The Pirates Strike Back
With so many video streaming services now, we need a unifier
20 years ago, the music industry had a problem. The rise of always-on, broadband internet connections mixed with the invention of simple media file compression to create an explosive situation: piracy.
Everyone points to cost being the biggest driver of piracy, but as the subsequent 20 years have proven, that’s not exactly the case. Sure, cost is part of the equation, but perhaps less the absolute cost versus the cost difference. That is, the amount you had been paying versus the amount at which the new offering is priced. Said another way, it wasn’t just that Napster was cheaper then the legal alternatives for getting music — it’s that it was so much cheaper (as nothing tends to be) versus paying $15-to-$20 for a single CD.
Anyway, that’s all obvious. Less obvious, but arguably more important in the above equation is something that’s a bit harder to measure: convenience. It wasn’t just that Napster was so much cheaper, it’s that Napster offered a far better experience. Even if a song took a few minutes to download, and even if an album took an hour, that was far better than getting in your car to go to a store to buy said $15-to-$20 CD.
Apple was able to battle back against piracy by altering the equation in both ways. First, they significantly lowered the price of legal music, by not only lowering album prices across the board to $9.99, but more importantly by lowering song prices — previously only sold via CD singles which were still usually around $10 — to $0.99.
But here too, the more important factor was convenience. Because Apple was able to get all of the music labels on board, basically all music was available any time via the iTunes Store. And because Apple also created the most popular MP3 player, the iPod, their store worked seamlessly with that device.
Apple couldn’t beat Napster’s free price, but they could offer a better selection and a better experience, for a lower price than what was previously available on the legal side of the equation. The streaming services just changed the equation even further once high speed wireless connections became ubiquitous. I mean, we now have access to basically all recorded music, 24/7, in our pockets, for $10/month. And, as a result, the music industry has come roaring back, with piracy just an afterthought.
I bring this up because we seem to be in the early stages of something similar playing out on the video side of things. As an article in The Verge this past week points out, the piracy of movies and television shows may be on the upswing due to services like Plex.
Plex, like Napster, may not have been explicitly built with the notion of easing piracy, but it’s doing the job nonetheless because the experience it’s providing is so much more seamless than the current legal state of the art.
What’s fascinating here is that the ingredients potentially leading to the rise of piracy this time around are totally different. With video (meaning, again, movies and television shows), we already have great streaming options. And relative to the amount of content they serve up, they seem fairly priced.
The issue is three-fold, or four-fold, or five-fold, soon maybe six-fold, or seven-fold. Netflix. Amazon Prime Video, Hulu, HBO, Apple TV+, Disney+, HBO Max, NBC Plus Max Super Ultra or whatever, and so on.
We were all so focused for so long on the great unbundling of cable, that we didn’t think through the ramifications. And again, by this I don’t predominately mean price — which plenty of folks recognized early on would likely go up with everything going a la carte — I mean convenience.
Even if you were willing to pay $10 to $20 for each of the services listed above, the experience of trying to find something to watch, sucks. And actually, I’d argue it gets worse the more of these services you have. Because you have to check each of them individually.
Before the unveiling of Apple TV+, the rumors were that Apple had been trying for years to create a service that was essentially a newfangled TV Guide for the era of the great cable unbundling. They may have been too early, but they could seemingly see the writing that is now more clearly on the wall — and will get a lot more clear to everyone this fall. Video content is about to be fragmented to all hell.
As you can see by their (lackluster) “Watch Now” area of the “TV” app on Apple TV (and soon, confusingly, many other devices), Apple wanted to create a hub to consolidate the content across all of these different services. But the powers that be wouldn’t bite. Or only a few of them would. And so you can’t, for example, find Netflix shows in this area. Which, given the dominance of Netflix in streaming, makes this area almost worthless.
Apple undoubtedly thinks that they can gain leverage to get Netflix to play ball. But they clearly failed in their first attempt at this by failing to make the Apple TV device ubiquitous — the old dominate with a piece of hardware playbook. Now they’re seemingly using Apple TV+, the service, as a new stick for this purpose. Once again, it probably won’t work.
In a twist, what may end up saving this vision is the aforementioned piracy. If and when the situation gets bad enough, that’s when all the players will start to agree that something like Apple’s TV Guide idea needs to exist. But because Apple is now a player in the content world as well, it will be harder for them to pull this off. And because unlike with music, there is no consumer expectation of full catalog interoperability, it’s going to be a lot more complicated.
Related, unlike with iTunes or the music streaming services, I don’t see this as a service anyone pays for. If there are transactions, it will be in the mold of Amazon Channels — people subscribing to streaming services from within Amazon’s walls. Which Apple is trying to do now as well, of course. Instead, what we need is a layer that sits on top of all the services you subscribe to, in order to make the shows and movies seamless to find and watch.
Again, Apple has been trying to do this. And is still trying to do this. But they’re maybe 50% of the way there, at best. The ideal experience is probably more akin to something like what Plex offers. And again, that’s because the pirates have created a more seamless experience since they don’t have to deal with the powers that be, legally.
The focus there is on the content, not the service which delivers the content. These services have become the new television channels, and no one cares anymore, because why would you? Even HBO is losing their sheen.
Given that you now have to pay for all these services individually, you might think these companies would be okay with someone else creating a UI layer on top of their content. But that becomes problematic from a customer relationship standpoint if and when people grow tired of paying for all of these services individually. Which we will — see: above.
And yet, that is the only way forward. Because again, it’s not just the cost side of the equation. Even if you are eventually paying for all of these services, the experience of using them as their own, stand-alone apps is sub-par. Which is a nice way of saying “crap”. It’s like an egg hunt in a coal mine. Friends was on Netflix, now it’s on HBO Max. The Office was on Netflix, now it’s on NBC Whatever. So and So Movie was on Amazon Prime Video, but now it has been pulled to stream exclusively for the next three month window on Showtime. You will not be able to keep up with it all. Nor should you.
In a way, the success state here ends up looking like… cable. A simple, unified UI to serve up the different content you want. Even better if you can buy different content sources as… bundles. Funny that.
