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Can Hollywood Challenge Dominant Apple?

Parks Associates and the Entertainment Technology Center (ETC@USC) released a new white paper detailing steps to achieve profitable distribution of mobile content on mobile platforms and devices.

They suggest that content owners should offer more free content on mobile devices in order to aggressively promote movies and programming on traditional media. By offering free content, this will prime the pump for future premium offerings. At least, that's the hope.

Parks Associates notes that less than 10 percent of Internet users are willing to purchase a digital movie download at current price points. That said, apparently it's not clear exactly what price point would be acceptable.

The new white paper exhorts Hollywood to use Apple's own tactics of offering bargain content in order to sell higher margin products for its own benefit -- in this case, to drive consumers to new theatrical releases, TV programming, and eventually made-for-mobile video programming, or "mobisodes."

"Many content owners have tried re-purposing TV and movie content on mobile and have largely been disappointed (i.e. failed miserably) by the revenues on those platforms," said David Wertheimer, Executive Director of the ETC@USC.

"While we believe wholeheartedly in Anytime/Anwhere availability of content, we also know that these devices, when content is created specifically for them, can create opportunities for marketing and selling content elsewhere -- especially now, while consumer habits are just taking shape."

"Hollywood shouldn't let Apple make all the money, especially since they are the ones making the movies," said John Barrett, director of research at Parks Associates. "Judicious use of free mobile content can help drive ticket and DVD sales."

I believe that Apple has already established itself as a digital media distribution dominant player, and they did it while Hollywood looked on in amazement. Parks' opinion assumes that big media companies ultimately have control over over what they produce. Frankly, I'm not so sure. They conceded online distribution to others because they totally misread the market opportunity.

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