Video piracy will shift from downloads to streams in 2009

Early in the month I wrote a piece for Forrester’s clients called How To Keep Casual Video Piracy At Bay In 2009. (Yes, I enjoy inserting little images like the idea of “pirates at bay” into my writing — I consider it a minor victory.) 

The premise of the report is that the video industry has yet to feel the heat of video piracy because, frankly, it’s just too much of a pain to pirate video. Only 10% of US online adults have ever downloaded video files via a P2P application. That’s because you need big storage, mega bandwidth, and you need to be conversant with a whole range of P2P hosting  sites that are not easy to navigate. In short, it’s inconvenient.

If you know me, you know I believe that convenience is everything in this or any business. That’s why piracy is about to get a lot worse: it’s about to turn from downloading to streaming.

That’s much more convenient. I didn’t have to download a single application in order to watch the opening minutes of Madagascar 2 on Megavideo.com just last week. (Note: I won’t post a link not only because the file has been taken down since then but because I don’t advocate piracy of any kind. I watched until the opening credits just to verify it was there and then stopped. I don’t download illegal video files or MP3s and when people email them to me I delete them. It’s not a high horse, just a personal ethic.)

More and more, people will be able to stream the stuff they want to steal rather than risk downloading it. That’s why the right solution is to make it easier to get legally than it is to steal. As I wrote in the conclusion of my report:

MAKE LEGITIMATE VIEWING EASIER THAN PIRACY AND LEGAL FORMS WILL TRIUMPH

Crushing illegal streaming will be even harder than crushing P2P sites. We don’t recommend that the industry give up, however. Instead, we think automated content identification systems from companies like auditude and Vobile, Inc. do an increasingly reliable job of finding infringing content, making it easier for studios and broadcasters to respond quickly to pirated streams around the world. However, erecting barriers to piracy is only one half of the equation. While they make it hard for the people who sponsor piracy, the best long-term solution is one in which consumers’ fundamental desire for easy access to top content is satiated through legal means.  

So far, the industry gets this, but as I have documented on this blog, there are some exceptions, such as when Warner Brothers TV pulled down episodes of The Mentalist from CBS.com. Interestingly, on the CBS.com fan forum for The Mentalist, one concerned viewer posted links to a variety of sites where you can stream the show illegally. Networks, even human ones, have a way of routing around blockages.

Why Joost canceled its P2P application

Like me, you may have received this friendly email from Joost this week politely informing you that the original Joost application will no longer function as of December 19th.

That’s fine with me, I uninstalled it a long time ago in favor of Joost.com.

For those of you unfamiliar with Joost’s roots, this is a rejection of the Peer-2-Peer (P2P) model that Joost originally built itself on. In early 2007, P2P was going to be the bomb. BitTorrent (the company, not the protocol), was positioning itself as the most cost-effective way to deliver HD content; Joost was launched in the same fervor as the brainchild of the founders of P2P network Kazaa . Back then, delivering video streams cost between 25 and 35 cents per gigabyte depending on your deal with Akamai. P2P was billed as a way to cut costs down to 5 cents. 

Fast forward to today, where CDN competition and great volume deals have gotten streaming down to between 6 and 8 cents per GB. Not as cheap as P2P, but darn close, and with better control over content. Plus, your viewers don’t have to download resource-hogging P2P apps.

Streaming is the proverbial wave of the future. With 61% of the population connected via broadband, with the rise in quality of streaming, streaming is the way that the lion’s share of online content will be delivered for the next few years. By cutting its P2P app and going all .com, Joost is merely accepting the facts and trying to build an audience for itself using the simplest method — an open website. And looking at Joost’s site metrics in the few months it has been available as a dot com, it’s clear this friction-free delivery method is working for them.

In fact, streaming is so easy, we expect piracy to shift from downloading via bittorrent to streaming from sites like megavideo.com.

New Media Minute – online video startups to watch

This week’s New Media Minute from Daisy Whitney. Of the ones she singles out, I’m a big fan of Boxee and will be blogging more on them in the coming weeks. I also have my eye on Kaltura. What online video startups do you think we should watch through 2009? Let me know what you think.

more about “New Media MInute – online video start…“, posted with vodpod

VUDU creates open development platform for TV

They say if you ask, you shall receive. Last week, I asked. I said:

So who is going to bring an open development platform to the TV in a commercially viable way? My money’s on Roku in the short run. Who else has the guts (or the financial imperative) to do this? One backdoor might be to create a TV set top that is truly DLNA compliant. Then people could create PC applications that feed DLNA content to the set top. I’ll keep my eyes on this for you. (For more on this, read my post called Joost’s iPhone App a Sign of Things to Come).

