Popcorn is Eating Hollywood, How Hollywood Bites Back

PopcornTime-0

In case you haven’t heard of Popcorn Time, here’s a quick rundown of what it is: (1) Install an app  (2) Open the app and get free, brand spankin’ new movies and TV shows. That’s it, magic. No waiting for new releases or hunting Netflix for the good stuff, all the latest and greatest right there at your fingertips. Make no mistake it is still downloading content in violation of copyright laws so beware. The difference is that now anyone can get these movies as easy as it is to fire up Netflix and in an interface just as nice.

How can this be so?

Well, legally it can’t. Popcorn Time is the easiest way ever to get torrent content; those new movies people you knew (not you!) used to somehow download from the internet are now right there is an easy to use, beautiful app. The kicker is that unlike the music industry which went after Napster for enabling the consumption of music without paying for it, the scary part for Hollywood is that Popcorn Time is an open source program meaning anyone can download and run the code. There is no ‘company’ to go after so the only way to stop it short of going after every person is to go after the torrent sites, a battle that has been failing since the dawn of the internets. The original creators backed away from the project, it disappeared for a day and then roared back as new groups picked it up and have greatly expanded the offering with more content, launched an Android app, and even added Chromecast support. All this is less than two months.

The rise of Popcorn Time is due to the simple truth that people want to watch the newest content without waiting for it or figuring out where to get it. Make it easy to find and consume and people will flock to your service. While Popcorn Time had Oscar winners Frozen, American Hustle, 12 Years A Slave, and more, in Canada the new arrivals on Netflix last month included the first two Bourne movies. Seriously.

What this all means is that the multi-billion dollar movie industry that relies on a business model centred around content rights and availability windows is being massively disrupted and there is little that can be done (remember, there is no company to go after). The scary part is that if Popcorn Time caught on to mass adoption and studios felt the pinch then it could spell doom for great content since it’s the money made from all of these rights dealings that pays for the movies we enjoy. As a consumer its great to get free new movies, but what happens when those movies stop getting made?

Hollywood has two options

(a) Get the lawyers busy trying in vain to shut down torrent sites, domain hosts, and going after everyone that downloads the app

(b) Recognize that the rights business models that have persisted for decades are not in step with consumer expectations in an always-on, instant gratification world and change

Just like their music industry brethren, studios are scrambling the but ultimately there is no stopping this train. The good news is that unlike the development needed to establish music downloads and streaming; iTunes, Netflix, Spotify and others are now in place and widely used. There is no user behavior chasm to cross, all that needs to change is the rules.

All of this is easier said than done. The entire music industry pulled in $15B last year worldwide from recorded music sales while global box office sales totalled $35.9B. Those numbers don’t include what HBO, Netflix, Hulu and others pay for the right to carry content which again outpace what music services must pay; Netflix is rumored to be paying Disney $300M for the rights to its catalogue and getting no new movies until 2016! The good news is that the highest revenue growth is from these streaming services and so the negotiating relationship is shifting. With Popcorn Time putting pressure on Hollywood and in position to jumpstart a potential death spiral for Netflix these two bedfellows should align as the enemy of the enemy becomes a friend.

Hollywood will eventually eat Popcorn

Given the choice to get what we want most of us will gladly pay a fair price for it. It’s when we’re not given the movies we want but feel we’re entitled to, business models be damned, that we are more likely to use something like Popcorn Time and face the chance that a studio lawyer will pick us out of the millions to march to court. It is a mammoth disruption with billions at stake but eventually we will all be able to get the latest and greatest movies and TV shows through our favorite streaming service or downloaded on iTunes or something like it. It’s easy to envision Netflix adding a Premium subscription plan that costs more than the regular but offers new content.

Walk of Shame which stars Elizabeth Banks opened last weekend and was simultaneously released on iTunes and Pay TV . It did horribly at the box office and rocketed to #1 on iTunes. The shift has already begun, grab the popcorn and enjoy.

 

Back to the Drawing Board

Its bDrawing Boardeen a while since my last blog post but for good reason (well, maybe there’s no excuse but I’m using one); I’ve been in the midst of a major career move. In January 2012, Synacor acquired Carbyn and I joined a company filled with amazing leadership, talent, and ambition to change an industry. I’m confident that Synacor will do just that but it’s time that I look to what my next challenge is. I’m not sure quite yet but life is short and there are too many broken things to sit idle for too long. In the mean time, I promise to blog more :)

This is going to be fun.

