In June 2014, the US Supreme Court ruled that cloud-hosted video streaming platform Aereo had breached copyright in the way it ‘acquired’ content, and the service was forced to shut down three days later. While the tech-savvy consumer might have felt aggrieved to see the dissolution of a highly innovative and forward thinking content service, the ruling came at the defence of the multi-billion-dollar television industry that is determined to avoid the catastrophe that engulfed the music industry 10 years ago.
So what does this mean for entrepreneurs and how can they learn from it?
Netflix is the biggest video on demand service in the world. It has more paying subscribers than the largest US pay TV providers; 28 million globally of which 24 million are in the US. It has changed the way studios think about content distribution, and how consumers access content on connected devices.
But all is not rosy under the hood at Netflix… Their role in the value chain is to realise a margin between content supply/delivery and consumer purchase. But in doing so, Netflix is hostage to the commitment of their suppliers and there are now big questions over the long term cost dynamics that could undermine their retail model.
We’ve had two big announcements in two weeks – first Google announced it would be bringing Google Play movies, TV shows and music to Google TV, then on Monday Microsoft announced that it is launching a new music subscription service on Xbox, dubbed Xbox Music.
It’s a clear signal that the big technology platforms (Apple included) are putting content at the centre of their TV strategies. And rightly so; consumers turn on a television to be entertained. But what does it mean for the likes of Spotify, Netflix and Amazon for whom these platforms present a critical route to the consumer?