Update*

I’m now writing for SiliconAlley.com. You can see my latest article.

http://siliconalley.com/blog/2013/06/www-and-the-holy-grail

 

Silicon_Alley

Advertisements

Confusion Reigns Supreme with Online Movie and TV Streaming Services. Consumers are the losers.

Confusion           caution-mass-confusion  220px-Aereo_logo netflix-appletv   streamingmedia

Recent shifts in technology due to the Internet have destroyed the profitability of several industries including the newspaper and music businesses. The next business that will be made over by technology is television. The profitability of owning TV networks is being undermined by digital video recorders, internet-enabled on-demand viewing, Netflix, Hulu, YouTube, and piracy/theft.  In this post, I’m going to list many if not all of these choices currently available to you and me – and there are WAY TOO MANY. And a lot of amateur content is taking up an increasing portion of a viewers’ time online and on mobile/tablet devices. You Tube has how many new original channels?  I mean unless you’ve got absolutely nothing to do 24hrs a day other than veg in front of a computer and or TV, you can’t ingest even 10% of this content.

Consumption of network and cable content is taking place in ways that allow viewers to circumvent high monthly cable bills, avoid watching commercials, or both. The new Barry Diller backed ‘Aereo’ – https://www.aereo.com/ will indeed disrupt cable and pay-tv as never before. Every single one of these changes represents a move to a revenue model that is less profitable than the one currently enjoyed by the TV networks. It is simply a matter of time before the revenue and profitability of the major networks begins to fall seriously erode.

342529-nimbletv

Consumers are awash with the plethora choices of streaming movie services, VOD and TV/time shifting programming (between 30 to 40 and counting). There are so many choices that I defy anyone to tell me exactly what they are buying and what each of them offer, specifically how tey are different. Anand Subramanian of startup NimbleTV was even more blunt. “There’s content everywhere. It’s a mess. It’s a total mess for consumers.”

Hollywood-sign-900Hollywood releases maybe 10-12 ‘big’ picture events every year and all of the releases are timed by Holidays (Thanksgiving/Christmas, July 4th, Memorial Day, Halloween, and Labor Day weekends). Independent movies are released around these times and are scattered throughout the year.  Years back when DVD’s were released, those releases in the stores reinforced the theatrical releases with a barrage of marketing. You saw the same big pictures being marketed again in 6-9 months after the theaters. So, when you went to Blockbuster you had a ‘a-ha’ moment. You’d say, oh yeah, I remember that movie, I missed it at the theaters and you would rent it. It was pretty clear what you saw,  what you missed and what you wanted to see again. Then, HBO and Showtime would re-market the same movies in their PAY-TV window approximately 10-12 months after the theaters.  They’d remain there for 24-36 months sometimes even longer.

dx4zdi1spq0olohforey    showtime

When Pay-TV was in its heyday, there was a ‘pay’ content war between HBO and Showtime. Some studios had exclusives with HBO, some with Showtime. To the average consumer, this didn’t mean all too much.  No one wanted to watch a Paramount movie, they wanted to see ‘Fatal Attraction’.  Maybe with the exception of which pay-tv service had Disney movies (if you had kids).  Now, that doesn’t really matter too much as kids watch gobs of shows on basic, Nick Jr., etc.  Over the years, HBO got wise and supplemented its schedule with well produced original programming and still is. Showtime followed with its original programming and both duked it out with Sports, specifically Boxing.

Time shift forward, now it’s a war between Netflix and HBO.

121007064534-amazon-prime-resize-horizontal-gallery    Hulu-Plus  shop-itunes-store-column-browser

Its not HBO and Showtime, but Netflix – http://goo.gl/0N2No . And its not only Netflix, it Amazon Prime, Hulu plus, iTunes and a myriad of other streaming offerings.  I’ve compiled a list below. But the bottom line is how does anyone really understand what they are buying? If you subscribe to Netflix, can I see Disney movies? Will I get mega-hit from Universal like Jurassic Park, Les Miserables, and Despicable Me Part 2? Or do I need to subscribe to several streaming services? And, which ones?

