Netflix, Hulu, Blockbuster VOD, Vudu, and a slew of other video streaming services have been popping up left and right. Yet there's a big problem with most of these services: many of them suffer from the same mentality that the recording industry had in 1999--they are resisting the demands of their customers.
Knowing a bit of history would probably help explain what I mean, as would a look into the current state of affairs. In 1999, Napster gave access to practically any music in the world to any user who had an Internet connection. However, there was no way to legally obtain copyrighted music via Napster and other services (at least at the time). Seemingly overnight a generation of thieves was created.
Rather than attempt to adapt, the principal players in the music industry attacked the very fans of their products. What happened next is exactly what you'd expect. People downloaded lots of music for free and did it in much greater numbers. It wasn't until Apple, Amazon, and a few others came up with a way to not only monetize the transactions, but also to catalog the music in a way that actually made sense. You were guaranteed virus-free, trouble-free access to popular music via the Internet. The five major labels signed, independents followed, and today iTunes is the largest music retailer in the world--serving over 10 billion songs as of February, 2010. (Right now iTunes is recording roughly 2 billion new sales every six months or so.)
While many people will get something for free if it's there, a large portion of consumers are more than happy to pay for their content. What it took the record labels so long to figure out is that costly court battles and attacking your userbase is unwise. Their resources would have been better spent investing in delivering their goods securely via the mechanism that consumers prefer.
It's about delivery
Who wants to drive to a store, deal with finding the CD or DVD on the aisles, stand in line, and drive home only to rip the content to a compressed format and consume via computer, media center, or portable player? Instead of understanding this simple concept, record labels missed out on years of royalties and profits. Four years worth, to be exact, since the iTunes Store was launched four years after Napster.
So what does that have to do with video delivery? For starters, we're seeing a similar reluctance to give consumers easy access to shows. What's worse is that the video industry is even more ripe for monetization than the record industry of 1999. Media convergence devices and software such as Boxee (Linux-based), GoogleTV (also Linux-based), and others are attempting to bring together all video content on the web in one device.
Anything from Youtube to television network sites to Netflix are viewable from one search bar, on one interface viewed on your TV. Content providers should be rejoicing. This means that middlemen (cable/satellite providers, the FCC, brick-and-mortar retailers) are cut from the profit loop. This is especially true if the networks house the content on their own servers.
It means that networks no longer have to worry about censorship if they want to run uncut content. It means that content providers can choose exactly which advertisements are shown during programming without negotiation with traditional television service providers. It means that users can watch their favorite shows whenever they want, as many times as they want, feasibly increasing the viewing audience for each program.
A huge blunder
The predominant mechanisms for delivery are closed, proprietary protocols--formats such as Adobe Flash and Microsoft Silverlight. This means that media convergence devices have to constantly adapt for each site, service, version, and format that are available on the Internet. This is nearly impossible at the rate that these sites and services change or are created.
Users are ending up with subpar experiences that hurt the viewerbase, therefore hurting profits. For example, I attempted to watch an episode of "The Andy Griffith Show" this past weekend, using my Boxee Box. Due to the way that overlays were created, I had a constant black box over the display of the feed. Funny thing is, that black box was a part of an advertisement that failed to run due to the incompatibilities of Flash. I opted to watch an episode of "South Park" (ripped from a DVD set) from my storage server instead. What this means is that TVLand lost revenue because I couldn't even watch the show, and therefore did not watch the advertisements.
There is a way to fix this
If providers used open protocols (like HTML5 video), then the burden will be greatly decreased on aggregators like Boxee and GoogleTV. At that point viewership will increase without a doubt.
Why am I so certain? Let's look at history. Compare the web today to the web in 2005. Firefox was still a fledgling browser and many sites relied on closed active-x controls (or similar proprietary applications that would work for one type of browser, but not another) that prevented Firefox users from fully enjoying websites. Web sites lost users because they were not compatible with their favorite browser.
Fast forward to now, and most non-media sites are using open protocols and standards that allow any browser to view them easily. (Hold-outs and exceptions are media streaming sites and browser-based game providers.) And the web has grown due to this revolution.
If the last decade showed us anything, it's that people will find ways to consume the content they want through the path of least resistance. Providers must adapt or risk alienating their userbase. My TVLand experience would have been completely different if it were done with HTML5.
Moreover, by switching to HTML5 video, content would be better scraped by search engines such as Google and Yahoo. As users search for content, HTML5 video will be better indexed than closed counterparts, and should return in more search results as well as work better with targeted searches. This would increase the audience viewing the content, increasing ad views, increasing revenue. To top it all off, HTML5 video plays without any plugins. Plugins add stability, performance, compatibility and security issues that may not be inherent in the browser itself. This is a win for everyone involved save for the providers of the closed source formats.
So what to do as a consumer?
As always, voting with your wallet is the best way. Appstorm.net lists some of the top sites that use HTML5 for video delivery. Add them to your Boxee, GoogleTV, or other bookmarks and view their content above closed-protocol-based feeds.
Write to your favorite providers requesting they open up! Spread the information from this article to others, and let them know that we are on the cusp of another media revolution.
The content providers need to know that if they aren't careful, they'll lose out to indie sites that aren't afraid to adapt. Or, worse, connection speed is only increasing and illegal filesharing sites are alive and spreading. Networks risk losing profits to content cannabalism, just as the big five labels did ten years ago.
My plea to traditional networks can be summed up as such: People want to consume your products. While people will always steal some content, many steal because of artificial barriers imposed by you. Don't make the same mistakes the music industry did. They might have prevented a few people from pirating a few albums--but they also missed out on scores of profits and fans.