Which is why the solution for video providers, says Nissen, is to come up with a business model that makes video easy to access, with monetization from subscriptions or ads. The same business model could then be used to entice those power users on the P2P sites (most of whom are downloading because it's easier than any legitimate service available) to bring their business to legal sites. That 9% base could generate $1.4 billion in subscription revenue and $1.1 billion in advertising revenue, Nissen says.
Ironically, DRM technologies could help them achieve this goal - not by preventing personal copies or device transfers, but by helping keep track of who's downloading what and creating tiered usage rights based on how much they pay.
For example, watermarking downloads would allow content providers to charge the price of a video rental for users who want to watch a film once, charge DVD prices if they want to keep it, charge extra if they want multiple formats (PC and iPod, for example) and the ability to upload clips on YouTube, and so on.
Of course, all of that is easier said than done. On the other hand, DRM tech has been capable of that sort of functionality for years now. The challenge isn't getting the technology to work. It's getting the content industry to admit that stopping the small percentage of people who aren't paying for video content by making digital video inconvenient for everyone to use is a bad idea - and one that's not working.