Simon Seroussi - Business Of Media

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Episode XVII – Going Pro or Go Home [18th Blog Post]

GoPro Inc. has made its has mark in the camera world. Nick Woodman started the company in 2002 with the aim of creating a camera that could capture with professionally looking camera angle. The fast-growing video camera maker sells dozens of millions of its cameras every year, pulling over a billion dollar in revenue yearly.

Today, investors are starting to see it as a fad, its in ending cycle. GoPro is facing important financial difficulties.  Since August 2015, its stock price has lost more than 80%, going from north of $64 a share to $11.65 today. The company announced lower than expected quarterly earnings and laid off 7% of its employees would define today’s GoPro customer’s base as people with a lot of GoPro-shot footage and unwilling to shell more money for an upgraded – yet essentially identical –camera.

Now, the company is now trying to turn things around with a complimentary product, and an entirely new device.

The complimentary product are two apps. After purchasing two video editing apps earlier this year, GoPro has worked on rebranding them. The first app, Quik, allows to edit videos, such as adding a soundtrack, effects and filters in just a few taps. It also has automated editing and can do some of the work for you. The other mobile app, Splice, “allows for deeper editing: […] change the speed of their clips, choose from more filters, transitions, and text options [video narration, mixing tracks etc.]”.

The second part of GoPro’s strategy is Karma, a camera-equipped drone capable of following the user’s movements and coming back to him after launching it in the air. While its truly revolutionary features remain to be seen (indeed, similar products are already hitting the market), one must salute GoPro’s efforts to enter this challenging yet promising market. 

Will any of these efforts be the catalyst GoPro needs? While this question is still impossible to answer, I believe that GoPro’s efforts show a smart change of strategy to steer away from simple upgrades in markets that are flattening – something Apple is also now suffering from – and venturing in new parallel markets in which their existing products can add value.

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Episode XVI – Its All A Game.

Gamification is an interesting concept that has enormously gained in popularity in recent years. It consists in applying typical elements of game playing to other areas of activity and has permeated many disparate industries: from education to dating. It can boost the attractiveness for a product or simply user engagement for an activity, or even a cause. Something, gamification is clear: the user has to play some sort of game involving a product or a process to be rewarded. In many ways however, gamification also materialize itself more implicitly: innovators try to make products that can at times be seemingly bothersome into fun experiences.  In other words, the goal is for everything to offer some form of entertainment.

A mobile application, Videorama, “makes editing mobile video actually fun” according to TechCrunch blooger Sarah Perez. The app’s need stems from the fact that smartphone users shoot hours of video footage but often leave it idle in a phone, in a folder’s folder in the desktop Photo app, or in an external hard drive. With Videorama, there is no learning curve: in a few clicks you can “do things like trim videos, add text overlays, music, or special effects”, like a pro. The app drives revenue via in-app purchases such as special FX or overlays, or – the most popular purchase – taking off the brand’s watermark from Videorama-edited videos.

I believe Videorama makes an intelligent use of gamification by engaging the users to have fun utilizing content he already spend time filming. Gamification has already imbued video content – with pioneering shows like Dora The Explorer – but it has yet to effectively penetrate video and music distribution where its potential applications are indeed harder to imagine.

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Episode XV – Bridging Human Connection And Technology

There are more than 1.5 million applications on the Apple Store, and just a little more on Google Play. Competition in this environment is not merely driven by the quality of the app, the efficacy of the execution, or the reach of marketing, its also luck and – just like the stock market – can depend on some variables outside of anyone’s control and unable to perfectly predict. The game Flappy Bird illustrates that trend: it was originally released on May 24, 2013 and only took off suddenly in January the following year, becoming the most downloaded app in the store and earning its creator $50,000/day.

However, when your name is Casey Neistat – a social media influencer with a cult following shy of 3 million people on YouTube, half a million on twitter and 1.1 million on Instagram – releasing an app assures dozens of thousands of downloads, a day. In the summer 2015, Casey launched Beme, an app in which videos are shared and disappear, similarly to Snapchat. A viewer can easily respond to the video with a reaction, a photo of his face as he reacts to the video. What differentiates Beme from its competitors is its social aspect: you can’t take a video and look at the screen at the same time. Thereof, you are forced to put the screen against the palm of your hand – of your chest, as Casey demonstrates it – to shoot a film. Neistat wants to allow people to connect through technology without giving up human and interpersonal live experiences. While his app was still in very early stages when released, he and his team have since worked to revamp it and make it more functional by giving it a more intuitive UI. Today, the New IOS app can be downloaded here, and might open tech companies to consider developing technologies that keep us in touch with our humanity.

