Kevin Spacey clearly gets it. Rampant piracy is an indication of a failing business model. It's not that people aren't willing to pay, and that's evidenced by the success of Netflix and shows like House of Cards. Same can be said of Steam's game distribution model. Give people what they want, how they want it, at a fair price, and you'll surely be able to make money.
I like the message -- and the messenger in this case -- a lot. Having read the full transcript of his speech, I'm trying to imagine what he might have left out, what his opponents will use to dismiss this event.
Off-hand, the easy out would be that 'giving people what they want' is actually pretty costly. The steep pilot culling selects for mass appeal. If 80% of the (paying) viewing public like a pilot, it's probably a low-risk venture with pretty predictable rewards. If those returns (ROI) are sufficient to keep the studio running, do the people writing the checks really care that more niche products _might_ gain slightly better rewards?
Yeap. Locking it all away for an absurdly high price or just giving it all away are suboptimal. Charge a "no brainer" price that most people won't have a problem with is supply meeting demand more optimally... For potentially higher profits.
Well steam sales have ran out steam it seems from anecdotal evidence. While the first few were a godsend and a very good piracy "amnesty" - currently I have more than 100 games in my backlog, so on the last two I bought only one-two games. And all around me people say the same. The only games I consistently buy are the humble bundles mostly to support the idea.
Here is some anecdotal evidence that there is is still plenty of pressure in steam sales..
"We sold more copies in the first 24 hours of the sale than we had on Steam in the first three months since release," Fish said, adding that the two-day price drop yielded more sales than the game drew in its first month on Xbox Live Arcade.
All told, Fez sold 105,000 copies in the 48 hours the game was on sale. He also posted a picture of Fez's Steam sales graph to better illustrate his point.
For example, Spacey says there will be 146 pilots made this year at the cost of $US300-$US400 million. Only 56 of those will actually be made into a series. “That makes our House of Cards deal for two seasons really cost effective,” Spacey says in the speech.
Of course it seems cost effective when the show is a big hit. But had it been a flop, it would have seemed a colossal waste of money - something that could easily have been surmised with a much smaller investment. For Netflix's strategy to work, they'll need to be able to continue to pick winners at a much higher percentage than the traditional television network has been able to. To do so they'll need to have content producers that understand what it takes to tell a good story. I think the downside is that this high risk strategy is likely to make them more risk averse in the shows that they choose to produce. They'll be a lot less likely to invest in first time writers, actors and directors. And they'll probably shy away from any story that is at all experimental in nature.
I bet I could read a script and tell you if it's shit or not. Why do you even need a pilot? And the funny thing is, good shows get watched. There's a huge market for quality television. Just look at what Mad Men, House of Cards, Game of Thrones, etc have done for their networks. Is it really that there aren't enough writers coming out of Harvard who can write a Mad Men script? Do we only have writers who can write shitty sitcoms? I doubt it. Or is Mad Men that expensive to produce? Watch one some time. Most shows take place in two locations and are all dialog. They could almost be plays. But for some reason NBC, CBS, and FOX only buy shows with a laugh track or a panel of judges. I don't get it at all.
Sorry, only those first two sentences are an actual reply. I got carried away...
This is a good point. A company should not be expected to just throw a bunch of shows out and see which ones stick. Too expensive.
What stuck out to me most in the speech was Kevin Spacey's quick mention of Netflix's response to the pitch: "We ran the numbers and we think our customer base would like it".
Media outlets thinking of taking the all-in approach will need the technology to calculate and hedge the risk . Netflix clearly has that in place, and it helped convince them to take a chance.
You left out the fact that Netflix has the viewing habits of millions of users, freely given in the most detailed way ever conceived. Remember, Nielsen ratings are self-reports written in a diary; this is real time viewing data. They have a better ability to understand what people enjoy watching.
I imagine that it would be possible to make lower-cost shows that attract a smaller audience but still earn enough to be worth it.
For example, space sci-fi has not representation on network TV right now despite existing demand for such a product. The problem is the number of people that want to watch such a genre are smaller than those that want to watch reality TV or other genres.
The potential with a distribute model that doesn't have a TV schedule is that it doesn't have to compete with other shows in the same timeslot, thus allowing for a less-expensively produced show to see earn enough money even if the audience is relatively small.
