Probst Tell Survivor Fans: TiVo Doesn’t Help Our Ratings

Feb 17

Posted by Davis in Disclosure - I own stock in co. mentioned, Marketing, TiVo, TV | Comments off

Over the years, I’ve had more than one love affair with a TV show, but no matter how much I’ve enjoyed epic hits like 24, Alias or Joey Grecco’s Cheaters, none of them have been able to generate the level of excitement that I feel when I watch Survivor. I’m not sure if it’s the Machiavellian nature of the show or simply being able to watch an assortment of characters who are so wacky that they end up making Gilligan Island look like the Love Boat, but I love the show so much, that I even organized a home version of the game with my family over the holidays (I ended up getting voted out 2nd for trying to emulate Russell Hantz’s bulldog strategy)

Because it is the number #1 show on my Season Pass priority list, you would think that I would never miss an episode, but every year, Survivor changes the name of their show just a little bit, so that DVR subscribers have to resubscribe to each new season. I’ve gone as far as sending angry emails to the Tribune company (the supplier of TiVo’s guide data), but to no avail.

While this may or may not be hurting Survivor’s DVR ratings, the fact that the producers of the show haven’t noticed has always baffled me. It would be like me changing my RSS feed every six months, so that only my superfans could easily follow my blog. Unless you like languishing in obscurity, this isn’t a very good strategy for retaining an audience or capturing people’s attention.

Recently, Jeff Probst, the host of Survivor, launched a blog to promote the show and other charitable causes that he cares about. On his site, he solicits questions from fans and answers the more common ones. While all tidbits about the show caught my attention, one particular answer jumped out at me. While answering the question of how long will Survivor continue to run, Probst says that the survival of Survivor is dependent upon live viewers because “TiVo doesn’t help our ratings.”

Now Jeff Probst certainly isn’t the first one to appeal to their fans to ditch the DVR, but I think that his pleas are at least a little bit misguided. I’m not sure whether it’s because the producers of the show don’t care about the DVR ratings or the advertisers themselves, but either way I think that there is a lot more value to a DVR viewer then his answer would suggest.

Over the years, I may have fast forwarded my way through more than one commercial break, but I haven’t been able to avoid the product placements that are embedded in the show. I don’t know whether or not the show makes more money from these ads, but I would suspect that they do.

Whether it’s Sears demonstrating the utility of their Craftsmen line of tools or Sprint demonstrating how you can keep in touch with loved ones on their new fancy cell phones, throughout a season there are many times where branding creeps into the show. While some may find this an annoyance, I actually enjoy this type of advertainment and it undoubtedly makes me more willing to spend my money on a brand.

During 2002, 24 introduced several cars during their program and I can tell you with 100% certainty that seeing those cars zip around in that show is what made me seek the out and ultimately buy my Thunderbird. When was the last time anyone could say the same thing about a car commercial?

Furthermore, even though I TiVo the show to watch later, because the program always leaves me wanting more, it drives me to the CBS website where you can view all kinds of clips and interviews that don’t make it to television. Unlike viewers who are tuning into the show online instead of live or on DVR, these clips are additive and include lots of spammy pre-roll ads that I wouldn’t put up with if I didn’t stay excited about the show.

It could be that Survivor is so good that they don’t need to rollover their DVR viewers every season, but by ignoring this opportunity, they are losing the ability to turn their more passive fans into passionate ones. With DVR penetration now exceeding 40% of all viewers, this kind of backwards thinking will ultimately hurt them and the show’s long term chances. So while I can appreciate that a live viewer may be worth more money to the show, I’m going to continue to time shift it, so that advertisers can learn how much more valuable it is to capture my heart for 44 minutes, then it is to hold my attention hostage for 60.

