00:00If you want to talk about file sharing, I believe that the industry has been too slow to embrace and adopt these paradigms.
00:06If you look at historically in terms of technologies, in terms of consumer-based technologies,
00:11you have basically shareware that introduces the consumer to it at no cost,
00:15at which point the consumer is on the hook, they've figured out, they've worked out the kinks,
00:18they've figured out how to interact with it and how to exploit it,
00:21and then you charge a fee and the consumer historically has been willing to pay that fee.
00:24I think an annual subscription-based system is one that works.
00:29You have the music business, a $3.4 billion a year business,
00:32which is largely about 1.7 million people in the country spending $200 a year.
00:37That same people would spend those $200 a year each year to have access to basically the entire library of existing music.
00:44Of course, you continue to react your subscription because you pay for new music.
00:47Royalties would be paid more directly to the artists.
00:51You have less overhead.
00:52You pay no shipping, packaging, and there's this mammoth amount of executives at music companies
00:59that are glomming off a lot of that money.
01:00I believe that paradigm is the most effective, productive, that's the paradigm that Adam Smith would most want.
01:06I think there are inefficiencies in the market now, and I think they're being worked out,
01:08and I think file sharing is pushing the industry toward that balance because of its availability right now.
01:17Or eventually it's just going to be video on demand, movies on demand,
01:20because bottom line, it's going to eventually affect your guys' pocketbooks if piracy continues.
01:25There is piracy of movies, and it will be movies on demand, but it will be a tiered structure.
01:29It will be like if you want to watch it first weekend, maybe it won't be available first weekend.
01:33But then if you want to watch it, you'll pay more, and then as it goes to another stage in its release,
01:38it will become less expensive.
01:39But there's a lot more adoption that has to happen technologically speaking right now
01:43before people can watch movies, or at least integrate it in terms of the PC and web connection.
01:49You know, the technology's not quite there yet, but it will be within, I would say, five years.
