Category Archives: Internet
Netflix Splits In Two, Hello Qwikster
Netflix CEO Reed Hastings just posted a blog post. He announced that Netflix is going to split into two companies. One will focus on streaming only. The other will continue delivering only DVDs by mail. This second company will have a separate brand – Qwikster.
Largely, users don’t have to do anything. If you just subscribe to DVDs, you will be moved to a Qwikster account. If you only pay for streaming, you will remain a Netflix user. However, for users who subscribe to both are bound to be a little annoyed. Instead of being able to search one site, you will now have two separate accounts, two separate bills, and most annoyingly – two separate websites to handle. That means two queues to edit and keep track of. Oh did you already watch that on streaming? Sorry, you didn’t take it off your DVD que on qwikster.com. We’re still sending it to you. Sorry you forgot to remove it from both of your queues.
This seems like yet another bungled step in the current odd track of moves Netflix has taken as of late. Luckily, Netflix doesn’t have serious competition, but it almost seems like they are willingly creating an opportunity for one to step up.
I had a feeling this is exactly what Netflix was trying to do when it announced it was separating DVDs from Streaming plans. They realize DVDs are old media. Expensive to ship compared to just moving data, and far less convenient.
Modern Love
It’s strange how the phone is the next step in social connection these days, as if that is somehow more serious, more personal, more dangerous than, say, letting someone into your daily thoughts and photos.
Analyzing Netflix’s Price Increase
Netflix recently announced an upcoming price change for their DVD delivery rental service. Their old plan stood at 9.99 per month for 1 dvd out at a time, along with unlimited streaming. You had the option of going streaming only for 7.99. Netflix is now splitting apart the dvd and streaming plans, making the DVD only plan also 7.99. While this means if all you use is DVDs, you will be paying slightly less, but for those who want to keep their old DVD and streaming plan, they are now paying 60% more.
The question is why the sudden drastic increase? As they are still making a lot of profit, it is hard to say it is greed alone. Instead, I think there are a few reasonable theories.
Development
One theory is that Netflix is going to shift from simply being a content deliverer, to a content producer. In fact, they are already doing this, as they recently bought their first show that will be produced by them alone, and distributed only on Netflix. Alternatively, they might want to buy content to distribute exclusively on Netflix, eliminating competition from Hulu, iTunes, YouTube and others.
You can see evidence of this already. See this and this.
With other content distributors seeing them more and more as real competition, it makes sense to produce your own content in case a movie studio chooses to not give you a deal. Further, if the content is compelling, Netflix could be the next HBO, convincing people to pay just to watch the original content.
And they just recently added Mad Men streaming. This all costs money to purchase rights for.
Kill DVDs
Another theory making the rounds is that Netflix is looking ahead to the future. In a very Apple like move, they realize that physical media is dead, so they are making it less desirable to receive it.
It costs more each year for Netflix to ship those discs to your house. They also have to buy the physical copies. Streaming on the other hand, costs little in physical media after the rights are acquired. Netflix has done a great job getting their software and brand on blu-ray players, TVs, cell phones, and video game consoles everywhere. They are invested in having you be able to access their movies on almost any device. Now, they want to focus on that shift.
The CEO even admitted as such:
The reason we felt confident about doing it now is the strength of streaming-only. We got convinced can that we can thrive on streaming-only, the best timing was now.
I believe the company also realizes that they if they want growth outside of the US, streaming is the way to go. Cheap, reliable, expedient mail isn’t available everywhere. But if you can get internet access, you are a potential customer.
Accounting
Finally, there is a theory floating that is a little more interesting. Netflix has to make deals for each film they put on Netflix. While the terms of these contracts aren’t known, it can be speculated based on how these deals are made in other media that studios are charging per potential viewer. Therefore, the more Netflix streaming users, the more Netflix has to pay per film.
Under the old plan, everyone who got a DVD got streaming in addition. I am positive many people who watch the DVDs rarely, if ever, stream. Many people use the DVDs and aren’t even aware of the streaming option. But, Netflix is paying for their potential eyeballs. By offering an option to switch to just DVDs, they can make sure they are only counting real streaming users.
In my opinion, Hollywood should be mighty grateful for Netflix. I believe that easy access to content discourages piracy. iTunes gave an easy alternative to searching for MP3s that might have viruses, be incorrect links, etc. Netflix is a great tool in the fight against illegal downloads.
Hopefully, the studios have taken notes of what happened to the music industry and aren’t destined to make the same mistakes. Even if they charge a little less per viewer, that is income that won’t be there if you drive users to illicit methods. The problem of course is that the value of the media is being lowered. Again, using an iTunes analogy, everyone now would never pay more than .99c for a song. You have reduced the value of a song tremendously. Hollywood is scared to death movies will go down this path when people are used to paying 9.99 a month for unlimited movies. Will be interesting to see where this lands.
