I want more Hulu!

I spent hours this weekend (first time I consciously took some downtime practically all month) on Hulu watching some The Office and Family Guy, and discovering Chuck (somewhat of a guilty pleasure type of a show). Hulu is a solid product. The fact that it’s free is pretty damn good too.

Liz Gannes at GigaOM has an interview with Eric Feng, who I met briefly at the Crunchies. At the time, I did not realize he was Hulu’s CTO. He had a great understanding of the product, which comes across in the interview and sometimes is occasionally lost on the most technical of people.

I imagine we’ll reach a tipping point sometime in the next year or so.

This revolution is so very obvious that it’s almost not worth pointing out. The ease of use of Hulu against Comcast’s horrific interface to find anything good on cable television. There’s almost no comparison.

But apparently, the tipping point is toast. But the argument is not against viral marketing.

Something less obvious is that content is still king. Democratization, accessibility, new content models: all very true, but really doesn’t change basic principles. But when you’re good, you’re good. The future organization of content providers still remains to be seen.

There’s a tidal wave of bad stuff out there, but lo and behold, technology again comes to the rescue to help work it all out. It’ll be a fun year in the content world.

Transformers: More than meets the eye?

Transformers has hit theaters and I’ll be viewing it with my fellow Generation Y’ers tonight.

This is the first time I can remember a “those were my favorite toys” nearly across the board.

It’s even become forgivable that Michael Bay is the director, maybe enough to forgive him for Armageddon and Pearl Harbor? Luckily, I’m hearing it’s the best movie Michael Bay has done and largely exceeding expectations. Over the top dramatics aren’t always bad, so long as it doesn’t involve Ben Affleck and animal crackers.

Either this means I’m getting old or it also possibly signals to me a shift in generations, where a new round of nostaglics including Transformers, Super Mario and Duck Hunt starts to transplant Night Rider, Pac-Man and Pong (you can probably instantly tell what generation I’m from based on these generational generalizations).

Nostalgia is a powerful thing and with successes like the Wii and now presumably Transformers that I personally relate with, it really hits home.

Within the hype around Web 2.0 and rapidly more powerful technologies, there’s a general aura of moving back to simpler things and simpler joys. The hottest technology companies today are largely successful because of the simplicity of their design, sometimes an even larger technical challenge even aside from the design challenge. As always, I think this move towards simplicity in stuff and joys is a great thing.

Paid Downloads Dead: No Way

James McQuivey released a report a few days ago that says that Paid Downloads will peak at $279 million this year, up from $96 million.

Liz Gannes at NewTeeVee takes issue with this, however admitting that she may be one of the affluent geeks currently even downloading paid videos.

The video/TV/movie/film landscape is definitely changing. However, it is a rapidly expanding pie. Production of everything from YouTube short clips to full-blown TV and channels on Joost to more independent films and productions. It’s an amazing democratization of media, something we should all embrace.

There will be pre- and post-rolls for the time being, although this method will eventually go the way of the banner: used, but increasingly less relevant. There will be participatory media and product placement, two areas that hopefully see some useful innovation and work towards democratization.

I buy the argument that Joost is a leading catalyst for ad-supported video. Short, independent content will thrive in an ad-optimized environment, of which Joost seems to be the key catalyst. Much professional content will find a way to monetize appropriately as well.

The business model, delivery method and technology for paid downloads aren’t there yet. It’s not there yet for ad-supported video. Hollywood can not sustain movie productions on advertising alone (Spiderman 3 anyone?). The machine works pretty good as it is – and a payment mechanism is necessary, whether it’s a DVD purchase, rental service (which still pays the content owner by way of the original purchase or revenue share agreement) or paid download/rental.

Will piracy kill the business? It may start to have more adverse effects, but this is a big business- people will figure out how to protect their revenue streams within reason (hopefully more so than the music industry). Early jumps into paid movie downloads to start to figure it out suggest that there it will turn out at least better for movie studios than for those in the music industry.

This being said, I’ve said before that Paid Downloads has major issues. It may be true that it will stall significantly until we get some true innovators to figure out the model.

As Founder of iLetYou and a true believer in easy solutions, I understand and believe the DVD and disc are going to persist for a while. News like this only prolongs how long it will be.