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Episode XIV – ISIS’s Anti-Democratic Use Of Technological Democratization

Access to technology has increased significantly in the last 30 years: almost every consumer around the world can buy a smartphone and roam on the web. In the past decade, this technological democratization has escalated to the point where professional and amateurs have access to similar technologies. Not too long ago, it was almost unimaginable to create popular video content without the support of a studio, the backing of a production company, and the presence of an expensive cast. Today, YouTube overflows with professionally edited video, Instagram is saturated with professionally edited photographs, and feature films like Paranormal Activity cash dozens of millions of dollars in the box office.

Previously, only professionals had access to such software, then company saw the value in client-facing sales and one could buy Final Cut Pro for more than $1,000 and Photoshop for $700… today these two software cost respectively $300 and $10/month, or can be easily illegally pirated. While this era has allowed for the common people to let their creative voices heard, it has also allowed devious organizations to more easily disseminate hateful ideas.

One of the most well known example of this happening is the Islamic State’s use of propaganda videos to attract new recruits and spread hateful ideals in the world. This week, ISIS released a video portraying children in military training accompanied by A Nasheed – vocal Arab chants – sung by a kid in French. The rousing chant threatens the West with an army of children ready to “sacrifice their lives” and superimposes images with high-quality photography and an agile use of camera angles.

Professionally edited videos such as these give ISIS an edge and dispel the idea that extremist groups are archaic lack any form of modernity. Using social media to promote these videos allows ISIS to establish a cool jihad, attracting thousands of youths in Europe and around the world, who often realize too late where they stepped in.

Technology is easily transportable and reproducible. While it might be hard for ISIS to restock in weapons, creating these videos is within anyone’s reach. This issue raises complex questions concerning the possible – and morally justifiable – regulation of technology.

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Episode XIII – Could Dreaming Work?

In on of this year’s biggest deal in video distribution, mass media giant Comcast has purchased the iconic film production label DreamWorks for $3.8 billion, more than “35 times [of the studio’s] 2016 Ebitda”. While as the result of the announcement the share prices of other studios have climbed – Lions Gate by more than 8.5% – experts claim that the move does not guarantee the same treatment for other studios.

Why then, did Comcast overpay for DreamWorks? Because it can. Comcast is valued at $150 billion, making it more than 130 times larger than its counterpart. In purely economic terms, the purchase will be beneficial in the long run. Comcast says the purchase price represents a “high single digit operating cash flow multiple” through synergies and savings that will reach, according the Wells Fargo, $300 million a year.

DreamWork’s five units that Comcast are purchasing, in order of size, are: Feature Films accounted (57% of the revenue), Television Series and Specials (25%), consumer Products (9%) and a New Media Unit which mostly consists in stake in AwesomenessTV (8%). According to Deadline, “Other segment which include live performances and licensing of its software tools was less than 1%.”

The purchase is strategic, and it is yet another one of Comcast’s strategic moves in the video-viewing environment. Comcast is hoping to use its scale and financial power to propel itself as a leading provider of kids and family content through AwesomenessTV and deals to produce shows for Netflix. For Comcast and its investors, the purchase is a drop in the bucket and yet might prove valuable in becoming a leader in a particular niche of the ever-more fragmented video distribution industry.

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Episode XII - Niche-ing

Video is, as shown by the topics of my previous blog posts, paramount in today’s entertainment economy. As in any market, products are segmented by type, quality or price: mobile, desktop, amateur, semi-professional, free with ads, subscription-based, freemium, and so on.

A young player recently announced a new offer. Fullscreen aims to leverage its connections and experience as a social media star talent agency to create a premium subscription service featuring YouTube -initiated shows (and therefore casting YouTube stars).

The company will directly compete with YouTube Red – a service provided by the Google-owned company – which already produces high-quality shows featuring YouTube stars. However, time has shown that YouTube Red positioned itself more as an ad-free version of the platform (similarly to Spotify’’s paid service).  

