December 07, 2005
Gordon Gecko updated for the 21st century: 'Tiered Pricing is Good'
The one bright spot for the music industry has been Apple's iTunes store, which has sold 600 million songs since 2003, accounting for 80 percent of legal downloads in the United States.
But what price is fair? Apple says it is 99 cents a song. Of this, Apple gets 4 cents, the music publishers snag 8 cents, and the record companies pocket most of the rest.
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Slate's Adam L. Penenberg wrote a good piece called The Right Price for Digital Music, Why 99 cents per song is too much, and too little. In it he suggests that a NASDAQ-like should exist for music downloads. I include it here because it's well written and the idea could also apply to video as well.
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Steve Jobs, who has been willing to take a few pennies per download so long as he sells bushels of iPods, calls tiered pricing "greedy." That view is shared by millions of consumers who believe the record companies have been gouging them for years. …
What we need is a system that will continue to pack the corporate coffers yet be fair to music lovers. The solution: a real-time commodities market that combines aspects of Apple's iTunes, Nasdaq, the Chicago Mercantile Exchange, Priceline, and eBay.
Here's how it would work: Songs would be priced strictly on demand. The more people who download the latest Eminem single, the higher the price will go. The same is true in reverse — the fewer people who buy a song, the lower the price goes. Music prices would oscillate like stocks on Nasdaq …
Since millions of tunes sit on servers waiting to be downloaded, the vast majority of them quite obscure, sellers would benefit because it would create increased demand for music that would otherwise sit unpurchased …
The big wild card here is the impact of illegal file sharing. David Blackburn ... has argued that peer-to-peer systems increase demand for less popular recordings but dampen sales of hits. If that's the case, charging extra for top sellers might just push legal downloaders back into the outlaw world of peer-to-peer file trading … A Digital Music Exchange may not be a perfect solution, but who would you prefer to set the price of music: consumers or record executives?
December 06, 2005
Use an MP3, go to Prison
I have long believed that entertainment companies and software companies do not under how free digital distribution can often lead to more revenue, not less. I first witnessed this phenomenon back in the 1980's; when people 'stole' an expensive and popular PC program, only to end up as a legitimate sale in the future just because they wanted the latest and greatest versions.
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This sentiment was expressed in an opinion piece by Damian Kulash Jr., the lead singer for OK Go, written in the NY Times.
On whether non-paid content automatically means that the music industry lost money:
"... the major labels need to face reality: ... It's much better to have copies of albums on lots of iPods, even if only half of them have been paid for, than to have a few CD's sitting on a shelf and not being played. ... This is not just our megalomania, it's Marketing 101: the more times a song gets played, the more of a chance it has to catch the ear of someone new."
And on Digital Rights Management (DRM):
"Conscientious fans, who buy music legally because it's the right thing to do, just get insulted. They've made the choice not to steal their music, and the labels thank them by giving them an inferior product hampered by software ..."
November 25, 2005
MPAA reveals plans to jail its best customers
Just before Thanksgiving, I wrote a post called MPAA: 'This week we created a great plan, next week we allocate resources to revise the plan'. I came across another MPAA story from earlier in the month at IP Democracy entitled Grandfather Sued for Grandson's Movie Downloads.
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(excerpts from the IP Democracy post)
... MPAA has filed suit against a 67 year-old grandfather whose grandson downloaded four unauthorized films from the web. The MPAA [is] seeking as much as $600,000 in damages for [the] four movies ... three of which the family already owned on DVD.
Hollywood filed suit after Lawrence, who had no knowledge of his 12 year-old grandson’s activities, couldn’t afford to pay the $4,000 settlement fee the MPAA sought.
“I can see where they wouldn’t want this to happen, but when you get up around $4,000 … I don’t have that kind of money,” Lawrence said. “I never was and never will be a wealthy person.”
If Lawrence couldn’t afford to pay the $4,000, I wonder how MPAA plans to collect its $600,000 if it wins the case. No matter. There are plenty more elderly people, not to mention widows and orphans, for Hollywood to sue.
November 23, 2005
MPAA: 'This week we created a great plan, next week we allocate resources to revise the plan'
There is only one way to fight illegal P2P networks; start offering a value added legal service that consumers embrace. I am a simple guy, so my definition of "value added" is this: fast downloads, dependable delivery, good quality, and no fuss. You do that, why not pay a small fee for P2P delivery of video?
Forbes had an article today that helps point out why the MPAA might be more interested in PR and is not focused on real solutions.
(excerpts from Forbes)
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It sounds great: The guy behind the software that moves a good portion of illegally swapped movies and TV shows through the Internet hooks up with the studios that make the movies and TV programs.
