1. The consumer has spoken but is anyone listening?


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The consumer has spoken but is anyone listening?

Ericsson Image Bank 2008

One would expect that listening to your customers’ needs and wants is a basic prerequisite for any business active in a competitive industry. It also is understandable that no business can satisfy all of its customers’ needs nor always meet the basic needs for most of its customers. This is where a competitive market and assistance of adequate regulation comes into place. It’s about correcting the behaviors of non-performers.

But what happens when an entire industry, not just one firm, persistently refuses to listen to most of its customers? When this happens, it is most common to hear from the proponents of change speaking warmly about the need to let the force of creative destruction have its course. This of course provokes counter-reactions that typically, in various forms and shapes, attempt to legitimize their position by saying for example, “this industry is so special”, “our products are so very unique” or “our customers are so unreasonable”.

Sometimes though a rare and unexpected thing happens. A respected insider comes forward and goes against the tide. This time around, the insider not only refuted the reasonableness of all the “legitimate” excuses but also came forward with a solution for how to listen and satisfy the basic needs and wants of most of the industry’s customers. This very rare event happened at the Edinburgh International TV Festival when Kevin Spacey spoke out.

For years, Ericsson ConsumerLab has been researching the needs and wants of TV and video consumers and has been highlighting not only the growing consumer demand for any-time any-where, any-device content services but also the growing willingness of consumers to pay for such services. Ericsson especially has been highlighting the growing consumer demand for direct theatrical releases to “TV-sets”, the so called premium VOD (PVOD) service. Providing a legal digital choice to a market that today only provides an illegal digital choice and an analog legal choice (namely a visit to a cinema for the first 3-6 months) is something that will address the negative symptoms of the digital market supply failure i.e. illegal downloading. Interestingly, Ericsson’s position on this issue is in line with that of several of the CEOs of Hollywood majors.

Coming back to the issue of first-release digital windows, multiple industry stakeholders have also identified the need for this kind of development in the market, including:

• Independent Scandinavians film producers
US Independent film producers
The French Ministry of Culture (limiting the length of exclusive first release cinema windows and prohibiting the use of exclusive cinema windows for films with less than 100 copies in the theatres)
• The Swedish Ministry of Culture (removing mandatory condition of exclusive cinema release windows in conjuncture with the use of film state aid)

All of these stakeholders have in different ways tried to address the first-release digital window gap that is purposefully designed and maintained by the cinema industry and it is an example of their persistent refusal to listen to their customers. This behavior is reminding us all about the music industry’s hard-learned story, the need of an industry to listen to its customers.

When Kevin Spacey’s says, “Give consumers what they want, when they want it and in the format they want it”, it is no different from what we are saying along with countless numbers of tech geeks. But of course few tech-geeks can deliver them as vividly, convincingly and credibly as Kevin Spacey himself! For this, all we geeks in thee tech-industry should be grateful.

My only worry is that the cinema industry is still not listening – but my hope is that policy makers are!

Written by Rene Summer

Director of Government and Industry Relations Rene is responsible for policy, formulation and promotion research in the areas of telecom regulation, TV-broadcast regulation, media regulation, copyright, advertising, state aid and consumer privacy.

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