That is the market that I'm looking forward to, removing the time-slot competition and allowing shows to compete on quality.
I agree entirely but that's what makes Netflix's choice all the more interesting. They have the opportunity to serve the long tail but thus far they haven't (with their original programming at least). Instead they've spent 100 million on 1 show on the belief that it would pay off big - in both attracting new customers and retaining existing.
Well, in general Netflix seems interested in providing content that falls into one of two categories. The first is what I think of as "low barrier to entry" tv shows. These are shows that people can turn on while cooking, cleaning, or doing other things around the house to replace pre-programmed tv channels.
"Many of the most-watched series have been off the air for years, like Star Trek and The X-Files." [1]
Personally, I think this kind of content goes a long way to keeping subscribers on Netflix, when they might have otherwise been tempted to turn on a tv channel.
The second kind of content Netflix appears to be interested in is content that pulls in new subscribers, This could be things like movies that were very recently released, or their own original content (mainly to replace the expensive deals to get those new movies).
But the thing about Netflix is that even a new show that might be viewed by other network producers as a flop can end up being a a good call. This is because Netflix isn't constrained by the same limits that cable tv is. The shows Netflix produces don't need to be blockbuster hits, as long as they can help fill the gaps in the "low barrier to entry" tv that keeps subscribers happy over the long run.
A cable channel can only show one thing to all it's viewers at a time, so filling that time slot with something that everyone likes is critical. Netflix can afford a slower burn with content that might not get a million viewers in the first season, but could easily be watched by several million viewers in the next 5 years.
However it's not a DRM free streaming model. So it's not much healthier than other types of restrictions - it's still DRM. Some truly DRM free streaming should emerge in the face of all these Netflix-like DRMed barbed-wired gardens. Streaming should be a convenience, not a way to restrict copying. Others brought Steam as an example - for Steam, there is competing GOG which is DRM free and proves the point that DRM free gaming without regional restrictions and other such junk can be successful. So what is there for Netflix?
Also, I didn't get his point about the music industry. Most music is easily available DRM free, unlike video.
I don't think most people expect DRM-free content when paying for a subscription model - I know I don't. I'm paying for the right to access that content when I want as long as it's available but I am under no assumption that I assume the right to take that content with me and do with it what I please. That type of content is completely different than what this streaming model represents. Netflix is surely on a better trajectory here than other providers, no?
It's not better as long as there is DRM in it. Why can't you expect to get the content with you? You can expect paying for titles some one time fee. Not unlike music and games. Streaming is just a way of accessing it from the "cloud" without the need to download it first. But why should it prevent you from downloading if you want to back it up, take it with you somewhere where you have no access to the cloud and so on? There is no good reason for "subscription model" in the digital world which restricts your ability to copy. Buy and use, that's what it's supposed to be.
>But why should it prevent you from downloading if you want to back it up, take it with you somewhere where you have no access to the cloud and so on?
That's the real problem; that internet is not accessible & free everywhere. I think DRM is fine as long as I can access my media anytime & anywhere on all my devices. Netflix pretty much fits this requirement aside from the hack of Linux+Netflix. The issue that internet isn't available to every human being or costs a ridiculous amount of money is a problem that needs to be fixed. I want to be able to say "Everyone has internet these days" and really mean it for all people of the world. We need to make it impossible for anyone to make the argument "but what if I don't have internet access?".
> I think DRM is fine as long as I can access my media anytime & anywhere on all my devices.
I think DRM is never OK. Not only because of privacy and ethical issues, but because if you can't fully control the content and the service which issues DRM closes down you would simply lose everything you paid for. It should be a deal breaker. Then pirating that content will be the only option to get it back. This Xkcd applies to video pretty much the same way as to audio for which it was made: http://xkcd.com/488
Unless we're talking about Win8-BIOS-TPM stuff(which I don't clearly understand just yet), I don't think proper(non-remote-controllable) DRM is a privacy concern. I'm not sure how it's an ethical concern either. But, I do think that if the DRM servers and/or media streaming servers are going offline and making the content disappear forever they should allow it to just be downloaded without DRM for free - since turning off the servers implies they're done making money off it(?).