However, I love technology and want to promote what’s best and easiest for consumers so it’s certainly not that I’m rooting for the death of paid downloads. I just believe the march to an all download/streaming world will be a slow, slow march for many of the same reasons there is a new proclamation that Paid Downloads are dead. Delivery to the TV will have to be a seamless experience, DRM will have to die.

The future holds more great content, all around. Let’s not forget all of the great pieces of film art enabled by plunking down bucks for a movie ticket, a VHS or a DVD. It’s digital equivalent is not dead- it’s just a slow, maybe even zombie-looking march at this point.

Flixster – Participatory Communities Still Win

Flixster recently closed a competitive financing round closed and is showing big breakthrough traffic numbers in the past year, as TechCrunch reported in separate posts within hours of each other.

I like what Flixster is doing.  They’ve chosen a select niche that as a founder commented in above blog posts: average ratings don’t mean much, so a place where you can discuss and get recommendations from others is what their community is about.

There’s open questions about whether they can aggregate enough advertising.  Investors see a value in this growing community.  Flixster as it stands doesn’t take much of an editorial approach to movies (differs from RottenTomatoes, my personal favorite for spot-on, one second movie choices)- it’s a perfect platform for mainstream movie premieres.  Critics say that the Flixster crowd is young and mainstream- this proves actually a positive when it comes to aggregating large, movie ticket buying audiences.

Or, it can serve as a social medium for a more participatory launch to take place, similar to MySpace profile advertising.  This seems to be more natural, however.  Every movie has a movie page.  On MySpace, every product has a user profile – slightly unnatural and counter-productive.

iLetYou is a participatory community, but you participate by providing both the market and the discussion.  For us, it’s not just enough that you are able to rent from the widest variety of stores.  It’s really important that the variety of stores allows the personal nature of recommending movies to come through- Vincent’s picks anyone?

The lesson here is that MySpace for dogs, MySpace for Wall Street and so on is a misnomer.  The successful “MySpace for ______” companies are those that simply take the participatory medium and meld it completely to its specific use.  Beyond that, it’s then up the companies to figure out a business model.  The participation age is not hype in Web 2.0.

I’ve always been intrigued by the movie business from end-to-end not just the glamorous side, ever since I was a teenage employee for Hollywood Video.  It has come full circle as I watch and participate in the evolving movie business.  iLetYou now looks to take the video store network into the participation age of the Internet.

Congrats to Flixster.  We’ll be watching them as we dive deeper into the DVD, game and movie space.

There is No Money in Online Movie Downloads

OK, maybe the headline should rather be There is No (BIG) Money in Online Movie Downloads.

I’ve watched with rapt attention as there have been some rather big announcements as NetFlix introduced its WatchNow feature. TechCrunch thinks it’s a great move and sings its praises as competition to the current IPTV players. GigaOM illustrates the delusions of grandeur that the announcement conjures are not founded in the least. Its gotten quite its share of media play in the past few days.

Kudos for an impressive if not partially clunky offering that is free with subscription not withstanding, there are some major problems with the business model of online movie downloads. My apologies if some of these are repetitive to you:

1. Movie studios do not have a major impetus or incentive to move significantly and swiftly to digital downloads. The DVD business is a lucrative business that has really changed the dynamics of the movie business. Movie piracy is a different beast than music piracy if only for the sheer size of the download. You can’t make a direct comparison between the two. Downloaded MS Office lately? The revolution has happened with open source software and web-based software, not huge multi-CD, multi-file downloads. Whether it’s a digital downloads for purchase or rent, you still face the studios’ resistance to a model with lower payoffs to them.
2. Consumers are not willing to pay $15 to $20 to download a movie. Couple this with fact #1 and you’ve got a major problem. Michael Greeson points out that “less than 13% of consumers would respond positively to such an offering” based on field research.
3. DRM. Complicated DRM schemes are just a mess that further lowers the implied value of a movie download.
4. Competition between Apple, Amazon.com, NetFlix, Movielink, CinemaNow, cable providers, YouTube and more. Competition will cause pricing pressure on these providers. The studios will ultimately pocket more, but they’re ultimately going to be resistant for reason #1. Just like iTunes is reliant on iPod to produce profits for Apple, these movie providers will find their profits elsewhere – for Apple, they just need to sell more iPods/iPhones/AppleTVs. So far, there is no Purple Cow in this group of providers.

