Can P2P save VOD?
People have been predicting that Video On Demand would be the “next big thing” for about 87 years now. Ok, maybe only 10. But it hasn’t happened. The main reasons are pretty clear:
- Fear on the part of the big media companies (fear of copying, fear of killing the DVD cash cow).
- The “couch potato problem” – I don’t want to watch TV/Movies on my computer.
- The cost problem. If you checked out my earlier post covering bandwidth costs, then you can see that $.75 – $1.50 in bandwidth charges to download a single video kills lots of business models like pay-per-TV-show or video rental.
The fear amonst the media companies is slowly starting to change. Just look at iTunes video downloads plus lots of other early initiatives. There’s a little more faith in the reliability of DRM systems now. Not so much that they won’t get cracked, but rather that common users won’t bother and will accept encrypted files.
The problem of getting content to your big screen has not gone away. However, there are more devices that help this happen, and portable players like the video iPod and video-capable cell phones are turning the third screen into a bigger market.
However, the bandwidth cost problem is still with us, even after the dramatic fall in costs over the last few years. There is lots of video content that simply isn’t valuable enough to be worth the cost to download. Very valuable content, like a Hollywood movie, can still only fetch a few dollars on a rental, which makes a $1 cost to download prohibitive. Shorter content is a lot less costly to download, but most of it much be ad supported because users won’t pay real money for it. All of which makes sense as to why iTunes would launch with first-run TV shows – the download cost is smaller, yet people (apparently) are willing to pay a couple bucks to download them. (Read Robert Cringely’s analysis of iTunes video costs and the advantages of p2p distribution).
So for a long time people have recognized that using peer-to-peer for video distribution could dramatically lower the costs. Warner Brothers is set to launch such a p2p vod system in Europe in March. But in fact the core p2p technology already exists, and it’s called BitTorrent. The problem is, that’s the same technology that people are using to pirate tons of video content right now. So while Vinton Cerf claims that Hollywood is interested in using BitTorrent for distribution, the MPAA is in fact filing lawsuits to shut down sites offering torrents for download.
Maybe the AllPeers plugin for Firefox is the answer. At least they’ve got the right idea, which is to run inside the brower. Of course, they need to support IE in addition to FF. If they could do that, and make the install as easy as the Flash player, then maybe…
Or maybe Windows Vista, with it’s built-in p2p features. Maybe MS will integrate hooks to the p2p library into an upgrade to IE…now that would be interesting!