Streaming Music Services
Some of you may have heard about this new service Spotify that just launched. Here is a quick announcement video:
So, just what the heck is it? I already use iTunes – do I need another music service? I’m going to break down what type of service Spotify (and its competitors) is, as well as how it compares to current music services – and even give you an insight into costs and features, so you can make a decision.
If you are still looking for a Spotify invitation, Klout is giving me a few invites to give away. Click Here. First come, first serve until they run out!
What is it?
Spotify just launched in the US this week. Before that it has been a Europe only, very popular, streaming subscription music service. Other streaming subscription music services are MOG, Rdio, Rhapsody, and Napster. Strangely, the last two seem to be forgotten lately. I don’t know if they simply don’t have all the features people are looking for, or perhaps they are stuck with a bad image due to being associated with the by-gone era of Napster and Realplayer. Grooveshark is similar to these, but offers its services completely free. How does it get away with it – basically by being quasi-legal. Grooveshark relies on users to upload media, like YouTube does with videos. Then when the music copyright holders come yelling, Grooveshark can limit liability and just delete that user and their uploads. This method allows for the service to be free, but also creates havoc when trying to find a particular track.
These services are similar to, but definitely NOT streaming radio services like Pandora of Last.fm. Those two services, while great (and free) are radio style services. You do not get to choose what you want to specifically want to play. Like the radio, you can choose a genre or similar artists – but if you want to play a specific song right this moment, you are out of luck.
Also, these new streaming music subscription music services are NOT storage lockers like Google Music of Amazon Cloud Player. With both of those services, you take music you have already downloaded, upload it to Google or Amazon’s service (a task that if you have a lot of music like me takes DAYS). Then you can log in from any computer and stream the music down to that device. (iTunes cloud service is even more differentiated. It won’t let you play via stream at all. You will be able to download copies of songs you already have to another device, but essentially you are doing just that downloading another copy, not streaming.)
To explain streaming music subscription services like MOG, Rdio and Spotify – think of these services like iTunes, but you don’t have to pay to purchase each individual song. You pay a monthly subscription fee, and you then get to stream whatever songs you want, whenever you want, for as long as you want. Its like you were given an iTunes gift card that never ends. this makes it decidedly different from streaming radio like Pandora.
The other key difference, is that you never actually download any music files to store on your computer (later I’ll explain this is kind of untrue in certain circumstances, but for the most part a very real consideration). This makes it different from Google Music storage locker type services, and iTunes download type services because you never actually buy or own the songs. You subscribe to access them. They are not stored anywhere on your computer.
The downside of this is that if you travel on a plane or are somewhere without internet access you can’t get to any music. Alternatively, if you stop paying the monthly fee, you obviously can’t access them. Or, if the company goes out of business, again you lost access to all that music. The upside to this? For one, its much more cost effective. Each track on iTunes is $1.29, on amazon .99c. Around 7-9 per album. Most of these services allow you to stream to your computer, unlimited music for $5 per month. So for the cost of an album you get all the music you want. Second, it also saves space. If you stream to your iphone instead of saving the music you don’t eat up all those GBs for music, meaning you can start shooting more video or downloading more apps.
Twitter Legitimacy
For those of you who are heavy twitter users, you know there are many celebrities on twitter. However, there are a lot of fake accounts as well. So, how can you tell if a twitter account is legitimate?
Today twitter unleashed a new feature that should make this a bit easier. They have created the “follow button”. Basically, this is a button on any web page that links back to a twitter account. Ideally, if you go to a celebrity’s web page, they can have the button on their site to link you to their official twitter account. Or, even if the celebrity doesn’t have a web site, other web sites can list the official twitter account. The example on the twitter blog was Jennifer Lopez. Let’s say you go to IMDB to see what movies she has been in. They would list a link to her twitter account on her bio page, which you could click to follow.
This is all dependent on trusting the linking site, but it is a lot better than just blinding picking a twitter account to follow.
More than 50 sites have added the Follow Button today, making it easy for you to discover the Twitter accounts of your favorite reporters, athletes, celebrities, and other personalities. Using the Follow Button is as simple as a single click. You can also see the profile and latest Tweets of the account you want to follow by clicking the username next to the Button.
Google Music
Today Google announced a new music service. While last year they boldly pronounced they would be soon launching a music purchasing service to compete with iTunes, it seems that was a bit too ambitious. What they have launched is more of a competitor to Amazon’s Cloud Music service.
So, what exactly is it? Watch the video:
Basically, imagine instead of storing your music on your computer and your iPod, you stored it online. Therefore, you don’t need to be in front of your computer to listen to your music. You don’t need to worry about running out of space or having your iPod synced. Instead, you access your music from any computer or device that has internet access.
A good analogy is that it is like Pandora, except you get your music library to go. So, you can make playlists and choose exactly what you want to listen to instead of a radio stream. I only hope that as an iPhone user, they either release an iPhone app, or Apple launches their own competitor.