And down the road very soon Barry Diller’s back Aereo TV will expand to 22 cities – https://www.aereo.com/. Why is this disruptive if it only offers ABC, CBS and NBC as the primary driver of the service? (more on this later).

abc_logo nbc-primetime-schedule CBS

Here is the list ( I hope I’ve got most included). I’ll admit I am confused as everyone else and I’m not going to buy or subscribe to more than one service especially when I don’t even know that if I do, I’ve essentially duplicated the movies and content I’ve subscribed to.

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Hallmark Instant Streaming – coming Spring 2013

Amazon Prime Instant Video – The Prime Instant Video library consists of over 30,000 movies and TV episodes, which can be watched via any device the streaming service is available on, including the Kindle Fire, iOS devices, Roku, Xbox 360, PS3, and the Wii U.

iTunes

Netflix

Redbox Instant (Verizon)

Redbox in Stores – Physical DVD rentals

Roku

Boxee

CinemaNow – Best Buy’s service plus

Hulu +  – Hulu now has more than 430 content partners, offering over 60,000 TV episodes, 2,300 TV series, and 50,000 hours of total video

NimbleTV – Just like Aereo (Barry Diller venture)

Motive TV – Like Nimble and Aereo from the U.K. heading to the US

Aereo – Just like Nimble TV

Ultraviolet – Studio driven answer. Welcome to DRM land.

Bigstar.tv

Crackle – SONY/Columbia Pictures

Vudu

RedBox (physical rental)

Kaleidescape

Sony Pictures Gift Store – more SONY choices

Flixster – Gateway to itunes, amazon and vudu

IndieFlix

Popcornflix

Cable Operators VOD library ( Time-Warner 4,000 movies + Comcast, Cox, etc.)

OnDemand via cable

Microsoft’s X-Box – a Gateway to Netflix + others.

Comcast’s Xfinity – Over 10,000 VOD movies (lots of NBC/Universal content)

Starz Play

Encore Play

MoviePlex Play –  Starz Play currently offers approximately 400 film and TV titles, including 300 movies and 100 episodes of Starz original series. Encore Play offers about 900 monthly selections, while MoviePlex provides access to 200 more movies every month.

AvailTVN_LogoAvail-TVN’s View Now – ViewNow’s library of movie content includes titles from both major and independent studios, which can be delivered in MPEG-2 and MPEG-4, as well as a range of adaptive bitrate (ABR) formats, to traditional set-tops as well as internet-connected devices like PCs, smartphones, and tablets. In addition to multiplatform rights, Avail-TVN says ViewNow includes download rights on a large number of titles.

M-GoM-Go – new app that elegantly streamlines all of your media together in one place including movies, music, TV and more. Formed in 2011, M-GO is a dynamic well-funded startup sprung from the cooperation of Technicolor and DreamWorks Animation. The M-GO app will be available for download for free on all major operating systems. M-GO is preloaded on 2012 Samsung and Vizio Smart TV and Blu-ray players as well as Intel Ultrabooks, totaling up to 30 million installed devices.

Watch ESPN is now available on Amazon’s Kindle Fire and Kindle Fire HD devices. Free to download via the Amazon Appstore, the TV Everywhere app offers access to live sports and channel programming from ESPN, ESPN2, ESPNU, and ESPN3, as well as ESPN Goal Line/Buzzer Beater when in season. As is the case with other WatchESPN editions as well as other TV Everywhere services, to access the content the viewer needs to first have ESPN in their TV subscription package. In conjunction with announcing the Kindle Fire app release, ESPN also revealed some end-of-the-year numbers on how WatchESPN is faring in terms of distribution and availability. The sports network says that total downloads for the WatchESPN app, which is now available in the App Store, Google Play, and the Amazon Appstore, more than doubled in 2012. It’s now available in 46 million households nationwide as six of the top 10 cable distributors also provide access to the service.

epix-hd-logo1EPIX plans to launch a streaming app for the PlayStation 3 during the first quarter of 2013, followed by an app for the portable PlayStation Vita console sometime in the spring. The apps will offer more than 3,000 titles, including blockbusters such as The Hunger Games, Thor, and Mission Impossible: Ghost Protocol, as well as EPIX’s lineup of original programming, which features music concert, comedy, and sports events. The apps will be available to PlayStation Network members in the US as a free download. Users will need to authenticate their EPIX TV subscription in order to watch the content.