Fullscreen, on the other hand, will focus on producing exclusive high-quality shows (while offering for free the audio content through ITunes podcasts) at a price-point almost two times less that of YouTube Red: $4.99 vs. $9.99, a “price tag [which] should be easier for teens and young people to swallow”.

With the mediocre results of YouTube Red – while it is still in early stages, a source at YouTube said that the “channel received only 7 cents per minute watched by Red subscribers, versus 33 cents per minute on the ad-supported side” – it is still very early to make any prediction as to the future of Fullscreen’s new service. While its service seems more specialized and has a clearer goal than YouTube Red’s, the democratization of professional software (Final Cut Pro) and knowledge (the internet) raises doubts as to the usefulness of a production company for ‘amateur’-created movies.

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Episode XI – Stand(ing) Alone against Netflix.

In the realm of video on-demand this past week, the news scoop was Amazon’s announcement to launch its streaming product as a standalone service, not merely accessibly through an Amazon Prime membership. With this announcement, the Seattle-based e-commerce tech giant hopes to ramp up their offer and compete head-to-head more fiercely with global market-leader Netflix.

While you might be quick to think that Netflix and its 80+ million subscribers watching original content is going to be hard to destitute. Don’t be so sure, Amazon’s offer, a dollar cheaper than Netflix’, includes 4K video, a feature only available to its competitor’s premium paying clients. Amazon’s also boasts high-quality original content, such as Transparent “which snagged five Emmy wins last year” and prides itself on high-value deals with HBO to showcase popular “old” shows such as The Wire and The Sopranos.

Amazon’s strategic move was timely, as Netflix recently announced in its quarterly earnings announcement a price hike: “Netflix customers will start to see their subscription for HD service rise to $9.99 from $7.99.” This has had quick market ramifications: since the announcement of this potential threat, Netflix’ stock was setback 17% and Amazon’s share propelled 7%.  

Amazon intelligently coupled this change by allowing prime customers to know pay monthly $10.99 providing “full benefits including Video, free shipping, and access to its streaming music service”.

While Netflix is still kind of the hill, Amazon’s 20+ million customers are steadily rising, and offers such as these show the world that the tide can still change.

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Episode X – The Power Of Influencers

Social Media Influencers have swamped the web. Originally on blogs, these new stars with massive following now have access to many other mediums such as Facebook, Vine, Instagram, Musica.ly, Periscope, amongst others.

From the onset, companies used influencers to promote their product. Now, streamlined and trackable platforms have emerged, as many companies are looking to enter that new flourishing market.

Neoreach, an influencer marketing platform, gives companies the opportunity to search for influencers to promote their brands, create and manage campaigns, and track the success of these initiatives. Taping into a database of more than 10,000 influencers, Neoreach offers brands the possibility to use every one of the mediums cited above to showcase their products.

The reason why influencer marketing has become such an attractive enterprise resides in the work of influencers. Indeed, influencers usually gained popularity by presenting/discussing industry-specific products/services. Therefore, when they promote similar brands, they appear opt-in, resulting in these campaigns not resembling anything remotely close to advertising. Audiences are more likely to listen to these influencers that they voluntarily follow than other forms of ads, even user-targeted ones.

Gwynnie Bee – the self-proclaimed Netflix for clothes – has made use of influencer marketing and has focused on video, as vice president of marketing Jennifer Ogden-Reese saw the medium as offering the highest growth. Why? “To tell our story because these women want to hear from other women about their real experiences with clothing”. In other words, the values of video appear to correlate the value added by influencer marketing over traditional advertising: its people talking to people, people telling stories, it’s looking for discussion rather than forcing a sale. I believe video influencer marketing, instead of treating us as consumerist commodities, is more human.

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Episode IX – The Turning Tides of Copyright

Last year, reports from Tru Optik – an audience measurement company focusing on private trackers (i.e: bitTorrent) – announced that the fifth season of Game of Thrones had smashed all piracy records, reaching 32 million illegal downloads for just the FOUR first episodes! According to Tru Optik, "in the US alone, nearly one million consumers downloaded episode one, which translates to $44m in unmonetized demand potential if each of these viewers subscribed to HBO Now for the three-month duration of GoT season five”. Simple calculations put those numbers at $968 millions globally for the first four episodes, therefore conjecturing potential non-monetized revenues of $2 billion for worldwide viewers. That’s almost  %50 of HBO’s $4.7 billion annual revenue for that same period. To enlarge the perspective, that is 8% of Time Warner’s annual revenue of $28 billion for the year – and the show is only released during 3 months.

