Apple & Netflix: Online Movie Rentals

So a couple of fun things have happened in the online media landscape over the last few days.

First, in anticipation of the announcement that everyone was expecting from Steve Jobs during his Macworld keynote address, Netflix ditched its online movie viewing quota. Steve O'Hear from Last100 explains what that means:
As of today, all subscribers except those on the most basic two DVDs per-month plan will be given unlimited access to the 6,000+ movies available as part of Netflix’s Internet streaming option, dubbed "Watch Instantly". Previously, subscribers were offered a limited number of Internet viewing hours based on which DVD rental plan they were on.

This is really cool, especially since Netflix has a subscription model and doesn't charge on a per-movie basis.

Second, as expected, Steve Jobs announced Apple's entry into the online movie downloads space during his keynote address yesterday. To see how this stacks up against Netflix's model, O'Hear compared the two based on (1) content, (2) pricing, and (3) convenience.

Each offering has its pros and cons: Neither has the upper hand in content, Netflix has better pricing (subscription model), while Apple has greater convenience (great hardware-software coupling and the ability to watch the downloaded movie on multiple devices). Of course, both are still limited by telecommunications infrastructure (especially Apple's movies-in-HD offering for Apple TV) and the reluctance of movie studios to fully embrace the online rental concept. And though the market for online movie rentals is still small, it is growing (thanks, in part, to the writer's strike).

So, at this time, it's not clear how things will go. What I do know is that 2008 should be a fun year in online movie rentals.

Wikipedia

Earlier today Tim O'Reilly wrote an excellent article on how Wikipedia is the new face of publishing. Fundamentally, he writes, Wikipedia is much like any other publishing organization because it has both "a large network of contributors and a core of committed regulars". That is why it puzzles him when publishing houses scoff at Wikipedia's content generation model. After all, they use the same model themselves.

This is just as true of any publishing company. Did Bloomsbury's editors invent Harry Potter? No, it was a welfare mom who dreamed up the idea while riding on the train.

What has changed, though, is the technology that brings contributors and publishers together and the speed at which all this happens.

Why the US News Media is, well, Crap

John Hockenberry, a former NBC Dateline correspondent, writes a fascinating article in the January/February 2008 issue of MIT's Technology Review in which he talks about how the US news media actively chooses to go with emotion-centred news stories (that appeal to as many people as possible) as opposed to more relevant, hard-hitting, and (dare I say) real news stories.

Networks are built on the assumption that audience size is what matters most. Content is secondary; it exists to attract passive viewers who will sit still for advertisements. For a while, that assumption served the industry well. But the TV news business has been blind to the revolution that made the viewer blink: the digital organization of communities that are anything but passive. Traditional market-driven media always attempt to treat devices, audiences, and content as bulk commodities, while users instead view all three as ways of creating and maintaining smaller-scale communities. As users acquire the means of producing and distributing content, the authority and profit potential of large traditional networks are directly challenged.

It's a long article, though, so if you want a quicker version, read what Jacqui Cheng has to say about it over at Ars Technica. Both are great to read, by the way.

Hollywood Directors that Generate the Most Money

Peter Sciretta from /Film has compiled a list of the ten highest revenue generating Hollywood film directors. Obviously, Steven Spielberg tops the list and, if you want a list of the next ten, check the comments.

Interestingly, as Sciretta points out, six of the top ten have been involved in trilogies, three others have been involved in big franchises, and the only one who hasn't done either is in the process of directing his first sequel. Oh, and they're all white men, of course.

Leo Laporte on Social Media

Leo Laporte, of TechTV and TWiT fame (the latter being home to two of my favourite audio netcasts), was one of the keynote speakers at the Blogworld Expo held in Las Vegas in November this year. You can find a video of his excellent keynote speech, with a rather inspirational introduction by Six Apart's Anil Dash, here on In Business TV's Brightcove channel.

Leo talks about the new face of media, where he sees new media going, and what it'll take to get it there. If you have the time, make sure you take a listen. It's a large file and takes a while to download, but it's worth it.

P.S. Apologies for the long hiatus from blogging. The last three weeks of term (including exam week) were really busy and since end of term I've been on vacation. I'm back now and should get back to posting regularly very soon.

