Sports Leagues Figure Out Build It Online, And They Will Come

from the somebody's-paying-attention dept

We've mentioned several times about how sports leagues are trying to crack down on unauthorized web streams of their games. It's a misguided effort that fails to recognize the opportunity here: people watch these streams because they generally don't have other options. Largely, they're not cheapskate pirates, but underserved customers. With that in mind, it was nice to see a story in the WSJ a few days back talking about how some American leagues' subscription streaming services are enjoying success. They've figured out that by offering users a better service than the pirate streams, they can get them to pay subscription fees. This gets to the heart of so many different industries' battles against piracy: it's not a technological problem that exists because there are inadequate locks for content, it's a business problem that exists because many companies are too complacent to develop services that deliver consumers content they want in a format they desire.

Filed Under: sports leagues, streaming, websites

Blame Game Continues: Now It's Online Streaming That's Killing Music

from the oh-come-on dept

Every new entertainment innovation has resulted in hand-wringing by the existing industry about how it's going to kill the business. Player pianos? Evil. Would destroy the sheet music industry. Recorded music? Would send musicians to the poorhouse and end live music. Radio? Would destroy the recorded music business. Home taping? Killing music. The VCR? The "Boston Strangler" to the movie industry. Notice a pattern? Every single one of them, in actuality, helped grow a market much bigger than that which preceded it. Yet, for some reason, no one in the industry (or, all too often, among the press who repeat their complaints) seems to notice this.

So here we have Business Week -- usually less susceptible to these sorts of claims -- repeating totally unsubstantiated arguments from music industry insiders that it's now legal online streaming services that are killing the music business. The fact that most of these services are really little different than traditional radio (which helped build up the massive recorded music industry) seems to zip right by without mention.

The problem is that the author of the article, and most of those quoted in the article, incorrectly seem to think that the only way the music industry makes money is in the direct sale of music. Thus, the fact that people listen to streams for free (or small royalties) is somehow seen as "bad." The fact that radio works on basically the same principle isn't even touched. The fact that there are tons of other ways for musicians to make money -- and for many of them it helps to have more people listening to their music via these services isn't even the same area code as the article.

Instead, the entire article seems to be based on a complaint from the guy who heads the National Music Publishers' Association , whose business has always been predicated on the house of cards of music licensing. Every time a new technology comes along, the publishers demand a new level of licensing. Right now they're pushing hard for yet another duct tape solution: adding another license for such online streaming services, and Business Week played right into their hands with a non-critical piece describing the "issue" in the exact terms they want people to be thinking about.

Filed Under: business models, licenses, music, recording industry, streaming

Sports Leagues Missing The Point About Fans Streaming Live Games Online

from the foul-ball dept

Just a few weeks ago, we were talking about sports leagues freaking out over online streaming sites like Justin.tv destroying the value of their broadcast rights. However, in that discussion, we noted that these sports leagues seemed to be missing the point: the reason watching such streams online is popular is that the sports leagues have failed to adequately serve the needs of fans -- often falsely believing that online streams of games somehow take away from live attendance or TV viewing. Yet, now the NY Times is continuing this story, highlighting how various sports leagues are trying to crack down on such online streaming. About the only "good" thing in the story is that many of the leagues say they've learned from the RIAA not to sue people, but just to send cease and desist letters. That's a start, but it still misses the point -- which the NY Times contributes to by falsely claiming that anyone streaming a game live online is "stealing."

The only reason such streams are being placed online is because the leagues themselves have failed to adequately provide the video in a way that allows fans to conveniently watch the games. These unauthorized streams aren't "piracy" or "stealing." They're the market telling these leagues to shape up and improve their product. And, while the article incorrectly suggests that unauthorized streams have no ancillary product for people to buy (and thus are a true "loss"), that ignores pretty much all reality around sports fandom. If a sport or a team can build a strong fanbase, then there are tons of things that can be sold to that fan -- such as tickets to live events, uniforms, cards, memorabilia and much, much more. The real issue should be about trying to get and capture more fans -- because true fans will spend a ton on a sport or team that they love. It's disappointing that the various sports leagues mentioned in the article are too short-sighted to recognize this, but it's even more annoying that the NY Times reported their position as if it were factual, without any quotes from those who would point out how wrong the leagues are in their thinking.

