the long term would use the existence of a "competing" product to lower their fees on renegotiation. So it's a lose/lose for any network or cable providers at the moment at least in the US.
That being said, it's their job to have their business model compete in the modern world - it's not the job of the modern world to adapt to their business model. Either they'll figure out a method to do so, or they'll die in 6-8 years and we'll build something better.
"Digital distribution" aren't magic words that make the production costs go away. In fact, they make production costs the most expensive part of the whole proposition.
Business 1 produces content and sells it in one venue. Business 2 takes all of business 1's content and sells it in another venue. And people are wondering why business 1 cannot just use business 2's model instead.
I don't believe that people here are really so dense as to not understand the problems with that scenario.
I don't believe that people here are really so dense as to not understand the problems with that scenario
Nor do I believe that you are so dense as to conflate copying with theft, so can we dispense with the comparisons that wouldn't look out of place in *AA propaganda?
As with most forms of media, the distribution costs are a small fraction of the production costs.
Film crews, especially good ones, cost money. Post-production crews, especially good ones, cost money. Actors, even bad ones, cost money. The equipment, sets, prop, makeup, computers, and all other physical items that go into making/producing a show cost money.
* The torrent sites don't have to spend money producing content. If they had to actually make the content they were promoting, would they be making a profit?
* Even if it were possible to make money under this model, it would be much less than the big media companies are making now. Why would they switch?