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Starz Announcement Augurs End of Grokster

Starz_1Starz CEO Robert B. Clasen issued a challenge to programers at the National Cable Television Association conference, urging them to stop thinking linear. Among his suggestions:

  1. The use of "button bonuses" to incentivize navigation choices, thereby creating upsell and cross-sell opportunities
  2. Rethinking navigation systems and the way consumers are educated
  3. Moving major movies on demand to two weeks prior to their premiere airing on the flagship Starz channel
  4. Incorporating DVD-like features such as interviews, behind-the-scenes and other short form programing into movie fare
  5. Changing the mix of on-demand programing to incorporate independent films, foreign productions and other niche content that has historically not been a mass audience draw

Clasen also predicted that the definition of on demand will soon mean viewers will be able to watch whatever they want, whenever they want, and wherever they want. I think this means the beginning of the end of P2P providers like Grokster and Kazaa.

The contradictions in the battle between labels and P2P providers come from P2P providers trying to have it both ways. They want to be a passive operator like AOL without having to monitor the (il)legality of what their customers do. Yet they want to operate their business like a network and collect affiliate and transaction fees.

This reminds me of the early days of cable. All sorts of networks came out of the woodworks, all saying variations of the same thing. "People love our programing, you (as the cable operator) will get lots of advertising dollars and we'll all make money." Today, the P2P guys seem to be telling the labels the same thing: "Hundreds of millions of people can't be wrong, you're going to get some money instead of nothing, and can't we all just get along?"

Now, as was the case then, the issue isn't just about making money. The labels know how to do that. What the P2P industry has not done is convey their vision on risk management. Clasen has filled the void left by the P2P players by telling content publishers how they make money without incurring risk to the way they currently do business. Clasen will be joined by a whole distribution ecosystem that encompasses studios, labels, and network providers who are all on the same page. Those who insist I don't get it probably aren't listening anyway.

As for the 130 million copies of Morpheus already downloaded? I'd argue that the half-life of media is getting shorter and shorter. Once upon a time there were millions of copies of Netscape Navigator 1.0 in use. Today, it's virtually impossible for find a copy of the executable, either online or on CD. I'd bet the only people that have still have copies are the ones that worked on the project. The rest of us, as excited as we were then, have somehow found a way to move on.

Link: PaidContent coverage of the NCTA


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