Needless to say that piracy is economically relevant. That being said a recent report by the Sydney Morning Herald seems to indicate that the trend might be changing. While Game of Thrones illegal downloads have risen exponentially more than the number of television viewers since the show aired (figures in the US: from 4.28 million in 2012 to 14.4 in 2015, while TV views went from 4.2 to 8.11 in the same period), recent reports indicate a decrease of illegal downloads. In Australia, authorities believe it is a combination of “education (piracy is theft, and it costs jobs), intimidation (the high-profile, if largely unsuccessful, legal campaigns against torrenters), and innovation (the entry of low-cost, high-definition streaming services)”. Personally, (I’m an HBO subscriber, but could not find my password) I have received a warning form my Internet provider after I illegally downloaded the show, it appears US efforts to deter piracy have increased.  

In conclusion, it seems that Time Warner’s efforts to globalize its offer and better agreements with international partners has begun to pay off.

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Episode VIII – Tale of Citizen Journalism

Citizen Journalism is nothing new. However in recent years, the practice – which consists in citizens collecting and disseminating information – has embraced mobile and social technologies and reached new heights.

Police shootings, ongoing political turmoil, and conspiracies…. people have raised their voices to discuss and denounce these situations.  They have counterbalanced the fact that high-impact social justice journalism has started to die out

For people, mediums are numerous: blogs (personal and public, i.e. medium), media platforms (YouTube…), social media, etc. While this democratization of media has allowed raising awareness for important social issues, it has also decreased the already-dwindling quality of content.

Facebook announced it will now be simple for people to create their own Live broadcasting videos. As with its previous product, Facebook is poised to beat the competition (Meerkat etc.) because the platform is already present on hundreds of millions of phones and more than a billion people use it on their portable and desktop computers every day.

This is certainly going to facilitate citizen journalist and I believe that an array of Social Media Influencers will specialize in giving live news. To put it in Mark Zuckerberg’s words, “Live is like having a TV camera in your pocket”.  Monetizing citizen journalism has already been explored by certain start-ups like NYU-student established Fresco News, which sends its users notifications when an event is happening around them, encouraging them to capture footage and submit for a chance to make some cash.  Facebook’s Live function however has capabilities to go beyond a simple news-disseminating app and – similarly to live 360 video announced by YouTube a couple weeks ago – will have application in other fields: it will allow users to share with any live experience with their following: concerts, sports, family-events etc. It is possible to imagine a possible Live integration with VR/AR/MR, and thereof conceptualize a world in which live experience has lost its intrinsic value and everything can be experienced virtually.

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Episode VII – New Reality Awakens

Imagine being able to project images in your field of vision, having the power to merge reality with the digital … the possibilities are endless. The tech seems so advanced, some entrepreneurs created a film about it, Augmenta. While Google Glass and Microsoft’s soon-to-be released Hololens give a taste of AR’s possibilities, Magic Leap, one of the most talked about and secretive start-up – not located in the Silicon Valley but with offices in suburban Miami, Florida – is claiming it will accomplish just that. And although the company has gone through three rounds of financing totaling to $1,42 billion and led by giants Google and Alibaba, it has yet to release a product to the public, let alone announce a beta.  It has has been widely criticized, with many convinced that Magic Leap– similarly to Theranos – is more talk than action, that the “it "looks too good to be true" (an audience’s impression visible in the comment section of this video Magic Leap released a year ago).

Recently however, Peter Yang for Wired silenced some skeptics with the release of an extensive profile on the Floridian company, unveiling some of the product’s inner-workings and hinting at some of the technology’s future applications. Before I say more, get a peek at what Magic Leap’s tech can achieve here. 

