Still, he believes that the movie industry is wrong in its approach
to technology. "The VCR transitioned entertainment from the theatre to people's homes," says Fung. "The Internet will bring immediate and global distribution that's cheaper than ever and is the natural next step." There's no doubt that Fung is right about that. BitTorrent technology should have been recognized immediately by the movie studios as a way to make their distribution chain more efficient. But the industry was so locked in its old business model that they allowed an entire culture of free movie-sharing to evolve with no reasonable, legal alternative.
The music industry, of course, has always been slow to embrace
new technology. Any time someone makes a technological advance, the recording industry claims that the sky is falling. They claimed that cassette tapes would kill the industry because of the ease of copying. Instead, cassettes allowed music to move into cars, portable stereos and, eventually, the Walkman. This vastly increased the number of ways that customers could consume music. The industry was also wrong about digital audio tapes, and they were certainly wrong about MP3s. While they claim that downloads are destroying the business, every indication is that they're wrong. Concert sales, ringtones and digital downloads are all on their way up. It's only CD sales that are down, and those are only down about the same amount as they were in the years following the disco bust.