Hollywood Vs. Technology - Part Two

Last week I blogged about the tech industry dragging Hollywood to the money trough time and time again despite Hollywoods reluctance. Well this Hollywood Vs. Technology battle seems to me as a little less one sided.

Thomson, the parent company of RCA, has announced they will launch a DVD player that can automatically skip or mute scenes that parents view as not appropriate. The DVD player will have 14 filtering levels and has gotten Hollywood all up in arms again. Big Hollywood names like Steven Spielberg are sponsoring a lawsuit saying that this product violates the rights of directors who expect their product to be viewed in it's entirety and without being censored.

Normally, with the promise that Hollywood will sue your pants off, a company like Thomson might back down and not release the product... but when WalMart and KMart are pre-ordering this product, the market potential is just too great. Can't you just imagine WalMart pushing this DVD player as the "Family Friend DVD Player." While selling through WalMart gives a company HUGE volume, it usually entails very small margins for firms. Like with almost every consumer electronics device these days, Thomson is looking to generate revenue from a service. The DVD player needs to know what scenes to skip, and the unit comes loaded with only 100 films of information. For $4.95 you can download additional titles as they come out.

Now let me ask the following question... there appears to be a market need for "Family friendly" versions of movies, so could Hollywood meet this market need and make money rather than fight it as simply "wrong"... I say yes. Why not simply price discriminate, and offer a DVD that comes with both the original content as well as one that is family friendly? Hollywood could voluntarily markup the content of the movies they release, and charge more for these movies.

(Note: I am segmenting the market with the assumption that parents will want both a full version of a movie to watch when the kids aren't around, as well as a kid friendly version).