Kevin Spacey on the potential of Netflix to disrupt traditional TV [video]

http://www.businessinsider.com.au/everyone-in-the-tech-and-tv-industries-is-passing-around-this-speech-by-kevin-spacey-2013-8

by wiremine • 13 years ago

103 63 13 years ago

businessinsider.com.au

zalew• 13 years ago

HN title sums up Business Insider summing up a video sum up of the speech.

3rd3• 13 years ago

As long complexity is only hidden but not lost, that’s OK.

Here is the full speech: http://www.youtube.com/watch?v=oheDqofa5NM

Tyrant5052• 13 years ago

Thank you, from the lazy.

shmerl14• 13 years ago

However it's not a DRM free streaming model. So it's not much healthier than other types of restrictions - it's still DRM. Some truly DRM free streaming should emerge in the face of all these Netflix-like DRMed barbed-wired gardens. Streaming should be a convenience, not a way to restrict copying. Others brought Steam as an example - for Steam, there is competing GOG which is DRM free and proves the point that DRM free gaming without regional restrictions and other such junk can be successful. So what is there for Netflix?

Also, I didn't get his point about the music industry. Most music is easily available DRM free, unlike video.

michaelwww• 13 years ago

I didn't get his point about the music industry

Maybe this will help: https://www.eff.org/wp/riaa-v-people-five-years-later

shmerl14• 13 years ago

Ah, this. Yes, RIAA are a strange bunch. They managed to get rid of DRM in sold music, but now fulfill their paranoid fear of piracy through DMCA takedowns and lawsuits. Which makes one think that they dropped DRM not out of common sense like could be expected.

methodin3• 13 years ago

I don't think most people expect DRM-free content when paying for a subscription model - I know I don't. I'm paying for the right to access that content when I want as long as it's available but I am under no assumption that I assume the right to take that content with me and do with it what I please. That type of content is completely different than what this streaming model represents. Netflix is surely on a better trajectory here than other providers, no?

shmerl14• 13 years ago

It's not better as long as there is DRM in it. Why can't you expect to get the content with you? You can expect paying for titles some one time fee. Not unlike music and games. Streaming is just a way of accessing it from the "cloud" without the need to download it first. But why should it prevent you from downloading if you want to back it up, take it with you somewhere where you have no access to the cloud and so on? There is no good reason for "subscription model" in the digital world which restricts your ability to copy. Buy and use, that's what it's supposed to be.

nemothekid• 13 years ago

Its hard to say if we'll ever get DRM free streaming. Unlike the music industry, the tv/film industry isn't being crippled by piracy - in fact the tv/film industry only seems to be getting bigger.

Simply put, there is no motivation for DRM streaming and DRM still remains a way for studios to keep control on who and when is licensing their content. Talking to some media execs, I was surprised to learn the reason most DRM is implemented is because for some content deal, the contract stated (which was written 6-8 years ago), said the player must have DRM. Now that the content landscape is getting even more fierce (with networks like CBS cancelling service to TimeWarner) no one wants to risk renegotiating anything.

Now what motivation does Netflix have to remove their DRM? They want you on their platform, so they can collect your data. The next Netflix that even has a chance of running it legal will probably incorporate ads into their monthly pay product like Hulu does, which isn't at all surprising considering a huge chunk of revenue for these guys comes from advertising.

I'm not hopeful about DRM-free streaming. The tv/film industry is much different from the music industry. From a consumer POV, the biggest difference is streaming wins over downloading. There is less of a demand for DRM free content because people simply aren't looking to copy their mp3s to their iPod/Zune/MP3 Player of choice. The Film industry has a much tighter control on how the content is delivered.

shmerl14• 13 years ago

Now what motivation does Netflix have to remove their DRM? They want you on their platform, so they can collect your data.

If they don't even hide their intentions in abusing DRM to violate their users' privacy, it should only strengthen the reasons to avoid Netfilx like services. I'm hopeful for DRM free digital video. It will take one distributor to break this sick trend. Netflix isn't the one with guts to do it.

yalogin2• 13 years ago

Regular people do not give a fuck about DRM. They just want to watch good content. As long as the DRM is non-obtrusive it does not matter. Why is it important to have DRM free content?

shmerl14• 13 years ago

"Regular" people give away their private info to Facebook as well. Most do this kind of stuff because they don't realize the implications, not because they think that it's really OK to do that. Sure, some might not care at all, but most simply have no clue. Unobtrusive DRM is actually even worse than obtrusive one, precisely because people might think that it's acceptable. It's like having hidden cameras in people's houses, and them getting comfortable with it, because they don't see it.

