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Dear CMO: The exigencies of rapidly evolving markets often create strange bedfellows. One look no further than the wild west of the entertainment industry to see as many examples as you care to read.
Apple suggests DRM-free music to the major labels, which are desperate to find a way to save themselves from oblivion. We’ll see what happens there. But the really interesting land grab is over on the studio side. There is an avalanche of soon-to-be-released video on demand (VOD) offerings ready to offer us more ways to watch the same movies as we do today.
Which leads me to this interesting piece of news that hit the wires the other day that made me almost spit my coffee across the kitchen. Did you read the piece about BitTorrent adding MGM’s massive film library to their new and remarkably legit BitTorrent Entertainment Network?
Am I the only one who had pictures of smiling corporate types standing next to the Northern Alliance somewhere north of Kabul? Aren’t these the same guys who, um, already offer just about every film already? For free?
I once did a bit of pre-project reconnaissance for a client in the storage industry, one of whose targets was the “BitTorrenter.” Try to get a “BitTorrenter” on the phone. I dare you. I had friends tell me their siblings were big users with “massive amounts of stuff they’ve downloaded… gigabytes of stuff,” only to have said brother or sister assume a pseudonym and deny everything, including being related to the sibling who fingered them.
You see, there are illegal aspects to unfettered peer-to-peer downloading which makes many users reluctant to have discussions with people they don’t know. If I was a studio head, wouldn’t these guys be the first people I’d want on my team?
Well, my answer would be “yes” and “no.” It’s more complicated than first blush might suggest, isn’t it? If you can cast BitTorrent in a legitimate light (“… if you can just see our new allies in the Northern Alliance as friends and not mujahideen, Mr. Rumsfeld…”) and cajole them into legal activity, isn’t that a good thing?
And if we can’t, is piracy such a bad thing? I recall a great case study involving our BitTorrent friends and Battlestar Gallactica’s launch in Australia that suggested piracy did more to drive viewership than all the ad campaigns in Oz. I wrote about this back in December.
If MGM and BitTorrent can get along, what’s next? Will we see Cisco and Hwa Wei collaborating on new router designs for China? And if we’re comfortable with our new friends in the War on Piracy, why does this make me so itchy?
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Comments
Stephen - Like you, I'm not sure what to make of this. The great Dr. Peter Venkman might give us an idea of what to expect: "Human sacrifice, dogs and cats living together - mass hysteria!"
Posted by: Cam Beck | 03.01.07
"And if we can’t, is piracy such a bad thing? I recall a great case study involving our BitTorrent friends and Battlestar Gallactica’s launch in Australia that suggested piracy did more to drive viewership than all the ad campaigns in Oz."
All you have to do is look at what happened with Radiohead's Kid A album. Back in 2000, when the music labels were busy organizing their lawsuits that would crush Napster, Radiohead, a band that had never enjoyed anything close to mainstream sales success, had their upcoming album leaked onto Napster, I believe in May, for an album that was going to hit the stores in the fall. What happened was that an entirely new audience was exposed to the band's music via Napster, and they loved it. And what's more, they had several months to tell others that the loved it, thus building more buzz for the album. When Kid A hit the stores, this band called Radiohead, who had never enjoyed ANY type of mainstream sales success, and whose album had been downloaded millions of times from FREE off of Napster, saw Kid A OPEN as the #1 selling album in the country, according to Billboard.
Look at what happened to CBS' viewership after they started seeding clips on YouTube last fall: they won the November sweeps.
One of the great things about YouTube is that it is actually giving media companies the ability to see that opening up the distribution to their offerings results in more sales.
Suing your customers aint the way to go.
Posted by: Mack Collier | 03.01.07
Stephen, I think that majors, both in the movies and music industry, still had not catch how to handle the issue of piracy. The lawyers' way is a short term reaction and can't be profitable in a medium/long term. That said, I see that all the troubles of YouTube opened a new scenario in which BitTorrent guys try to put their feet. In the name of money, we will probably see new unexpected alliance take place quite soon.
Posted by: gianandrea facchini | 03.01.07
Interesting situation here. MGM and a few others have literally embraced this tar baby, BitTorrent, and may not ever be able to extricate themselves. And maybe in entertainment, that's OK.
The Battlestar Gallactica case, plus Mack's example above, show interesting proof points for "sampling" as it relates to entertainment -- I don't see this showing up in software, though. I've never come across a software company saying, "sure, we're giving it away for free... when it hits the shelves, it'll sell like hotcakes," because it just doesn't happen that way in that business. Why not, I wonder? Why do we watch pirated movies or listen to pirated music and then buy it when it hits the shelves, but not software?
Perhaps Adobe and others have the right idea by designing certain products to be distributed for free while having others available only at a premium price. Interesting psychology, though, seeing the difference between these two markets.
Posted by: Stephen Denny | 03.01.07
[Perhaps Adobe and others have the right idea by designing certain products to be distributed for free while having others available only at a premium price.]
I think the jury is out whether this approach is working for the online New York Times, and their premium "Times Select" offerings for subscribers.
The Wall Street Journal is doing — and has since the beginning — a fine job of getting people to pay for their online content.
Posted by: Roger von Oech | 03.02.07