Popcorn Time, the (in)famous web program that invites users to stream a deep (unlicensed) catalog of movies, and is often characterized as “Netflix for pirates,” is in the news again this week. First, a TV-show catalog has been added to Popcorn Time, which originally streamed only movies. Second, an Android mobile app was released.
Updating the progress of the Popcorn Time project throws into bold relief some differences between the movie and music industries, illuminates the music industry’s leadership position in cloud-delivered content, and possibly heralds a new Napster-like era of disruption in how media is consumed.
Background
Popcorn Time is free and open-source. That means that, similar to file-sharing platforms like Gnutella and Bit Torrent, the technology can be adopted and adapted. This “forking” has already occurred with Popcorn Times, resulting in alternative apps in over 40 languages.
The Popcorn Time founders quit the project in March, saying they were weary of fighting legal battles. The project has been taken over by other developers.
The Netflix comparison is apt, in both design and function. The web app looks similar to Netflix, probably with intention, and the model is the same from the user’s viewpoint — you click on a movie and sit back to watch.
The business models are quite different, of course. Popcorn Time content is unlicensed. The movies come from Bit Torrent file-sharing, and a single stream can be cobbled together from multiple sources. Popcorn Time is like a Bit Torrent download app, but with near-instantaneous streaming built in, plus an organized and beautifully presented catalog.
Makings of a killer app
Those two features — beautiful presentation and the instant gratification of streaming, are what made Popcorn Time an instant hit, and instantly notorious. Like the original Napster with music, Popcorn Time solves a consumer-service problem with an irresistible value proposition, and is potentially as disruptive as Napster was.
The consumer-service problem in the movie business echoes music’s product assumptions in the mid-1990s, inasmuch as it fails to provide digital-era access to content. This is not a “content wants to be free” screed — it is about removing artificial friction for 21st-century consumers who have been groomed to expect global access to everything, and on-demand delivery of entertainment to all personal devices.
When Napster hit the Internet, it solved two consumer pain points. First, it broke apart albums into random-access singles, solving wasted consumer expense. Second, it liberated back catalogs of music whose owners had removed from circulation, or had packaged into cumbersome and undesirable compilations.
Granularity and a long tail, when combined, make a killer proposition for consumers, who have proved willing to pay for it. The iTunes Music Store dragged major music labels into that new reality. More recently, music services have started a migration to streaming, and all signs point to continued reduction of direct ownership of music.
The targets
Popcorn time clearly emulates, and targets, Netflix. In a larger storyline, Popcorn Time’s unhindered movie streaming targets the industry’s distribution model, which hinges on “windowing.” Windowing establishes sequential movie-release periods for different venues — theaters, on-demand cable, DVD, Netflis, scheduled cable, etc.. Note that Netflix and other subscription services are a window, subject to withholding by rights-owners. That is the reason the Netflix catalog (just as an example, not to pick on Netflix especially), is so thin, generally B-grade, and unsatisfying to many.
A recent New York Times article explained why the windowing system is in place, and why it won’t change on its own. “Why are movies released in this staggered way? And why can’t the system change to accommodate an all-you-can-eat plan? Money, of course.” HBO has purchased exclusive rights to about half of all major-studio U.S. movies through 2020. Netflix and its cohort of services will not get any better for years. (One reason Netflix and Amazon Prime are developing original content — they are emulating HBO.)
It is that consumer problem — represented by Netflix on the front end and the industry’s strategic lock-down of content on the back end — which is solved by Popcorn Time.
Pirating movies has been possible for years, using the same platforms that preceded subscription music services. Spotify was founded, to a large degree, to solve rampant file-sharing piracy of music in Sweden. (It worked.) but downloading movies is substantially more difficult than downloading music — the files are much bigger, can take hours to acquire, and take up more at-home storage. That reality makes Popcorn Time even more potentially disruptive, as it solves a more serious front-end problem for the consumer.
Hard lessons to learn
The music industry is an entire evolutionary cycle ahead of the movie industry. Between 1998 (when the MP3 revolution started) and today, music rights-holders and their lobbying groups have learned a few important realities the hard way:
- Technology moves fast
- Internet technology and its effects are unstoppable
- Consumers flow to whatever mode of consumption gets them what they want in the easiest way
- Consumers will pay for access and ease-of-use with some kind of currency
Napster delivered the first three lessons to music labels. It came up fast; file-sharing could not be stopped (even though Napster was forced to shut down); and it was immensely popular. The industry resisted the fourth lesson, preaching an untrue maxim: “You can’t compete with free.” (Bottled water companies had a good laugh over that.)
Ironically, technology taught the fourth lesson when Apple persuaded the labels to release their content to an online-only store in a singles format. iTunes Music Store became the world’s largest music retailer, driving big-box music stores out of business. Streaming service is an easier and more fluid development of the same user values.
The movie and TV industries have had their assumptions proved wrong in the past. When VCR technology unlocked home recording of TV broadcasts, then-president of the Motion Picture Association of America (MPAA) Jack Valenti flagrantly compared the new technology to the Boston Strangler murdering women in their homes. It took Supreme Court testimony from a tech-friendly Mr. Rogers to convince regulators to allow VCRs into the market. Eventually tape and disc releases of movies and TV series became indispensable revenue streams, and the technology proved to be an incomparable asset to both industries.
Is it Popcorn Time?
There is a lot of “potential” and speculation when contemplating the Popcorn Time apps and the platform’s future as a disruptor. Is it powerful enough to shift the course of movie consumption, as Napster influenced the music industry?
It is clearly unstoppable, like other forms of file-sharing. Lawsuits chase an ephemeral target. The open-source project can continue anonymizing and decentralizing, attracting a growing audience. That’s not a prediction, but is (again) potential.
The Popcorn Time founders left an eloquent message behind when they quit the project. “Piracy is not a people problem. It’s a service problem.”
Popcorn Time solved it. Time will tell the outcome.