Posts from Netflix


Yesterday as I was getting off a plane, I saw this tweet on my phone and replied to it:

Jason probably tweeted that news at me because of the HBO No Go post from last August in which I expressed my exasperation that I could not airplay the HBO Go content from my iPad to my TV via  AppleTV. So that nuttiness has been addressed by HBO. Nicely done HBO.

But there's more to ask of them. It would be nice if the HBO Go app came pre-installed on connected devices like AppleTV, Roku, Boxee. It would also be nice if HBO Go supported AllShare so Samsung users could have the same thing that Apple users have.

HBO’s Eric Kessler said yesterday at an AllThingsD event that "Our long-term goal for Go is to be on all devices and all platforms." That is exactly right. That's what Netflix has done for years now and that is what HBO needs to do.

Slowly but surely HBO is evolving to being more like Netflix and that's a good thing for its subscribers. Now if we could only subscribe without having to go through a cable company. But we've already talked about that this month and I don't expect that to happen so quickly for all the reasons we discussed in the comments to that post.


HBO vs Netflix

Business model matters.

The quote of the week for me was this one from Ted Sarandos, Netflix’s chief content officer:

The goal is to become HBO faster than HBO can become us.

Netflix will have to produce shows that are worth watching. HBO has proven it can do that over and over again for years. Netflix has not.

But Netflix allows you to have a direct relationship with them and use your account on almost every connected device I can think of. HBO requires you to have an account with a cable company and then even if you do, it is hit or miss whether you can use their service on the device you want to.

That's what I mean by business model matters.

HBO is experimenting with the Netflix business model outside of the US. They have a streaming service in four markets in Scandinavia that looks a lot like Netfix. But they don't seem eager to bring that to the US.

HBO isn't going to adopt the Netfix business model in the US without a strong reason to do so. If Netflix is successful with their model and proves that it works, maybe that will be the strong reason to do so.

So, if you want an HBO that looks like Netflix, support Netflix' efforts to look like HBO.


Fast, Fair, and Frictionless Content Licensing On The Internet

Yesterday we talked about some industry self regulation that the tech/internet industry could put in place in respecting copyright on the Internet. Today I would like to talk about some industry self regulation that the content industry could do in support of the same issue.

If you think about what it would take for the "three engineers in a loft" to get the service they build from the greylist to the whitelist (you need to read the post I linked to above to understand this context), they would need to get fully licensed to distribute the content in their service. That requires getting deals done with all the content owners.

Today that is hard if not impossible. I have seen this first hand many times. The content owners don't make it easy for new services to get licensed and in many cases they simply refuse to provide the licenses. This does a number of things.

First and foremost it stifles innovation because the best user experiences and business models come from rapid fire iteration and hyper competitive market dynamics.

But it also means that users find it difficult to find the content they want to consume legally and so they head off to the black market.

And it also means that two way, highly interactive services where the users are curating, posting, and engaging with content are problematic because they are subject to copyright infringement claims that cannot be easily resolved with instantaneous real-time licensing of the content that users are posting.

A friend of mine who does a lot of business with the content industry sent me an complimentary email about yesterday's post. I replied with:

I like the term copyrespect that someone used in the thread

Two things we need on the net

1) a culture of copyrespect

2) a fast fair frictionless licensing system that isn't based on propagating artificial scarcity

I don't think you will get one without the other.

Let's take Game Of Thrones. If you want to watch it on your iPad, you basically have one choice. You get the HBO Go app, you authenticate with your cable provider, and then you can watch it to your heart's content. But what if you don't have a cable provider. Well then you are out of luck.

That's not ubiquity and that is not fast, free, frictionless licensing on the Internet. If HBO were to make Game Of Thrones available to Hulu, Netflix, and any application that "three engineers in a loft" build on a standard set of licensing terms with instant self serve licensing (like Soundexchange), then there would be no need to go to Google or Bit Torrent and look for a pirated copy of Game Of Thrones. It would be all over the Internet legally and at a fair price. I am certain that most users would respond positively to such progress.

As hard as it is going to be to get the tech/internet industry to self regulate by building in blacklists and whitelists into search, social media, and other web and mobile services, I think it will be even harder to get the content industry to build instantaneous real-time self service licensing systems for their content. But that is what is going to be needed to create a culture of copyrespect on the Internet and I encourage them to get on with it.


Scarcity Is A Shitty Business Model

The Gotham Gal has been under the weather this weekend. Last night we made soup for dinner and decided to sit on the couch and watch a movie and go to bed early. After dinner, we fired up Boxee and checked out Netflix. Nothing good there. Then we fired up the Mac Mini and checked out Amazon Instant Video. Nothing good there. Then we went to the Cable Set Top Box and checked out movies on demand. Nothing good there. Frustrated and unwilling and uninterested in heading to a "foreign rogue site" to pirate something good, we watched a TV show and went to bed.

Making movies is expensive and risky. I totally get that the studios need to make a lot of money on those movies to make their business model work.

But denying customers the films they want, on the devices they want to watch them, when they want to watch them is not a great business model. It leads to piracy, as we have discussed here many times, but more importantly it also leads to the loss of a transaction to a competing form of entertainment.

We would have paid good money to watch Sherlock Holmes or Tinker Tailor Soldier Spy. But it simply was not an option. So we went with a TV show that was free and then went to bed.

I am sure there was a time when scarcity was a good business model for the film industry. And I am sure that many of the leaders of the film industry came of age during that time. I understand their muscle memory in terms of the scarcity business model. But restricting access to content is a bad business model in the age of a global network that costs practically nothing to distribute on.

I've argued this point many times with film executives. They insist that they need their windows. They argue they need to manage access to their films to extract every last dollar from the market. That just doesn't make sense to me. If they went direct to their customers, offered their films at a reasonable price (say $5/view net to them), and if they made their films available day one everywhere in the world, I can't see how they wouldn't make more money.

I understand that many participants in the broader film ecosystem might do worse under this model. And I understand that moving to such a model will cause great disruption and pain to the broader film industry. But the studios themselves are likely to do better in a direct distribution model where they reach a broader market at lower effective prices to the end customer. This is what happens in digital distribution. Prices come down, markets expand, customers see lower prices and broader availability. Producers do better. Everyone else does worse.

But for some reason the fim industry doesn't want to move to the new model. They want to stick with scarcity. So they lost a transaction last night. And they lose transactions every night, to piracy, to competing forms of entertainment, and possibly to apathy brought about by frustration. Such a shame.