Weekly News Roundup (1 February 2015)

February 1st, 2015

It’s been one hell of a week here in Australia. Two weeks ago, we had almost no streaming video-on-demand services, and now we have two, with Netflix on its way too. Australia may now have the most competitive SVOD markets anywhere in the world, and Netflix’s success here may no longer be guaranteed.

We’ll have more on this later in the WNR, for now, let’s start with the copyright related news stories.

Copyright

iTunes 10

Digital music sales have fundamentally changed how music is sold, from the days of (much more profitable) CD albums

Another nail into the coffin for the notion that piracy reduction leads to increased revenue, based on the far too simplified idea that every pirated copy is a lost sale. Despite a dramatic decrease in the music piracy rate in Norway, revenue for the industry has barely changed, and in real money terms, may have decreased since the heady days of piracy.

Whereas in 2009, 80% said they downloaded pirated music, now, only 4% admit to doing so. And despite the country’s tougher copyright laws, it was refreshing to hear from the country’s anti-piracy lobby that new legal services, and not legislation, has been largely responsible for this change in behaviour. But despite music piracy having been practically defeated, music industry revenue in Norway remains flat.

The explanation is simply. The fall in music revenue has little to do with piracy, and much more to do with the transition from physical media, CDs, to digital. Highly profitable CD album sales gave way to cheaper digital track sales, and revenue has been going downwards ever since (which is common sense, since there is quite a difference in earnings between paying $12 for an album of 12 songs for only one song that you actually want versus paying $1.29 for the same song as a download). The fact that piracy, itself a by-product (or side effect) of the digital transition, rose during the same time period only suggests correlation, not causation.

Now, some of this lost revenue is being clawed back by revenue from streaming. It’s not going to replace what was lost by CD album sales, which seems to be the chief complaint of the music industry these days. They’re just going to have to get used to the new normal, because purchasing habits have dramatically changed and no amount of blaming piracy is going to change it back.

High Definition

For video streaming, things are changing too. Instead of relying on the (often limited and frustrating to use) streaming capabilities of other CE devices (such as Blu-ray players, smart TVs and game consoels) to watch streaming content on their TVs, more and more are using dedicated media streamers such as Apple TVs, Rokus, Chromecasts and Fire TV Sticks. And even more, 40% of households, will be using them by 2017, says NPD.

Amazon Fire TV

Devices like the Amazon Fire TV are taking over from Blu-ray players and game consoles for TV streaming

It goes the other way too. Streaming services need to realise that user experience is sometimes just as important as the content. Taking a look at Australia, where the streaming scene has exploded in the last week with the launch of not one but two new streaming services (and this is before Netflix even arrives, in March). Both new services, Presto and Stan, have decided to go down the Android, iOS and Chromecast route (Stan additionally also supports Apple TV). Devices like the Chromecast now represents the quickest way to get video streaming apps on TVs, even TVs without Internet connectivity, and it’s also easier for developers than having to work with Microsoft or Sony, or who knows how many other smart TV makers, to get apps onto these closed platforms. Netflix, with their experience and expertise, will be able to launch in Australia with greater hardware support, and that will give them a big advantage.

Microsoft does have an advantage here, with Windows 10 apps likely to work across a range of Windows and Xbox devices, making it easier for developers (and increasing the incentive) to make apps for that platform. Sony, on the other hand, will have to hope that the PS3/PS4’s popularity is incentive enough for video app developers to take on the platform (time will tell if Presto and Stan get PS3/PS4 apps). That leaves the smart TV makers, all of whom have their own closed platforms that developers will have to take a lot of time to learn and develop for. What smart TV manufacturers need is a common app OS, and Android TV may be the answer.

Apps and OS’s aside, what has made things easier recently has been the increasing support for HTML5, which allows websites and apps to share common code, and for an easy way to streaming video. YouTube’s decision this week to default to HTML5 for its videos, for Chrome, IE 11, Safari 8 and Firefox beta users, is the best indication yet that this is the direction all web/app developers will be heading towards. It’s bad news for Flash though, and I think even Adobe realises that its time has come and gone.