Now about Aereo.  One of the things we all get cable for whether you realize it or not is to receive the 3 main Broadcast Networks, ABC, CBS and NBC. These are on basic cable in 100% of all cable systems nationwide. And basic cable costs at least $ 50-70 a month and 9 times out of 10 its bundled with pay-TV and a phone land line along with internet access bringing your bill to over $ 100 a month.  And generally, one has a Netflix or Amazon Prime subscription (or another streaming movie service).  There are 2 kinds of camps here or cable subscribers, one with kids and the others without kids. For the people without kids, Aereo + 1 streaming movie service (unless you are a sports nut and MUST have ESPN) would be sufficient. You’d have local broadcast TV and all the movies you could watch/stream. What else do you really need (unless you must watch ‘Honey Boo-Boo’ and then I can’t help you). For the families with kids, this is slightly age dependent. Its hard when you have toddlers NOT to want to get several of Viacom’s Kids channels or Disney’s kids channels (Nick, Nick Jr., Disney Channel, Disney Jr., etc. )  If you have older kids, teens etc. a movie streaming service with Hulu + might suffice.  For those without kids, Aereo + a movie streaming service will drastically cut your bill. Aereo I believe will charge about $ 9.00 a month, no subscription or early termination fee (take that Cox, Comcast, Time-Warner and Fios). Maybe with Amazon Prime or Netflix and your looking at under $ 20.00 a month. Yes, you will need internet access so add another $40-60.00 a month depending on your need for speed. But its definitely less than the typical bundled services. If you don’t think that Aereo has Pay-TV in its crosshairs, you’re crazy. We shall see how this unfolds as it winds its way through the courts. Yes, Aereo is being sued by the broadcasters and others, but it’s also rolling out its service nationwide this spring. I am signing up to see what its like – but it seems like an idea whose time has arrived

13 Movie Online Services is WAY too many. (PPV Part 2)

Netflix vs. Google TV 2.0 PPV (powered by Honeycomb 3.1) vs. YouTube rentals vs. iTunes vs cable PPV vs VUDU vs. Blockbuster OnDemand vs Facebook OnDemand vs BigStar Movies vs CinemaNow OnDemand vs. Alphaline ( Sears/Roxio) vs. Redbox (due 2011) vs. Flixster via Warner Bros. vs anyone else ?

What happens when the airlines have a fare war? You know, you can fly from NY to L.A. for $xx.xx and then the next thing you know, another airline tops that price by $ 20.00? Or gives you a free bag to carry on board? All of a sudden 5 or more airlines have the same special going on. Who do you fly with? Decisions, decisions… It all begins to seem and look the same to you. You get to the same destination, same approximate times, using the same type of transportation, in the air for just about the same money. Who suffers? Ultimately the carriers do.
Meet the carriers. Not the airlines, but the carriers of movies online. I count thirteen (13) of them – eleven (11) of them are live as we speak. All boasting the same movies for the most part for the same prices. All rentable at the same time for about the same amount of time. And I’m not even counting Redbox as an online rentable service…yet. What’s a consumer to do – who do you choose? And why. Do you ‘subscribe’ to a Netflix monthly or do you pick off a film on a one-off basis from another provider. More importantly, how do all of these guys begin to differentiate themselves from each other? How and where do they market themselves? Netflix is clearly the 900lb gorilla today. I guess iTunes is # 2. But beyond them, I can’t really tell who’s in third place. But more importantly, do I really care? Do I need3 or 5 or 7 similar services? On top of all this, I have Verizon’s FIOS cable service at home with thousands of movies to choose from to watch on any given day/hour.