I asked and today I received. VUDU has debuted an open set-top-box development platform called VUDU RIA. At the same time, VUDU made sure to kickstart the application development process by building a bunch of apps to show how easy it is to provide Web-like experiences to their set top boxes. They have flickr, Picasa, YouTube, as well as many online video channels.

This is it, folks. This is what we all have been waiting for. Now if only VUDU could sell more boxes so that developers would have an incentive to fill the world with VUDU applications.

If you don’t understand why I’m so excited, may I direct your attention to the iPhone App Store. This is perhaps the most important decision Apple was ever dragged kicking and screaming to make. The iPhone App Store has created an environment where thousands of developers have innovated to provide consumers with experiences, content, and services that they value. All without having to cut deals with Apple (which would inhibit innovation). Yes, there are still issues with Apple’s random and arbitrary decisions about approving iPhone apps, but this genie is completely out of the bottle and flying high so Apple will have to cede more and more control.

VUDU wants to benefit from that scenario. They can imagine a world in which VUDU RIA becomes a default language for developing TV-based apps. Yes, they want other CE makers to adopt VUDU RIA. They’ve been smart about it — they have designed around a very limited set top box spec: 300 MHz processor with 128MB of RAM. That means a TV maker like VIZIO could design its first Web-ready TVs to that spec and immediately have content to offer buyers, without having to create a custom environment of their own and do content deals. They can simply plug into the dozens and hopefully hundreds of apps built in VUDU RIA.

Of course, they’re not the only ones with this vision. Intel and Yahoo demonstrated a TV widget language they want the world to adopt. But VUDU has a box and real apps, where the Yahtel approach is still an idea for now. And don’t forget Roku and Sling, both of whom I have written about who have a similar ambition.

This is the most important thing that will happen in TV in 2009. The battle of the development platforms. And notice that nary a single cable provider is on the list of combatants. Hmmm.

On the rising problem of “disappearing content” from online video sites

Gotta give some props to Greg Sandoval (pictured at left) at CNET News who did a great piece this week on the seemingly random removal of content from Netflix and iTunes. (see TV has license to kill movies at iTunes, Netflix | Digital Media – CNET News).

If you’ve been reading my posts lately, you know that “disappearing content” is par for the course. One of my most read posts in the history of this blog is my piece on Why CBS Pulled The Mentalist From CBS.com. I also briefly covered how Sony Pictures apparently pulled certain of its films from Netflix only when viewed through the Xbox 360 (you can still watch them elsewhere). 

I know it’s easy to start throwing snowballs at these guys for not understanding the power of the online channel. I have a few of those snowballs in my arsenal as well. But I have to confess, I consider these stops and starts a good sign.

What? That’s right, this is a good sign. Because if the corporate heavies had their way, none of these movies or TV shows would be available on Netflix, iTunes, CBS.com, the Xbox 360 (you get the picture) in the first place. The fact that they threw too much up there, then realized they didn’t quite have full permission to do so and have had to retrench is a sign that they’re experimenting. Importantly, the fact that they only pulled a few and didn’t just rip the whole thing down is also a good sign. Remember, danger lurks in darkness of media executives’ souls. They’d rather not do the right thing. But the dynamics of the market are forcing them to. Huzzah for us. 

Let them have their fits and starts, let them figure it out as they go along, as long as they keep moving forward.

Agree? Disagree? Feel free to weigh in.

Joost’s iPhone App a Sign of Things to Come

A relatively silent shot was fired the  first week of December which, though it was not at first heard around the world, will eventually change the way all media are distributed. Sound provocative enough? 

I‘m talking about Joost rolling out its iPhone application. This changes everything.

You might think I’m going to on and on about how mobile video is eventually the future, blah, blah, blah, but I’m not. Because it’s not. Mobile video will be a very nice complement to the TV and the PC. It will remain the third screen for as long as you can imagine. This post is not about the future of mobile video.

