Intel: Piracy forced music industry to introduce new distribution models

In the company newsletter, Intel has outlined its ongoing strategy to capitalize on the consumption of digital media - or what is expected to become the next major growth engine for hardware manufacturers. In the firm’s mind, piracy may not have just damage to media publishers but may have driven Sony BMG & Co. into the right direction in the end. The company claims that it may have been ultimately music piracy that made the music and video publishers rethink their business models and build a foundation for the digital media age.

"Although the music industry first scoffed at making music available over the Internet, rampant music piracy helped change its mind," the newsletter reads. "Piracy is also helping change the minds of Hollywood, Bollywood, and other movie makers worldwide."

Intel itself recently is engaged in becoming a part of the distribution of digital content : Together with Morgan Freeman’s Revelations Studios, the company founded ClickStar that "could shake up Hollywood’s traditional "windows" model where movies are first released to theaters, then to the hospitality industry - hotels, airlines, pay per view - then for general consumption on DVDs."

Brendan Traw, an Intel Fellow, is quoted saying "You do have some innovators in that industry who are willing to try something new - whether its ClickStar or whoever - and once those guys can show there’s money to be made I suspect you’ll see all of Hollywood move (to that business model) as rapidly as they can."