Unable To Raise Money Blockbuster Turns To The Lucrative Used DVD Market

Feb 14

Posted by Davis in DVDs, Media, TV | Comments off


Blockbuster Store Closing
Originally uploaded by Michael Kappel

Poor Blockbuster, even after wiping out their debt via bankruptcy they still can’t seem to figure out the home entertainment market. When he noticed that a nearby Blockbuster was closing down, Dan Rayburn with StreamingMedia.com decided to pop in for some bargains. After a closer look however he noticed that prices for used DVDs were 2 times the cost of a new one at Amazon.

“Apparently Blockbuster doesn’t know what movies rent OR sell for these days. I don’t like seeing a company go under, it puts a lot of people out of jobs, but in this case, as a consumer, one can’t help but be happy to see Blockbuster closing down. Any company that treats consumers as if they are idiots and thinks they don’t already know of other options in the market for getting movies cheaper and in better quality, does not deserve to stay in business.”

Harsh words, but he hits the nail right on the hammer. I get the sense that Blockbuster’s creditors never really took the problems at the company all that seriously. Nevermind having to be crazy to loan them money to begin with, the way they’ve chosen to negotiate is nearly schizophrenic. Even before they went into bankruptcy there were all kinds of mixed signals. Now they can’t seem to figure out whether they want to save the company or just liquidate it for the pocket change that is left. My guess is that they thought they could turn this thing around by raising prices and injecting a little bit of cash, but now that consumers have walked away and are clearly not interested in paying these prices, they are bleeding cash in a bad way.

Fast forward to today and their creditors seem like they are having second thoughts about throwing good money after bad. With each delay, it’s looking increasingly likely that Blockbuster’s bankruptcy will end up getting a sequel (or at least a chapter 11 written.) Blockbuster may try to put what’s left of their company on the auction block, but unless they can prove that they can stop losing money, there’s no way that they’ll get anywhere close to the $300 million they’ll need to survive. My advice for the savvy bargain shoppers . . . hold off on your DVD purchases for six more months so you can take advantage of their real liquidation sale.

FCC’s “Handcuffs” On Comcast Will Allow Internet Rates To Rise At More Than Twice The Average Rate Of Inflation

Jan 19

Posted by Davis in Media, TV | 1 Comment


Screenshot showing Comcast’s current prices in the bay area as of 1/19/2011

I’ve got to hand it to Comcast, it may have taken them a year to get their merger approved, but the “handcuffs” that the transaction will impose may as well have been handed to them on a silver platter. Frankly, I’m less concerned with the monopoly that this will give them on content and more concerned with the monopoly they already have on my internet access, but irregardless of what I think about the merger, the one thing that’s abundantly clear is that the FCC is certainly no friend to the consumer.

Most of the conditions around the Comcast merger seem to deal with content, but the one piece that actually “sounds” like it could help consumers is the requirement that Comcast provide $49.95 stand alone internet access to their customers for the next three years.

On the surface, I like the idea of a price cap, but when you do the math, it’s clear that the FCC has left plenty of room for profits in Comcast’s future.

Because Comcast currently offers stand alone internet access at $40.95 per month (or at they do in the SF bay area), it means that their prices can go up by $9 over the next three years, before they’ll have to worry about hitting the cap. This means that they get to increase rates by 21% to comply with the program.

Ouch, I’m sure that it will be painful to comply with this condition :roll: When you also consider that the price cap is only for 3 years (despite all the other conditions being for 7 years), it means that Comcast could effectively increase rates by 7.3% each year. With the historical rate of inflation around 3.25%, it’s clear that consumers are getting bamboozled on this one.

