Streaming, Sharing, Stealing: Big Data and the Future of Entertainment (Mit Press)

Everyone has an opinion about the future of entertainment. But there aren't too many people whose opinions come backed by decades of consistently interesting and award-winning scientific research. Smith and Telang, both pre-eminent scholars of the economics of digital entertainment, have written a fascinating and very readable book about an industry that touches us all.From the opening vignette about the making of “House of Cards,” through the discussions of long tail economics, the ascendance of iTunes and shifting nature of market power, to the realization that using big data isn’t necessarily at odds with the creative process, the ideas in the book are presented with refreshing clarity. The writing is delightfully jargon-light, packed with examples that bring the science that it’s based on to life.Highly recommended to any intelligent reader who wants insight into the future of entertainment. (And there’s plenty of incisive and subtle analysis in here for any entertainment executive looking for a deeper dive into the forces changing their industry.)

This was very interesting and not just stating obvious facts. I wrote a book report about this for journalism school and genuinely enjoyed it. I think this would be a good read for business school as it lays things out almost like case studies. I know I will be bringing up these concepts in conversation .

Professors Smith (Harvard) and Telang (Carnegie Mellon) have produced one of those books that changes the way you think about an industry and where it is going. It has the two characteristics I admire most in a good business book: deep and reliable scholarship and thoroughly engaging and entertaining style. The subject of this book is the profound change the entertainment industry is undergoing.The book covers movies, music, books, television, radio and more, but to get a sense of the issue, I will focus on the first topic the authors cover: free-to-air television.To sell a TV series to one of the major networks, requires making a pilot episode that can cost between $5 and $6m. It is estimated that some $800m is wasted annually on pilots that never make it to the small screen. If the series is accepted (a big if, because the industry is very wary,) these weekly episodes must fit precisely into 22 or 44 minutes for viewing in 30 or 60 minute slots, including a catch-up from the week before.After a first-time release on television, the series might be made available after some time on pay channels, to encourage people to watch the earlier version. This is necessary because the TV stations earn their living by attracting viewers, and then selling that viewership to advertisers.That has been the traditional way of doing business in the television industry, but much has changed making alternatives more effective and more attractive to almost everyone. But not for the traditional media owner.Netflix is an American provider of streaming media, video-on-demand online, and DVD by mail. Watching a series as part of your subscription fee, saves you the annoyance of commercial breaks because the company earns through their subscription fee, not from advertising.“One of the most profound examples of this shift in market power occurred when Netflix began to offer original programming,” the authors explain.Beau Willimon, the creator of the American political drama, ‘The House of Cards,’ approached Netflix with his ideas for a series. The reception he received was completely different to what he would have received from a television network. They agreed to purchase the series without a pilot! This was not an act of bravado, or deep conviction. Their business allows for this type of decision-making.Netflix can collect accurate data on the tastes and choices of its subscribers, not from interviews, but from what they download to watch. Based on these facts it was clear that there was an audience for House of Cards. Additionally, Netflix can target potential subscribers who would be the audience for such a series - as individuals! This tailored, direct marketing is not possible from the traditional network alternatives.Traditional television fare must be slotted into a 24-hour day, so what is broadcast needs to be as attractive to audiences as possible. Only with large, appropriate audiences will advertisers pay for the commercials that fund both the station and produce profits for the shareholders.With Netflix streaming movies and series on demand, viewing isn’t restricted to a specific time of day so the question of when best to show the series is not relevant. Netflix is not limited to the number of shows possible in a 24-hour period. Its business model is - whatever you want, whenever you choose.This offers many attractive advantages. The viewer does not need to wait until next week to see the next episode, it can be viewed on demand. This gave Netflix the advantage of being able to release all of season one’s thirteen episodes at once. For the creators of ‘The House of Cards’ this was a huge artistic advantage because the story line did not have to be designed in odd chunks – it could be written as one would a book, made up of chapters of uneven length.As with a book, the reader can read as much as she likes in her available time. Releasing the full series all at once allowed the viewer to binge on all 13 episodes at once (as one of my colleagues did!) Rather than subject oneself to the tyranny of the studio’s time schedules and intrusive adverts, the viewer is now in control of his viewing experience. This raises the bar for the enjoyment of this type of leisure-time experience.At the opening of ‘The House of Cards’, Frank Underwood kills an injured dog. When an executive was informed that “people are telling me we’ll lose half of our viewers when we kill this dog. What do you think about that?” He was able to reply that he didn’t really care if they were offended or not. No television studio executive could have replied with the same indifference, as a loss of audience would translate into a loss of revenue. If Netflix subscribers were repulsed by Frank Underwood’s actions they could choose from more than 100,000 hours of other Netflix content.“While Netflix was working hard to expand the use of digital channels to distribute and promote content, the networks were trying to find ways to limit the use of digital channels to avoid cannibalizing viewing (and advertising revenue) on their broadcast channels,” say the authors.The advances in technology have drastically changed the way people can consume media, and the future of the older models is no longer assured.This is not only true for broadcast movies, but is true for music that is no longer sold and controlled by stores. Both movies and music can be easily pirated, copied and consumed across many devices and through many channels. Offering books digitally, opens them to the same competition and threat.What all sorts of content producers have learned is that in the digital era, control is much more difficult to exert. With the ability to copy or pirate content, consumers have a more alluring new option: free.To compete with piracy one can make the pirated content harder to find and more legally risky to consume. Or, as Netflix has done, by delivering more value than consumers could receive from pirated content, and by charging a reasonable fee for this extra value.To thrive in this new digital age as a media house, requires reliable and detailed observations of audience behaviour. The new ways to distribute content need to be more personalized than is possible from broadcast channels, and the promotion of this content has to be done differently. The development of content needs to be less restrictive and allow new levels of creative freedom for writers.Further, a new and more economically efficient way to monetize content needs to be found: on-demand bundled services currently beat à la carte sales.“We don’t know which firms are going to come out on top in the next phase of competition in the entertainment industries. But we do know how technology is changing the entertainment industries.” A stern warning from the authors, two very well informed and thoughtful men.Readability Light ---+- SeriousInsights High +---- LowPractical High ---+- Low*Ian Mann of Gateways consults internationally on leadership and strategy and is the author of the recently released The Executive Update.