That is what Bram Cohen, creator of BitTorrent software, and the Motion Picture Association of America, Hollywood's lobbying arm, said. Just listen to the press release: "The announcement today is historic in that two major forces in the technology and film industries have agreed to work together."
... But if Hollywood is looking for a way to solve its online piracy problem, this isn't it.
The problem, in a nutshell, is that Cohen can't do a thing to stop folks who want to use his software to swap copyrighted files, no matter how well intentioned he is...
Even folks who use Cohen's official software ... aren't necessarily affected by the agreement. Only users who use a search engine Cohen installed earlier this year will notice a difference, because Cohen has agreed to take down links to pirated files...
So what does the deal really mean? For Cohen, who just recently transformed himself from a programmer with no interest in business into an entrepreneur who has received $8.75 million [in venture capital], it means he can operate his company without being sued by a Hollywood studio...
... NBC Universal has already struck a deal with privately held Wurld Media to begin using peer-to-peer software to distribute some of its films beginning next year. ... [this] could ultimately mean that consumers could pay less for an Internet download than they would through other outlets.
"We could literally take a 1 gig piece of video and sell it for 10 cents and make money," says Wurld Media Chief Executive Greg Kerber. "You can't do that with conventional electronic distribution."
August 17, 2005
Veoh: an Internet Television Peercasting Network
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Veoh Networks, a San Diego start-up, is described as an Internet Television Peercasting Network. They also completed a Series A round of financing led by Shelter Capital Partners. No where could I find how large (or small) that financing round was but Dmitry Shapiro, the company’s founder, did tell me that they are well capitalized and has what he needs to solidly move forward.
One of the impressive thing about Veoh is Dmitry Shapiro. He is a specialist in peer-to-peer networking and computer security. Veoh just announced its own protocol appropriately called VeohNet. I am not in Dmitry's league of expertise so my take is to think of it like BitTorrent (swarmcasting) but even better. For example, viewers will not have to open up ports to make it work. Also, publishers can pull back content if they need to. This should go a long way to solving legitimacy issues and ease of use.
InformITV said: "Unlike unmanaged P2P networks using software such as BitTorrent to share mainly illicit copyright video, Veoh will have a community of publishers and content will be approved by editors. The system will also integrate with Google Video and RSS, providing content producers with easy publishing to multiple video systems."
The current management team is supposed to include executives and advisers from Coco-Cola, Columbia Pictures, eBay, Gateway and Musicmatch.
I have put Veoh on my radar because there is a compelling economic logic to using the Internet as a distribution mechanism that allows content providers to connect directly with viewers. There have been many postings here on content owners who are doing exactly that. Who knows, maybe Veoh can latch onto that pin action.
From what I know about their business model it is straightforward. Publishers can use a program called VeohUploader (which is due to be released tonight). Dmitry described to me that if you can handle being a seller on EBay, you can become a publisher on Veoh. A content owner can specify whether people can watch for free or pay per viewing or work under some sort of subscription model.
Les Moonves, here is your chance to test your $1 per CSI episode and see if the market place validates that price point. But the real reason I bring that up is this: if Viacom were to do that in Veoh’s business model, they simply could start tomorrow. They would not need Comcast or Time Warner’s agreement to do so. They also would not have to invest any significant money to do so. This is why Veoh can allow people to easily become their own publishers.
Obviously, one key business driver for Veoh will be to amass an audience size to make it worth the larger network’s while. This is the classic chicken and egg scenario: well branded networks want larger audiences to make it worth their while, and larger audiences show up for high-quality content. We will see how Veoh gets past this business challenge and I for one will watch their progress.
There’s not much yet at Veoh’s web site, but you can sign up for notification when their beta is ready. Another thing is that you can enjoy their word-smithing:
It will open the world of media so that every country, established or third political party, foundation, charity, cause, company, and individual has an unrestricted voice, able to reach the farthest reaches of the world, with the capacity to alter human understanding. We will be able to stop wars, expose genocide, enlighten, entertain, educate, bring together, inspire, connect, and help find love of all kinds.
We are building the next phase of the Internet, the Self Published Video Web. Think of it as Television 2.0Posted by Martino Mingione at 04:29 PM | Comments (598) | TrackBack
July 10, 2005
Forget the Bootleg, Just Download the Movie Legally
(Excerpted from The New York Times Technology Section)
After years of avoiding it, Hollywood studios are preparing to let people download and buy electronic copies of movies over the Internet, much as record labels now sell songs for 99 cents through Apple Computer's iTunes music store and other online services.