The Good Network: Why Paying it Forward Pays Off

give-and-take

I just finished reading Give and Take: A Revolutionary Approach to Success by Adam Grant. If you’re in business, a relationship, or simply alive this is a must read. Grant’s groundbreaking research in organizational behavior explores how we approach our interactions with other people and contrasts the success of Givers, Takers, and Matchers. By no means will this post spoil the read so once you’re done reading this post (and shared it!) you should definitely pick up the book (e-book, or audiobook), it will likely change or re-enforce your thinking on how interaction style contributes to success.

The central question is;

“According to conventional wisdom, highly successful people have three things in common: motivation, ability, and opportunity. If we want to succeed, we need a combination of hard work, talent, and luck. [But there is] a fourth ingredient, one that’s critical but often neglected: success depends heavily on how we approach our interactions with other people. Every time we interact with another person at work, we have a choice to make: do we try to claim as much value as we can, or contribute value without worrying about what we receive in return?”

Outside the workplace, in our relationships with family, friends, and partners Grant argues that we are mostly givers, helping without expecting a win. When our career success is on the line, Grant describes how people are aligned to being either a Giver, Taker, or Maker to achieve their goals.

Takers: Takers have a distinctive signature: they like to get more than they give. They tilt reciprocity in their own favor, putting their own interests ahead of others’ needs. Takers believe that the world is a competitive, dog-eat-dog place. They feel that to succeed, they need to be better than others. To prove their competence, they self-promote and make sure they get plenty of credit for their efforts. Garden-variety takers aren’t cruel or cutthroat; they’re just cautious and self-protective. “If I don’t look out for myself first,” takers think, “no one will.”

Givers: In the workplace, givers are a relatively rare breed. They tilt reciprocity in the other direction, preferring to give more than they get. Whereas takers tend to be self-focused, evaluating what other people can offer them, givers are other-focused, paying more attention to what other people need from them. 

In contrasting Takers and Givers, Adam argues that the preferences in approach are not about money, they’re not distinguished by how much money they make or donate. The difference is in their attitude and actions towards other people.

“If you’re a taker, you help others strategically, when the benefits to you outweigh the personal costs. If you’re a giver, you might use a different cost-benefit analysis: you help whenever the benefits to others exceed the personal costs. Alternatively, you might not think about the personal costs at all, helping others without expecting anything in return. If you’re a giver at work, you simply strive to be generous in sharing your time, energy, knowledge, skills, ideas, and connections with other people who can benefit from them.”

Grant agrees with and cites organizational behavior research that suggests none of us are purely Givers or Takers but Matchers, and that our personality isn’t fixed but fluid…

“We become matchers, striving to preserve an equal balance of giving and getting. Matchers operate on the principle of fairness: when they help others, they protect themselves by seeking reciprocity. If you’re a matcher, you believe in tit for tat, and your relationships are governed by even exchanges of favors.”

“Giving, taking, and matching are three fundamental styles of social interaction, but the lines between them aren’t hard and fast. You might find that you shift from one reciprocity style to another as you travel across different work roles and relationships. It wouldn’t be surprising if you act like a taker when negotiating your salary, a giver when mentoring someone with less experience than you, and a matcher when sharing expertise with a colleague. But evidence shows that at work, the vast majority of people develop a primary reciprocity style, which captures how they approach most of the people most of the time. And this primary style can play as much of a role in our success as hard work, talent, and luck.”

Ok enough with the book citations. As the title of this post suggests; contrary to what the asshole in your office thinks, in ranking the three approaches Givers come out on top…but they also dominate the bottom. Takers and Matchers make up the middle. How is that possible that Givers are on top and at the bottom? The answer is in the strategies givers use and choices they make in achieving their goals. Successful givers leverage three strategies; sincerity screening, generous tit for tat, and being willing to negotiate. Read the book to learn more.

A giver can be a huge pushover and land at the bottom or a smart, well networked person that helps others and builds great re-pour; paying it forward and becoming a trusted asset to the organization manifesting in career success.

You can think less “me, me, me” and not be so much a taker, genuinely not feeling you need to step on others to meet your goals. If you’re a taker and fortunate enough to realize it, treating others with more empathy will make you more a matcher which is where most people sit. Giving without expectation of return is something that can’t be faked; its something that you do because you feel it’s the right thing to do and believe that by helping or working for the benefit of everyone may ultimately come back to be a benefit to yourself. If karma shines on you great, if not that’s fine too. You can’t fake it and people who are pure givers are a rare breed.