Magic Leap is not a lens; it is – to put it in its founder's words Rony Abovitz – a photonic lightfield chip. Contrary to current AR solutions that project an image onto a glass in front of the eye, Magic Leap beams light into the eye and tricks the eye to focus far or near depending on where the virtual object is situated.  The company remains secretive as to how the technology exactly works. As Yang explains, "intellectually, I know [it is] an elaborate simulation, but as far as my eyes are concerned it’s really there [...]". In short, Magic Leap crosses the limits of virtual reality and reaches for the sci-fi-like mixed reality, where virtual objects are not only integrated to the virtual world but are also responsive to it: a virtual object can be hidden behind a ‘real’ object yet exist.

According to Yang, reality-alternating technologies will open up the tech industry to a new currency, experience. We will be able to “generate, transmit, quantify, refine, personalize, magnify, discover, share, reshare, and overshare experiences". He continues by emphasizing the growth of the industry, and is not hesitant to compare the upcoming construction of culture and conventions in VR/AR/MR to that of the Cinema. He assures that “Magic Leap [has] an opportunity to become [one] of the largest companies ever created".

Augmented Reality’s possible uses are indeed widening and as a result, other players in neighbouring industries, especially video distribution, are eyeing the market. This week’s announcement that News Corp led the seed round of web-based augmented reality Australian startup Plattar confirms that idea. And if Peter Jackson believes in the endless possibilities of AR, I do too.

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Episode VI – Return of 360 Virtual Reality

Virtual Reality has been around for a while: the Sensorama invented in the 1950s engaged viewers with video, sound, smell, and touch. It is one of many examples of virtual reality predating the headsets we are familiar with today. Virtual reality, which can be broadly defined as a technology replicating real environment and allowing a user to interact with it, has recently made leaps and bounds.

These headsets, such as the popular Oculus rift, allow users to be fully emerged into new worlds. But as in any market, “spin-offs” alternatives have started to surface: I believe the biggest contender to be 360 video, a cheaper alternative to fully immersive virtual reality.  Furthermore, 360 video adds a layer to the market-pulls that attracted cord-cutters: audiences can not only easily watch video content when they want to, they can interact with it and rendering the viewing experience a personal and unique one.

Although 360 video has also been around for some time, YouTube has announced groundbreaking news: the online-video Google-owned Giant will be launching live 360 video channels. Fancy a courtside seat to see up close Stephen Curry’s impeccable shooting technique? You’ll soon be able to watch it from your smartphone on your commute.

The announcement is not only threatening more expensive virtual reality options – the Oculus rift retails for $599 and needs a computer to power it – it could potentially become a dangerous competitor to live sports offers, be it cable, satellite, or online-live streaming skinny bundles. In other words, 360 video isn’t merely quickly taking its rightful place as a major player in the newly formed virtual reality industry; it will also certainly steal shares from various other markets.

One of the biggest differences between current VR options and 360 video is the democratization of the latter. Putting on an intrusive headset makes current VR options ideal for tech savvy individual. But it only took me a few seconds with an url in the body of an e-mail to make my baby boomer mother smile as she interacted with a a 360 video. With perfect integration to Google’s Cardboard, 360 video is going after everyone.  

With the Google powerhouse – accustomed to and involved with enhanced reality technologies, such as Magic Leap – and the YouTube platform behind it, I believe live 360 video will be making waves globally.

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Episode V – Satellite Providers Strike Back

The threat to cable and satellite TV of Netflix and other streaming services like Hulu is evident. In recent years, the number of cable subscriptions has drastically decreased by the hundreds of thousands per quarter in the past few years. People, looking to save money and watch their favorite shows whenever they desire, are switching to over-the-top content.

As a result, a previously fragmented and diverse TV audience has witnessed its own consolidation into a particular type of viewers that see added value in watching a specific type of content live: sports fans. Nielsen data, as seen in the graph below, reflects this shift. Ten years ago sports programming accounted for only 14% of live viewing in the U.S. Today, it represents nearly all of live TV viewing, with 7% accounting for “other programs” (Nielsen, 02-22-2016).

To retain this live TV-viewing and in try and to recreate an appeal for TV viewing cord-cutters, a new hybrid offer has slowly made its appearance in the market. Initialized by DishTV, SlingTV allows viewers to stream TV channels on their computers and portable devices, including costly sport channels. AT&T will now follow suit with the recent announcement of the release of their service in the third quarter of this year.