TiVo Plans To Give 1 Free Month Of Hulu+ To Subscribers

Jan 11

Posted by Davis in Disclosure - I own stock in co. mentioned, TiVo | 2 Comments

I was surfing YouTube and came across an interesting ad announcing the launch of Hulu Plus on TiVo. It appears that the ad was uploaded by the agency that created it, so it’s hard to tell what this means in terms of timing, but one tidbit that I was able to glean from the spot, was an announcement that TiVo will be giving away 1 free month of Hulu+ service when they launch it on their DVR. TiVo offered a similar promotion when they launched support for Rhapsody and while I ultimately didn’t turn into a subscriber, I did enjoy the opportunity to check out the service. The simple fact that Hulu makes their paying customers still view ads, kind of makes the service a non-starter for me, but if TiVo wants to comp me with backstage access, I certainly don’t mind taking a peek. While it’d be nice to see this launch sooner than later, at least some of the details are finally starting to leak out.

In related news, it also looks like the same ad agency uploaded a spot for TiVo’s iPad app to the site. Since TiVo announced on Twitter that this would launch by the end of January, it makes me wonder if both partnerships will be launched simultaneously. We’ll have to wait to see if this is the case, but methinks that we won’t have to wait long to find out.

The Compuservation of Television

Jan 11

Posted by Davis in Disclosure - I own stock in co. mentioned, DRM, Media, Netflix, TiVo, TV | 2 Comments

Gossip Dirt

The more things change, the more things seem to stay the same. Over the last ten years, the internet has redefined nearly every aspect of our lives. Whether it’s how we communicate with old friends, how we get our news or how we do our shopping, I could give you countless examples of how this technology has changed the way we interact with the world.

Thinking back to when dial up was first getting started, it’s not too hard to imagine an entirely different future. You see, when internet service providers first got into the business, they didn’t want to provide unrestricted access to their subscribers. Instead, they wanted to create a massive intranet where they could charge businesses fees to reach their customers.

In this bold new world that they envisioned, people wouldn’t be buying search terms on Yahoo!, they’d buy keywords on AOL. Instead of being able to use any email provider you wanted, they would only allow you to log into Compuserve accounts. This balkanization of the internet almost succeeded and for a time, Compuserve actually ran one of the top airline ticketing services, but eventually consumers saw the forest for the trees and instead of paying $19.99 a month for a stripped down version of the world wide web, they insisted on unfiltered access to the internet.

Once a few consumers started to move, the rest of the industry followed and as a result we now have third party sites like Facebook, YouTube and blogs, that have been able to build an audience on the free and open web.

With online video still coming of age, it’s interesting to see how the same Compuservation is occurring again, except this time it’s around the television. NewTeeVee has a provocative post out where they argue that the smart television providers are becoming the new gatekeepers for content. This is better than having the cable companies control your television, but it’s is still a watered down version of what you deserve.

I don’t care whether we’re talking about TiVo, Boxee, Roku, AppleTV or any of the latest digital video solutions, all of them have placed restrictions (albeit sometimes unwillingly) over how much their customers can do with their hardware.

Some of these restrictions are because of frightened content owners. For example, customers who rent their TiVo from a cable company aren’t allowed to access Netflix because of agreements Netflix made with the studios. Some of these restrictions are because of plain old fashioned greed. Hulu has already had more than their fair share of conflicts from disabling access to their videos on devices that are designed to sit next to your TV and would love to charge hardware companies for access. Some of these restrictions are self imposed. There’s nothing stopping Apple from offering flash on their iPad, except for their own selfish desire to control 100% of their media eco-system.

Whatever the reason, no matter how you slice it, these “internet” enabled devices have all failed to actually bring the internet to your TV. Looking over the headlines from CES, it’s clear that tablets and “smart TVs” were all the rage in Las Vegas this year and while it’s neat to see content companies start warming up to these devices, if consumers are forced to continue at big media’s pace, it will take another 10 years before you’ll be able to access even 90% of the content that’s out there today.

Because of these restrictions, it’s become increasingly difficult for me to endorse these options as adequate solutions. Over the years, I’ve managed to sample and collect a large number of different media streaming devices, but by far, the most powerful digital media device that I’ve ever used was the cheapest laptop that I could buy from Walmart. Maybe I’m crazy and other people don’t actually want access to the internet on their TV, but from the very first moment that I plugged it into my television, it was just as liberating as the first time I used TiVo to free my TV.