Filed Under: sports leagues, streaming, websites

Now Blockbuster Wants To Sell You A Proprietary Box So It Can Sell You Streamed Movies

from the broken-record dept

Stop us if you've heard this before: a company wants to sell people a box so they can pay to download movies. Sound familiar? That's because plenty of companies have tried it before -- all with little success. Consumers haven't shown much interest in buying service-specific hardware so they can buy movie downloads from a single provider for a number of reasons: poor selection of movies, the cost of downloads, the cost of the hardware, download times, and lack of portability to name a few. What's amazing is that so many companies keep lining up with their own efforts, without ever really fixing any of the problems, as if time will solve them. Now, it's Blockbuster's turn, as it's announced a $99 box that can access $2 movie downloads. Blockbuster says its service is different than all the failed ones before it because it has "more recent" movies. Netflix's streaming service has 12,000 films and TV shows -- less than 10 percent of its collection, thanks to Hollywood licensing schemes. Blockbuster has a whopping 2,000. But they're newer, they swear. So not only has Blockbuster failed to solve one of the problems of these services (narrow selection), they've exacerbated it and are calling it a feature. Now that sounds like the path to success.

Filed Under: movies, settop box, streaming, videos
Companies: blockbuster, netflix

Lala Sings Yet Another Tune

from the well,-let's-see... dept

Over the years, one of the companies that we've talked about here that has been full of hyperbole, but almost no substance, has been music startup Lala. It's gone through many different incarnations, each coming with grandiose claims that weren't supported by any reality. The amazing thing is that every time it made an announcement, the mainstream media rained down praise on the company, as if it were the savior of the music industry. For example, when it first launched, it was a near exact clone of an already widely failed business model: having people pay a dollar to trade their used CDs. Yet, the mainstream press treated the company like it was a great new concept -- despite the fact that a bunch of dot coms during the bubble had tried and failed to do that, and the company PeerFlix was already trying (and failing) to do the same thing in the DVD space. The press was so bought into the concept of Lala, that the NY Times even included the heavily venture funded, for-profit company in a story on companies that didn't want to profit (seriously). Then the company got lots of press by claiming it would donate 20% of its profits to a charity for musicians. But what about the claim that it didn't want any profits? If that were true, what profits did it plan to give away (and why only 20%)?

Either way, not much came of the CD swapping business, and last year, the company totally changed its business model, instead offering up free streaming music, insisting that it was ready to spend $140 million on those streams (despite the fact that, as far as we know, the company had only raised $9 million). The business model was apparently to lose money on every stream, and then get people to buy un-DRM'd music downloads instead. Except that, once again, the company was exaggerating. The non-DRM turned out to be a different kind of DRM, and as for that non-existent $140 million the company was ready to spend? Well, apparently it never showed up because the company shut down the service just a month later.

So, forgive us for being a bit skeptical whenever the company roles out a new announcement, and the press rushes to write about it. But, here we are, with Lala's latest business model being announced. At least, this time, much of the press coverage acknowledges Lala's ever-changing business and expresses some amount of skepticism.

On the whole, though, it's new idea sounds better than previous versions, at a first glance. The idea is to set up something of an online iTunes, with a few interesting features. For example, you can listen to any song in its catalog once for free. After that, you can "buy" it for only 10 cents. The problem is that you're only buying access to a stream of the song, rather than actually buying the song. So, the song itself goes in your online music player, and can then be accessed and played from any web browser. If you then want to buy an MP3 version, it costs another $0.79. On top of all that, apparently, you can download an app that will automatically add all of the music you currently have (whether legally or illegally obtained) to the online app. I tried to download the app and received an error, so I have no idea if it actually works. Update: Got the download to work and scanned my collection. It recognized significantly less than 50% of my music, though that may say more about my musical tastes than about Lala. Also, I specifically told it not to upload my music, and it is doing so anyway. That's not very comforting.

