Web 2.0: Future of Entertainment with Cuban, Hastings, Powell, and Ev
I was really looking forward to this panel about the entertainment industry. The panelists were Mark Cuban, Reed Hastings, CEO of Netflix, Michael Powell, former head of the FCC, and Evan Williams, founder of Blogger and Odeo. What I found most interesting were Powell's insights on how government regulation is a) hideously out-of-date, and b) has negatively affected the industry.
Hastings: Forces of control vs. forces of freedom (traditional broadcast media vs. internet / people in this room) the primary concern of the forces of control is people in this room. The internet is tossing things on its ear, but will take longer than we expect because of exclusive content deals.
Cuban: Hard drives & flash memory will change the way content is distributed.
Battelle: Thought good content would route around forces of control?
Ev: There is a replacement for video itunes--it's FireANT. [first I've heard of it, thanks Ev!]
Cuban: Content is changing, but delivery mechanisms aren't changing. We don't have delivery mechanisms to keep up.
Battelle: i thought we were going to get to the future fast over IPTV. Why is Korea ahead of us?
Powell: In Korea, 80% of people live in highrises. We need bolder, further-reaching broadband policy. We still look at it like utilities regulation, our government think it's oil, gas, natural gas, water, and broadband. But if Broadband is [truly] a revolution, it's a hell of a lot more than that: broadband access can lead to socioeconomic policy, opportunity for many Americans, better health care.
Powell: "I ask my 16 year old so, why don't you pay 99c on iTunes? Dad, that sucks, music should be free. But this is the same 16 year old that has a $40 ringtone bill. He's become acclimated to paying for content like that."
Battelle: Why are content companies suing their customers?
Cuban: Simple answer, the job of a studio exec is to keep their job. It's easy to blame declining sales on piracy.
Powell: Hiring lawyers and suing is a hell of a lot easier for the average corporation than being creative.
Hastings: Content exclusivity is a problem even though the distribution technology exists. Buying physical media is ok. I don't agree with Cuban that IPTV rollout won't happen--for Netflix customers a 12 hour delivery time is much better than a 24 hour [Ed: or longer] delivery time. The bandwidth for a human to absorb a large screen is enormous, and they want high quality content to take advantage of their tools. Music people will trade convenience for quality, but video people won't.
Powell: Communications policy is premised on single monopoly of a switched telephone company. Government embraced the idea that one telco is more effective distribution mechanism. Government competition is premised on technology tied to a specific service (telephone over coax is regulated differently from telephone over twisted copper). We need to tear apart these buckets.
Ev: User generated content can compete with big media in the sense that it competes for attention. People are willing to sacrifice production values and quality when there's a personal connection.
Cuban: Advertisers will pay for audio and video on the net, so you create content for it. There's no entertainment concept there, "build it and they will sell it."
Powell: We should be aware of disruptive forces in content. Look what skype did to telco.
Cuban: There a huge opportunity for user generated content.
Q: Why can't i download movies from netflix on my tivo?
Hastings: Licensing problems, even Movielink, owned by studios, has so few movies. It has nothing to do with technology and everything to do with protecting existing business models.
Q: How do you see convergence happening between people being able to create content with so many available high quality tools?
A: content is there, but the distribution is a problem.
Hastings: What the internet needs to do for a movie is create demand. The costs of production have come down, but Netflix create demand for longtail product. Marketing can't work the same way with movies as with content because it's a one-time brand experience. Content is serializable, but movies are one-and-done.
Powell: Broadcasting is one declining segment of the media sphere. What is the holistic perspective on the media landscape that includes the internet, cable, satellite, etc., and how should it be regulated?