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The studios have been working to confront the business challenges of digital sales. Those initiatives gained new urgency on June 27 when the Supreme Court ruled that companies distributing software that allows users to trade pirated copies of audio and video files are liable for copyright infringement only if they induce users to break the law.
Sony is converting 500 movie titles to a digital format that can be downloaded and sold. Universal Pictures ... is preparing nearly 200 titles for digital online sale. And Warner Brothers ... says it has already digitized most of its library of 5,000 films and will start selling some of them online later this year.
The studios have strong incentive to make sure they offer consumers legal options: the rapid adoption of high-speed Internet connections is making the trading of pirated copies online easier and more widespread.
Not surprisingly, the videos that people most want to download are those that Hollywood is most shy about making available online.
Studios do not want to undercut box office receipts and DVD sales for hit movies, and TV networks do not want to put popular shows online, which might allow more viewers to skip the commercials. CNN just moved most of its online video content from a paid service to its free Web site, with a commercial in front of each clip.
And even lengthier programming is gaining appeal. About 700,000 people watched the season premier episode of WB's "Jack and Bobby" through video streaming when it was on AOL last fall.
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Broadband's Sizzling Growth. |
July 02, 2005
BitTorrent Tracker Sites and Google, Hypocracy 101
Yesterday, the Wall Street Journal wrote an article entitled "Alerted by Users, Google Removes Free Video Clips."
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Apparently, there was a significant copyright infringment that allowed people to view movies like "The Matrix Revolutions," "The Matrix Reloaded," and "Scarface." Also, TV shows were uploaded including episodes of "Family Guy" and "The Simpsons" and clips from "The Daily Show with Jon Stewart."
Google Inc. said it removed the copyrighted video clips that Internet users uploaded for its new video-search service without the content owners' permission.
"We take copyright very seriously," said Susan Wojcicki, a Google product-management director. "We have clear policies in place to protect copyrighted material and copyright holders." She said that she was unaware of any complaints by content owners related to the incident and that Google would remove any unauthorized video at the owner's request. (emphasis added)
Side note: we just found another mission for the MPAA; monitor Google Video and tell them when violations occur.
OK, let's think about this from a different angle. A BitTorrent Tracker updates an internal database specializing in the location of both legal and pirated files. It displays these results to users when search requests are received. The result is that many sites are sued into oblivion despite the fact that they do not host the illegal files themselves. Their 'crime' is that they make it too easy to find the copyrighted material on other people's computers.
Google updates an internal database from its search engine spiders and maintains the location information some of which is legal files and others pirated media. It displays these results to users when search requests are received. Google Video now go beyond the BitTorrent sites in that they now also allow people to upload the files for access! But are they sued? No.
Two lessons can be learned here. The MPAA appears to rely upon some form of an 'ignorance factor' amoungst Internet users. Also, It helps to be a huge media company that is worth more than all of Time Warner. When you get that big, even Hollywood does not send the MPAA against you.
Posted by Martino Mingione at 09:50 AM | Comments (156) | TrackBackMarch 03, 2005
Grokster Fans Share Their Filing
In briefs filed with the Supreme Court two days ago, consumer groups asked the court to uphold the Ninth Circuit and rule that Grokster Ltd.'s and StreamCast Networks Inc.'s digital file-sharing technologies do not violate copyright law.
The court's answer could help determine the future courses of multi-billion dollar TV, movie and music businesses.
Quoting Broadcast and Cable:
"As did the ninth circuit, Consumer Federation of America, Consumers Union, Free Press and Public Knowledge, argue that the 1984 Sony Betamax case protects Grokster, StreamCast and others from secondary copyright liability (essentially liability as accomplices to illegal file sharing) because their peer-to-peer (computer-to-computer) file-sharing software also has legal uses.
They argue that to punish the technology rather than the abusers of it, as they say studios want to do, flies in the face of established fair-use protections.
The major studios and record companies counter that they want the companies punished and that not to make them liable for the illegal sharing that they directly profit from and constitutes the majority of their business flies in the face of established secondary copyright liability.
The Betamax case , which established home videotaping rights, should not immunize companies that are profiting from the illegally traded files, the studios argue. Betamax, they say, was about balancing effective copyright protection with "the rights of others freely to engage in substantially unrelated areas of commerce."
The new technologies tip the balance far to the side of content piracy, they charge."
Rather than a single library copy, digital file-sharing could mean that nobody ever had to buy a DVD or CD again, the content providers argue, denying billions of dollars to copyright holders and customers to online content businesses such as Apple's iTunes and MovieLink.
The Supreme Court will hear the case March 29.
Posted by Martino Mingione at 08:54 AM | Comments (32) | TrackBack
