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It's All About the Bottom Line

By now, everyone has heard of the SOPA/PIPA debate (unless they live under a rock or don't use the Internet). Both bills center around online piracy. The entertainment industry likes to often expound on how it is the cause of their monetary losses through out the digital age. There are losses certainly, but it can be argued that there are much more harmful factors to their bottom lines than that of piracy---online or physical.

And they only have themselves to blame.

For the purpose of this blog, no actual store names or confidential information will be disclosed.

Now that the disclaimer is out of the way, here goes:

I work in retail. I am the receiver at a general merchandiser. As such, I am the one that handles all the products that come in and go go out. This entails acknowledging the trucks, checking in vendors, and such. Mostly, it entails the receiving of merchandise NOT brought on our trucks. Most of this comes via UPS or Fed Ex.

The things that come this way are books, movies, and music. ALL of our entertainment normally arrives in this method. It also goes out the same way. Doing this job as long as I have, you start to notice that independent studios aren't so "independent." Anchor Bay is actually Fox. Paramount and Warner belong to a company named Ingram. Sony and Columbia are one and the same.

We know that the actual cost of a DVD is not that high. They are easy to manufacture. Sure, the actual content put on that DVD cost a lot of money to make, but the actual DVD is cheap. Why, then, do we see such high cost for it and its eventual replacement, Blu Ray? Because they are using old data and old models.

I have, for next week, several movie returns. Most of the titles will comprise of TV Show Box Sets. One return is almost 800 total items. Another is approximately 500 more movies. It sounds like a lot, and it is. These will be sent back through UPS to the various vendors they belong to. What bothers me is the fact that I KNOW the majority of these will be shipped back into my store as early as next month for our Lowest Prices of the Season sale. It is an endless circle of doom that repeats often.

I don't really know how much money is lost on streaming sites such as the now defunct MegaUpload(MegaVideo), but I can only imagine the total monetary loss they incur just on shipping alone. It has to be billions of dollars. Billions. Just this week alone, about four movie titles I returned the week prior came back in with a new shipment. Our Electronics Supervisor brought them back to me, and once again today I returned them. I am not going to hold my breath on them NOT coming in next week or the week after that.

Remember, this is only one store. My chain is hundreds of stores, so multiply what I am doing by that. Multiply it again by all the other chains and all of their stores. The money we are talking perhaps equals if not exceeds the supposed billions lost on online and physical piracy alone. It is waste, plain and simple.

Music is a bit better, although not by much. Their biggest hit comes at Christmas time, when they send out thousands of Christmas CDs and then return at least half. The particular vendor my store uses seems to be a bit better managed, but I can't help but wonder sometimes when I scan out a CD and see it come in no less than two weeks later that perhaps something is woefully wrong with the picture.

And then there's books. Much like video killed the radio star, e-readers have severely crippled hard copy books. Or has it?

I could perhaps devote an entire blog to why I hate the book companies.

Yesterday, I returned almost 400 books. Hardcover is shipped direct back to the vendor from which they came. Paperback, on the other hand, is another story. Ever wonder why a book will say "The sale of this book without its cover is unauthorized. If you purchased this book without its cover, you should be aware that it was reported to the publisher as "unsold and destroyed." Neither the author nor the publisher received payment for the sale of this stripped book."

It means exactly what it says. They DO destroy the book after processing. Out of the 400 books I processed, nearly 300 were paperback. As per my corporate and their corporate, we threw every single one away. Every. Single. One. To even take one of these "stripped" books, even if one does not sell it, is a fireable offense. They will not donate them to places such as nursing homes, hospitals, or libraries, either. Essentially, if they can't make the money off of them, no one will have them.

That's not the worst part. Remember the circle of doom the movie studios participate in? Oh yeah, the book companies are exactly the same, if not worse. I have started a log to combat this, to raise alarm at the sheer waste of resources, money, and time. Just on the first return that I logged, I had 4 titles that were shipped in the same day I returned (and subsequently threw) them.

I received one title, at 40 copies. Upon their arrival, I became frustrated. I knew what was going to happen to them the moment I opened the box. I hoped that I would not be right, but no dice. I threw 20 of them away. HALF of them went into the trash.

When I confronted my rep's boss upon her visit about my concerns, I was told that it is due to a title being a "best seller" and that they send in that many to ensure enough being available to the consumer. My argument was that we are not a book store and to pretend that we are sets us up for situations like this. I've often said that if Jesus himself wrote it I still wouldn't need 40 copies. I'll only end up throwing half of them into the trash, anyways.

Some of the titles that were returned incurred no sales. Some of those titles had only been in the store a short two weeks.

If the entertainment industry is indeed serious about bleeding money, instead of looking at online piracy, they ought to look at their own business practices. From the outdated broadcast television model, to the shipping circle for all of its mediums, to the pricing of them, they are losing more money due to this than they really will from piracy.

Stop needlessly shipping items in an endless circle. Allow for books to be given away in donation or amongst a store's employees. Find ways to not waste so much in receiver's time. (Truth be told, it sounds like I'm trying to put myself out of a job, but honestly,  there's more to my job than simply scanning movies/books/CDs in and out. I'd have more time to do those things if I wasn't always doing these things). Stop throwing money at lobbyists in DC to combat something you can already largely stop and combat with several measures already in place.