Netflix Moves into Online Television

A few weeks ago I talked about how Netflix is planning to move into the online video space. Well, it launched its first big foray into that this week by signing up with NBC Universal (press release here). Netflix subscribers will now be able to watch NBC's shows (like "Heroes" and "The Office") on Netflix the day after they're aired. All this is only for the US, of course.

Meanwhile, this now becomes the third distribution channel that NBC has signed up with (post iTunes) in order to distribute its content. The fourth is still in private beta. Last 100's Daniel Langendorf is keeping score.

E-Books to Finally Take Off?

Much as I would love to get the Sony Reader (I can't, I don't have enough spare cash lying around) because I think it would be incredibly useful to me, it hasn't done all that well in the market. In fact, the whole e-book concept hasn't gone down well with consumers. At least not as well as, say, Sony would have hoped. (Or as I would have hoped, because that might have considerably reduced the retail price of the Reader, thereby making it affordable to me!)

All that might change, though, with the introduction of Amazon's long-awaited, much rumoured-about, Kindle e-book reader. At least I hope things change. Kindle hasn't yet been launched by the way -- it's supposed to be launched later today in the US -- but it's already being talked about. Notably, in Newsweek's interview with Amazon's CEO, Jeff Bezos, though both CNET and Engadget have talked about it as well.

We learn in strategy that, in many ways, the holy grail of strategic competition is to change the industry (presumably in your favour!). Amazon's already done that a number of times and, through to the Kindle, they're hoping to do that yet again. Being a fan of both e-books and tablet PCs, I hope they succeed.

Expect more coverage (on this blog) of this device and of this strategic move as more details emerge.

More on the WAG Strike

Marc Andreessen recently wrote a post on the strike called by the Writer's Guild of America (WGA) in which he takes media moguls to task over their "[crawling] into a hole of protecting the status quo".

And, if that's not enough, Suicide Girls posted an article that explains, from a writer's perspective, why exactly they've gone on strike. That article tells us a bit about the producer-writer negotiation history and why the current strike is so important to writers today:

This dispute is not just about writers. We are the first union that is fighting for our rights and equal pay when it comes to the Internet. What we do now will affect every union in Hollywood

If you want some solid insight on what's going on -- i.e. the backdrop of the once-in-a-lifetime industry shift that is currently happening and how the WGA strikes fits into that -- read both of those.

Writer's Guild of America Goes on Strike

It's fun when subject matter from two courses converges. In this case, it's my E-Commerce and Negotiations course materials that are converging because the Writer's Guide of America (WGA) has gone on strike, partly over how much they get paid when the shows they write on get downloaded. Nate Anderson over at Ars Technica explains it really well:

No one is Hollywood is quite sure how this whole "Internet thing" will affect the TV and movie businesses, but the writers and producers both know one thing: they don't want to give an inch of ground when it comes to pricing residuals for Internet distribution of shows. After months of fruitless negotiations on a new contract, the Writers Guild of America announced publicly today that it would be going on strike, in large part over "new media" concerns. If you thought late-night television wasn't funny now, wait until the writers quit.

Writers get paid "residuals" whenever a show they've worked on or a movie they've helped write gets sold on DVD or aired in syndication, and these residuals can make up a healthy part of a working scriptwriter's income. The Alliance of Motion Picture and Television Producers (AMPTP) insists that the residual rate for new media uses be fixed at the current DVD rate. The writers want the DVD formula—and the new media rate along with it—to be increased.

Our Negotiation's professor, John Onto, has taken great pains to warn us about the dangers of boiling the negotiation down to a single, contentious, value-claiming issue. When that happens, the negotiation becomes a bargain in which one side will always "win" and one side will always "lose" [1]. Unfortunately, that is exactly what seems to have happened here. Oh well. At least it's a good learning opportunity for us Negotiations students!

Footnotes

[1] Unless, of course, a creative, possibly value-creating solution to the deadlock can be found.

DVD Format Wars...Get Over it Already

CNET's Don Reisinger makes a very good point. He says "Am I the only person who couldn't care any less about the HD DVD/Blu-ray war?" And the answer is no, Don, you're not. In fact, my attitude at this point is: buy a player that plays both formats and, well, get over it already. Says Reisinger:

I've succumbed to High-Def Format War Fatigue, and to be quite honest, I think most of the world has too. Eventually, one format will win and the other will lose. In the meantime, ignore the predictions and hyperbole, and get down to enjoying some movies.

Amen.