Media companies have a crucial decision to make: do they want to get more revenue per user out of a user base that will quickly lose share to Experience-First Piracy, or instead do they want to take a near-term revenue hit in order to shore up their digital service partners’ longer term future? Ironically this happens at just the time that Amazon increases its pricing for Prime and Netflix is considering increasing its pricing in order to cover higher rights costs. For Netflix and Spotify et al, that means getting below $5 a month. Pricing: The harsh reality of the internet economy is that when something is widely available for free you have to make your paid-for product even cheaper than it was intended to be.Which means that content companies need to saddle them with as little up front rights acquisition debt as possible, freeing them up to spend big on development and design. This means licensed services have to be continually pushing the user experience envelope, using their capital to hire the very best designers and developers. There will never ever be the user experience gulf again. Now the ante has been well and truly upped. User Experience: Before Experience-First Piracy, the retort to media companies was that all they needed to do in order to stay ahead of piracy was to create more compelling alternatives.It is time to treat them as first class customers, not second class ones. BlueRay and DVD are fading yesteryear technology, the media industries’ most engaged and valuable audiences are online and using online services. As soon as a release is ready for its first post-theatre window it should go straight onto the paid video services. The movie studios need to learn that lesson fast, and treat Netflix and Amazon Prime etc. Windowing: Netflix can only dream of having the content Popcorn Time has, just as early licensed music services could only dream of having the catalogue Napster had in 1999/2000. The problem itself needs addressing with three key strategic focuses: So what can media companies do to respond to Experience-First Piracy? Legal action will be the first port of call but ultimately it is a pain killer, not a cure. Three Ways to Hit Back at Experience-First Piracy The emphasis there is on the ‘might’ as it is an argument that ultimately the Pirate Bay was not able to defend in court. What’s not to like? Worse still – for media companies, not consumers – these sites might – even have a legal defense as they do not actually host any of the files. It looks and feels just like the real thing, only for free and with even better content. Popcorn Time and the inevitable coming wave of new Experience-First piracy apps will give piracy truly mainstream appeal. Until now, piracy was largely the domain of youngish tech savvy males (69% male, 50% under 35). “What if a series of open source APIs were built on top of some of the more popular file sharing protocols so that developers can create highly interactive, massively social, rich media apps which transform the purely utilitarian practice of file sharing into something fun and engaging? If you thought the paid content market was struggling now imagine how it would fare in the face of that sort of competition.” In fact Popcorn Time looks exactly like what I envisaged two years ago: Forget whack-a-mole, this is potentially a drug-resistant, mutating contagion. With multiple development forks already this is an entirely new beast in the piracy arena. On top of all this Popcorn Time is open source, with installer and project files all hosted on developer collaboration site GitHub, and with the app built on a series of APIs. In fact one might argue a ‘Netflix clone’ interface (see figure) but with new releases that Netflix does not even have. Instead of downloading the video Popcorn Time streams them to the end user, with titles selected from a neat Netflix-like interface. Popcorn Time is an open source interface that sits on the top of pirated video content on torrents. This is the new era of Experience-First Piracy. However bad piracy might have been for media companies, it is just about to get a whole lot worse. Now with the arrival of Popcorn Time that scenario has come to pass. Two years ago I said that the nightmare piracy scenario for the media industries would be when the pirates gave up trying to fight enforcement and turned their attentions to build great user experiences.
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