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That’s the way. See how every story this week seems to have segued nicely from one to the other? I love it when this happens, even if sometimes I have to take force the issue somewhat. See you next week.

Weekly News Roundup (25 January 2015)

January 25th, 2015

How has your week been? Mine’s been great. I went to watch a night of tennis at the Australian Open during the week, which was pretty awesome. Have also been binge watching season 3 of American Horror Story. So busy week, lots of news stories as well, plus dealing with server issues (more on that later).

Let’s get started.

Copyright

The Pirate Bay's New Homepage

The Pirate Bay’s New Homepage – looking more and more like it was before

Those regularly checking The Pirate Bay website to see when it will be back will have noted some major, and familiar, changes this week. With 6 days to go (as of the time of writing) before the countdown timer strikes zero, the homepage now has a very familiar look, complete with search box (still “locked” and unusable, unfortunately). It’s the biggest clue as to what will happen on the Feb 1, when I assume everything gets “unlocked” and TPB goes back to normal operations. If you want to find out more on the Pirate Bay raid, you can have a look at this article written by TorrentFreak.

Speaking of The Pirate Bay, regular visitors to Digital Digest may have noticed some connections problems recently, and if you want to find out why, this other TorrentFreak article has a pretty good explanation for it. Getting DDoS’d by errant Chinese DNS servers trying to redirect zombie Pirate Bay tracker (and also to Facebook, YouTube, porn site) traffic, is a new one for me and other server admins I’m sure. I’m not blocking all Chinese traffic like many other server admins (some are even blocking Australian IPs, which is unfortunate), but have put in measures that should hopefully filter out the misdirected traffic (at least most of it).

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Popcorn Time

Netflix worried about Popcorn Time

It’s not Amazon, Hulu Plus or even HBO’s standalone streaming product that is worrying Netflix most, according to the company’s CEO. Instead, it’s piracy and in particular Popcorn Time, the so called “Netflix for Pirates” that is the company’s biggest competitor, says Netflix’s Reed Hastings.

The reason Netflix’s boss specifically pointed out Popcorn Time was not because, like most other piracy tools, that it allows you to get free content. The reason Popcorn Time is such a threat is that it compete with Netflix directly on the one thing that Netflix is great at: making things easy. Instead of downloading a torrent file, starting a download, downloading the actual file and getting it to play using a media player, Popcorn Time offers the same easy to use click and play interface that Netflix is famous for. And this is why Netflix is worried.

Add to the fact that Popcorn Time is likely to have all the big hits, whereas Netflix subscribers can only dream about watching ‘Frozen’ or ‘Guardians of the Galaxy’ or ‘Dawn of the Planet of the Apes’, and you can see why Netflix is worried.

However, it’s worth noting that Hastings described Popcorn Time and piracy in general as a “competitor”. This is such a refreshing change from the usual rhetoric you hear from others in the entertainment industry. It means Netflix is willing and ready to compete, to offer better, unique (ie. original) content, and to innovate, instead of litigate, their way to the top (or rather, to remain at the top).

High Definition

And it’s working, at least based on the Netflix satisfaction survey I mentioned in last week’s WNR. And satisfaction is likely to continue to improve as long as Netflix keeps working hard to bring new content to its network, starting this weekend with the streaming exclusive release of The Interview, only a month after the film’s original theatrical release. No doubt Netflix paid big bucks to Sony to secure the rights, and the bucks had to be big because the Netflix release of the film in US and Canada comes three weeks before the movie hits Blu-ray and DVD.

Comments about the quality of the movie aside (a lot of people don’t seem to like it, and the publicity the movie earned seems to have helped it quite a bit – the movie probably would have flopped at the box office badly), the atypical release schedule for The Interview should be studied to see if it could represent a new way to release (certain) movies. And I suspect Sony’s willingness to sacrifice disc profits in exchange for selling the rights to Netflix could also signal the studio, and Hollywood’s interest in finding a new way to do things. Who’d thought that we’d have North Korea to thank for all of this!

And Netflix might have to work harder to bring more original content and exclusives to its subscribers, what with HBO’s standalone streaming service rolling out soon. But it’s not Netflix, but cable companies, that may have the most to fear from a newly uncoupled HBO, at least according to a new survey which found that 50% of those interested in HBO’s new service will cancel their pay TV bundles once it is launched.