When Netflix (or any other DRMed code) runs on your machine, it runs as a black box for you. Why isn't that a privacy concern and why should it ever be trusted? It's unethical because it's an overreaching preemptive policing, but it's a long subject.
> do think that if the DRM servers and/or media streaming servers are going offline and making the content disappear forever they should allow it to just be downloaded without DRM for free
They may be "should" allow it, but they will never do at that point. They have more important problems to care about when they close down. So it's our obligation as responsible users to demand DRM free content from them right away, and avoid those who refuse to sell such.
Okay, I think I see what you're saying about the decryption binary blob. With all this Ed Snowden stuff, it would not be unreasonable to have some suspicion of any network-software that has a wide user base. Netflix-app would be a good place to have a government backdoor...
Then how do we deal with piracy? Is piracy even a problem at all? I guess if iTunes is selling music without DRM and not falling apart, then we think TV-shows/movies can do the same?
> Okay, I think I see what you're saying about the decryption binary blob. With all this Ed Snowden stuff, it would not be unreasonable to have some suspicion of any network-software that has a wide user base. Netflix-app would be a good place to have a government backdoor...
No need even to go so far. DRM by definition implies that they don't trust you, the user. So, I see no point to trust them in return. It's normal to assume that DRM is always a risk of privacy violation. Surely, it's a good ground for sinister abuses like your example as well.
> Then how do we deal with piracy?
DRM doesn't deal with piracy. Publishers and distributors don't even hide this fact these days. So what are they using DRM for? Guess yourself, but expect nothing good in there.
The recipe for dealing with piracy is ages old - increase quality to be competitive. I.e. some part of piracy which can be affected is caused by the fact that pirated content has higher usability (no DRM, regional restrictions and other such junk). By releasing quality products while being DRM free and delivering them with high level of convenience, distributors can compete with that sector of piracy. The segment of piracy which is caused by people being crooks and getting free stuff won't be affected at all. DRM doesn't affect it either.
I agree with you in principle on a LOT of the points, but the real issue is that most content producers (publishers are a different issue...) would LOVE to be able to do this:
"The recipe for dealing with piracy is ages old - increase quality to be competitive"
But realistically it's fucking HARD. Mainly because increasing quality to be competitive with piracy would generally require breaking tax and import laws everywhere.
Even if it doesn't require breaking those laws to be competitive, you have to at least pay enough people to be aware of them, for each and every country you want to be able to distribute your content in.
So decent* DRM isn't about stopping piracy, really. It's about slowing it down just enough that it's still worthwhile to jump through the hoops required to bring that content legally to other regions.
*: It's actually fairly hard to hit this goal on the head, and often I feel companies buy too far into their own bullshit and sense of entitlement with DRM. A lot of shoddy executives with poor understanding of software misuse DRM to the extent that it drastically lowers the value of the content (see: always on DRM) Please continue to bash them, they deserve it.
> Mainly because increasing quality to be competitive with piracy would generally require breaking tax and import laws everywhere.
I'm not exactly sure why so? Take for example gaming. GOG sells DRM free games worldwide, without regional restrictions and no inflated pricing for countries like Australia for example. Why can't video be sold on similar terms?
>So decent DRM isn't about stopping piracy, really. It's about slowing it down just enough that it's still worthwhile to jump through the hoops required to bring that content legally to other regions.
In my view it never pays off. The downside of reduced usability is always worse than any potential gain in slowing down piracy on the period between some new DRM scheme is introduced until it's broken. Usually that period is small, and ever since that DRM becomes obsolete, while usability stays crippled for legitimate users. All those involved in production and distribution should always keep in mind that DRM means their voluntary reduction of quality for practically absent gain of shortly slowed down piracy. How are they planning to compete, when instead of increasing quality, they cripple their own products?
You are not paying for the content in this model - only the ability to access the content through the provider. It's the same as all free and/or pay-for-web-services. You have no control but that is the sacrifice you make for having the ability to access it from the internet, and not your device.
> You are not paying for the content in this model - only the ability to access the content through the provider.
Which I think is not something that should even exist IMHO. Since paying for content itself is easier, can work with the same convenience of streaming, while not preventing the backup. Everyone wins, since piracy will exist even when some service attempts to prevent copying.
