I was a little surprised when I read this. NBC was doing
time-shifting & editing of their showing of the opening
ceremonies of the Olympics (China 2008, Summer). What surprised me
was this bit:
As the four-hour ceremony progressed, a game of digital
whack-a-mole took place. Network executives tried to regulate leaks
on the Web and shut down unauthorized video, while viewers deftly
traded new links on blogs and on the Twitter site, redirecting one
another to coverage from, say, Germany, or a site with a grainy
Spanish-language video stream.
NBC seems to have completely missed two important lessons that
could have been learned from watching RIAA & those sharing
music online:
- You can't win.
- You'll be disliked by your fans for trying shenanigans.
Before I go any further, let me state unequivocally: NBC has
every right to do this. It's their feed - they bought the rights. I
just don't think that this is the best way for them to act.
As you can read in this article: NBC didn't win. Sure they
stopped many people from watching but I'm also sure that they knew
at the outset that it was a mitigation approach: lessen the numbers
of people who would get the content, not stop it entirely.
You never come off looking good from slapping down fans. Clearly
these people want what you have to offer: otherwise they wouldn't
be trying to watch it. It's what Steven Page, of the band BNL, talks about their
stance on getting content to fans. Regarding DRM & file-sharing
MP3s:
We're trying to ... listen to our fans and see how they want the
music delivered to them.
It reminds me of Seth Godin's blog:
Do you own trees? In a nutshell: Newspaper (& book)
publishers don't own trees or printing plants, so why do they get
hung up on dead-tree books?
Similarly, NBC doesn't own TVs - so why focus so much on the TV
version? (Of course, GE owns NBC - so they do, in a sense, sell
TVs. But I don't think this is part of a strategy to sell more
TVs.)
NBC offers full versions of their TV episodes online. I don't
know if they are time-delayed, but they obviously understand that
they are a media & entertainment company: not a TV-show
company.
Cannibalize Away
As the NYTimes article states: it was about ad-revenue. Clearly
NBC was expecting these attempts: they had their lawyers ready. I'm
sure that they ran the numbers and figured the lawyers were cheaper
than the potential for lost revenue.
I read a relatively good book in the completely wrong time. I
picked up for $3 in the bargain bin (authors: it's a hard truth,
but remember that
your creative property eventually wraps fish):
Unleashing the killer app. It's more than a bit dated: it reads
like a manifesto for early 2000 digital media.
But one important idea stuck with me: cannibalize your
revenues.
The book talks extensively about the idea of cannibalizing your
revenues. In a way, I think they were right. If your choice is
"maintain status quo and current revenue" or "cannibalize revenues"
then it seems like a bad choice. However, I think the reality of
online media is often different. The choice is "cannibalize
revenues" or "lose revenues to a different offering."
The RIAA is making a third option which is "fight for the status
quo" - but I think this option is a short-term solution to a
long-term problem: technology has changed the way music is
delivered: the status quo isn't a long-term option. Best-case: you
can get government protection in a few countries, but in many
countries it won't fly: and you'll lose those revenues. Again, a
mitigation strategy at best. And think I think we've understand the
brand cost that goes with this approach.
The choice is either deliver it how people want (even if that
means sacrificing existing revenues or reducing them) or someone
else will. The fans will find a way. Hiding behind laws (and
litigation) is, at best, a stall tactic. And there is a brand cost
associated with that.
Which problem are you trying to solve?
So, what do you do? You could look at this problem in one of two
ways:
- You need to keep the content on the TV where you can sell
ads
- You need to find a way to get revenues from non-TV
mechanisms
NBC took route 1. But route 2 is available. Maybe the finances
don't yet make sense: there was more money available from TV ads
than online. And that can work - for now. Every Olympics that
passes, more people will be looking online. More people will get
their content online. More people will be aware that you tried to
stop them.
The cost of stopping them increases and the value of the TV
option decreases.
That is, assuming the content is the same.
So why make it the same? My TV is 32" and supports HD (High
Definition: mine supports 720p to be precise). My computer monitor
at home is 19", my laptop at work: 15.4" and my iPhone has a 3.5"
screen. And the bandwidth (cable, internet, or cell phone
connection) is different on each too.
Why on earth would I want the same content and quality with
each? I don't.
Different content for different tastes, times, and formats.
In 3.5", I'm not going to be able to visually see the
photo-finish of the US men's 4x100 swimming relay as the anchor
swimmer passed the French swimmer in the last 15m. I will, however,
appreciate that in 720p HD.
But I do have my iPhone with me when I am not at my desk,
laptop, or TV: so give me news there. (To their credit NBC has a
good mobile site for the Olympics.) And let me watch things live
from a device when it is happening live: for things where "live" is
important (like the lighting of the Olympic torch).
It's the same for movies, in my mind: I want a certain
experience in the theater. Some movies I pay for the theater
(sometimes even the IMAX), some I don't.
It's the same for music: some bands encourage sharing bootleg of
their concerts - and that can be a good listen. But I also want the
studio album.
The kicker in all this is that NBC is spending time and money to
get over 2,200 hours of Olympics online. They realize it is
important: so why did they miss so dramatically with the opening
ceremonies?
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