Who wins? Well, independent producers win, but we already know this with the phenomenal success of YouTube. I think whoever can produce a great VOD product can eke out wins, most likely this is on the cable companies. Consumers do win – they get more choices on how they want to get their content.

There’s a natural order that will sort these things out and eventually things will settle on a model that works. But it will take longer than expected and many will get burned (as GigaOM also points out).

Style, panache and service produces the value-add, the marketing punch and ultimately profits. It’s why classy independent video stores can survive and win and, honestly, it’s what we think can make iLetYou a destination site for movies with a dash of personality. There’s no profit in bits – whether those bits are delivered digitally or on disc.

What are your thoughts on online movie downloads?

iLetYou.com has launched!

iLetYou.com has launched.  In the coming weeks, we’ll be inviting people to try out the Private Beta.  We’ve also launched an iLetYou blog, The Rental Economy, that will discuss the burgeoning online rental economy.

Do you have 10, 100 or 1,000 DVDs or games?  Whether you own a physical store, small or big collection, check out iLetYou and find out how you can make real money or earn credit from you collection through online rental, no matter what the size.  I would definitely like to speak with and help you directly – please write us at beta –at– iletyou.com.

Why does it work? It’s just cool…

There’s been a lot of speculation of DVDs versus movie downloads. I think it’s a valid conversation, otherwise I wouldn’t have spent so much time myself examining it.

How about this for an explanation of why DVDs are still here to stay? It’s just a cool format. Burn-to-DVD, custom DVD creation, special feature customization – Business 2.0 has a pretty good article with some new technologies coming to fruition that will along the DVD format to really ride down the long tail, both independent and custom-created professional content.

I remember taking a computer animation course on the art of storytelling using computer animation, with the promise that we’d receive a DVD with our work at the end of the course (I never did get the DVD). The tools are only getting better.

Sometimes you get wrapped up in the business analysis when you forget why something succeeds in the first place – it’s just cool. The world is littered with cool things that failed, but DVDs certainly are a home-run hit – that’s why they won’t be going away for a while.

A DVD still contains a wallop of storage, easy to burn, easy to carry around and easy to ship. HD-DVD only increases this high storage, easy portability ratio.

My new startup iLetYou hopes to help distribution of these new and existing creations further on a great format… DVDs. It’s coming right around the corner.

Little Miss Sunshine – Winners and Losers

Just watched Little Miss Sunshine last night – a little late in the release cycle, but was finally convinced to go out and watch it. Little Miss Sunshine introduces and follows a family of six: the dad who’s obsessed with winning but hasn’t really won anything, the granddad that has decided that being old means doing whatever you want, the uncle who failed committing suicide, the son who ascribes to Nietzsche and has taken a vow of silence for months long, the daughter who is still learning her way and the mom just trying to hold it all together. The movie follows the family in a trip to California to the Little Miss Sunshine pageant in California for Olive, the daughter. RottenTomatoes as usual is a better place to get a synopsis and more reviews of the movie.

When mainstream drivel gets you down, it’s always nice to see a movie like Little Miss Sunshine to remind you why the art of cinema will continue to be a powerful aspect of modern culture. I think what really makes this movie great is its subtler points – a testament to great writing. When the movie tries to get a little too direct with its judgment on beauty queens and pageants, that’s when it is actually at its weakest.

This family is a band of losers, at least losers as they would be judged by typical American standards. Greg Kinnear delivers great lines as the dad like “sarcasm is the instrument of losers” and “don’t apologize, only losers apologize” (paraphrases), seemingly a subtle indicting on the American obsession with winning.

Combine this with nicely incorporated references to the typical “you’re only a loser if you don’t try”, there is a counterbalance struck in this movie. The family definitely has bravado, enough to get to California and triumphing over many absurd events in just a two day span. So are they losers? Not according to that definition.

So what’s the message? This isn’t a message movie, just a well done movie to make you think (and laugh out loud at times).