Instead, I’m talking about what I have been calling the “many devices, many services” model of media consumption in many of the speeches I give. This model follows nicely in line after the “one device, one service” model, which is best embodied in the iPod/iTunes or Kindle/Amazon combinations. This is a fine model, usually one that a new technology category will start with. But that model is quickly followed by a “one device, many services” model. This is the case with the Sony eReader, which, unlike the Amazon Kindle, has published an open development platform which allows any bookseller in the world to sell books into the eReader ecosystem. One device + many services. 

Before we move into the “many devices, many services” model, a quick interim step called the “many devices, one service” model flourishes briefly. This is best exemplified by the Netflix on LG, Xbox, Samsung, TiVo, and so on model. I love this model and have written about it copiously.

But what we will see next is what Joost has done by exploiting the iPhone’s application development environment. It has volunteered itself as a service on the iPhone, without Apple ’s express permission. In other words, in the “many devices, many services” model, devices are built with open platforms that allow any (ergo: many) services to spontaneously connect, without doing a biz-dev deal. 

Top Joost Picks: Oily Britney Spearks, Star Trek, Victoria's Secret, any guesses what target audience Joost appeals to?

“Many devices, many services” is the future of video. And it requires the use of an open platform and open protocols. Joost, which got its start as a P2P video delivery mechanism, has since opened itself to wider consumption by going straight IP. Once it speaks IP, Joost can easily be ported to any IP device, including the iPhone. Including the T-Mobile G1. And so on. It has been so successful on the iPhone so far that it’s regularly in the top 10 free applications on the iPhone App Store (see pic, today it’s #5, yesterday #2, it see-saws).

All we need now is a (commercially-viable) open development platform for the TV set-top box. We already see a rabid community of Apple TV hackers who are writing their own code to create an open platform out of the walled garden Apple built. (I’ll write more on that later in the month because I’m trying it out myself.) And Comcast and Cox and Verizon will take years before they consider an open platform — they’d rather charge you for everything you want to do, even if they only enable you to do it badly, which is the case with things like whole-home DVR.

So who is going to bring an open development platform to the TV in a commercially viable way? My money’s on Roku in the short run. Who else has the guts (or the financial imperative) to do this? One backdoor might be to create a TV set top that is truly DLNA compliant. Then people could create PC applications that feed DLNA content to the set top. I’ll keep my eyes on this for you.

In the meantime: Joost iPhone users. Are you using the app? Does it work as advertised? Satisfied? If not, this could slow down the proof of concent the “many devices, many services” model needs, so I hope not. Let me know.

Next up: online video sites start programming

Programmers. It’s a word that broadcast and cable networks use to describe themselves. They don’t just deliver video, they “program,” meaning they select the content to fit the audience, and they arrange it in just the right order to satisfy. 

Programming also happens to be what online video sites need next. Sure, letting me search for content is a given, but what about tailoring the content options so they feel like they have been “programmed” just for me?

This is a great intro for a new weekly feature I’ll be adding. Beginning this week, I’ll be embedding the New Media Minute from Daisy Whitney at TVWeek on a regular basis. I like much of what Daisy has to say — she’s often focused on some of the online video production and management topics that I don’t get to, so her content will be a great add. Plus, Daisy gets it, so her point of view is worth sharing.

From her this week: 

What if online video was more like Amazon or Netflix? Imagine video-centric sites like Hulu or NBC.com actively recommending videos just for you…The future of online programming could get a lot more personalized as video sites develop the brains to predict and serve up shows tailored for an individual viewer’s tastes, reports the New Media Minute. For details on what this future might look like, check out this week’s edition. You’ll also hear from YouTube documentarian Chuck Potter about what it takes to be a Web star.

Why Sling.com matters

It’s a question I’ve been getting from the press since Sling.com was first placed in private beta test. “Why is Sling trying to create a website when Hulu, Veoh, Joost and others have already cornered millions of visitors?”

It’s a sensible question, but it doesn’t take into consideration Sling’s ultimate strategy.  The first issue to raise is a simple one: this is not that expensive of a site to run. The content is hosted by the content providers (including Hulu.com) so there’s no cost there. The only money they give those people is the privilege of letting them keep the lion’s share of the revenue associated with the content Sling.com is passing through.

The real point to raise, however, has to do with Sling’s secret plot to take over the world. Yes, Sling has a secret plan: they want to make it easy for you to take content from anywhere and watch it anywhere. Diabolical, no?

First piece of their plan is letting slingbox owners — the few, the proud — access their slingbox content from any Web browser, rather than through a proprietary application. This is critical. This will mean you can check your slingbox from any IP device, including iPhones and T-Mobile G1 phones. Get it? That’s a critical feature to add.