In the opening of the book Grant describes venture capitalist David Hornik who is a giver and has a remarkable track record. I haven’t met David but I am fortunate enough to know a few givers and they have selflessly been a tremendous benefit to my career. I like to think that the thousands of coffees I make time to have to listen to aspiring entrepreneurs and the introductions I’m happy to make for them means I have some giver tendencies, or maybe I’m a matcher, others are better to judge. What I do know is that nice guys don’t always finish last because I’ve seen many at the top.

I credit my father with teaching me that much of a person’s ultimate success is not in their own hands but rather comes from working hard, being good to others and, as I’ve found, serendipitous events that you couldn’t plan for or control. I’ve never met anyone more selfless than my father. He ran a travel agency and one year had booked hundreds of people on Yugoslavian Airlines, collecting thousands of dollars in ticket fees that he passed onto the airline for them to issue the tickets (this was the mid-90s) and get his small commission back on each ticket. Then the Balkan War broke out and Yugoslavian Airlines stopped flying and went insolvent taking all the ticket fees collected with it and stranding passengers that had already paid. Every other travel agency I’m aware of simply explaining to these passengers that had lost their money and their tickets that its not the travel agency’s fault, their money is with the airline and there is literally nothing that can be done. People lost their money and tickets and agencies lost their commissions. All of this is well within normal but my father did something different and remarkable, he dug into his own funds and refunded all of his customer’s money. Thousands of dollars that spelled a very tough time for his travel agency that would take years to recover from. I asked him why and he simply said that it was more important to be good and fair to others, even if it meant some sacrifice to yourself, your rewards will come.

My father was a very intelligent, faithful, and welcoming man. When he passed I overheard someone saying to another person at the funeral; “he’s the only person I know that I have never heard someone speak badly of”. Your shoes are impossible to fill but thank you for being a giver and giving your all so that I could succeed. I’m by no means perfect but hope I’m making you proud.

 

Cars, TVs, Watches, Toasters…the Power is in Your Pocket

The-Internet-of-Things-InfographicIf you work in any company or venture connected to technology than by know you’ve realized that the next frontier is the internet of things (IoT); namely that so many things we use everyday will be connected. What started with computers, morphed to phones and tablets, and found its way to TVs, and more recently wearables (wristbands, watches, etc.) will now pollinate to cars, appliances, and more. It’s the natural order of things. What may be implicit but hasn’t been discussed is that all of these things will rely on one thing you use and can’t live without, the phone that lives in your pocket. The worst kept secret that Apple and Google are in a land grab for the automobile world largely broke this week with Apple’s announcement of CarPlay and Volvo showing a video demo to the world (below). Add Google’s announcement of the Open Automotive Alliance and the battle is on.

Auto makers are hedging their bets, many planning to offer both Apple and Android inside their cars and for good reason. iOS and Android have proliferated to the point where its a neck-and-neck two-horse mobile race (sorry Microsoft, Blackberry, others) and therein lies the advantage. No matter what thing is connected, they will all be an extension of what is running on your phone.

CarPlay and undoubtedly Google’s offering (possibly called projected mode) will be a second screen manifestation of what you have on your phone. Think of it as AirPlay and Chromecast; you can enjoy the things you do on your phone in a more auto-friendly way on a beautiful nice screen. If you’re working in a company or thinking about starting an auto-focused infotainment system or app you should think twice. The internet of things will all be tied back to control from the smart phone, not device specific implementations across the spectrum of devices. For consumers it means that all of your devices could (in theory) work seamlessly, extending your experience (whether powered by iOS or Android) to all the connected things you care about. For developers it provides more consumer touch points. For Apple and Google its a battle to the death to become an increasingly integrated part of our lives. Something we couldn’t walk away from if we tried, all monetized through the services on these devices that bring us search, ads, and apps.

At the D Mobile conference last year I asked Eric Schmidt how Google views the connected home. His response was “Google thinks of Android as the OS for all connected devices, everything from a tablet to a toaster.” Its happening and in the future, when you ask your toaster who has a special on bread it will point you to a store in your neighborhood. Your car will tell you the closest place near by. Your phone might send you to the website. And Google will get paid. Pure genius.