There are a few notable things here. First, getting a bunch of record labels (both majors and indies) to agree to a 10 cent price for anything is a first. Second, getting the industry to agree to a system for "unlocking" songs that people already had (even ones they downloaded through unauthorized means) is also quite a feat. In the past, the RIAA has fought vehemently against such systems, such as when it sued the original MP3.com. If the system works, I could see it as a useful way of syncing the music I already have to an online player -- and if it actually works well, it's possible that it could make sense to then purchase other tracks that way. But there are a lot of ifs involved in that process, and initially, many people might just try to use it as a backup/virtual iTunes, meaning they won't buy anything new from it, which would quickly drain Lala's remaining bank balance, without bringing in much revenue. A Business Week article notes that the company only has $3 million left in the bank, which isn't very much unless it can raise another round.

One other point. That Business Week article concludes by suggesting that Lala's success may come from the fact that it's just trying to sell music, noting that it's about time the focus was just on selling the music: "An approach that's all about selling music. Not iPods, and not ads. Just music." I can understand why someone might think that makes more sense, but it's unlikely to succeed. Because of the lack of marginal cost on music, there will always be a downward pricing pressure. Therefore, focusing just on selling music is a dangerous business model. For instance, even if all music is free, Apple's going to make good money selling its scarce iPods. But if more and more musicians decide to offer free music, then Lala may need to find yet another business model to stay in business. It sounds great to focus on "just selling music" but the economics suggests that doing so is a bad business proposition.

Filed Under: locker, online music, streaming
Companies: lala

Has The Recording Industry Given Up On DRM For Streaming Music?

from the would-be-good-if-true dept

We recently mentioned that a big supporter of DRM stopped by in the comments to insist that DRM was here to stay despite plenty of evidence of its gradual decline in the market. Well, now the EFF has pointed out more evidence of the death of DRM. It wasn't that long ago that the RIAA was pushing for laws that would require DRM on any streaming music offering (yes, streams, rather than downloads). Since many streaming services simply stream straight MP3s, it's possible to record them, or to simply copy them from their "hidden" places on your hard drive. Yet, the EFF has noticed that even the big services that have officially licensed music from the big labels are using plain MP3 streaming, which would suggest that even the RIAA isn't insisting that its partners use DRM on streams.

Of course, this raises a second important question. If these services are officially allowed to download MP3s to your desktop, is there anything illegal in then keeping the files? Most of these services work by effectively downloading the plain MP3 into a slightly hidden folder (it's not really hidden, they just don't make it clear where it is). Considering that it's a legal, RIAA-approved service downloading a plain old MP3 to your hard drive, it's difficult to see how they could claim copyright infringement if you were to keep that file, right? Of course, considering how much the RIAA is trying to charge these sites, they may not live all that long anyway.

Filed Under: drm, streaming
Companies: imeem, lala, riaa

And You Thought The Next Generation Video Standards Battle Was Over?

from the we've-got-a-new-one-coming-on dept

If you thought the questions about what technology standard we'd be using to watch movies was settled when Blu-ray won the next generation DVD standards battle, then you're in for a bit of a surprise. In taking nearly half a decade to decide which standard would make it, the DVD camps left open plenty of opportunity for online competitors to start making their moves. The technology for delivering movies online has been rapidly improving. But, of course, what we didn't count on was that it would just create a huge new mess.

Earlier this week, there was all sorts of talk about Netflix streaming movies to the Xbox as part of Netflix's effort to get consumer electronics companies to build in support for Netflix streaming. As we warned when that announcement was made, it's a bad idea for Netflix to focus on a proprietary streaming solution, as it's only going to set up another standards battle. And, indeed, Blockbuster is working on its own such solution. Then, of course, everyone knows that Apple's in the market with the AppleTV. And don't forget Sony, which is selling a special (extra expensive) TV for downloading movies. And, of course, there are countless startups in the market as well.

Oh, and how could we forget Amazon? The company is now announcing its own proprietary online store for streaming movies and TV. This one piggybacks a bit on Sony's awful plan (meaning if you buy that super expensive internet-connected TV, you'll also be able to stream movies from Amazon).