I have licensed movies before from each of the studios and it was no easy task. Number one, its VERY expensive. Figure an upfront fee to be paid to play, maybe between $500k-$1m. That’s just for starters. Then there are the guarantees against each title licensed. Therefore as a provider of online fare, you’ve got to re-coup that fee with a certain number of minimum rentals or turns of the gate so to speak. With nearly 13 services out there plus cable choices, I’m going to take a guess here a few will not make it. Not only must you guarantee upfront cash, you also must explain how you are going to market the studios films, how you will digitally protect them from piracy ( good luck on that one) and how you will separate yourself from the rest of the online movie ‘noise’. All of this and then compete with the new ‘premium’ $30.00 a pop cable TV onDemand offering ( not that I think that’s going to be too successful – it’s the least of these companies problems).
However, the one issue I have with all these services is this: I am unable to save ANYTHING I purchase or rent for viewing later on a rainy day. If I had a ‘digital’ locker – someplace to hold what I spend my money on to see so I can view it later (more than 24hrs later), that might sway me to use that service ALL THE TIME.

A Train Wreck Indeed!

How do you f’up the pay-per-view business? You don’t. No need to – it has been one train wreck since 1984. (Full disclosure: In 1984, I started a nationwide satellite delivered ‘A’ title Movie service called’ The People’s Choice’ alongside of Jeff Reiss’s ‘RequestTelevision’ and Scott Kurnit’s ‘Viewers Choice’). When I was in this business, Bill Mechanic (ex-CEO, Chairman of Fox, Disney, green lit ‘Titanic’) and Barry Diller were at Paramount, Jamie Kellner ( Orion Pictures who went on to run ‘The WB Network’), Hal Richardson ( President at Paramount) was at Disney/Dreamworks, Eric Frankel (President for 26yrs) and Stanley Solson along with Eddie Blier were at Warner Bros. ( close to the Steve Ross reign whom I knew well from High School days), Mike Medavoy at Tri-Star, Ned Nalle at Universal and Andy Kaplan at Sony. Most all of these people now still are around and are running their own ship BECAUSE back then, they had a some foresight and moxie. They DID agree to let the PPV at least try and get off the ground by granting PPV rights to a few nascent, early entrants in the business. At that time, there were only a few addressable homes to see the films.

Since the inception of PPV on the cable landscape, its always been a ‘promise’ business at best. Nothing really ever took off or was unbelievably successful (and I am referring to MOVIES, not the WWF, Boxing or the Adult business). Many a business and consulting firm was built around it, hardware made for it, ordering systems invented and manufactured and in the end, most went out of business. Most cable operators didn’t even understand it or what it was suppose to be, what ‘tier’ to put it on and how to promote it. Most felt it would cannibalize their existing cash cow, PAY TV.

It never cannibalized anything because it never got off the ground. No one could agree on a movie PPV ‘window’ (the timing of when a PPV movie should be allowed to be seen and ordered on PPV). Many a conference, discussion group, speech and convention sessions were had – all futile. Nothing was ever decided. The VCR’s were blamed as the culprit, then it was the movie studios, then it was theater owners, then it was Pay TV and the ‘exclusivity’ wars of the 90’s. Then the Internet crept upon us all and that was the new Darth Vadar. You can’t release a film on PPV too early because it could be copied easily and even easier become distributed by means of the internet all over the planet (meaning no more duplicating and bicycling cassettes as if my friends ever did this in mass to begin with). Now, using the Internet, movies would be all over the place, everywhere. Everyone would have a copy. Well? Do we ALL have copies of Avatar? Tootsie? As Good As It Gets? Dirty Harry? A good industry has got to know its limitations! And this one never did!

Now, theater owners are afraid of the 60 day release window. Pahleeese! Just read a few of the articles below.

http://engt.co/lWRaty

http://bit.ly/kXEgRU

http://lat.ms/kiRwwc

Theater owners and the Hollywood creative community are livid about Premium VOD, which they perceive as paving the road to cannibalizing theatrical attendance which would in turn harm a movie’s overall economics, creating a dangerous downward spiral. In addition, there’s concern that if consumers switch to watching movies on the small screen then the creative license implicit in a big screen emphasis will get squeezed. While their concerns MAY be justified, the good news for them is that Premium VOD will be lucky to achieve even minimal success.