Speak for yourself. I'd much rather pay $7.99 a month for a subscription that provides me streaming access to everything rather than $20-$30 buying new music every month.
That's easy, because most people do not care to do that. Having owned a collection of DVDs it was "fun" to buy them when it was the thing to do but totally useless now. I care not to take the baggage of managing hundreds of titles with me just to have the knowledge that I own it. I do not wish to own such things unless I want to - which will be rare and should be on me to purchase that item outright from the provider.
This is about simplicity and ease-of-use only, not about ownership. If you insist on ownership there is nothing preventing you from buying the work directly.
I'm fine with buying the work directly, but can you point to a good store which sells it simply as files with no DRM attached which I can download after buying? I don't need physical DVDs clutter, it's so much last century.
Sure, streaming as convenience is good to have. But it doesn't remove the need for personal backup. Network connectivity is not available always and everywhere, as well as you can't rely on the service to be always around. If you don't care to lose your extensive digital library when that service goes bust it's up to you, but it's a normal thing to care about it.
Its hard to say if we'll ever get DRM free streaming. Unlike the music industry, the tv/film industry isn't being crippled by piracy - in fact the tv/film industry only seems to be getting bigger.
Simply put, there is no motivation for DRM streaming and DRM still remains a way for studios to keep control on who and when is licensing their content. Talking to some media execs, I was surprised to learn the reason most DRM is implemented is because for some content deal, the contract stated (which was written 6-8 years ago), said the player must have DRM. Now that the content landscape is getting even more fierce (with networks like CBS cancelling service to TimeWarner) no one wants to risk renegotiating anything.
Now what motivation does Netflix have to remove their DRM? They want you on their platform, so they can collect your data. The next Netflix that even has a chance of running it legal will probably incorporate ads into their monthly pay product like Hulu does, which isn't at all surprising considering a huge chunk of revenue for these guys comes from advertising.
I'm not hopeful about DRM-free streaming. The tv/film industry is much different from the music industry. From a consumer POV, the biggest difference is streaming wins over downloading. There is less of a demand for DRM free content because people simply aren't looking to copy their mp3s to their iPod/Zune/MP3 Player of choice. The Film industry has a much tighter control on how the content is delivered.
>Now what motivation does Netflix have to remove their DRM? They want you on their platform, so they can collect your data.
If they don't even hide their intentions in abusing DRM to violate their users' privacy, it should only strengthen the reasons to avoid Netfilx like services. I'm hopeful for DRM free digital video. It will take one distributor to break this sick trend. Netflix isn't the one with guts to do it.
Ah, this. Yes, RIAA are a strange bunch. They managed to get rid of DRM in sold music, but now fulfill their paranoid fear of piracy through DMCA takedowns and lawsuits. Which makes one think that they dropped DRM not out of common sense like could be expected.
Regular people do not give a fuck about DRM. They just want to watch good content. As long as the DRM is non-obtrusive it does not matter. Why is it important to have DRM free content?
"Regular" people give away their private info to Facebook as well. Most do this kind of stuff because they don't realize the implications, not because they think that it's really OK to do that. Sure, some might not care at all, but most simply have no clue. Unobtrusive DRM is actually even worse than obtrusive one, precisely because people might think that it's acceptable. It's like having hidden cameras in people's houses, and them getting comfortable with it, because they don't see it.
What has sharing personal information on facebook got to do with DRM? What does an informed person have against DRM if it lets him use the content anyway they want to consume it (e.g. netflix)? I am just trying to understand what the complaint specifically is.
> What has sharing personal information on facebook got to do with DRM?
It was a comment on "regular" people. I.e. their acceptance of Facebook's disrespect to their privacy often comes from them being clueless. Same thing with acceptance of DRM which you brought above. People don't think.
> What does an informed person have against DRM
Informed person doesn't trust DRM, and doesn't proliferate it by supporting distributors who push it on people. See the whole discussion above. No point to repeat the explanations.
Steam doesn't prevent any piracy DRM wise. And its success is not related to its DRM. They were just first and grew big before others entered the scene. I personally don't use Steam, precisely because of their proliferation of DRM. For DRM free gaming there are GOG, Humble Bundle and others.
I'd compare Steam to Netflix, yes. Both are widely used, and both cause damage to the industry by DRM proliferation.
