My wife is from China and wants to have Chinese subtitles when she watches American shows and movies with me. Where is she supposed to get them? The copyright holders and licensed content providers simply don't offer them. Fansubs are literally the only available option.
Imagine if the Executives at the all of these entertainment companies looked at it like this.
And speaking about really under-served - there are deaf people among us.
Sure -- but the most popular torrents are always the latest hollywood films (not to mention screeners or rips before they are even released on a DVD).
The case for "15 years old movies with no US DVD copies" are not really representative of the majority of cases. The long tail, maybe.
And those movies come from torrents, more often than not, (even worse, subtitles are actually made for specific rips, with respect to frame rates and sync, and say so in their metadata).
As for $1 mobile apps, same deal but with less confidence that the app is worth even trying, much less paying for.
But "underserved" still exists. I'll discuss Netflix as I have the most experience with them, but I think most of it holds true for iTunes, too. FWIW, Amazon's video service seems a bit worse than Netflix.
Pirating movies offers a far superior playback experience. Netflix usually has shitty subtitles: limited languages, sometimes ALL CAPS, no choice of hearing-impaired versus speech, no rich overlays (like some anime subtitles, where they'll overlay translations next to signs, etc.). The audio channels are also limited - many shows only offer terrible English dubs.
There's no easy way to take advantage of your sound setup. With normal players on Windows, it's trivial for me to divert low-frequencies to my subwoofer (using the simple on-motherboard audio jacks). No special hardware required. On Netflix? Uh, use the Xbox (ugh) and hope the movie has a 5.1 track.
I can't control quality on Netflix. Switching to HD is a crapshoot, even with a solid connection, and sometimes HD just isn't available. Jumping around, even to parts I've already watched, requires buffering again. And if a show is too dark/light, I can apply video corrections, too.
Oh, and if you're travelling? Enjoy the library of content randomly changing, and then you'll find certain shows lose their English audio/text and require <geo-located country's> audio or subtitles. Not to mention being able to copy a file over to a tablet for a drive or flight.
Plus, DRM doesn't get in the way. My folks have Netflix on an Apple TV (with a shitty Toshiba LCD TV). They regularly get HDCP errors, that seem to go away at random (change HDMI cables, restart things, try different HDMI ports on the TV).
Netflix wins purely on that it makes discovery and management easy and the UI is simpler (duh). The actual core playback product is terribly subpar.
I pay for Netflix and Hulu, and still download the content they offer to avoid these problems. I use Netflix mainly to check out a new show when I'm literally too lazy to pull over my wireless keyboard and grab a torrent.
Netflix, studios and TV would be terribly upset if someone bothered to write a torrent search/download/manage/playback UI that was as slick as Netflix.
99 cents, once, is a pittance. When it's repeated over and over, it stops being a pittance. The app stores are flooded with minimum-price apps that are useless trash. I completely understand people that pirate cheap apps when there are no demo features.
And when that requirement is not provided, what we have is flawed product being sold.
And now with this news it seems that some people insist on their right of selling flawed product.
Again, there is no point of arguing if you don't understand it.
From their point of view, it doesn't hurt their customers in the slightest, because their customers don't need subtitles (and if they did, they wouldn't be able to use them either way).
Also, is VLC legally playing DVDs? I thought they used DeCSS or something to bypass the DVD's "protection".
Maybe so, but in 99% of the cases, the people using the subtitles have not also downloaded the film in iTunes.
They just use them with the film they got off a torrent.
(Sure, they might have also "bought the DVD", but I doubt that too, if my friends are people I know are any indication).
No, the download method is very much relevant. People download from torrents files they DON'T own any license for (from DVDs or whatever).
The just casually pile on new movies to watch.
Oh, and they are not previewing the movie to "consider it for purchase" either.
Also think about how awkward it is to record free broadcast television on a computer compared to letting someone else package it.
Sure. But that's like 1% of use cases. Most people download movies they don't own -- to see new stuff without having to buy the DVD or go to the movies. Nobody I know (in several countries) downloads only (or even mainly) movies he owns from torrents.
That's how you get screeners on the most popular torrent lists. I seriously doubt those people own the DVD when it's not even released yet.
So, while you do that, and I sometimes do it (rarely), it's not representative of what is usually done.
This is not zero sum game. It is possible for both customer and publisher lose; it is possible for both to win at the same time.
If the (potential) customer doesn't feel it's a big enough win for the price being asked, they can used their expenditure budget elsewhere to what they perceive to be a bigger gain.
If the price being asked is greater than the cost they are willing to bear, it's up to the (potential) consumers to reassess their priorities within their means.