Since almost all new laptops include an HDMI port, getting it connected to the big screen was as easy as plugging it into an HDMI cable. Not only will this setup let you access sites like Hulu without big media interfering, but I can also do PC related tasks on a big screen environment. For example, over the holidays I was able to connect to Skype and do a video chat with the entire family on the big screen. I’ve always been a fan of comic books, but the comic book experience is very different when you’re looking at the action at 40+ inches. Do you ever play video games like Axis and Allies? Being able to see the entire war map actually changes your strategy compared to when you have to view troop movements region by region.

The point that I’m trying to make is no matter how progressive and advanced these technology companies are, no matter how many “apps” developers create, until the CE industry and the content industry abandon their gateway plans, you’ll never get to experience everything that the world wide web is capable of.

Instead of navigating this minefield of short sighted media companies and a CE industry that has lost sight of who their real customers are, take my advice and buy an HDMI enabled laptop before you buy the latest and greatest half baked technology product. A cheap laptop won’t necessarily make it easy to record your broadcast television, but if you’re only going to own one media device for your TV, an HDMI enabled laptop will beat the pants off of any digital device on the market today.

Why Are Cable Prices Moving Higher? Because There Are More Of You Than There Are Of Me

Jan 10

Posted by Davis in Media, Netflix | Comments off

Undercover

Looking for more proof that the pay television industry still doesn’t believe that cord cutting is really a threat? Analysts are predicting that those of you who haven’t cut the cord yet are likely to see price hikes across the board in 2011. Given all of the cool digital distractions that are out there, one might argue that this doesn’t make a whole lot of sense, but the reality is that the telcos will continue their rate increases until the higher prices don’t offset the subscriber losses.

Last year may have been a watershed year for the cord cutting movement, but a closer look at the data reveals that most consumers haven’t been as price sensitive as those who quit pay television. As of October 2nd 2010, ESPN had approximately 100 million subscribers. I use this as a proxy for the pay tv industry since most basic cable, satellite and fiber customers receive the channel by default. A year earlier, ESPN had approximately 99 million customer. If we assume that the telcos averaged $75 for a TV subscription in 2009 and that they increased rates by 5% last year, then this means that not only were they able to net an extra $5.4 billion in fees last year, but they’ll get to collect again on these fees in 2011 and into the future.

So what happens when consumers finally start to resist these fee increases and the trend reverses, the cable companies still get fat and happy until they have a full scale revolution on their hands. Even if we assume that 2% of all telco customers will quit pay TV over every 5% increase in price, then we’re still guaranteed to see fee increases into the foreseeable future.

Don’t get me wrong, losing 2 million subscribers would hurt the pay TV industry, but at the new $78.75 average price, it would only cost them $1.8 billion in lost revenue each year, while they would be gaining an extra $4.125 billion with the higher subscription fees. While the pay TV industry may realize that their golden years for growth are now over, that doesn’t mean they can’t do basic math and engineer higher revenue while they have you over a barrel. Until a significant number of people say enough’s enough, they’re never going to take the threat of cord cutting seriously, so if you are still paying for your television, then you’re part of the problem, instead of the solution.

Over the long run, defections will accelerate and eventually they’ll be forced to abandon their annual price increases, but until then it’s clear that the pay tv industry is going to milk consumers for as much as you will let them. The only silver lining that I see in all of this, is that a 5% increase for the pay television industry is equivalent to a 50% increase in what Netflix’s charges for a digital subscription. This should give Netflix a lot of room to remain competitive while poaching the digital living room.