The Death of Bitcoin & The Future of Digital Currency

bitcoin-crackThe value of Bitcoin has been all over the map. It’s the new currency one minute and a failed experiment the next, but isn’t that how may great inventions began? Much like technology inventions that have changed our world, Bitcoin is the manifestation of computer science genius, as Marc Andreessen deftly describes. Wasn’t it once said that no one would want a personal computer at home? That no one could make money from the internet? That TV would fizzle and die? Yes to all. But Bitcoin is different from these life changing tech marvels. Bitcoin may prove to be the start of something but may not be the thing itself.

“I think there is a world market for maybe five computers.” – Thomas Watson, President of IBM, 1943

“There is no reason anyone would want a computer in their home.” – Ken Olsen, founder of Digital Equipment Corporation, 1977

Mobile transactions and payments have been common place around the world, especially in the developing world. Safaricom’s M-Pesa, DonRiver, and other providers and integrators have been making sure laborers, civil servants, and others have been getting paid reliably using mobile digital credits in societies where fraud and corruption would have otherwise sucked money out of their pockets. Bitcoin is different from these systems in that although 1 BTC = $502 (as of this writing according to Coindesk), much like cash is (kind of) backed by gold but you carry cash not gold bars, the aim is to position Bitcoin as the currency itself and not simply something to be traded for cash; a significant disruption to the financial system with the promise of a currency by the people for the people. Problem is that Bitcoin wasn’t made by those in charge and hit the established system so fast that it scared the powers that be and also didn’t come with the fraud protection, security, and controls to ensure that your money is safe. Just today there are reports that Mt. Gox, one of the largest BTC exchange is insolvent with as much as 700,000 Bitcoins unaccounted for. That’s $351.4M as of this writing. That’s serious money. Worse, without protection measures, if your Bitcoin wallet is hacked tonight there really isn’t any real recourse to take tomorrow. But as the growing pains continue for Bitcoin, the promise of a viable digital currency is alive and well.

Bitcoin has been banned in China and Russia. On the opposite end of the spectrum, The Royal Canadian Mint, Canada’s manufacturer of coins has just passed another milestone in bringing to market MintChip, the first government-backed digital currency. Interesting to note that The Canadian Mint also manufactures coins for smaller countries such as New Zealand and Luxembourg and there is talk that once in market, the digital platform can power digital currencies for these nations as well. Where Bitcoin is today an unregulated digital currency for the masses, MintChip is more akin to the work done by the likes of M-Pesa; a digital credit system backed by hard currency, but differs in that MintChip won’t be something you take to a bank to get “real money”, the hope is that it lives on as the transactional currency itself fulfilling the promise started by Bitcoin.

So where does this leave Bitcoin and all the start-ups and exchanges clamoring to own a piece of the Bitcoin ecosystem? Well, every new currency type needs exchanges and trading desks, fraud protection and security, banks and wallets and digital currency is no different. Coinbase, for example, an international digital wallet that allows you to securely buy, use, and accept bitcoins has likely built a platform that can power other digital currency not only Bitcoin should a new leader, or multiple international digital currencies emerge (I’m not connected to Coinbase in any way but I trust they’re smart guys that think big and I know their investor are and do). The early champions of Bitcoin-supporting technologies will be the front-runners to power the digital currencies of the future. As for Bitcoin itself, two things can happen; (a) the people truly have the power and with entrepreneurs building for Bitcoin, merchants accepting it, and people using it the currency actually goes mainstream forcing the financial system to respect it and all its new-found security. Or (b) Bitcoin will be remembered as the forefather and catalyst to the financial-system approved, government backed digital currency that my kids and grandkids will carry in their phones (or wristbands or watches or eyes) when they buy a Coke, coffee, or whatever new cool things haven’t been invented yet.

Digital currency may not take over as quick as some may like. It’s no question that moving away from the gold standard resulted in a financial system that has less “real value” and is open to market manipulation than if we were still based on a tight dollar-to-gold ratio. Likewise, fear of manipulation, intrusion, and coersion by governments abound with a non-physical currency where all of your purchases can be traced and governments can punish and bankrupt each other or otherwise gain political advantage by hacking finances. The hope is that these concerns will be checked my systems to ensure they don’t happen and digital currency will bring greater equality to the masses and not accelerate the divide between rich and poor. Whatever side of the fence you’re on, Bitcoin has started a train in motion and there will be many more pitfalls along the track but it seems inevitable that software will again eat the world.  and the day of your leather wallets and money clips are numbered.