After all, it's all about the bottom line.

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That is crazy to me and it literally makes me sick to think about all those book - all that paper, just going into the trash.

You would think that the publishers and movies studios would have learned something from the music industry - the same with cable tv providers and tv networks.

I am not condoning piracy but they clearly grossly overestimate the negative effect of piracy on their respective industries. I am not saying they don't lose some money, but they seem to be of a mind that everyone who pirates would go out and buy all the stuff they are pirating if they had no other way to get it and that is just plain false and unrealistic.

If I come upon a series that seems interesting either ended or in progress, my first step is to check netflix and hulu and the official website to see if they have full episodes. What I won't do is go pay 50 dollars for a box set just to find out I don't like the show or to catch up on a show in progress. I want to know I am going to enjoy something before I invest that much money in it.

There have been many shows I never would have watched had I not started them online to catch up. Shows that I have later decided to purchase the box sets of because I liked them so much.

Like the RIAA other media venues are going to have to step into the 21st century. Yes megavideo/upload is gone but that is one of 100s or more and that isn't even mentioning all the torrent sites and private communities aren't as well advertised.

People are clearly saying that it is time for a change. If they really want us to fit television and movies into our lives then they need to make it more accessible. People don't just work 9-5 and sit at home for prime time. Not everyone has a DVR. If you miss an episode of your favorite show your only recourse shouldn't be to wait months for reruns or the season set. That alone shows a marked lack of respect for the consumer. You want people to watch to be loyal viewers then you make it impossible with growing adds, shrinking show times and a lack of availability of the product you are trying to sell to them. You turn society into one set on instant gratification and then deny it and expect people to just accept that.

I can't tell you how many people I know that would rather pay piecemeal for tv channels than buy a cable package.

My husband lived with roommates before we moved up here to be with him in Arkansas and we ended up locked into a contract with Directv. Their basic package is 60.99 since out sign on deals are over and boasts 150 channels. Of those 150, taking out all the shopping, religious, and foreign language channels I ended up with about 40 on my custom channel guide. I called and was like this so is not worth 60 dollars a month and was given the 'family' package which is unadvertised. for 30 a month I now get about 25 channels, but had to give up ones I really enjoy like BBC America and Cartoon network and even FX. It is a total racket.

I understand there is a huge outlay for most movies these days and I don't want to kill movie theaters. I want my own kids to have the memories I do of meeting friends at the movies on a Friday and night, catching a show or two and just hanging out and nothing can really match that experience but I am worried they won't be able to afford it. Now you buy a ticket, drink and popcorn and you are out at least 20 bucks. Let theaters get first run for a set period of time then open up to at home streaming - not six months later but more like 6 weeks later. Someone who didn't bother to go see your movie in 6 weeks probably isn't going to but they might rent it from you to stream at home. I would say they could get away with charging at least 15 dollars to let people stream a movie well before the dvd release.

Something will have to give somewhere and I don't believe it is going to be the general public that falls into line - not this time at least - not with the current state of things.

That's just it. They are acting as if this is the mid 70s or early 80s before most of the recording devices came into being and the Internet was a far off never heard of network.

I am certain that online piracy does dent their bottom lines in some ways, but the money they throw at Washington to promote bills such as SOPA/PIPA, combined with their own backwards shipping practices have to blow that loss out of the water.

Truth be told, most people who watch something on the internet at these streaming sites end up buying the DVDs down the road. It's cumbersome to watch a show through these sites, what with buffering, lag, and broken links. If you find you like it enough, you buy it so you can watch it in a much more convenient format.

It's interesting that you bring up the cable providers. The entertainment industry is under the impression that people are watching this stuff for FREE on the Internet. Not unless they're hijacking the cable company. I personally pay $150/month for both the TV and Internet packages combined. It is unreal the amount of money they squeeze---and a new notice says my provider will up the bill in a short two months. Streaming is not as free as they think it is. They're just angry they're not in the loop here. If that's the case, cut a deal with the cable/internet providers to get your portion. But honestly, don't insinuate that this is FREE viewing by any means.

I honestly think that if they want to continue making money, they will have to rise up to the new market demand. People want to have whatever movie/show they WANT at will. They no longer want to wait for a show's time slot or a movie's release to DVD. The notion that we are held hostage by Network Executives programming schedules is largely over.

As you pointed out, Megaupload was only ONE site. This rabbit will lead them down the hole and lose them over and over again as they pursue other sites like it. There are hundreds upon hundreds of similar sites, and when you start to actually compound the amount of money it would take to zap every single one---even under a SOPA like law---it has to exceed the piracy monetary losses as well.

Piracy isn't going anywhere, rather they like it or not. This debate largely goes back to Guttenburg's press, really. As long as people can reproduce things, you can't stop it. And I don't see them ending devices that can make copies, as there are so many who would be outraged by that. The money they make off of those products alone exceeds piracy, too.

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