It’s Time For Netflix To Say Goodnight To Silverlight

Jan 9

Posted by Davis in DRM, Netflix, Technology, VOD | 1 Comment

In 2006, Netflix scored a grand slam when they announced a $1 million prize for anyone who could improve their recommendation engine by at least 10%. It took 3 years for a team of scientists to actually accomplish this feat, but the prize was ultimately worth far more than a million dollars in publicity and to Netflix’s bottom line. Better recommendations not only led to happier subscribers (less churn), but they also made it easier for Netflix to sell the niche content that they spend less money on. Recognizing the benefit that they received from the contest, Netflix was quick to announce a sequel, but ultimately had to suspend their plans over privacy concerns.

While a contest to replace Silverlight likely wouldn’t garner as much attention, I believe that the financial benefit to replacing this outdated codec, would be just as significant.

Some will argue that I’m being tough on poor old Softie and that Silverlight represents some of the best video compression out there, but consider my logic for a moment. From the way I see it, Silverlight has two basic flaw. It’s buggy as all get out and it’s a bandwidth thief.

The screenshot posted above is a real life example that I encountered of Silverlight in action. All codecs are prone to errors of course, but look at all the hoops Netflix makes their customers jump through just to support a buggy piece of software. If I had a nickel for every time I’ve had to restart my browser after a Silverlightning strike, I’d probably have .35 cents by now. Seriously, I have less trouble with Real Network’s codec and that’s saying a lot. Instead of putting up with these kinds of errors, Netflix should be actively searching for a more reliable alternative.

Given Netflix’s runaway success, it shouldn’t be a surprise that the big telco companies are running scared. While usage based pricing hasn’t hit the US yet, the Canadian telcos were very quick to raise rates the minute Netflix invaded their territory. When you consider how many internet service providers also sell video, it’s clear that Netflix will need a way to undercut these tactics, especially if they plan on expanding internationally. Currently, an SD movie over Silverlight clocks in at approximately 2 Gigs, while an HD movie will cost the user 3Gbs towards their cap. If Netflix could reduce the size of a movie file by 50% – 75%, without sacrificing quality, they could end the usage based meter for their customers, while also undermining a critical future component to their latest competitors’ business model.

Getting Hollywood to sign off on an outsourced video codec could be a potential problem for Netflix, but even if they were able to gradually ween their customers away from Silverlight by delivering independent films with the new technology, the benefit could still be substantial. Given how little they pay for traffic, they probably wouldn’t save $1 million on their bandwidth bill, but being able to stop telcos from nickle and diming Netflix’s members would be priceless and would help to future proof their business.

The Next Big Big Thing In Advertising

Jan 4

Posted by Davis in Marketing, SA | Comments off

Clear Channel

I managed to get stuck in traffic during the middle of the day today and had the opportunity to listen to old people talk radio while I waited. There was some cranky guy on who was clearly worried about his own job in media. During the program he bemoaned Facebook’s $50 billion valuation, the demise of newspaper circulations and the end of the good old days when we used to have to pay travel agents $100′s of dollars to buy tickets for us.

Even though I didn’t agree with his bleak sentiments, it did make me reflect on how technology has managed to eviscerate one industry after another. Some of these trends caught on like wildfire, while other ideas were forced to lay dormant for years while the rest of the world caught up. Whether you’re talking about landlines, photo processing booths or Blockbuster Video, sooner or later good ideas have a way of replacing yesterday’s technology.

Normally, I expect to see new innovators challenging the status quo, but one industry that is experiencing it’s own “life changing” moment right now, is actually being led by the incumbents. Most people think of billboards are being somewhat of an eyesore. If you’re located in an area where you spend a lot of time, then you know what it’s like to have to look at the same old ad for months and months. By the time they do update the ad, the old one is usually halfway peeled off. Advertisers may be able to reach millions of people with a campaign, but it limits the value when they have to plan their campaign months in advance and when the presentation makes their brand look so tattered.

