Return Of The Gatekeeper

Making content available on-demand was supposed to put the consumer in charge. Armed with “personalization” tools and backed by social media filtering the viewer/listener/reader would be king, usurping the power of traditional gatekeepers.

But a funny thing is happening on the way to the throne: consumers increasingly are inviting gatekeepers back into the realm, albeit not necessarily the same ones they had overthrown.

guard-buckhm-palace-shst_w_755Speaking at MIDEM this week, MIDiA analyst Mark Mulligan reported that “The percentage of people who make their own playlists on streaming has dropped by 10 percentage points in just one year,” said Mulligan. “The main playlists which people are using are the playlists which are being pushed to them,” by the streaming services, or in some cases by record labels.

Citing data provided by Spotify, Mulligan noted that in December 2014, Spotify’s Today’s Top Hits playlist had 2.3 million followers and generated 35.4 million streams per month. By April 2016 it had grown to 7.8 million followers and was generating more than 120 million streams a month. Read More »

We’re All Netflix, Now

On April 10th Showtime will make all 13 episodes of its new Steven Soderbergh series “The Girlfriend Experience” available on its VOD platform in a single, binge-ready dump. So too will Starz, with all six episodes of the new Andrew Dice Clay comedy “Dice,” as the pay-TV networks increasingly ape the strategy pioneered by Netflix.

They don’t have much choice. Bingeing is how Americans watch TV now. According to Deloitte’s latest Digital Democracy survey, 70 percent of viewers admit to binge-watching, defined as viewing three or more episodes in a single sitting, and one in three say they binge at least once a week. The average number watched during a single binge, fact, is an astonishing five episodes, which in the case of a drama series could easily eat up four or five hours. Millennials in the survey average six episodes per sitting.

We binge-watch so much TV in fact that we’re making ourselves anxious, depressed and lonely, according to a separate study by researchers at the University of Toledo. Yet our appetite is only growing. According to Deloitte, all age groups in its study binged more in 2015 than they did in 2014.

The seemingly irresistible trend, however, poses a dilemma for traditional linear networks. Making new series or seasons available for bingeing risks undercutting primetime ratings. Read More »

Why Sean Parker’s Screening Room Could Succeed Where Others Failed

Efforts to shorten the theatrical window by enabling early in-home availability of movies have a poor track record in Hollywood. DirecTV’s effort in 2011 to offer movies in-home 60 days after their theatrical release for $30 quickly foundered, despite the support of four major studios, largely because the studios, fearful of retaliation from theater owners, didn’t shorten the window enough to persuade consumers to shell out the high ticket price. Digital HD, heavily promoted by 20th Century Fox, offers movies in home three to four weeks before their DVD/Blu-ray release for a premium price, but support from other studios has been spotty and DHD has had negligible impact on consumer behavior.

home-theater-lightingEfforts to eliminate the exclusive theatrical window altogether, such as Netflix’s insistence on making its original feature films available on its streaming service the same day they’re released in theaters, have been met with a near total freeze out by theaters, and no major studio has dared try.

It’s no surprise, then, that the new proposal from former Napster co-founder Sean Parker and Prem Akkaraju to offer movies in-home day-and-date with their theatrical release for $50, through a platform called The Screening Room, has sparked controversy in the Hollywood. Art House Convergence, which represents 600 independent theaters, released an open letter to the industry decrying The Screening Room concept.  “We strongly believe if the studios, distributors, and major chains adopt this model, we will see a wildfire spread of pirated content, and consequently, a decline in overall film profitability through the cannibalization of theatrical revenue,” the letter said. “The theatrical experience is unique and beneficial to maximizing profit for films. A theatrical release contributes to healthy ancillary revenue generation and thus cinema grosses must be protected from the potential erosion effect of piracy.” Read More »

More Than A Game: What TV Can Learn From Twitch

One of the enduring frustrations of would-be TV innovators, famously voiced by Steve Jobs back in 2010, has been the inability to integrate live, linear and on-demand content into a single, easy-to-navigate platform. “The problem with innovation in the TV industry is the go to market strategy,” the late Apple CEO told the AllThingsD conference that year. “The TV industry has a subsidized model that gives everyone a set top box for free. So no one wants to buy a box..The only way that’s going to change is if you tear up the set-top box, give it a new UI, and get it in front of consumers in a way they’re going to want it.”

