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Very good post Brandon. I have been in the VOD / DRM market for all most 9 years now so I feel the pain and challenges first hand.
On the issue of DRM
DRM was never smooth and transparent to the user, Microsoft screwed it up big time on that front. To make it worse their are so many easy to use technology to brake the DRM its became a moot point to use it. I mean we were punishing the good guys (the customers who were paying us making them hard to play the vide). For me DRM is dead at this point, we don't sell it any more and stopped working on it all most 2 years ago.
Now lets talk about Tube sites.
Illegal tube sites will grow and grow primarily because of the following reasons
1. The DMCA laws that are in the books right now makes running a tube site with stolen content perfectly fine and legal.
2. Internet bandwidth is the largest cost for these tube sites but these prices are dropping every day as technology allows you to push more and more over fiber (there are trials going on right now that is 100G over wave while right now the most common is 10G over a wave), so what happens when we you can push 10 times more then right now for all most the same cost....more high quality movies.
3. We don't have a single organization like MPAA to fight. I thought FSC was suppose to do that but nothing has happened in that front.
4. As long as their are other adult sites willing to buy the tube traffic, Tubes will be in biz. You don't see Sony buying ad space on a Torrent site.
5. Thanks to all the shady billing practices users hate us.
So the question is how can pay sites / VOD sites compete with Tubes.
The short term advantage pay sites have is that they can deliver better quality (i am talking about encoding quality) videos such as HD since Tube sites cant deliver high quality videos with out losing money on bandwidth....of course this is going to change when the bandwidth prices drops even more. If your video quality is same as the quality on a tube site ....their is no reason to pay for it.
Build a strong following. Pay sites are alleyways concerned on getting a new user , never on keeping the existing users happy. the sites that has long retention does a good job of keeping the customer happy and brings this community feeling. Users want to keep supporting the site because they know that their money is funding the development of new content.
Those are the ideas top of my head....feel free to add more
Jay
objectcube.com
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