The second piece is in enabling people to watch online content on their TVs. This is not for Slingbox owners, it’s for an even smaller group: Slingcatcher owners. But it’s a very smart step, one I’ll be writing about at Forrester in early Q1 as I consider all the ways you can put Hulu on your TV set. Because the Slingcatcher lets you share PC and online content to your TV, aggregating the best content on Sling.com just makes it that much easier for Slingcatchers to access the best of the Web on the TV. It’s a small step, but it represents big thinking. 

Big thinking because once Sling can show that it has the technology in its Slingcatcher and the content on Sling.com, it will then start calling Samsung and other TV and Blu-ray makers to say, “Hey, want an Internet-connected TV strategy that puts the best of the Web on your device quickly? Partner with us!” Sling licenses the technology, pre-connects Sling.com (through a proprietary UI) to the device, and boom, instant Internet-connected TV strategy without the hassle of knocking out content relationships. It’s the same motive that led both Samsung and LG to work with Netflix. 

It’s going to be the race to watch in 2009. I’ll be tracking it: who gets Hulu to the TV, then CBS, then ABC (because that will be the order in which it happens). And all of this makes it easier for you and I to watch what we want, when we want. See why Sling.com matters now?

Interview with a TV addict

I’ve been posting about TV addiction lately and in my efforts to find people who are addicted to TV, I came across such a unique example that I had to dedicate an entire post to her story. Her name is Xochitl Garza, though her blog readers know her as Equis Buffy. Her daily posts about TV can be found at her blog, You Have No Messages: The Story of My Life. How I found Xochitl (Aztec for “flower,” her name is pronounced So-cheel) is its own story, but suffice it to say that this is one addict who is clearly not in denial. In a recent interview, she answered some of my questions about what it’s like to be an addict:

How many hours of video do you think you watch in a typical week? I usually watch about 30 hours of primetime TV. I have three daytime programs (“Martha”, “Oprah”, and “ General Hospital ”) that air 5 times a week but I do not necessarily watch each episode. So on top of the 30 hours of primetime I probably have an additional 10 hours of daytime TV that I watch.

How do you break down that viewing: live, DVR, online, anything else? I would say at least 95% of that viewing is DVR. I rarely watch live TV anymore but there are times when it can’t be avoided. Like when I’m home sick or on the weekends if there is really nothing else to do.

How important is it to you to share your watching with others? There are some programs that I watch that I never find myself discussing with others like “Samantha Who” or “The Mentalist”. These are the types of shows that any viewer can start watching mid season and never feel like they are missing any crucial portions of the plot. Then there are other programs such as “Heroes” or “Lost”. As soon as the credits roll I am bursting at the seams with anticipation. I can’t wait to discuss all the twists and turns, the questions that have been answered and the new theories the episode has spawned.

How important is that impulse to share in your choice to blog about your shows? I decided to start blogging about TV this past summer. When I noticed how many emails I was sending each week to my family, friends, and co-workers on the subject of TV. Everything from a weekly recap of specific shows to which programs may or may not have been canceled. I figured instead of generating a distribution list for all the fans of “Gossip Girl” and a separate one for “30 Rock” I might as well put all this information in one place.

What’s the best way to tell whether someone is addicted to TV? I would say the same way you would gauge any other addict. If it starts to interfere with other aspects of your life then it has become a full fledged addiction. If you find yourself spending the first hour of your workday online trying to get spoilers for next week’s episode of “Fringe”. Or if you’re skipping your niece’s birthday party because you want to watch the season finale of “Grey’s Anatomy” live then you are an addict.

Is it necessarily bad to be addicted to TV? The name of my blog is You Have No Messages. I always use to tell one of my sisters that if I ever wrote a book it would be called You Have No Messages: The story of my life. The same sister thinks that the vast amount of time I spend watching TV might be the reason for the lack of voicemail I receive. I think it has more to do with getting older and priorities shifting. Instead of going out every other weeknight and every weekend I like to spend more time at home these days. The more time I spent at home the more I learned to enjoy TV. TV has not completely annihilated my social life. All of my friends will tell you that not only am I a walking TV Guide but that I also throw the best parties this side of the Mississippi. I feel my life is well balanced. If TV consumes all of your life then I would say it is a bad thing.

