Owned vs. Newly Purchased Media

Owned vs. Newly Purchased Media

Fifth of a Series of Blog Posts from Maremel's White Paper: Opening Pandora's Digital Box

Challenge:
Fates of Owned Media vs. Newly Purchased Media

Will it be worth the consumer’s while to convert old to new?  Time and convenience have been trumping cost in many instances.  iCloud from iTunes, for example, provides clean tracks to replace ones you already have in your physical storage for the cloud.

UltraViolet, in the film realm, has approached this transition with a mixed package.  Buy a DVD and gain rights to using the content in any mode, including online.  The fine print on the online is for a year, with rights then to be renewed for an undisclosed sum of money.

Consumers, with available freemium storage space over 5 GB now, are being trained by the marketplace to not pay for digital storage.  Will users pay a premium to store their digital stuff, or judge whether they will use something a second time?

Other forces are training consumers to “borrow” content, for one-time use.  Video on demand has not performed as many early analysts predicted a dozen years ago, but provides a single-use option with much less revenue to the studio or producer.  The TV Everywhere initiatives by many of the cable companies, including HBO Go, are training consumers for subscription-based extensions into the mobile world from their video services.  Netflix’s 24 million subscribers (3Q2011) and Hulu’s 1 million premium subscribers are all following the call of renting a package of experiences.  All of these services provide robust ways to not “buy” anymore, with a strong connection and even tethered in many off-line environments.

Challenge:
Usage Models for “Buying” Versus “Renting”

Questions of ownership may have more to do with usage models instead of media segments.  Products may need to address different aspects of the consumer relationship, especially need for multiple sittings to consume the content (e.g., books, games, and classes).

 

 

 

Ownership may make sense across multiple users (e.g., family media ownership), who may not be sharing all of their media subscriptions.

Cloud Challenges

Third of a Series of Blog Posts from Maremel's White Paper: Opening Digital Pandora's Box

 

If we believed ads and websites in 2011, eager consumers are ready to connect everywhere and anywhere.  Consumers and content service providers face challenges in their transition to cloud-based archiving of owned media content:

Consumer Challenges:

Discovery within My Own—and Other’s—“Digital Stuff”

In the physical home, old CDs and DVDs get shoved into the back of the shelf, given to friends, or sold at yard sales.  Some consumers have built 300 DVD collections, and a few have had software that helps them know what they own and where they have put it.  Search has been visual, scanning the covers or spines of the collections.  Concepts of discovery of our own content, as well as what to do (and IF we should pay) for old “stuff” will bring consumers to question what they need in terms of long-term access to “owned” content.

  • Books: Discovery and sharing—even with physical storage—has become a bigger challenge with large libraries.  A variety of social cataloging web tools have grown to help with abundant book libraries.  Within the book space, a variety of tools are available, including aNobii, Shelfari, BookJetty, weRead, Goodreads, and LibraryThing.  Some combine information on consumers’ physical library, recommendations from the community, and possible purchase of new digital books.

Consumers face a growing challenge of digesting their owned media.  With electronic books and other media files, the physical problem escalates.  Book storage online already raises the question of title-level metadata and sterile taxonomies.  For example, Kindle’s iPad software shows titles, authors, and cover art images to scan through, with no ability (yet) on the iPad App to search or “folderize.”

  • Music: Music has extended social curation and discovery with abundant new streaming SaaS offerings.  Data-rich new challengers in 2011—including Spotify, MOD, and Rdio—launched their curation offerings into Facebook’s connection-rich platform.  Turntable.fm brought individuals out as live DJs, sharing mixes and songs live on Facebook with friends and strangers.
  • Video: With video, 2011 and 2012 spurred the launch of a whole new breed of SaaS tools having to do with shared media curation of the television viewing experience.  Cloud co-viewing tools continued beyond GetGlue to Yahoo’s mobile IntoNow, which compares the audio of what you are watching to identify and share taste in television programs.  Tunerfish, a Comcast offering, reminds users that their favorite show is on tonight as well as lets them connect to discuss the program.

Joint Ownership

Ownership may not be to one IP address or individual.  For example, I don’t own most of my content.  My family owns most of my CDs and DVDs in a shared cupboard in my home.  We have a shared hard drive, and are building new digital home storage as we speak.  Ownership, however, is shared.  Even my Netflix account is shared, with my 14-year-old running the queue (much to my chagrin).

New digital services have been dealing with this issue.  Audible, for example, delivers “purchased” audio books, which means rights to listen on- and off-line to audio books on their service on a variety of devices.  The service allows use of up to 5 devices, which can be reset at any time.  Barnes & Noble permits digital book lending for up to 14 days, but only once.  UltraViolet, which has launched a multiple mode ownership system with Paramount, Universal, Sony, Warner Bros. and Lionsgate, is another example in the video realm.  That new service permits up to six users in their Terms of Service agreement.  They have begun to release “Horrible Bosses” and “Green Lantern” (both Warner Bros.) since Oct. 2011 for home consumption under these rules; we’ll see if they change over time.

Offline and Online Use

Mobile bandwidth can be expensive for consumers to use for connecting to their own media, so Wi-Fi has become a welcome alternative for connecting mobile devices with rich media content.  Consumer storage has had to assume that you are not sitting at someone’s computer in a robust broadband work environment.  Users want to be able to fill their tablets or smartphones as a transport bucket for this week’s reading, listening, and viewing – at least under the current models of mobile monthly bandwidth contracts.

Content Provider:

 

Commoditization of Services, Migration, and Survivability

Consumers will want perfection: permanent tools for low cost.  Users will want migration and survivability if a SaaS fails, closes, or is sold, with the ability to transfer their “digital stuff” out.  Consumers will be afraid of “lock in,” as it would make them dependent on the terms of use, which might change.

Meanwhile, IaaS and PaaS will allow new systems to launch, cannibalizing existing systems and putting them at business risk.  Pure storage, with limited barriers to entry, can be a race to the bottom in terms of both service and pricing

Competing with Freemium

Many digital consumers have become trained to seek freemium business models, which give them a fairly large bucket of storage for free with extended product abilities and storage for a certain amount per month.  Dropbox, which has gained market share with its integration with the iPad, provides 2 GB for free, with more storage given for referrals (up to 5.5 GB), and even more for pay or for organizations.  Amazon’s CloudDrive is free for 5 GB, while Microsoft’s SkyDrive offers 25 GB for free.

Device Abundance from the Consumerization of IT

Increasingly, many consumers have gained the attitudes that their device is their stronghold and they have the right to use it for work and home. Publishers for mobile have been working on this question for years, and entire ecosystem layers have stepped into media platforms to digest digital output into the various carriers and devices.

 

Mutual Challenges:

Licensing:

Per the Betamax Case in 1984, users have the right to make a personal copy for their own use and time shifting. Questions repeat as to who owns what with what rights to digital copy, on what drive in what location.  As noted above, different companies are setting different rights rules as to cloud-based media.  As a consumer, the pitch seems to be rights to my stuff anywhere, everywhere, and all the time.  Start-ups, especially in music, have been pushing back on the physical-media based licensing structures while trying to launch readily on IaaS backbones.

In music, Echo Nest has launched a PaaS that connects licensing rights with new music platforms. So far, however, it only has EMI (which now has been sold) as its core.  220 young start-ups so far have launched new SaaS services based on this Echo Nest PaaS licensing-fluid platform.