Over the last year, there have been two improvements in the signage industry that have impressed me a lot. The first has been how effective Lamar Advertising has been at using their digital signage portfolio to make a splash in social media. When Ashton Kutcher was trying to hit 1 million followers on Twitter, the company cashed in by giving away free exposure to @aplusk. When the goons at NBC butchered the Tonight Show by bringing Leno back, Lamar used outrage over the incident to reach the heart and souls of TeamCoco fans. While neither of these examples netted the company any serious cash, what they did prove was how much the internet/media/consumers will freak out over billboards that mention current buzz. With most companies clueless about ways to drum up buzz, Lamar’s portfolio offers an easy way for their customers to inject themselves instantly into any social conversation. Even if the sign is only up for a day, it will live forever online. With the TV advertising industry ready to pop, there will be a lot of money available to businesses that can provide this kind of immediate reach and response.

The other signage company that has really caught my attention is Clear Channel Communications. The company may be a dinosaur and burdened with way too much debt, but over the next 2 years, they plan on deploying 300 interactive displays that can only be described as life sized iPads. So far the displays have been a huge hit at San Francisco bus stops and I think that they are the real deal. Before the holidays, Digital Signage Insights posted a comprehensive behind the scenes view into how they work and their capabilities,

“The content management system, graphics processing unit, and real-time measurement application built into each digital bus shelter are capable of producing 3D graphics and immersive content the likes of which have not been seen in the digital out-of-home media sector. Clear Channel and its partners have just begun to scratch the surface of what these systems are capable of. The “Yahoo Bus Stop Derby” is a crowning example of what can be achieved at the convergence point of creativity and technology. San Francisco’s interactive bus shelters have been built with the future in mind. Owing to Clear Channel’s and Obscura Digital’s views on the expansion of the web into real world environments, the units allow for seamless scalability and back-end cloud networking. From supporting cinema-level 3D graphics, processing interactive 3D visualizations, to offloading real-time rendering to the cloud, San Francisco’s new bus shelters can do everything short of driving you to the office. On top of that, the shelters have been equipped with a real-time user-metrics collection system that provides advertisers with actionable intelligence throughout their interactive campaigns. The granular behavioral data that the units capture can be used to optimize applications in real-time, so to achieve the highest level of user engagement.”

The outdoor signage industry may seem as quaint as using your spare change for the payphone, but there’s no doubt in my mind that the industry is evolving. Whether either of these companies have the balance sheet or wherewithal to move past their debt issues is another story entirely, but I certainly can’t fault them for creating new and innovative ways where advertisers and consumers can connect on a more emotional level.

Has The DMCA Created A Legal Bermuda Triangle For Downloads?

Jan 4

Posted by Davis in DRM, Media, Movies, Netflix, Technology, TV, VOD | Comments off

For the last several years, the entertainment industry has been doing their darndest to put The Pirate Bay out of business. Whether it’s been suing TPB’s users, going after TPB’s hosting providers or trying to make the site’s founders criminally liable for the behavior of their customers, it’s clear that TPB doesn’t have many friends in Hollywood. More recently, we’ve seen a legal settlement industry spring up where mass lawsuits are threatened against consumers for allegedly participating in P2P activities. Whether or not the entertainment industry has been successful in these endeavours is open to interpretation, but in their zeal to put an end to filesharing, they may have created an even more dangerous monster.

One could argue that it all started with YouTube, but over the past few years we’ve seen a shift in consumer behavior away from P2P and towards streaming and downloading services. To see proof of this trend, all one has to do is compare the traffic of TPB with the streaming/downloading search engine FilesTube.

According to Compete.com, over the last year FilesTube.com has been able to consistently attract 50% more visitors than TPB. Not too shaby of a feat considering that Filestube.com didn’t even exist 3 years ago.

Given their animosity towards TPB, one would think that entertainment executives would be celebrating the cultural decline of TPB with a round of cold beers and high fives, but the reality is that instead of curbing piracy, they’re merely redirecting that illicit traffic towards safe harbors where consumers don’t appear to be at risk. In the immortal words of Princess Leia, “The more you tighten your grip, Tarkin, the more star systems will slip through your fingers”

By continuing to squeeze P2P users with countless numbers of lawsuits, the entertainment industry may have been able to establish a precedent that uploading content to the internet is a copyright violation, but what’s less clear is whether or not simply downloading that same content is actually illegal?