nrivadeneira• 13 years ago

Kevin Spacey clearly gets it. Rampant piracy is an indication of a failing business model. It's not that people aren't willing to pay, and that's evidenced by the success of Netflix and shows like House of Cards. Same can be said of Steam's game distribution model. Give people what they want, how they want it, at a fair price, and you'll surely be able to make money.

venomsnake• 13 years ago

Well steam sales have ran out steam it seems from anecdotal evidence. While the first few were a godsend and a very good piracy "amnesty" - currently I have more than 100 games in my backlog, so on the last two I bought only one-two games. And all around me people say the same. The only games I consistently buy are the humble bundles mostly to support the idea.

NoPiece• 13 years ago

Here is some anecdotal evidence that there is is still plenty of pressure in steam sales..

"We sold more copies in the first 24 hours of the sale than we had on Steam in the first three months since release," Fish said, adding that the two-day price drop yielded more sales than the game drew in its first month on Xbox Live Arcade.

All told, Fez sold 105,000 copies in the 48 hours the game was on sale. He also posted a picture of Fez's Steam sales graph to better illustrate his point.

http://www.gamesindustry.biz/articles/2013-07-15-fez-sells-1...

clebio• 13 years ago

I like the message -- and the messenger in this case -- a lot. Having read the full transcript of his speech, I'm trying to imagine what he might have left out, what his opponents will use to dismiss this event.

Off-hand, the easy out would be that 'giving people what they want' is actually pretty costly. The steep pilot culling selects for mass appeal. If 80% of the (paying) viewing public like a pilot, it's probably a low-risk venture with pretty predictable rewards. If those returns (ROI) are sufficient to keep the studio running, do the people writing the checks really care that more niche products _might_ gain slightly better rewards?

ballard• 13 years ago

Yeap. Locking it all away for an absurdly high price or just giving it all away are suboptimal. Charge a "no brainer" price that most people won't have a problem with is supply meeting demand more optimally... For potentially higher profits.

DanielRibeiro• 13 years ago

Note that Kevin talked a lot more than this small clip: http://www.theguardian.com/media/video/2013/aug/23/kevin-spa...

I highly recommend watching the whole thing.

DigitalSea• 13 years ago

I think Spotify which I might add has dramatically reduced piracy in the countries it is available has proven that streaming is the future. People don't care about not being able to download it, as long as they can watch it whenever they want. Going back to Spotify, I don't remember the last time I downloaded any music for free, I just use Spotify.

adamnemecek3• 13 years ago

It has been argued multiple times that Spotify is not sustainable.

http://www.npr.org/blogs/therecord/2012/09/26/161758720/how-...

So it's cool that you are getting your music legally, nonetheless, in the end it's not that different than in you had pirated it.

randyrand• 13 years ago

That's not all that related to sustainability. Sure, it might mean musicians make less but that's just supply and demand and supply is HUGE (still not infinite).

selectodude• 13 years ago

Spotify pays out 97 percent of its total revenue to the record companies. If the record companies are taking an enormous percentage of that and not paying the artists, it's perfectly sustainable once you remove the parasite siphoning off all the money.

http://mediadecoder.blogs.nytimes.com/2012/08/24/pandora-and...

benackles• 13 years ago

The technology and business model side of the equation could be solved, if the licensing problems were resolved. Too bad all the streaming services are still hamstrung by licensing issues from truly providing a service wherever you are. Netflix is still unavailable in most parts of the World, including many Asian countries where piracy is the most prevalent.

avalaunch4• 13 years ago

For example, Spacey says there will be 146 pilots made this year at the cost of $US300-$US400 million. Only 56 of those will actually be made into a series. “That makes our House of Cards deal for two seasons really cost effective,” Spacey says in the speech.

Of course it seems cost effective when the show is a big hit. But had it been a flop, it would have seemed a colossal waste of money - something that could easily have been surmised with a much smaller investment. For Netflix's strategy to work, they'll need to be able to continue to pick winners at a much higher percentage than the traditional television network has been able to. To do so they'll need to have content producers that understand what it takes to tell a good story. I think the downside is that this high risk strategy is likely to make them more risk averse in the shows that they choose to produce. They'll be a lot less likely to invest in first time writers, actors and directors. And they'll probably shy away from any story that is at all experimental in nature.

shazzdeeds• 13 years ago

This is a good point. A company should not be expected to just throw a bunch of shows out and see which ones stick. Too expensive.