Why? The cost is one – $ 30.00 for a poor film or film that has not done well at the theater or is released directly to DVD (or what was once called DVD) is insane. Sorry, justification by babysitter fees and popcorn costs don’t cut it. These are niche films. Avatar and other BIG films will never see this light of day through this window. But ‘Cloudy with a Chance of Meatballs ‘ will (and has already, sort of). Example – first film up is Just Go With It” starring Adam Sandler and Jennifer Aniston. Ho-hum. Good cast and a flop a the box office for the most part. I’d be pissed if I paid $30.00 for this AND CAN’T EVEN KEEP A COPY IN A DIGITAL LOCKER TO SEE WHEN I WANTED AGAIN? WTF? And frankly that could be one of the keys to making this viable. Give me the ability to KEEP it as if I bought the DVD ( keep it in a ‘cloud’ locker) and I’d might buy a few films – that would help at least justify the cost.

And, as Will Richmond from VideoNuze so aptly points out, “Studios seem to believe that making movies available sooner in the home will attract demand. But the problem is that there are already so many choices for watching movies in the home – pay-TV, Netflix, iTunes, Amazon, Vudu, etc. etc., that it will be very hard to break through the noise, solely with a “sooner” positioning, which is more than offset by a ridiculously high price point. Consumers are savvier than ever; they’ll quickly realize that they can get the same movie for $4-5, a sixth to a seventh the price of Premium VOD, just by waiting a couple more months for it to appear on pay-TV or online VOD.”

So, theater owners who vow to ‘go to war’ are wasting their time and efforts. I guarantee them that the Movie studios and cable operators and satellite delivery services will win the war for them. Somehow, these guys think that consumers are not too smart. When are they going to wake up and smell the coffee? When are they going to realize that all of us don’t rush to ‘steal’ digital copies of films for any number of reasons (i.e., they are 700megs of data AT LEAST, cumbersome to store, less than perfect copies that lack subtitles at times and extra’s.) They are not MP3’s! Music and movies may both have a digital base as a common denominator but ultimately I’ll listen to Hotel California many more times than I can watch Avatar in my lifetime. And the pirates don’t make a bit of difference except barely on the streets of lower Manhattan or Tokyo where poorly made copies sell for $5.00 until those vendors get caught that day. And they on sell about 30 movies at that point – no MASS market like that that would ruin a $250m box office in the theaters or in any ancillary market I know of.

Theater owners should rejoice that soon this whole business will be in Netflix’s (or some other digital distributors) capable hands and not the studios. (Apologies to those friends of mine at the studios now – its not your fault, it’s just the ‘economics’ to blame and perhaps a few at the top thinking we are still in the DVD/VCR age). Make the business consumer friendly – give us a copy of what we buy and allow us to watch it whenever we want for our money that we spent. After all, I can do this with new music released, why not new movies released?

It’s the pirates who are on the right side of history.

In Praise of Piracy – a well written article and one you might want to read, by Jon Evans.

http://techcrunch.com/2011/02/05/in-praise-of-piracy/

then visit this site:   http://www.dontmakemesteal.com/   –  a Digital Media Consumption Manifesto

b.

 

What Content Can NOT be Pirated, Is still 100% Free and Millions of People See DAILY?

It’s not the movies. They are all over everywhere. It’s not music. It’s not photo’s or documents. C’mon…Its TELEVISION! What I mean is this: TV isn’t pirated out of the box because the episodes of LOST or V or the last NY Giant football game (sorry, I’m a fan) debut on TV. I can’t find the upcoming episode of V which is on ABC tommorrow -10/10/09 – on any torrent or newsgroup. It may show up AFTER its debut on TV, but never before. There are no ‘screener’s’ floating around the newsgroups. This being said, the content on these networks becomes all that much more important. And, I believe because its so accessable, that’s one of the reasons its NOT on the newsgroups or torrents as much as the movies and music are.

-Coming up:

Wal-Mart and Target – The last DVD standing

 

TV is coming to the iPhone and it’s free and it will ‘rock’ rumor has it.

Word on the street is

images

Hulu will be putting out a free iPhone app very soon that streams full length TV shows using 3G and WiFi. And any hopes of AT&T charging for TV flew out the window.  Guess Apple apple will be sucking wind about charging all of us now through iTunes to watch the same things. Wonder what that will do to iTunes sales of these shows. My hunch is not too much and if anything will make more fans and will increase ratings. Why? Why do I say that giving away ‘Lost’ won’t cause a loss of

sales of the same at iTunes? itunes Because, if you are really a rabid ‘Lost’ fan, you will want to own it anyway, whether you get to watch last night’s season finale or not. Giving it away for free (and on a very small screen) only whets the appetite of those that might decide to sample the show using the app. Come ‘on everyone, haven’t you all

heard of piracy? Calico Jack the Pirate Well, this is simply ‘legal’ . Have you ever heard of the WWF? (or WWE today). They still give away wrestling on TV daily on TBS and charge $ 39.99 or more for essentially the same show on PPV.  It seems like someone in Hollywood may finally be seeing the light.

