Fear And Loathing In Online Video

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Editor’s note: Jay Fulcher is CEO of video technology company Ooyala. Follow him on Twitter @jbfulcher.

The story of Hollywood’s relationship with technology reads like an on-again-off-again soap opera romance: initial feelings of fear, panic and jealousy followed by amity and intense attraction, followed, in turn, by more fear, jealousy and heated exchanges.

Back in the early 1980s, MPAA President Jack Valenti went before Congress and asked them to outlaw the VCR. His graphic language infamously went so far as to compare new TV tech to the Boston Strangler.

We are going to bleed and bleed and hemorrhage, unless this Congress at least protects one industry . . . whose total future depends on its protection from the savagery and the ravages of this machine . . . I say to you that the VCR is to the American film producer and the American public as the Boston Strangler is to the woman home alone.

After the Supreme Court ruled that personal recording devices were, in fact, legal, Hollywood discovered that people enjoyed watching movies in their own home — just as they enjoyed going to the cinema. Rather than destroying the movie business, the VCR gave people new ways to watch their favorite content. It also brought in billions in new revenue for the entertainment industry.

But this love affair wasn’t meant to last. Hollywood’s feelings toward technology quickly soured. They sued to block the DVR. Then they sued to shut down cloud-based DVRs. Now they are suing Barry Diller’s cloud-based DVR.

Like a heroine in a romantic comedy, Hollywood is typically disgusted by new technology before they can learn to love it. Take online video, for example. The rise of tablets and mobile connected screens means there are more ways than ever before to engage viewers and profit from professional content. This is truly an historic opportunity.

But instead of embracing streaming media and new distribution opportunities, many in the entertainment industry continue to resist change. Instead of focusing on building great viewing experiences across all screens, Hollywood crafted SOPA, a piece of legislation so controversial that the entire Internet protested against it. (This was also the only time in recorded history when everyone on the Internet agreed on something.)

Hollywood deserves to make money from its content. And studios certainly deserve to protect their property online. But in order to excel in the digital age, the decision makers in L.A. should spend less time fearing the future and more time building innovative experiences that will delight their fans.

Here are three things that Hollywood can do to profit with online video.

  1. Focus on your customers. Hollywood needs to make their customers — not their detractors — a priority. A lot of people genuinely love the movies and want to pay for premium content. Find ways to encourage — not discourage — digital distribution. Include bonus features not featured on physical media and offer access to exclusive content or websites. Reward people for downloading your titles, and give them a reason to come back for more. Miramax, for example, uses online video and social media to connect with viewers and expand the reach of its catalog (full disclosure — they are a client). Taking care of your customers is always good business.
  2. Deliver engaging media experiences to all screens. The scarcity model may have worked for Hollywood for a long time, but it makes less sense in an always-on, hyper-connected world. As Fred Wilson recently wrote, we need more premium content online, not less. In the digital age, consumers want to get content on all of their devices — and they’ll resist experiences that limit choice. Put more energy into giving movie fans what they want and Hollywood will earn their goodwill (not to mention money).
  3. Make it feel as familiar as channel surfing. New technology demands an intuitive UI and a simple interface. Advanced IPTV should feel like traditional TV. People don’t want to “log on” to TV or see error messages or loading screens. They want to go access the movies and TV shows they care about on the devices they use every day, and they want it to be fast and simple. Deliver a great future TV that feels like classic TV.

Note that none of these ideas include lawsuits or legislation. The entertainment industry should realize that online video — like the VCR and DVR before it — isn’t something to be feared. It is a way to engage your audiences and profit from new sources of revenue. Helping people connect with great movies rather than fighting to keep content away from viewers is right for consumers — and right for Hollywood.