ABSTRACT
The years 2006-2008 will be viewed historically as revolutionizing how consumers watched, accessed, and paid for video-based content. The explosion of video on the Web came about suddenly, fulfilling the promise of what many envisioned almost a decade earlier before the .com bust. Much of the change was enabled by technology, such as widely adopted DRM solutions, increased broadband penetration, and the advent of video-capable iPods and then iPhones. For the technology to take hold, however, other adoption accelerants as well as conducive legal and economic platforms were needed. All of these factors came together in a period of not much more than a year and pointed toward a radical shift in the landscape. The confluence of several factors, a number of which are discussed in the following sections, ushered in the digital revolution that threatens to upset and cannibalize traditional TV and video distribution:
n The Googleization of the world and proving the Web can be monetized
n The YouTube and Hulu generation, instant streaming, and the emergence of free video-on-demand (VOD)
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n The introduction of the video iPod and then the iPhone n Implementation of reliable, flexible digital rights management
(DRM) technology n Traditional distributors, not pirates, legally making the
market n Mass market adoption of high-speed Internet access (fixed and
wireless), together with the adoption of common standards
Initially, the quick pace of change and related murky legal waters cast fear among traditional distributors that the lifeblood of their business may be snatched away before they could even respond (with some arguing via illegal means). The crisis in the music industry, which was first paralyzed by online piracy and then rescued in part by iTunes, was threatening to similarly upend visual media as peerto-peer services enabled file sharing of movies. Long form video content, which previously had been thought to be somewhat immune given the inherent barriers of hour plus stories and correspondingly large file sizes (i.e., a film cannot be divided into independent consumptive elements, like a record can be split into songs) was suddenly vulnerable. Whether melodramatic or not, the fate of media was literally perceived to be in the balance — and to many it still is.1
