Fred Wilson, one of my favorite bloggers, recently posted a strongly worded article on his blog entitled “Scarcity is a Shitty Business Model.” In it, he argues that the current thinking of content creators, movie studios, networks and cable operators is deeply flawed, as it makes it harder––not easier––to find premium video content online. Wilson’s post begins by documenting his family’s quest to find a good movie online.
After dinner, we fired up Boxee and checked out Netflix. Nothing good there. Then we fired up the Mac Mini and checked out Amazon Instant Video. Nothing good there. Then we went to the Cable Set Top Box and checked out movies on demand. Nothing good there. Frustrated and unwilling and uninterested in heading to a "foreign rogue site" to pirate something good, we watched a TV show and went to bed.
We would have paid good money to watch Sherlock Holmes or Tinker Tailor Soldier Spy. But it simply was not an option.
At present, content release windows reflect a media landscape that no longer exists. And I agree with Fred that they should go the way of the UHF dial. Look at Margin Call for an example of a film that debuted on demand at the same time it hit theaters––and performed well both at the box office and in the living room.
Viewers today want more broadcast-quality programming. They want unfettered access to their favorite TV shows and movies, and they want to watch it all on multiple devices. In an always-connected, on-demand world, it doesn’t make sense to ask your viewers to wait.
Wilson points out that these archaic release timetables are actually costing the industry money. More passive viewers will revert to free content on their TV or DVR while the more motivated, less scrupulous viewer will simply pirate the movie that they wanted to buy in the first place.
To be sure, online piracy is a complicated issue, one that deserves significant attention as online media matures. Ooyala, for one, takes DRM and rights protection very seriously. But when hopping on Bit Torrent is literally the only way to see new movies online, it is clear that the film industry needs to change its tune.
Scarcity made a lot of people a lot of money for a long time. But losing scarcity doesn’t necessarily mean losing money. In this era of TV Everywhere and online video analytics, there are better, smarter ways to profit in a world without content windows.
Change is hard––Wilson notes this in the close of his article. But smart companies anticipate and create radical change. Expect the “winners” of tomorrow to be the disruptive innovators of today. Ooyala is uniquely positioned to help forward-thinking media companies, film studios and networks move more content online and give their viewers what they want.