Création et Internet or the French version of the RIAA

So last week, a copy of the new X-Men movie made the rounds on the newsgroups. Missing many elements of a feature film, it only heightened awareness of the film’s impending debut this summer – not deterred it. In fact, you can easily argue that fans who saw the illegal copy will RUN to the theater and pay to watch the film in its entirety WITH all the special effects included. Fox- it was a very nice ‘deliberate’ slip-up. Deliberate?? Huh? Its actually a brilliant marketing move on their part. How do I know this? All the posts disappeared in the newsgroups 2 days after they appeared. Only the actual newshosts can delete headers and posts. Confirming that someone at Fox MUST have made an arrangement to put up the movie and then pull it down. No other film was ever pulled like that, leading me to believe that Fox most likely paid to have it put up and pulled down. A very inexpensive but brilliant marketing play.

07piracy600

Now for the French. Arrest the downloaders? Huh? How about arresting the UPLOADERS instead? There are far fewer uploaders than downloaders. After all, get rid of the content going up and there’s nothing to pull down and download. Known informally as the “three strikes” directive, it has won preliminary votes by the Parliament and is expected to be approved in both houses Thursday.

The law empowers music and film industry associations to hire companies to analyze the downloads of individual users to detect piracy, and to report violations to a new agency overseeing copyright protection. The agency would be authorized to trace the illegal downloads back to individuals using the downloading computer’s unique identification number, known as its Internet Protocol, or IP, address, which the Internet service providers have on record.

For a first violation, the agency would send a warning by e-mail.

If a user made another illegal download within three months, a second warning would be sent by certified mail. If a third infraction occurred within a year, the service provider would be required to sever service. an Internet advocacy group based in Paris, said some computer users would turn to encrypted downloads and other methods to avoid detection. On Wednesday, a Swedish company, the Pirate Bay, began a service called Ipredator, which lets users use its virtual private network to make anonymous downloads for 5 euros a month.

So, how in the world will this law make any kind of dent in piracy?? Esplain Lucy!

UPDATE:

At the last minute, several members of the opposition Socialist Party rushed in to vote against the plan, according to Christine Albanel, the culture minister, in what she called a “cynical maneuver by the opposition.” The bill was rejected, 21-15.

Jérémie Zimmermann, director of La Quadrature du Net, an Internet advocacy group in Paris, described the outcome as “a huge political blow” for Mr. Sarkozy and Ms. Albanel. “It’s a victory for the citizens and the civil liberties over the corporate interests,” Mr. Zimmermann added. LONG LIVE FRANCE!

The video industry may be encouraging the very behavior they seek to stop.

A very good article from Rob Griffiths at Macworld. Its worth reading because he’s on the money here. Furthermore, what he does not mention is that a lot of the piracy actually stems from the employees at the studios themselves releasing DVD screeners out onto the web.

As a consumer of audio and video in many forms—CDs, DVDs, and online purchases—I find it interesting to watch as the various media businesses adjust to life in a digital world. On the music side of the world, it seems that (slowly but surely) they’re starting to “get it.” Consumers don’t like to be hassled by digital rights management (DRM), they want to pay a fair price, and they want to use their music on devices they own without worrying about format, rights, or permissions issues.

For the longest time, the music industry insisted on copy protection for online music sales, even though (higher quality) CD versions of that same music were (generally) shipped without any form of copy protection.

So at first, everything you bought from the (then) iTunes Music Store was protected by FairPlay, Apple’s generous (but still restrictive) DRM solution.

In June of 2007, though, the first chinks in the DRM armor appeared, with Apple and EMI announcing iTunes Plus, DRM-free music at higher bit rates for $1.29 per song, versus the 99 cents per song for the FairPlay-protected versions.

