When MP3s first came on the scene, some industry observers doubted they would ever catch on because, so the argument went, music lovers would not trade the “physical experience” of a record or CD for the empty, unsatisfying experience of a virtual good that could be electronically downloaded. Well, we know how that one turned out for music.
The video download business, on the other hand, has not fully made that transition. Sure, people do download movies, from both legitimate and illegitimate sources, but the vast majority of video distribution (in the broadest sense of the world) outside of cable/satellite is still based on physical goods, whether rented at the supermarket or bought out of the back of a van.
With increasing bandwidth, emerging media home networking standards, and ever-lower storage costs, it would seem that we are on the verge of the “download-to-own” and “download-to-rent” markets taking off, right? Well we’ve been on the verge for a while now, and I don’t think it’s a matter of technology. What if that’s the wrong model for video content?
In the meantime, streaming has emerged as the distribution model of choice for short-form video, including user-generated content: YouTube serves 1B streams per day. Increasingly, streaming video is also extending to TV programs and feature film, ie professionally-produced, long-form content. In the US, Hulu alone sources roughly 1 billion streams per month. Traditional broadcasters around the world (including the BBC) are also getting in on the action, with TV Everywhere, Catch-up TV and Over-the-top being variations on a common theme.
As more and more consumer electronics devices have built-in Internet access, whether it’s a $69 broadband box or a $1,000 Connected TV, we are getting to the point where accessing content in the cloud is not only technically feasible, it is just much more convenient. No longer having to move files around, I can access the content wherever I may roam.
There is still much room for business model innovation. “Paywall” seems to be the buzzword of the month. (Whatever happened to “subscription”?) Time-based access such as rental also lends itself to streaming. But there is also an opportunity to use streaming for content that users have “bought”, although not too many people seem to be using this model yet.
Think of it as a permanent right to access the content you’ve bought, without being burdened by moving files around. I call this the Ownwall. The greatest consumer benefit is that the content is available wherever there is an Internet connection — and these days, in most areas you need to try hard to go somewhere where there isn’t one.
A couple of industry initiatives like DECE and KeyChest are promoting the notion of a “rights locker” that keeps track of all the content you’ve bought. Maybe this is just me, but the term “rights locker” elicits some negative associations — smelly socks and athlete’s foot. What did my rights do wrong to get locked up? My reservations with the terminology aside, if successful these initiatives will represent a step in the right direction. (Nyuk, nyuk. Get it? The right direction. I crack myself up sometimes).
Consumers will be able to aggregate the content they purchase from any participating retailer and download it to their devices. DECE goes beyond this by defining their own media format and enabling content downloaded to one device to be side-loaded to another device, as long as it is in the user’s “domain” of approved devices. (Full disclosure: I represent Adobe in DECE; however, the description provided here is based on publicly available information.)
Now, if all content lives in the cloud and I can stream it to my notebook/netbook/tablet/smarphone/smartbook/connected TV/[add device not yet invented here], then maybe all of this could be a lot simpler. I could go around buying content, and have instant access to it on any Internet-enabled device. Interoperability is handled in the cloud, which is not as daunting as it sounds, since in practice there really aren’t that many complete platforms for video distribution out there.
But wait, there’s more: as the technology gets better (more interactivity, higher resolution, 3D, 4D, holodeck), so can my content experience. I don’t need to re-download, because I never downloaded in the first place; the next time I go to watch the movie, I am pleasantly surprised by the upgraded experience.
Most of this is possible today — well, maybe not the 4D stuff. There are still some open questions, such as “How can I be sure I can go back 20 years from now and still retrieve my content?” (I would answer that one with another question: do you use Gmail?) Or “What if I’m on a plane or in a submarine and can’t access the Internet?” (I say design for the main use case and accommodate the corner case, not the other way around.)
At the end of the day, consumers will provide the answer. As technology/content providers our role is to enable and experiment, and then let the market decide. What do you think will be the predominant model? Is ‘own-to-stream’ the new ‘download-to-own’?