Popcorn Time Shuts Down, But Hollywood’s Threat Is Not Over

What a week for Napster-like (the original Napster) online movie service Popcorn Time.  First, just this past Monday, TechCrunch calls it “Hollywood’s Worst Nightmare."  Then, the service’s founders abruptly shut it down mid-week due to the fright it created -- and the fright that they apparently did not want to be part of (read its founders’ farewell manifesto here).  Hollywood views this as a big win against piracy -- a win echoed in the music world just this week by a jury verdict of copyright infringement against cloud “music locker” service MP3Tunes that was founded by original MP3.com founder Michael Robertson.  That service is now, for the most part, also shut down.

No matter how you view these 2 services, however, the fact remains that although they may be gone, Hollywood’s threat to its traditional business models remain.  I have seen this movie before first hand as President of groundbreaking online music service Musicmatch -- a legitimate service that entered into licenses with all major and indie labels.  I helped lead Musicmatch back in the days of the original Napster, and I saw first-hand the music industry’s misguided attempts to sue it and others out of existence -- its strategy being that the best offense is a good defense.  In other words, focus your resources on litigating your enemies into oblivion.

But, as I thought then, I continue to think today -- the best offense is ... a good offense!  The genie is, as we all know, out of the bottle ... forever.  These particular threatening services to premium content creators (movies, television, music) are gone, but others continuously will take their place for myriad reasons.  In fact, Popcorn Time’s fate likely will embolden others to relentlessly continue a threatening mission.

INNOVATION is the answer.  Hollywood must focus on its strengths, of which there are many.  These are just some answers -- answers that find their precedent in the past ten years of learning by the music industry:

(1) Customer Experience -- this is the single most important factor!  The customer must be delighted.  Legitimate services, with real money behind them, can bring significantly more to the table in terms of customer experience than any Popcorn Time-like service can -- and THAT should be their focus.  For one thing, the creators (actors, directors, producers) will (or should) actively support official services -- and they certainly won’t (at least for the most part) support the others.  Direct fan to artist engagement alone is a significant and winning differentiating factor, if done right.  The primary point is that Hollywood must actively support “legitimate” services -- license more, not less, of their content -- so that users are delighted, rather than frustrated.  It is frustration that turns some away to the perceived “dark side."

(2) Quality -- although related to customer experience, this is a bit different.  Hollywood-backed services can work closely with other major players in the overall online eco-system to optimize the streaming experience itself.  Put simply, your online movie experience will (or should) look and sound much better.

(3) Security -- although I am no engineer, Popcorn Time-type services have the potential to expose the user to more hacking-type threats than more buttoned-up officially-backed services that invest in significant (although certainly not fool-proof) security measures.

These are not the only factors, but these are some important ones.

I am an optimist that consumers on a mass scale will PAY for Hollywood-backed subscription services if done right.  It is up to Hollywood to smartly enable service providers to give the consumers what they want in those services, because online and mobile distribution -- and the human instinct to want what we want, right now -- are here to stay.

And, we are still only in the early innings of this reality ....