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.

Joost goes flash

In yet another sign of the online video times, Joost today announced it would do Flash, Web-based streaming online at joost.com rather than relying on the proprietary, P2P client it launched back in early 2007.

My take: this is the right thing for Joost to do to match the friction-free experience sites like Fancast.com, Hulu.com, and nearly everywhere else is able to provide. Requiring that people download and run a separate application (not just a plug-in, as ABC.com requires) just isn’t consistent with the ease that online video has come to offer. Sure, it made sense in early 2007 when most top content wasn’t available online anyway. But that all ended when Hulu launched.

Furthermore: the days of the proprietary video player are gone. Sorry to Miro, Vuze, and the original Veoh player. There’s no need for a dedicated video aggregation application. the only chance for such a player is in the download for offline play world, which is where iTunes sits.

Adobe Media Player, a player designed to allow the downloading of streaming video for offline playback, is going to struggle in the balance for a while as people so excited about streaming don’t see the need for it yet. One of two things has to happen there: either people will eventually see value in offline playback, or wireless broadband will become so ubiquitous that we’ll never need untethered video playback. All depends on how fast Adobe can move the ball forward and convince big content providers to release their content for secure offline playback.