According to the Copyright.Gov FAQ website, “Uploading or downloading works protected by copyright without the authority of the copyright owner is an infringement of the copyright owner’s exclusive rights of reproduction and/or distribution. ” [Emphasis added by me]

Setting aside the ethical question of whether or not it’s moral to download grey area content, it is clear that US Copyright law places some restrictions on infringing downloads vs. legitimate ones. From the same FAQ page,

“Whether or not a particular work is being made available under the authority of the copyright owner is a question of fact. But since any original work of authorship fixed in a tangible medium (including a computer file) is protected by federal copyright law upon creation, in the absence of clear information to the contrary, most works may be assumed to be protected by federal copyright law.” [Emphasis added by me]

Now I’m not a legal beagle, but I believe that this means that consumers can’t be prosecuted for downloading a movie, if the service they are using claims to be offering content with the blessing of the legal copyright owner. For example when I’m streaming (making a cached copy) of old episodes of Battlestar Galactica from Netflix, I’m not actually breaking the law because I have a reasonable belief that Netflix has licensed this movie for their subscribers.

Since many streaming sites are largely controlled by the company that is paying for the bandwidth, it would be relatively easy for the studios to hold these companies accountable if they did stray off of the straight and narrow path. Where the legal waters become more murky though is when service providers (streaming companies) allow others to upload content instead of taking charge of this themselves.

With YouTube receiving 35 hours of content per second, it would be impossible for them to screen every second of footage that is uploaded to their site. Because of this the DMCA offers YouTube a safe harbor as long as they respond to DMCA takedown requests and don’t encourage piracy. To date we’ve seen several lawsuits that have tried to challenge this exemption, but so far they’ve all been a bust for the entertainment industry.

So on one side of this digital triangle you have consumers who are exempt from legal liability as long as the service provider requires uploaders to claim ownership of everything that they upload, on the other side of the triangle you have the service providers who are exempt from liability as long as they respond to DMCA request and don’t uploading anything themselves and on the final side of the triangle you have the content owners themselves who must choose between trying to police an endless stream of piracy or to quietly embrace the millions of consumers who are now streaming their television instead of paying for cable.

In a perfect world, only the actual copyright owners would be uploading their content to these digital locker services, but because sites like Megavideo.com pay users based upon the number of plays their videos get, there is an economic incentive for rouge operatives to cheat the system by claiming content as their own. To Megavideo’s credit, they have a history of refusing to pay copyright violators, but from a practical standpoint there are many who’ve been able to collect royalties on other people’s content.

Also to Megavideo’s credit, the entertainment industry has a long history of embracing “piracy” while staying in the closet about this. For example, when Viacom sued YouTube for copyright infringement, some of the clips they sued over were uploaded by Viacom employee’s themselves. It would hardly seem fair to hold either YouTube or consumers who watched those clips liable for copyright infringement when Viacom was creating a honeypot to tempt web surfers with.

Some will argue that content owners would never do this, but there are many reasons why someone would choose to embrace piracy and the popularity that it can bring a film. Whether you’re trying to jumpstart a struggling TV series or you’re trying to increase licensing opportunities, just because someone doesn’t pay to view a video doesn’t necessarily mean that the creator won’t benefit from that attention.

One of the things I’ve noticed when browsing through the FileTube.com search results is that often times studios will be unrelentingly aggressive about filing DMCA takedown requests the minute infringing files are uploaded while other files will remain online for over a year without even being “noticed.” While it would be tough to argue that 100% of these files are being monetized by the original copyright holders, I do believe that many copyright holders have chosen to secretly monetize their content in this way, but aren’t able to publicly disclose this because of how it might impact their negotiations with more traditional video distributors.