As discussed here in previous posts, the Federal Communications Commission is currently considering a number of steps to promote greater integration, from redefining who qualifies as a multichannel video programming distributor to mandating downloadable security for set-top boxes, but none of those steps — or even all Forza-Forizon-2-Twitchof those steps together — would solve all the problems or resolve all of the commercial and technical conflicts that make seamless integration so challenging today, and in any case could be years down the road.

There is one corner of the media business. however, where the integration of live, linear and on-demand content is actually happening today: games.

Over the weekend, the hugely popular site for live-streaming game play, Twitch, announced a number of new features during its first annual TwitchCon in San Francisco, including the ability to upload videos directly to the Twitch platform. Up to now, Twitch channel owners have needed to stream content first and then incorporate the archived stream into their channel as on-demand content. Now, users will be able to upload video directly to the platform without having to stream it first. Read More »

Meerkat and The Dawn of Sender-Side VOD

There are plenty of live-streaming platforms out there for anyone who wants to set up their own broadcast on the cheap. But few have caught on as quickly or generated as much buzz as Meerket, the barely month-old streaming app that rides atop Twitter.

meerkat_logoOr at least it did until Friday, when Twitter abruptly cut off Meerkat’s ability to easily access users’ list of followers to automatically alert them to when a new “Meerkast” is in progress.

The move was neither unprecedented for Twitter, which has never been overly developer-friendly, nor particularly surprising insofar as Twitter announced its acquisition of Periscope, a competing live-streaming app, reportedly for $100 million, on the very day it shut the door on Meerkat.

So much for platform neutrality.

Read More »

Selecting outputs at Best Buy

The Media Wonk got a fair amount of feedback on a post from last week on the controversy over the MPAA’s petition to the FCC for a waiver on the rules on selectable output controls. Some readers liked my analysis; others were something less-than convinced. I commend both to this feature article on Best Buy in the current issue of Bloomberg BusinessWeek (nee BusinessWeek), which provides a very useful perspective on the same phenomenon I was trying to get at in my SOC post, namely, the complex and conflicbest-buy-storeting business relationships that retailers, content owners and device makers increasingly must navigate in the digital age, and how that might manifest itself in their strategic moves.

The thrust of the piece is that Best Buy, as the last CE retail giant standing since the liquidation of Circuit City earlier this year, is starting to flex its muscles with vendors to influence product design, merchandising strategies, customer service and other aspects of their business as it looks for ways to fend off new competition from the likes of Wal-Mart and Amazon. Read More »

Selectable outputs, or selectable logic?

The long-running battle at the Federal Communications Commission over the MPAA’s petition for a waiver of the rules banning the use of selectable output controls on devices that can receive TV signals is turning into a textbook example of how regulation can distort business decisions. I almost hate to write that sentence because I don’t want to sound like some sort of Cato Institute ideologue with a jones for deregulation. But the SOC debate has become terminally absurd.

And petty. Just before Thanksgiving, the MPAA filed an ex parte brief with the commission in which it called Public Knowledge legal director Harold Feld, in so many words, a liar.

First and foremost, MPAA would like to respond to certain Public Knowledge statements about the waiver request that, quite frankly, constitute blatant untruths. MPAA appreciates that different parties can reach different conclusions about matters of public policy. Indeed, MPAA has welcomed the opportunity to engage with Public Knowledge and its allies in an honest and open debate about the merits of the SOC waiver request. Regrettably, however, Public Knowledge, apparently having determined that its arguments on the merits have failed to gain traction with the Commission, has resorted to outright distortion and falsehoods. In particular, MPAA believes that the Feld Video Blog contains statements that are simply and irrefutably untrue.

 That drew a sharp retort from PK president Gigi Sohn, and a melodramatically “more-in-sorrow-than-anger” reply from Feld in a subsequent video blog post.

fcc-sealFor those joining us late, the MPAA’s petition has been pending before the commission for more than two years, but was victim of a pocket veto by the previous FCC chairman, who refused to put it before the other commissioners for a vote. With the Barack Obama Administration now in charge, however, there is a new FCC lineup and new chairman, and the studios have tried to capitalize on the changes to breathe new life into the old petition.