But the end result is a total mess for the entire market, and that doesn't help anyone. All of the players should take a look at how badly the multi-year DVD standards battle hurt the industry. It makes people unwilling to buy certain hardware, as they don't want to be stuck with the "loser" a year from now. What's wrong with coming up with a single standard for streaming movies from any particular service to various TV-connected devices and computers? Then let the different providers compete on actual services provided? That would increase adoption, and let these companies do what they do best, rather than fighting a can't-win battle against too many other competitors.

Filed Under: movies, next generation, online video, standards, streaming, television, video
Companies: amazon, apple, blockbuster, microsoft, netflix, sony

Actors Now Fighting For Royalties That Will Make It Harder For Big Studios To Compete

from the short-sighted dept

After the TV writers' strike from earlier this year, we noted that the final settlement actually was not in the best interest of the writers, even though they got much of what they wanted in demanding royalties from online usage of their content. The actors unions are now gearing up for that same battle, as well, as they, too, are demanding rights over online usage, including royalties and the right to demand permission before any of the works they appear in can be used online. It's difficult to feel sorry for Hollywood producers here -- as they very much brought this on themselves, convincing lots of people that they should get paid every single time any of their content was used. Thus, it's no surprise that the writers and the actors are now demanding the same rights.

However, just as it was wrong for the producers to be demanding a fee for every usage, so is it wrong for the writers and the actors to be demanding such a fee. All it will do is make it much more difficult, time consuming and expensive for any of that content to go online. And that will open up much wider opportunities for other content to go online instead, decreasing the overall value of the content made under these agreements. It's hard to fault the actors (like the writers) for looking out for their short-term interests and demanding the same sorts of things that the producers have demanded of everyone else -- but it's setting up a bad situation over the long-term, where the studios under these agreements won't be able to adapt to the changing media landscape.

Filed Under: actors, entertainment industry, hollywood, online, producers, royalties, streaming, strike

TV Companies Embracing Online Streaming... But Why Not BitTorrent?

from the solves-the-bandwidth-problem dept

The NY Times has an article talking about how the various TV producers are finally embracing the idea of offering up TV shows online, noting that Warner Brothers is now opening the vault and adding a bunch of old shows that can be streamed directly online. This isn't all that surprising. However, what's odd is that the article includes a few complaints about the cost of doing this compared to the revenue, with NBC Universal boss Jeff Zucker complaining "there are streaming costs so you have to make sure you’re covering that." Of course, that brings me back to a discussion some folks had around here over four years ago -- when we started wondering why television companies didn't just use BitTorrent to distribute their shows. If you combined RSS and BitTorrent (which was briefly referred to as "Broadcatching" by Ernest Miller) television companies could make it very easy for people to watch their shows. With RSS, they would "subscribe" to the shows, so as soon as a new one came out, subscribers would definitely see it. It would increase loyalty and remind people to watch their favorite shows. And by using BitTorrent, it would take the bandwidth cost away from the television companies. Unfortunately, the entertainment industry is still too scared of BitTorrent to realize how it can be embraced. So they complain about bandwidth costs for absolutely no reason.

Filed Under: bittorrent, costs, rss, streaming, television, televisions shows
Companies: nbc universal, warner brothers

Who Wants To Watch Full Length Movies On Their Mobile Phones?

from the please-tell-me-this-is-an-april-fools-joke dept

We were just talking about how people don't want to watch broadcast TV on their mobile phones, as the content isn't really designed for people on the go, and all of a sudden Sony thinks that people will want to watch full-length feature films on their mobile phones? Yes, Sony has worked out a deal to offer streaming feature films on AT&T mobile phones starting in May. The films are old films that have already had all the marketing life squeezed to death out of them ("Karate Kid," "Ghostbusters," "Bugsy"). While there won't be a charge to watch them, they will include advertisements (because there's nothing people like better than watching commercials on a tiny mobile screen as they wait to see the ending of "Ghostbusters"). Oh yeah, also, viewers have no control over the timing. It's not "on-demand," it'll just be an ongoing loop. Weren't companies like AT&T just complaining about too much bandwidth being wasted?

Filed Under: content, mobile phones, movies, streaming
Companies: at&t, sony