What stuck out to me most in the speech was Kevin Spacey's quick mention of Netflix's response to the pitch: "We ran the numbers and we think our customer base would like it".

Media outlets thinking of taking the all-in approach will need the technology to calculate and hedge the risk . Netflix clearly has that in place, and it helped convince them to take a chance.

hershel• 13 years ago

It's even better for netflix. They has the technology to allow directing decisions , small and big, be decided by data :

http://gigaom.com/2013/07/25/at-netflix-big-data-can-affect-...

elq2• 13 years ago

The notion of what makes a flop is quite different in the netflix model vs normal TV.

avalaunch4• 13 years ago

Could you elaborate on what you think that difference is?

pkulak• 13 years ago

I bet I could read a script and tell you if it's shit or not. Why do you even need a pilot? And the funny thing is, good shows get watched. There's a huge market for quality television. Just look at what Mad Men, House of Cards, Game of Thrones, etc have done for their networks. Is it really that there aren't enough writers coming out of Harvard who can write a Mad Men script? Do we only have writers who can write shitty sitcoms? I doubt it. Or is Mad Men that expensive to produce? Watch one some time. Most shows take place in two locations and are all dialog. They could almost be plays. But for some reason NBC, CBS, and FOX only buy shows with a laugh track or a panel of judges. I don't get it at all.

Sorry, only those first two sentences are an actual reply. I got carried away...

intopieces• 13 years ago

You left out the fact that Netflix has the viewing habits of millions of users, freely given in the most detailed way ever conceived. Remember, Nielsen ratings are self-reports written in a diary; this is real time viewing data. They have a better ability to understand what people enjoy watching.

davemel37• 13 years ago

This reminds of Fred Wilson's post about Piracy http://www.avc.com/a_vc/2012/01/screwcable.html

jamesmcbennett• 13 years ago

In this interview, is there a relationship between a TV pilot and a lean startup MVP where Spacey is against such a pursuit preferring more visionary endeavours that take longer to get feedback?

lukifer• 13 years ago

I still think Netflix is sapping some of the fun and vitality out of their original series by putting all the episodes up at once. Is binge-watching great? Of course it is! A huge library of great shows to binge-watch is one of the Netflix's biggest selling points.

But getting it all at once is like peeking at your Christmas presents early: you think you want it, but it spoils some of the fun, the eventy-ness of it, and the social context created by a shared timeline (the so-called "water-cooler effect").

Anyone who doesn't want that experience can still wait until the whole thing is out, probably just a few months, at which point it will still be available in the binge library, presumably forever. (I know some who prefer not to start a new series at all until the entire thing is finished, which is also okay.)

avalaunch4• 13 years ago

Anyone who doesn't want that experience can still wait until the whole thing is out, probably just a few months, at which point it will still be available in the binge library, presumably forever. (I know some who prefer not to start a new series at all until the entire thing is finished, which is also okay.)

Likewise, I could say that anyone who doesn't want to watch them all at once doesn't have to. You can choose to watch only 1 episode a week.

werid• 13 years ago

the problem is that these people tend to enjoy discussing "this week's episode" with their friends, and that's hard when they've watched the entire season/series.

L_Rahman• 13 years ago

This is a very significant issue that I think should make Netflix re-evaluate their initial release model.

For me, and for a significant number of attentive television fans, a big part of the experience is reading the nightly discussion post by our favorite reviewer and discussing the episode with everyone in the comments section. I'm part of the very active AVClub community and teasing out what happened with the everyone else who just watched the episode greatly enhances the viewing experience.

For FX's The Bridge whose lead character falls within the autism spectrum, a certain commenter who is also on the autism spectrum writes a few hundred words that illuminates what it's like going through life in a very different way from most others. I have learned a great deal in the process, and it's something that is possible only because one episode is available per week. If they were dumped at once, maybe I'd rush through the whole thing at once, or she would and this exchange would never have happened.

chewxy• 13 years ago

Not really. I found that shows like Person of Interest, Continuum or even bits of Fringe are best watched in a row. I would say American TV production schedules of 24 episodes a season is the bits that are killing TV watching.

I would definitely not mind 6 episodes per season of high quality entertainmen (aka British TV production schedule).

I wouldn't know about the water-cooler effect because I've never actually experienced discussing with other people last night's TV.

Kevin Spacey on the potential of Netflix to disrupt traditional TV [video]

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