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06/11/09

CEE and the Entertainment Industry

Living in Hungary, which is a country located in Central-Eastern Europe, and being a part of the EU can be such a weird experience.

Globalization, the internet, outsourcing, trends like these enabled us to work for international companies, allowed us to read sites, magazines, follow blogs like anybody would do in Western Europe. Being the citizen of the European Union, and having access to the same information as anybody else in the EU makes us want to consume the same things.

Our expectation is to watch movies at the same time we read about them on movie blogs, we would like to purchase games that game sites talk about right now, we'd like to download music that shows up on rollingstone.com, NME or Pitchfork reviews, we'd like to IMPULSE BUY online like anybody else with the same taste and budget.

Not only this is not happening, I don't even see any trends that would change the situation. The major online music stores like iTunes or Amazon do not sell to CEE countries, console gaming download stores like the XBox Live Marketplace, the Playstation Network Store, or the Wiiware/DSiWare stores from Nintendo do not allow purchase using a Hungarian registration and a Hungarian debit or credit card. We don't have Amazon Kindle store access. Basically the only major, international entertainment content provider is Apple with a Hungarian AppStore here, only providing iPhone and iPod apps, not music or movies.

There are many reasons companies use internally or externally about why this is happening, some of them:

  • Copyright is not managed and controlled centrally within the EU, agreements have to be made with local copyright management groups
  • The standard of living, and with it, entertainment budgets tend to be lower in this region
  • Localization costs money, it takes a budget to create a translated, localized store front, and it costs money to provide support and maintain the sites
  • Piracy is a big issue, people have ample access to movies, music, games for free

My opinion is, while these points are valid, in the end, all these companies essentially turn down free money in a globally shrinking economy and a significantly impacted entertainment market.

Copyright

While the EU is talking about working towards a single copyright solution across the EU, companies should work extra hard to accommodate these new markets, and enable rightful product purchases instead of driving more and more customer generations toward piracy themselves. Force the major content providers (game publishers, major labels) to sign EU-wide publishing contracts for these online stores.

Market size

The recent recession seems to become an equalizer, wiping out family entertainment budgets worldwide. I suspect this will even out across the EU within a few years. Reuse the marketing budgets, the videos, ad campaigns EU-wide, we don't expect any specific local messages.

Cost of localization

Virtually everybody I know who wants to have access to this digital media would be just fine with non-localized store fronts and non-localized content. We all speak English and we're used to this. Add to the Terms of Service we need to accept that support will only be provided in English or German or whatever, we can deal with it. If the market becomes significant enough, localize things step by step.

Piracy

Piracy is a classical chicken-and-egg problem across the region. It will obviously not change until we have equal ease of access (and equally reasonable pricing) to legal content. There is no other way to turn the tide: publishers need to provide quality and quantity online, make it possible to buy!

By ignoring these markets, publishers and online platform providers risk losing new generations of consumers forever. I applaud services available to us, like Valve's Steam online game store service, the Apple AppStore, and the EU-wide World of Warcraft service. I don't think it required a major investment from them to accept my Hungarian card. I suggest a similar approach to Sony, Microsoft, Nintendo, Amazon, etc. Just let us give you money!

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