What would someone have to pay you for you to watch no TV/video for a whole week? How much more would they have to pay you to get you to promise not to go back after the week is over and catch up on your shows via DVR or online?  I’ve thought long and hard about this one. There are a few different variables I have taken into consideration when determining my answer. If the week is during November or February (two out of three sweeps months) the amount would be $5,000. If the week takes place any other time with the exception of May, the amount would be lower, $1,000. It would take an additional $1,000 in both situations in order for me to not be able to go back and catch up. As for the month of May I’m going to have to say now way no how. Not with the possibility of missing an excellent season finale. I thought back on episodes that I could have possibly missed in years past such as  The Gift from “Buffy The Vampire Slayer,” The Telling from “Alias,” Everyone’s Waiting from “Six Feet Under,” or Leave It to Beaver from “Veronica Mars.” I would have never forgiven myself if I had only had a verbal recap of any of these episodes instead of getting to witness them myself. Who am I kidding for a cool million I would practically do anything.  

There are many gems in Xochitl’s story. One of the most telling tidbits is that she knows the names of the episodes she’s referring to. At a more intriguing level, what she says about balancing life and TV is particularly important. Contrary to the image of the couch potato sitting for hours on end in front of a flickering screen, today’s TV addict is an engaged, socially connected viewer who wants to talk about TV with others and engage them in the conversation. Xochitl is an example of a more empowered addict, a viewer who can veg with the best, yet hang with her peeps at the best parties “this side of the Mississippi.” One tool that helps her do this is the DVR, but the Web also plays a role in not only the viewing but in building the conversation. This may be one addiction that gets healthier as technology improves it.

Does Xochitl’s story resonate with yours? 

Are you addicted to video?

It’s a question that is becoming more and more relevant lately. It turns out that when we are given more ways to watch our favorite shows, we don’t just “time-shift” as so many have suggested. We also time-overload, meaning we watch a whole lot more video than we did before. Nielsen has been showing us over the last two years that as people add DVRs, they end up watching more video per day. ABC and NBC have publicly shared the results of their private research which reveals that as people have the Internet as a way to watch favorite shows, overall viewing goes up.

Face it, America. You are addicted to video.

I’ve tackled the question of why we’re addicted to video in various forums. In some of my conference speeches I’ve discussed the human brain’s preference for moving visual stimuli — it’s a survival mechanism we evolved over millions of years. I got on the phone the other day with a reporter who wanted to understand the future of video. Soon she found herself stuck in a heavy conversation about how neurons work. She didn’t expect it to go there, but it does. We are hardwired for video.

For the past few weeks I have undertaken a few experiments on the question of TV addiction. As I’ve posted before, I asked a Web 2.0 marketer, John Johansen, to live without video for a week and blog about it. He did, admitting that it was harder than he expected.

I also put out a call to find self-identified video addicts. Through blogs and emails I invited people to contact me with stories of addiction. I didn’t define addiction (will do that in a later post), but let people self-identify. Turns out people are pretty clear on what addiction means: you trade other important things to get your fix. Here’s a favorite story from a Pepperdine Law School student:

Season 7 of Gilmore Girls – the final season – was having its finale and I was going to watch it with a friend. But I was moving that day too and my boyfriend was helping me move all my stuff to a friend’s. I was supposed to follow him up Malibu Canyon with all my belongings that evening – but opted to stay in Malibu and watch the season finale of Gilmore Girls. My boyfriend pleaded with me to not watch the show and follow him up the canyon – but of course I rebuffed him because this was GILMORE GIRLS – and there was no way I was going to miss this episode. He pouted for the rest of the day – which I just didnt understand why – and went home alone. 

After the airing of the season finale – I drove up Malibu Canyon alone and got a call from my parents. Turns out my boyfriend had called and asked “their permission” to ask me to marry him. He was planning on pretending his car had stalled in one of the scenic overviews of the canyon and propose when I pulled over to see what was wrong. Of course, since I watched Gilmore Girls – I missed his proposal and as a result didn’t get a surprise planned proposal.

A week later he gave me the ring and I tried to reassure myself that this way was so much more romantic and cute than his original plan. But honestly, I had ruined the surprise by being addicted to tv and have always regretted it. And whats worse, he wont ever let me live it down that I chose Gilmore Girls over him.

 I found several other good stories which I will draw from later. But I want more stories like this one. Are you an addict? Add your story of how much you love video and the lengths you have gone to get a fix.