It was the satellite providers that introduced this new product because their TV offers are much better perceived than that of cable providers. At first sight, this offer seems similar to web-only services provided by Netflix, Amazon or Hulu. However, the growth of these so-called “skinny bundles” has been really low, adding less than 100,000 subscribers a quarter. Is possible that in the video distribution segment, hybrid-services do not work? This questions remains to be answered.

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Episode IV: HBO’s New Hope - part2

As I’ve mentioned in previous blog posts, Netflix has been dominating the on-demand video industry. Before the tech giant’s ascent, Time Warner Inc’s HBO was unambiguously the network people went to access high-quality content: from the Sopranos to The Wire and Sex in the City.

With the release of its standalone streaming service HBO Now, HBO became one of the only services capable of offering a deferred and live on-demand video package with an internet-only subscription priced at $14.99 a month. The number of HBO Now subscribers announced earlier this year, 800,000, has been a huge disappointment and fell much below analysts’ expectations.

The suspected cause for this initial failure is believed to be timing: according to journalists, direct competitor Netflix has offered, "more compelling year-round lineup compared to HBO" (Brand Reed, BGR). Indeed, the new seasons of HBO’s current headlines, namely Game of Thrones, Silicon Valley and True Detective, all premiered in the spring or early summer, hence acquiring and retaining customers only seasonally.

Now however, HBO plans to face Netflix on a global scale by offering catered programming to international audiences. In other words, HBO wants to create more “show addicts” to put it in The Motley Fool's contributor Daniel B. Kline,  and plans on achieving this goal by becoming more “ecosystem agnostic”  (Chris Smith, BGR). HBO plans to increase its show offering all year around, and make it more than ever accessible on every platform: laptops, phones, smart TVs, and other devices capable of running independent apps.

Will that be enough to face Netflix? The giant is no longer the new kid on the block, the Internet company re-affirmed itself as the market leader for cord-cutters: this year, it will release 600 hours of original content, and expand its online-only offer to 130 new countries.

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Episode IV: HBO’s New Hope

Before the Netflix’s ascent, Time Warner Inc’s HBO was unambiguously the network people rushed to to access high-quality content: from the Sopranos to The Wire and Sex in the City. 

Recently however the pioneering tech giant has dominated the on-demand video industry. HBO, now through its standalone streaming service HBO Now, has been trying to compete with Netflix by offering very high-budgeted TV-series whereas the Los Gatos,CA Internet company has been focusing on licensing previously released series and the distribution of medium to low-cost original productions. And while HBO has been pretty successful selling their offers in cable bundles, they are losing the online video-on-demand war.

That being said, in Time Warner’s latest Q4 earnings statement and recent news, a shift in HBO’s strategy has been outlined. HBO is planning on delivering its productions on a more global scale while driving efforts to appeal to a more “agnostic ecosystem” in HBO's CEO Richard Plepler words.

This new strategy certainly fits the growing number of cord-cutters who do not want to pay for cable to access HBO's high quality show. I believe this to be a smart strategy that might drive down the illegal downloading of ultra-successful shows like Game of Thrones if a readily available online streaming option is offered. Nevertheless, the competition will be rough as Netflix recently announced will increase the volume of their original programming by by 33% from 2015, bringing more than 600 hours of footage to its users.

HBO, may the force be with you!

see more at: http://bgr.com/2016/02/15/hbo-now-movies-shows-international/ see more at: http://www.fool.com/investing/general/2016/02/19/heres-how-time-warners-hbo-plans-to-take-on-netfli.aspx

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Episode III: Revenge of the Content Creators

              In The Creative Apocalypse That Wasn’t Steven Johnson discusses whether or not the age of digital reproduction will undermine the livelihood of artists and hence their creative output. Although the post-Napster world has brought along the fear that “we will end up in a world in which no one has an economic incentive to follow creative passions” (Johnson 3), data indicates that “the voices of artists seem to be louder than ever” (4). Their numbers have been stable, even growing in certain industries, and while it is certain that this new era has changed the lives and identity of artists, they make money capitalising on new and existing trends: actors now have access to hundreds of new studios and content providers (Netflix, Amazon, FX etc.), musicians have increased their income by focusing on live performances, and novels have found new shelves in evermore popular indie bookstores.

