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:

  1. You can't win.
  2. 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:

  1. You need to keep the content on the TV where you can sell ads
  2. 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?


Thursday, August 14, 2008, 12:00 AM

tagged: videotechnology, bnl, drm, lawyers, musicindustry, nbc, olympics, openingceremonies, riaa, swimming, china, 2008