While the uploaders who falsely claim ownership of copyrighted material certainly put themselves at legal risk, with most of the uploading activity occurring outside of US borders, it’s unlikely that many infringers will find themselves being dragged into US court.

Some will cry foul over this latest trend, but I do find it fascinating how alternative business models can thrive when copyright issues aren’t strangling internet startups.

For example, one of the unique ways that Megavideo is able to sell memberships for their service is by letting consumers watch a certain amount of video each day for free before being interrupted with a time out. By running their business this way, they are able to use each and every video as an advertisement for their paid service. Since you may be 80% of the way through a movie when the time limit hits, a consumer is given the opportunity to ask themselves whether or not the content is really worth paying for to see right away or if it is a piece of garbage that you don’t care about finishing anyway.

Can you imagine if you were able to go to a movie theater and didn’t have to pay for your ticket until you had already watched 80% of the film? It would probably hurt ticket sales for a lot of the big budget flops, but the really well made movies would be incredibly successful because they’d be able to convert a larger percentage of those free eyeballs into paying customers.

Whether or not content owners are embracing this business model may be unclear, but by aggressively pursuing P2P users, the entertainment industry has made it clear that downloading without uploading is a much safer alternative for consumers then participating in the P2P movement. As technology marches forward, we’ll find out whether or not this Bermudian Copyright triangle gets sorted out, but in the meantime the efforts to prosecute P2P users, only seems to be driving consumers from a clunky bandwidth intensive technological solution to offshore providers who are offering a more elegant experience.

It’s probably worth pointing out that the MPAA has claimed that movie streaming is still considered a form of theft, but instead of backing up their position by citing the appropriate copyright laws, they instead try to equate digital streaming with physical theft.

The problem with this position is that companies like Sony (one of the MPAA founding partners) is apparently offering a shoplifters paradise in the form of all you can stream free movies on their Crackle.com website. Other MPAA partners like 20th Century Fox have not only made their movies available online at their official sites, but have also licensed their content to a number of different distributors like Comcast’s Fancast.com. Since it would be impossible for the end consumer to know the contractual details of every one of these down stream relationships, it would hardly seem fair to hold the consumer liable if someone uploaded a clip that actually infringed.

While I’m entirely open to exploring other opinions that downloading (without uploading) is still a copyright violation, I’ve yet to see any legal evidence indicating that this is actually the case. What do you think, when you hit play on a Simpson’s clip on YouTube have you actually committed a crime?

Comcast Raises DVR Prices For East Bay Residents Yet Again

Dec 30

Posted by Davis in Disclosure - I own stock in co. mentioned, Netflix, TiVo | 4 Comments

I think that most people realize that TiVo is about 1000 times better than the DVR that you get from your cable company, yet the cable companies still continue to rent out their DVRs by the truckload. This mostly has to do with the convenience of getting your set top box directly from your television provider, but some are under the false impression that they are saving money by renting their DVR instead of buying.

I was recently perusing my Comcast bill and noticed that they are once again raising prices on their DVR packages. At. $19.95 per month, it’s still 48 cents less per year than what TiVo currently charges for a TiVo premiere with no up front cost, yet millions of people still put up with a sub-par DVR experience at virtually the same price. Over the last 10 years, I remember TiVo raising prices once, over the same period it feels like Comcast has raised prices every 6 months. On the surface, $19.95 per month for a DVR may not sound like a lot, but thanks to the most recent rate changes, it now costs East Bay Comcast customers more to record their television each month, than it does to subscribe to their basic TV service.

It would be one thing, if Comcast was using your $240 per year in DVR fees to keep improving their DVR experience, but anyone whose used the device knows that it still suffers from severe lockups and buggy/slow interactions. Heck, even if the cable dinosaurs wanted to innovate, because of how much money they pay the content industry, they’re still prevented from offering services like Netflix on their DVRs.