             In short, the evolutionary and radical innovations brought upon by the digital revolution have induced a process – to put it in Joseph Schumpeter’s words – of creative destruction: some players disappeared, new ones have emerged, and many have been able to evolve, artists being a prime example.

             In the context of video distribution, more specifically in the film and “TV”-series industries, Johnson –based on rotten tomatoes ratings– argues that the quality of provided has not decreased. What has changed interestingly is the way content is now produced, created and distributed. The previously segmented operational chain that begun in Hollywood and ended on your TV-screen took a drastic turn: players like Netflix and Amazon create, produce and distribute content in a new complex digital supply chain. This not only gives them immense freedom and control, it also gives them the opportunity to create content in harmony with the development of new technologies (3D, 4K video etc.).

             Large media conglomerates have retaliated either through new offers (Time Warner’s HBO) or, more recently, by attempting to use their established power to limit competition. In my previous blog post, I discussed Verizon’s and other wireless providers’ efforts to promote their video streaming service over competitors by implementing bandwidth data caps. Similarly, Comcast has announced it will start testing broadband data caps but will exempt its own Stream TV service from the rule. As described by James K. Willcox in Comcast Data Cap: The ISP Wants You to Pay for Netflix Binges “if you use more than the 300GB allotted each month and want to continue streaming, you'll have to buy additional 50GB blocks at $10 each”. Netflix has recently distributed more and more highly acclaimed original shows (by releasing entire seasons at once). While this technique might have been initially limited for Netflix –as usage most likely peaked ephemerally after releases– the quantity and diversity of newly released shows will certainly cause a more stable user presence on the online content provider. I believe Comcast’s attempt will only succeed in receiving a heavy backlash from its clients and soon enough sanctions from the FCC as new data caps strategies have recently swarmed the media industry.

- See more at: http://simonseroussi.com/2016/02/21/episode-iii-revenge-of-the-content-creators/

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Episode II: Attack of the Wireless Providers

      In the past two decades, Net Neutrality has been an important subject of contention, principally between cable companies and the rest of the world. Laws were voted, discussed, criticized, amended and ultimately defended by institutions, companies and individuals in favor of an open internet. Indeed, after much debate the FCC voted in 2015 to uphold Net Neutrality rules, preventing internet providers to take measures such as  bandwidth throttling . Recent news however show that Internet Providers have not given up their desire to control the data flowing through their cables.  

Net Neutrality Timeline

         While discussions on the topic had cooled down despite cable companies  probing for loopholes, Verizon’s latest actions have refueled concerns about the enforcement of Net Neutrality rules.  After canceling the existence of unlimited data plans a couple years back, Verizon has now begin unveiling its new business strategy to profit from data while remaining in a gray legal zone.

        In January, Verizon introduced FreeBee Data 360. Through this service, content providers can provide consumers mobile content without using these customers’ very expensive shared data plans as well as engage customers in marketing campaigns. Colson Hillier, vice president, Consumer Products at Verizon argues it is “designed to help marketers take an active part in consumers’ mobile lives” (prnewswire). A Verizon representative continued in the line of Hiller’s argument and told Re/code “FreeBee Data 360 is an open, non-exclusive service available to other content providers on a non-discriminatory basis. Any interested content provider can use FreeBee Data 360 to expand their audiences by giving consumers the opportunity to enjoy their content without incurring data charges.” (Why Verizon’s Free Go90 Net Neutrality Argument Is Weak). This idea is however largely flawed. The ‘service’ indeed allows larger companies to drive better customer engagement than smaller start-ups in an internet space normally characterized by equal opportunities.

        Verizon’s strategy was further unveiled throughout a new measure that excluded its new video streaming app, Go90, from  bandwidth caps . What this means is that mobile users will use their data to consume on-demand video services such as Netflix or Youtube but will be exempt from data usage if adopting Go90. Although as Re/Code points out “Verizon defended its service as a win for consumers”, it is a blatant example of unfair competition as Verizon controls the networks. Ultimately, Verizon’s argument argument is weak. That being said, the company was still confident enough to push the new measures through and are now emulated by other major players.

         In short, it appears FCC Chairman Tom Wheeler still has a lot of work to do.

- See more at: http://simonseroussi.com/2016/02/21/episode-iii-revenge-of-the-content-creators/