It’s a pretty well known fact that many current pay TV subscribers are only keeping their subscriptions because of HBO, and so having a standalone HBO product will mean they no longer have to pay for subscriptions they don’t need.

House of Cards Poster

House of Cards was nearly an HBO show

But HBO had to make this move into the increasingly competitive streaming marketplace, not just because it’s what subscribers want, but because in time, the likes of Netflix and even Amazon (what with their Golden Globe win for ‘Transparent’) will be able to catch up with their own original programming. Netflix boss Reed Hastings recently revealed just how competitive the content licensing market has become and how the streaming giant missed out on Amazon’s award winning ‘Transparent’. According to Hastings, HBO also failed to secure rights to ‘House of Cards’, but managed to grab ‘True Detectives’ from Netflix. Both Netflix and Amazon are trying to turn themselves into HBO by purchasing original programming, and so HBO has to compete in the same market space now, rather than later.

For now though, a $15 HBO streaming account seems reasonable for the quality of programming you get. But in time, HBO may also have to offer content from other networks to expand their library and make the product more like a premium version of Netflix. That’s my guess, at least.

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And that’s all I have for you this week. Hope you enjoyed this WNR, see you next week.

Weekly News Roundup (18 January 2015)

January 18th, 2015

Things are finally starting to come back to normal in terms of news, I guess people are just starting to get back into work (earlier only physically, but now mentally as well). I’m the same too, so it’s very likely that it wasn’t the lack of news, but my lack of interest in reading and writing the news, that was the cause for the shortened WNR from previous weeks.

Okay, enough waffle, let’s get on with this week’s roundup.

Copyright

Hotline Miami 2

Banned in Australia, so the game’s makers says it’s okay to pirate

When is piracy okay? When the content creators says it’s okay, apparently. The banning of the ultra-violent Hotline Miami 2 game (banned not for the violence, but for sexual content) in Australia has so angered one of the game’s designers, that he has urged Australians to pirate his game and play it that way (and don’t even bother sending donations or anything like that, just enjoy the game, says Hotline Miami designer Jonatan Söderström).

While at first this seems like quite a controversial move by someone who is directly harmed by piracy, if you actually think about it, it’s not that controversial at all. With the game banned in Australia, it will be very difficult for gamers here to buy the game legally (they can still use VPNs to access overseas online stores, like Steam). With no expected income to come from Australia, why not let fans and gamers pirate the game? It can only help to promote the franchise, and really, comes at very little financial cost for the publishers.

Just goes to show that the effects of piracy isn’t always black and white, and there are many instances where piracy is not harmful, or it can be even helpful in some situations.

The Pirate Bay

Not long to go before we find out if The Pirate Bay will be making a comeback

While Hotline Miami 2 has not been released yet, by the time it is, and if Australians still can’t buy the game, they might be able to download it from The Pirate Bay. “But wait a second DVDGuy,” I hear you asking, “isn’t TPB dead?”

It might be right now, but it looks like the world’s most popular piracy site will be making a comeback. The clue comes from an encrypted message left on the site, which was finally cracked last week, revealing a link to a YouTube video. The video was a super cut of Arnold Schwarzenegger’s signature “I’ll Be Back” line, thus providing a vital clue as to whether The Pirate Bay will be back or not. The key to cracking the code (is in the actual decryption key, wearetpb) was found in the HTML source code for the page (it’s still here, if you want to take a look), and Reddit user “dafky2000″ who was first to crack the code.

The countdown timer on the site, which counts down to zero around the 1st of February, might indicate the time and day when TPB will make its much anticipated comeback. Not too long to find out if this is the case …

High Definition

Netflix

Everyone loves Netflix, apparently

Netflix leads all competitors not only in market share, but also in user satisfaction, according to a new survey. Netflix users watch far more than other users, watching an average of 7.7 hours per week, compared to 4.1 hours for Hulu Plus users and 3.5 hours for Amazon Prime Instant. The same users also enjoyed their watching experience far more on Netflix, with the streaming platform receiving a 4.1 out of 5 score. Amazon Prime Instant Video and HBO Go scored 3.4 each, cable/satellite providers 3.2 and Hulu Plus was fairly far behind with only 2.9.