Smith and Telang use extensive research to shed light on consumer behavior in the entertainment industry. The book tells the stories of different elements of the entertainment industry (movies, music, books, and even gambling) and the impact of comprehensive consumer data and technology on market strategies. The journey of the past 10-20 years of technology advancement and its impact on the evolution of well-known industries make the reading both familiar and fun. The authors do a remarkable job explaining complex concepts, integrating themes and delivering a path forward.

While I agree that Big Data has a role to play in the entertainment industry, I think the authors ignore all the successful content that was produced without the benefit of Big Data. The authors give House of Cards as an example of how Big Data helped produced a great series, but they conveniently ignore shows like Game of Thrones which was not produced based an Data analytics. Also, what they ignore is that Big Data does not speak for itself. There is always an element on interpretation, which inevitably calls for human judgment and media expertise.

Well written and very interesting even to someone not necessarily in the entertainment or cable business.Great book and authors are super nice!

Tech advances have changed our world radically over the last decade and are changing it faster still. Through this impeccably researched book, besides understanding how published music and movies & TV businesses have changed, we can get profound insights into how much power we as individuals have given to Big Data companies, how our society, indeed our politics, or democracy is being changed under our noses.

This is a good overview of the vast changes taking place in the entertainment industry. As someone who's studied Netflix, much of this wasn't entirely new. Still, I enjoyed learning about the economics behind some of these companies' decisions. Those who believe that media companies can’t stand still are sorely mistaken. The authors do a good job of proving that.

Excelente compra. 100% recomendable.

This is the best book on how digitization has affected business models since Carl Shapiro and Hal Varian anticipated the changes in their 1999 class "Information Rules". Highly recommended to anyone who wants to know how digital technology will change business going forward.

ótimo pra quem quer maiores detalhes sobre o mundo OTT e como os content provider estão cada vez mais acertivos em seus conteúdos.

The book is fairly basic and doesn't really give too many examples backed with data but rather speaks of a generalists view of what's happening. Can be avoided

Great book to understand the past of the entertainment industry and how new tech are changing it. Definitely worth reading it if you are curious on these topics