I think Spotify which I might add has dramatically reduced piracy in the countries it is available has proven that streaming is the future. People don't care about not being able to download it, as long as they can watch it whenever they want. Going back to Spotify, I don't remember the last time I downloaded any music for free, I just use Spotify.
Spotify pays out 97 percent of its total revenue to the record companies. If the record companies are taking an enormous percentage of that and not paying the artists, it's perfectly sustainable once you remove the parasite siphoning off all the money.
That's not all that related to sustainability. Sure, it might mean musicians make less but that's just supply and demand and supply is HUGE (still not infinite).
When you're in a constrained format like radio or cable tv you can only play one thing for your audience at a time. Because of that it's critical that what you play has mass appeal so that lots of people will be okay listening to it.
When you're in an unconstrained model that lets users pick what to watch or listen to, that mass appeal factor becomes much less important.
Sure, there's a HUGE array of music available, and each of us can claim that we think most of it's shitty. But when you actually start comparing what you consider shitty to what I consider shitty, I'd be willing to bet there are a LOT of areas that don't overlap.
This is the power that comes with being able to stream the content that the user wants. Mass appeal becomes much less important.
So yeah, there's a huge amount of music out there that I think is shitty. But there's an equally huge number of people that all have different opinions on what the shit actually is.
I'm not sure I understand your argument. I agree that in an unconstrained format mass appeal is much less important. Yet I don't feel some sort of 'good music' saturation point has been reached within the single subgenres (and subsubgenres) and I think that it will take a while for that to happen.
I still think Netflix is sapping some of the fun and vitality out of their original series by putting all the episodes up at once. Is binge-watching great? Of course it is! A huge library of great shows to binge-watch is one of the Netflix's biggest selling points.
But getting it all at once is like peeking at your Christmas presents early: you think you want it, but it spoils some of the fun, the eventy-ness of it, and the social context created by a shared timeline (the so-called "water-cooler effect").
Anyone who doesn't want that experience can still wait until the whole thing is out, probably just a few months, at which point it will still be available in the binge library, presumably forever. (I know some who prefer not to start a new series at all until the entire thing is finished, which is also okay.)
Anyone who doesn't want that experience can still wait until the whole thing is out, probably just a few months, at which point it will still be available in the binge library, presumably forever. (I know some who prefer not to start a new series at all until the entire thing is finished, which is also okay.)
Likewise, I could say that anyone who doesn't want to watch them all at once doesn't have to. You can choose to watch only 1 episode a week.
the problem is that these people tend to enjoy discussing "this week's episode" with their friends, and that's hard when they've watched the entire season/series.
This discussion of an ep or event in series happens regardless... You are just defending a timescale based on an old model as a reason for it to exist.
This is a very significant issue that I think should make Netflix re-evaluate their initial release model.
For me, and for a significant number of attentive television fans, a big part of the experience is reading the nightly discussion post by our favorite reviewer and discussing the episode with everyone in the comments section. I'm part of the very active AVClub community and teasing out what happened with the everyone else who just watched the episode greatly enhances the viewing experience.
For FX's The Bridge whose lead character falls within the autism spectrum, a certain commenter who is also on the autism spectrum writes a few hundred words that illuminates what it's like going through life in a very different way from most others. I have learned a great deal in the process, and it's something that is possible only because one episode is available per week. If they were dumped at once, maybe I'd rush through the whole thing at once, or she would and this exchange would never have happened.
Not really. I found that shows like Person of Interest, Continuum or even bits of Fringe are best watched in a row. I would say American TV production schedules of 24 episodes a season is the bits that are killing TV watching.
I would definitely not mind 6 episodes per season of high quality entertainmen (aka British TV production schedule).
I wouldn't know about the water-cooler effect because I've never actually experienced discussing with other people last night's TV.
The technology and business model side of the equation could be solved, if the licensing problems were resolved. Too bad all the streaming services are still hamstrung by licensing issues from truly providing a service wherever you are. Netflix is still unavailable in most parts of the World, including many Asian countries where piracy is the most prevalent.
In this interview, is there a relationship between a TV pilot and a lean startup MVP where Spacey is against such a pursuit preferring more visionary endeavours that take longer to get feedback?
