[RawAlex]

The whole "FREE!" movement is one of the most dangerous and ill-thought out concepts on the internet. The people from Sony are basically seeing their content, their products, and their profits being traded for free online, without any chance for them to earn income from it. From where they sit, the internet is a cesspool, a black hole to shovel product into and lose it forever, ending what would be the "long tail" for their products.

For a content producer, the internet is hell.

Short term, for "consumers", the internet is heaven. Get all the music, movies, TV shows, porn, whatever it is, get it all for free, never have to pay, enjoy it all you want, life is good, Everything is "FREE!".

Long term? There are only a few ways this plays out, and none of them are good for consumers. Companies like Sony could stop being in the software business altogether (software being anything that can be digitized, from movies to music to software to games to whatever is digital or can be digitized). When their return on investment is too small to justify the risks, they will stop doing the work. That is the "nuclear option", where the vast majority of movie and music companies simply stop producing product.

More likely are non-nuclear options, which will still hurt the consumer greatly. Imagine video game systems where you neve buy a physical copy of the game, but rather it downloads over the net (for a fee), but only the pieces you need at that moment to play the given level or given area. Everything is done online, you never end up with a complete version of the game (and likely the pieces you get would be keyed off of a unique console / PC identifier that would mean even the parts wouldn't run anywhere else). Imagine all movies not as downloads, but as a semi-streaming "chunk" viewer that only allows you to get chunks at a time to watch, and that they chunks are deleted as they go along. No more video stores, no more Blu-ray - just hard protected PPV. How about music, on a Rhapsody style player, except that the content is downloaded on the fly, encoded to your particular player device. 4G networking, no storage, no retention, just a list of "rights" to songs you could listen to if you choose (the only thing your player would retain would be a playlist, no actual music).

Basically, rent to use. Think of it like online computer apps taken to the top level.

The third choice is throwing up their arms and giving in, distributing everything for free with the chance to upsell to something else, trying to sell the home theatre systems, big screen TVs and music systems on the basis of giving away the content. As it isn't a tied sale, it is likely a non-starter for most companies.

So HP, how does porn fix itself? It moves to the same sort of process: PPV style streaming of content, even from inside paysites. No WMV, no MPEG - 100% steamed with zero retention. Literally, no content to download and keep (maybe images, they are a dying art anyway), all video in formats that are keyed to the user's computer only, so even capturing it would be pointless. Flash movies are actually a tiny step in that right direction, except that flash files can be captured and displayed.

Porn also needs to take a harder stand against non-competitive selling using their product. Most tube sites are dependant on dating, cam, and other non-porn products to make their livings, using porn as the lure and the sales pitch. Those companies who are producing content to support their websites or sell on DVD need to be more agressive about making sure their content isn't used as a free lure to sell someone else's product. Remove the cam and dating ads from most tube sites, and they would fold like a cheap tent in a windstorm - as would most of the torrent and file trader sites.

The porn people can fix it, but they have to be motivated. Apparently 5% profit is enough to keep some of these people in coke and hookers, so they aren't going to fix it any time soon.