In very broad strokes, the MPAA argues that its member companies would like to introduce a new high-definition video-on-demand window for movies immediately following the theatrical window and before those movies are released on DVD and Blu-ray. The new window, according to the MPAA, would allow consumers to watch movies on their home theater systems earlier than they can today based on the current sequence of rlease windows, which generally doesn’t make movies available for home viewing until three to six months after their theatrical release when they come out on DVD. But the studios would only do that, the MPAA argues, if they’re allowed to remotely disable any analog outputs on receiving devices by inserting the appropriate “flag” into the VOD signal.

Why? Because analog outputs on HDTV sets and other devices do not support digital copy protection encryption like the High-bandwidth Digital Copy Protection (HDCP) system supported by HDMI and certain DVI connections. The studios fear that permitting their “high-value” content to travel over unprotected outputs would allow users to record the movies and then redistribute them over the Internet.

Public Knowledge and other opponents of the waiver argue that allowing the studios to turn off analog outputs would “break” as many as 25 million devices by preventing them from receiving or displaying the content and and is therefore anti-consumer. (There are also technical arguments over whether the MPAA has met its legal burden of proof to qualify for a waiver and other super-wonky issues that even The Media Wonk won’t delve into here.)

Here’s the problem: Because the debate is occuring in a public-policy context the MPAA is playing what it considers to be its best public-policy card: fear of piracy. We would only be too eager to offer this shiny new benefit to consumers, the studios say, if  we could just do something about the terrible scourge of piracy. But there’s a far more compelling business case for granting the SOC waiver that the studios are not making.

For its part, Public Knowledge is offering counter-arguments that, while they may address  the public-policy questions at issue, are utterly naive as to the business considerations distributors face when releasing a movie.

The studios know perfectly well that turning off the analog outputs for the proposed VOD transmissions will have little effect on the broader piracy problem (or, I should say, some people at the studios know that, some of them really are crazy). The reason they need to do it is to give themselves cover with Wal-Mart and other large DVD retailers who would raise holy hell over a new “unprotected” window ahead of theirs. Of course, they, too, know the piracy argument is a feint. But they would nonetheless use it to squeeze the studios on shelf space and price at a time when the studios can ill-afford to lose more DVD business.

Theater owners would also squawk, of course. But the studios have no doubt calculated that there is nothing the theaters can really do about it. They need Hollywood’s movies far more than Wal-Mart does.

Cable operators, who would benefit from the new window, have predictably come out in favor of granting the waiver. But they, too, would be all too happy to turn around and use “piracy” during the new window to squeeze the studios on licensing fees in the traditional VOD window. It’s business, after all. not a morality play.

And that, ultimately, is the flaw in Public Knowledge’s case against the waiver. To argue, as it has repeatedly, that the fact that a few independent distributors like Magnolia and IFC have released movies on VOD ahead of their theatrical or DVD release proves that piracy is not a real problem, and that the studios could release movies the same way now, is simply a non sequitur. Independent distributors are in a different business from the major studios. They do not have business relationships with Wal-Mart and Best Buy to protect.

family-watching-dvdAs things now stand, routinely releasing movies on VOD ahead of their DVD/Blu-ray release would not be a sound business decision for a studio to make, given all of the considerations that must go into the distribution of movies, and no business person answerable to shareholders is likely to make it. Would the use of SOC change that? It might, but not because it would do anything to prevent piracy. It might because it would give the studios a tool to manage their business relationships through a period of technological and industry transition.

That may not sound very noble (or compelling to regulators), but I don’t find it particularly nefarious, either. Making and distributing movies is a business, and expecting that it would operate on something other than business principles is absurd.

For similar reasons, I don’t find the “breaking 25 million TVs” argument very compelling, either.

Public Knowledge and the Consumer Electronics Association complain that “allowing the MPAA to shut off analog outputs will leave over 20 million TV sets and downstream devices like Slingbox unable to receive the MPAA’s content.” That may be so, but it’s also so that NO TV sets or downstream devices can receive the MPAA’s content in the proposed window as things now stand. And they’re simply not going to start receiving it just because Public Knowledge and CEA think they ought to be able to because it’s not in anyone’s economic interest to let them.

Granted, it may be that the likely consumer benefit of the new window is not a sufficient trade off for changing the rules that have governed TV receivers up to now. But “no one should have it if some people can’t” is not an argument to that point one way or another. In fact, it’s not really an argument at all. It’s an attitude.

And it’s not a sound basis for either business or public policy decisions.