Then, in September 2007, Amazon launched its own MP3 download service. Unlike the iTunes Store at the time, music in the Amazon MP3 store was (and remains) completely free of DRM. As a consumer, I was intrigued, and tried it out. While the Amazon MP3 store can’t rival the rich experience you get in the iTunes Store, it’s not a bad solution, and its download tool automatically adds my purchases to iTunes.

Finally, to put the proverbial nail in the DRM coffin, Phil Schiller announced at this year’s Macworld Expo that the iTunes Store was going DRM free—at the expense of Apple’s one-price-fits-all strategy. Over the next few months, the entire 10-million-strong iTunes Store music catalog will migrate to DRM-free versions (at higher bit rates)—Apple claims that more than 80 percent of iTunes music is available now in iTunes Plus format.

image

As a music consumer, I’m thrilled with this—no more do I need to carefully manage my authorizations for music playback amongst the various machines I use. I can burn anything I want, back up my songs without having to re-rip them, and generally not think about what happens to my music if the iTunes Store ever vanishes. With one click of a button, I can upgrade my entire library and be done with DRM…in theory, at least. (Of course, there are some issues with the upgrade plan, but it’s still better than DRM-encoded music.)

So it seems, finally, the music industry gets it. Given the chance, consumers will pay a reasonable price for unprotected, high quality music that they can use as they wish. Unfortunately, the video industry hasn’t yet apparently seen even a flicker of such enlightenment in the distance. You can see evidence of their confusion all over the iTunes Store, starting with iTunes Plus.

What about video?

iTunes Plus applies only to music in the iTunes Store, not to video (or audiobooks, for that matter). So while my music will be “free,” I’ll still be messing with authorizations for the video content I purchase from the iTunes Store. That’s unfortunate, and strange, given that the large size of movie files means they’re typically harder for consumers to distribute than relatively small music files.

imageWhy is an HD movie different than an HD TV show?

Beyond iTunes Plus, you can see more confusion in the handling of high definition (HD) content on the iTunes Store.

You can, for instance, purchase a TV series in HD and watch it on your Mac or Apple TV…but you can’t purchase an HD movie at all, and you can only rent them on an Apple TV, not a Mac. Why? What’s different about an HD TV series and an HD movie?

From my chair at least, nothing. I know, behind the scenes, they’re controlled by two very different entities, but as a consumer, such things shouldn’t matter. When I want to purchase HD content, I want to be able to use it on whatever device I wish, and transfer it easily between all such devices I own. The current model is just completely confusing, and makes no sense.

Of video and piracy

It really makes no sense when you consider that the video industry is taking these protective steps against those who are probably least likely to steal their content—consumers who have decided to purchase through the iTunes Store. We’ve made a conscious decision to buy our audio and video through the iTunes Store, and yet the video industry treats us as though we’re all pirates foaming at the mouth, ready to upload our freshly-purchased content to every pirate server in the known universe.

image

One way to really alienate your customers is to treat them all like thieves and criminals. (I’m not sure the music industry has fully learned this lesson either, given some of the RIAA’s tactics…but at least record companies are making strides on DRM.)

If I want to steal a movie, there are many ways to do so quickly and easily, as seen in the image at right. Using Tropic Thunder, the movie in my sample image above, it took all of one Google search to find literally dozens of different versions of the film, with varying levels of quality and features.

Quite ironically, a stolen movie is actually easier for the consumer to use than a legitimately-purchased copy of the same movie. A stolen movie won’t be DRM-protected, may be encoded at a higher bit rate (better quality) than a purchased version, and can be easily played on any device capable of playing back video. Why is it that pirates are rewarded for their actions, while legitimate consumers are punished and treated as if they are pirates? By making it difficult for honest consumers to purchase and use their products, the video industry may be encouraging the very behavior they seek to stop.

The pricing issue

My final annoyance with the video industry and the iTunes Store has to do with the pricing of TV series—another behavior that may drive otherwise honest consumers to take dishonest actions. The new season of 24 started recently, and for better or worse, it’s a series I enjoy watching. Given how much time I spend in front of the machine, however, I thought that maybe I’d purchase the 24 Season 7 HD season pass from the iTunes Store.