If you want to sign up for it, you can here. It’s a limited beta, so you need an invite.
YouTube Copyright School
YouTube has created a video to educate users who are uploading videos that violate copyright laws. Interesting take on teaching the finer points of IP law.
Twitter, Attribution and Copyright
In Copyright law, two of the rights the owner of the copyright has are the right of distribution and the right of public display. (Copyright term definitions thanks to http://www.bitlaw.com/copyright/scope.html)
The distribution right grants to the copyright holder the exclusive right to make a work available to the public by sale, rental, lease, or lending. This right allows the copyright holder to prevent the distribution of unauthorized copies of a work. In addition, the right allows the copyright holder to control the first distribution of a particular authorized copy.
The public display right controls the public “display” of a work. This right is limited to the following types of works:
- literary works;
- musical works;
- dramatic works;
- choreographic works;
- pantomimes;
- pictorial works;
- graphical works;
- sculptural works; and
- stills (individual images) from motion pictures and other audio visual works.
On twitter, the popular microblogging site, there is the concept of the “retweet“. This is when you post exactly what someone else said to your twitter stream. I think you could potentially make the argument that this violates both of the rights I listed above. You are now distributing someone else’s creative work (I take for granted that you believe a tweet is an original creative work, which could be argued itself) without their permission. I can do nothing to stop you.
Now you copyright nerds will probably think, “wait, what about first sale doctrine?”.
The distribution right is limited by the “first sale doctrine”, which states that after the first sale or distribution of a copy, the copyright holder can no longer control what happens to that copy. Thus, after a book has been purchased at a book store (the first sale of a copy), the copyright holder has no say over how that copy is further distributed. Thus, the book could be rented or resold without the permission of the copyright holder.
However, I would point out that nothing is “sold” on twitter. The point of IP law is that we want to benefit the creator through compensation, in order to encourage them to create. Here, the tweeter has not yet profited. You could probably say he profits by the retweet, but I might counter that he would rather gain a follower than have you simply retweet his work for others to see. One could envision a twitter account that does nothing but retweets another account.
Another argument could be that Twitter is a free service, and users know what they do when they send things out into the universe on it. Going further, there is almost definitely a clause in the User Agreement that anything you post is the property of twitters, and not yours. Therefore anyone can retweet it with Twitter’s permission.
That is fine, and I grant that admission. However, my point here is that Twitter is indicative of most people’s understanding of copyright on the internet. Most people don’t realize people don’t generally have the right to distribute another’s work. Instead, most people believe that as long as you attribute something, like you do in a retweet, or on the popular tumblr site by “re-blog”ing something it makes it legal. This is simply not true. But, in this current generation it is almost like a de facto license to use the work, what I would call “attribution licensing”. It makes it ok to use a work, even though you have no permission from the artist.
How will this shape copyright understanding in the future? I believe generations who grow up with the internet will have vastly different understanding of “owning” the rights to a photo or written work than those who grew up before it. The question is whether it will affect legislation and lead to actual statutory changes to reflect societal understandings.
Would that be detrimental to artists? Would we get fewer works, or would they simply not post them via online tools? Or, are the benefits of the “attribution” and attention from that enough to warrant use of the social media? I’m waiting for the first large scale false attribution where something is widely spread as attributed to someone who didn’t create it. Then we will see how people react to attribution as licensing.
Internet killed the IP Star
Intellectual Property theorist and professor Eric Johnson posted today the start of a series explaining his thesis that the internet has proven that the main tenants behind the argument supporting IP rights is wrong.
Sure, the internet allows for the easy skirting of US copyright law – see napster, bittorrent, etc. However – while he has not explicitly spelled this out YET- Johnson appears to be arguing that the internet also indicates we don’t need IP laws to encourage creativity.
The real driver of intellectual property law, especially in the United States, has been the idea that if copyists can take a free ride on the creative and inventive labors of others, then people will generally stop bothering to create and invent.
This is the classic economic argument for intellectual property law. And it makes perfect sense. But it turns out to be wrong. Even wildly wrong.
For a variety of different reasons, it is now possible to say – with confidence – that the classic economic rationale for intellectual property law is in error. The reason we can say this now (and maybe could not have said so with conviction not so many years ago) has to do with recent history and recent scholarship. Between what we are seeing taking place on the internet and what we have learned from new academic research, especially in the field of behavioral economics, we can now say that the field of intellectual property law has long been laboring under a false assumption.
I am going to guess that he will point to evidence that people are sharing creative works online (like videos via youtube, and written works on blog) free of charge. Therefore, we don’t need economic incentives to encourage creation. However, I would counter that there is a vast difference between the 30 second clips uploaded to Youtube by a 14 year old and a fully funded studio film.
I am really looking forward to his next few posts.