Netflix was so liked, that 62% said they would still continue subscribing after a price increase, with 21% saying they were willing to pay up to $3 more. What’s most interesting was that the same question when asked in July 2013 only yielded a 9% result, suggesting that Netflix has seriously improved their content offering (very likely via original programming) in this time to make it a much more attractive and, in the minds of viewers at least, a much more valuable service.

Gaming

The Wii U has just had its best month ever in terms of sales, but that’s only because it has been struggling badly in all the months after its original launch (and now, it’s doing less badly). It’s still far behind the PS4 and Xbox One in terms of sales, and almost can’t even be considered a current-gen console, given its hardware limitations and low sales numbers.

Which is probably why Nintendo may already be well into developing the successor to the Wii U, and it may be here next year. According to the analysis done by Digital Foundry, based on information they’ve gleaned from talking to various people, the console is much more likely to continue Nintendo’s philosophy of doing things differently than Microsoft and Sony. The new console is much more likely to continue the Wii U’s attempt to fuse mobile and home gaming, with the Japanese company linking up with the makers of the iPhone/iPad’s PowerVR chip for new console’s hardware.

Whether it can be the Microsoft/Sony killer that the Wii was, or the “too little, too late” feeling that you get with the Wii U, we’ll have to wait and see.

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There’s no more wait however for the end of this WNR, which is coming right now, right here. See you next week.

Weekly News Roundup (11 January 2015)

January 11th, 2015

Another pretty quiet week as we slowly ramp up to normality in the coming weeks. Actually, quiet is probably the wrong word to use when the CES is on, but while there is sufficient quantity in news stories, much like the CES, the focus was mostly on a single subject: 4K.

Panasonic Ultra HD Blu-ray Player Prototype

This Ultra HD Blu-ray player looks like just any other Blu-ray player, but can play 4K Blu-ray discs

Which brings us to the week’s only notable story, of Panasonic’s demonstration of a 4K Blu-ray player prototype. It’s still a very early prototype, with the commercial version months away (probably closer to the end of 2015, than right now), so even this story is very much a non-story. What is slightly more interesting is the official name of the new 4K Blu-ray discs: Ultra HD Blu-ray. To be completely honest, I had kind of expected it to be called “Blu-ray 4K”, to follow the naming convention established by “Blu-ray 3D”, but using “Ultra HD” allows some room for expansion in case CE manufacturers can’t get the traction they want from 4K and move on to 8K or whatever.

So this was very much a CES dominated by 4K (just like last year’s), and proponents of physical discs will hope that UHDBD can take off and give discs a second-life. Because, based on the revenue stats from 2014, Blu-ray will need it. Revenue fell 8.7% compared to 2013, the first time revenue has fallen since the format’s inception. Of course, a lot of this is due to the lower average price of Blu-ray titles (so more discs sold, but at a lower average price, still equals a loss of revenue), and also largely dependent on the caliber of releases. It was notable that, despite being less than a year away from its commercial release, only Panasonic managed to bring a prototype Ultra HD Blu-ray player to CES this year … most of the 4K focus has been on digital and streaming options instead.

But I think discs still have a place, and especially for 4K, since the 15 Mbps required to stream a single 4K Netflix stream (which can only be considered to be “good” quality, not “theatrical” quality) may be too much for most non-fiber connected homes. Ultra HD Blu-ray discs, on the other hand, will be able to give 4K streams 3 or 4 times as much bandwidth so they can truly shine on even the biggest screens, which is what 4K is all about really. It’s like that old joke about sending TBs of data, and that sometimes carrier pigeons are the best choice in terms of throughput. So for 4K movies that may take up to 100GB of space, discs are still the best choice for now.

Speaking of Netflix, the company’s chief content officer Ted Sarandos wants to bring ‘The Interview’ to Netflix, after the film became Sony’s biggest digital release ever, grossing over $31 million after being purchased or rented 4.3 million times. It’s unknown whether Sony will bite, and how releasing straight to Netflix will impact on the studio’s relationship with pay TV operators, but it’s clear that ‘The Interview’ is new territory for all involved and could signal a new way to distribute movies in the future.