Then I saw the cost, a whopping $68, and changed my plans. Nearly $70 for something that has no physical media, would be very difficult to resell (is it even possible?), and is encumbered by DRM! You can’t even burn it to a DVD for use away from a computer or Apple TV (even the non-HD version is expensive, at $45, and non-burnable, like all iTunes Store videos). So I’d be paying $70 for basically nothing more than the right to watch the video on my Mac, iPhone (non-HD, of course), or Apple TV. (Even old versions of TV series are outrageously priced—the seven-year-old 24 Season 1 (non-HD) is still $40!)

As it turns out, I can actually watch 24 for free (and legally) on Fox’s Web site—and in full-screen mode, the video looks quite nice even on my 23-inch LCD. Sure, it’s not available on all my devices, but if what I really want to do is watch something on my Mac, free sure beats $70.

image

If I really want 24 on all my devices, and I find the $70 to be a huge burden, another quick trip to Google finds that all four episodes of the new 24 season are readily available online. Legal? Not even close. A tempting alternative for those who aren’t able to afford $70, or perhaps live outside the geographically-restricted area where they could buy 24 even if they wanted to? You bet.

So by pricing the season at a somewhat ridiculous price point, Fox has not only lost a sale, but has probably encouraged people who would otherwise give it money to go find alternative solutions. For me, I would’ve gladly paid about $30 to $35 for the season pass—the ability to watch on any device would be nice, and I’d love to feel like I’m supporting the series.

Instead, I’ve chosen to do what I’ve done the prior years—record 24 on my Tivo, and then watch it (skipping commercials) on the big screen. Not as convenient as having it available everywhere, but $70 is simply well past my cutoff point for a convenience cost.

Some shows get it, it seems. You can buy 16 30-minute episodes of The Daily Show for $10, or about $1.78 per hour of entertainment. Contrast that with 24, which will cost you $3.80 per hour (I’m using the actual show lengths here, i.e. 21 minutes or so for The Daily Show and 44 minutes for 24). But The Daily Show is an exception; current seasons of most TV series seem priced to dissuade purchase, rather than to encourage purchase.

I firmly believe that if the prices were to be halved, volume would increase dramatically—and it’s not like there’s much direct cost in producing the downloadable version of an already-filmed TV show, so almost all the money the studios would earn through increased volume would be profit (less what they must pay out in commissions, of course). So why are they asking such outrageous sums for current (and non-current) TV series?

Hopefully the video industry will see what the music industry has done and take steps to adjust its rules on HD content, its stance on DRM, and its pricing policies. As things stand now, however, video producers are treating their customers like thieves, and encouraging them to find alternative solutions that are less costly, unencumbered by DRM, and more agreeably priced. Some alternatives are legal, others are not…but no amount of protection on iTunes Store videos is going to change that fact. Pirates will pirate, and the current iTunes Store video rules hurt only those who seek to legitimately purchase their content.

gran-torino2

Despite every single Pirates best efforts, Hollywood had a record boxoffice.

calico-jack-the-pirate

According to The Hollywood Reporter Hollywood had a record box office year. This despite cries and complaints from the MPAA about piracy is going to kill this business.  According to the article, In 2008, about 1.36 billion tickets were sold in the US and Canada, which is actually down from the 1.4 billion tickets sold in 2007.  Thanks to a 4.7 percent increase in average US ticket prices to $7.20, and despite a prediction of a “really hard year” from the National Associate of Theater Owners, 2008’s box office earnings narrowly edged out last year’s by two percent. 2007 was also a record year for profits, though, growing 5.4 percent over 2006 by grossing $9.63 billion. Now, that’s not so bad, is it?

No question that piracy in some ways can hurt a box office, but how much remains to be seen. It is also quite possible that the availability online allows and fosters conversations about a film (good or bad) and one can argue that this is itself publicity and marketing (word-of-mouth) for a film. Add in the social networks, fan pages, widgets and IM/test discussions, etc.

So speaking of piracy, I think I’ll take a peek at what’s up in the newsgroups all over the world, specifically looking for Academy Award screeners. I’ll post my findings here in the next day or two. Stay tuned. oscar-academy-award