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That’s it for another really short WNR. Normal service to resume next week?

Weekly News Roundup (4 January 2015)

January 4th, 2015

Welcome to the first WNR for 2015, an abridged version since, well, I don’t think anyone’s in a mood to read (or to write) an essay length article, not this early in the year anyway. Hope your NYE celebrations were awesome, or at the very least, you managed to get a sensible good night’s sleep to get energized for the new year.

So let’s take a look at some of the stories doing the rounds for the last week of 2014 (and the first week of 2015), some of which I may cover in more detail during the next week.

Guardians of the Galaxy

A super hit at the cinemas and on Blu-ray, but not that popular for pirates …

So it’s the end of the year, and as is customary, there are a lot of “top 10″, “best of” and “year in review” type of stories. The top 10 most pirated films for the year, for example, can be found out in this article courtesy of piracy tracking firm Excipio. Surprisingly, at least for me, was the fact that ‘The Wolf of Wall Street’ was the year’s most pirated movie, not ‘Guardians of the Galaxy’ (the top box office earner for 2014), which wasn’t even on the top 20 list. One explanation is that movies like ‘Guardians’ and the new Hunger Games movie, ‘Mockingjay’ were released too late in the year to climb on the list, but movies like ‘The Lego Movie’ (4th on the box office charts) also didn’t make the top 20.

In fact, the most pirated movie released in 2014 was ‘RoboCop’ (3rd on the piracy charts, although it includes the original, and much more superior version, in the numbers) – this is a movie that was 54th on the box office charts, a flop by most standards. The piracy charts also include the 8th placed ‘The Legend of Hercules’ (107th on the box office charts), another flop that somehow beat out top movies like ‘300: Rise of an Empire’ (even if this much worse of the two Hercules films this year was available online for 2 month more than the 300 sequel, released in March).

It seems to me that pirates are very selective in what they download, and it has nothing to do with how they select which movies to watch at the cinemas, or to purchase on Blu-ray and DVD. A point that has already been made recently.

Game of Thrones: Season 4

… while popular TV shows, especially those that aren’t easy to access, *are* popular with pirates

The same may not be exactly true for TV downloads, with the top 10 list compiled by TorrentFreak matching well with the popularity/critical acclaim of said show. Though if you dig into the figures, you’ll find that many of the shows are being pirated more outside of the US, or in areas that do not have as easy/cheap/fast access to the latest episodes. Access is much less of a problem for movies (perhaps more so for certain movies that don’t get wider, or long releases, such as flops, hence the piracy), and when access is the main problem, piracy will usually follow popularity trends. Solve the access problem, then people will pay (like they do for hits like ‘Guardians’), and only pirate those that they deem unworthy of their patronage, or movies that aren’t easily available to view at the cinemas, or on Blu-ray/DVD.

Fibre Optics Cable

Fiber broadband … the MPAA’s next “public enemy number one”

But instead of focusing on the access problem, and solving that by having better and more viable options, particularly taking advantage of new technology like fiber broadband (4K cinema quality movie streaming, anyone?), Hollywood instead lets their fear rule and instantly adopts a over-cautious approach to new innovations in technology. That they’re now fighting against Google Fiber, instead of trying to find new ways to sell content to those on these super-duper fast broadband connections, just goes to show why they keep on losing to tech companies when it comes to innovation. Especially when they use dubious methods to come up with dubious conclusions about said new technology (including the fact that studios would lose $1 billion dollars a year more due to fiber, based on the assumption that 31% of the entire population of Kansas City, including little children, grandparents, those that don’t use a computer, are pirates).

Every change can be seen as an opportunity, or an impending disaster, and I just wish the creative industry, for once, looks on the bright side of things. Stop being so focused on sending DMCA takedowns, or throwing tantrums if you don’t get your way on things, and start confronting change and saying to yourselves “how can I make the best of this”, and maybe, just maybe, things will work out for the best.

So movie studios, please make this your New Year’s resolution, and I think you’ll find this will be a win-win for everyone!

That’s it for the first WNR for 2015. Hope you have a great year!


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