Why the World (Including Hollywood) Needs AnyClip

Movies are the world’s most influential communication medium.   They catalyze conversation in countries all over the world.  Films teach history, tell stories, and make people laugh until their bellies and faces ache.  Moving pictures are for the young, old, rich, poor, educated, and the illiterate.

Etched in each moviegoer’s memory is a panoply of great scenes from tens of thousands of films.  How much fun is a dinner, cocktail, or keg party if nobody could quote a movie line?   The language of film is universal.

Unfortunately, to re-experience these moments can be painful.  Watching Humphrey Bogart kiss Ingrid Bergman or John Belushi scream “Food Fight” or Russell Crowe facing down tigers in the Coliseum is a challenge. These are moments that everyone wants to experience over and over again. But, does anyone really pop in a DVD and patiently scan for their favorite scenes? No. We search the Internet. Mostly, we don’ find what we’re looking for, and, when we do, it’s far from a cinematic experience.

THE PROBLEMS

So far, The Internet has  provided a piecemeal solution to digital video. There are plenty of video sharing sites filled with user-uploaded content, but their selection is haphazard at best. You might find “I love the smell of napalm in the morning” seven minutes into a longer clip or with abominable picture and sound. Diehard fans do will share shaky, unreliable videos of their televisions shot on camera phones.

So you might find what you are looking for but only if you’re willing to sort through a lot of garbage and put up with subpar film quality. But  people love movies so they put up the  problems.

Over 12 million people have watched the above clip from The Lion King.   I wonder how much money Elton John and Tim Rice have gotten for their work.  Neither the owners of these films nor the artists who make them receive any compensation from the display of their works. If it’s not illegal, it’s definitely unethical. This user-generated video industry combined with other public policy issues have unintentionally driven a wedge between Hollywood and the most dynamic and creative Internet companies. Content owners must benefit from Internet distribution and AnyClip wants to provide the most compelling and engaging platform to help them do so.

WHAT IS ANYCLIP

Six months ago, my co-founder Nate Westheimer and I joined an amazing group of Israeli developers who also happen to love movies. We wanted to build a Web service that would allow anyone to find any moment from any film ever made instantly. Our co-founder and lead investor Erel Margalit suggested we name the company AnyClip.

Everybody wants to relive scenes and AnyClip set out to make that possible. Creating the data and search technology to make that work presents formidable challenges. When searching for a scene from a movie, people describe moments in so many different ways: from dialogue and plot description to hazy memories of shark attacks and flying cars. This creates really engrossing and thorny computing problems. If someone searches for “dead shark,” do they want to see Roy Scheider blowing up Jaws (i.e. action on screen) or Woody Allen lamenting the “death” of his relationship with Annie Hall (i.e. dialogue)? The AnyClip platform incorporates tools to handles these issues and more.

Early tests show our service can be a great discovery engine for films. A search for “I love you” produces countless clips from hundreds of movies. A brief visit to AnyClip can yield an iTunes download or an addition to a Netflix queue. At AnyClip, clips are dynamic and up to four minutes long. You can adjust a clip to relive exactly the joyous, daring, or inspirational moment you crave.  This sample may encourage a purchase, rental, or download of the entire film.  At minimum, it reunites the movie lover with the art and the artists who brought them such joy.  This reaffirm  loyalty and interest in the future work these artists produce.  That’s called “promotion.”  AnyClip evokes memories and channels them to enhance the values of the world’s great film libraries.

Today, we also launch a public API for our data and eventually for legally licensed content. This would allow companies like IMDB, Slide, RockYou, Netflix, Zynga, OMGPOP, Twitter, Facebook, Mahalo and – most importantly – the insanely creative and brilliant independent developers around the world to build great user experiences with movie clips on top of our movie data. AnyClip is a platform to power a renaissance of the greatest movies the world has ever known.

DISRUPTIVE BY DESIGN

If you look closely at the movie ecosystem, the only institutions that suffer from a legally available AnyClip are those that benefit from leaving the current system intact.   First and foremost are existing Internet media providers that hide behind the safe harbor provisions of the Digital Millennium Copyright Act. While nobody knows precise numbers, YouTube has served billions of movie scenes to audiences around the world.  Overseas video sharing and PTP sites — Tudou, Megavideo, PirateBay and BiTTorrent –operate outside the reach of US laws. Naturally content owners have been wary of digital distribution in light of these abuses and violations of the DMCA.

History shows Hollywood struggles with new formats and other technological innovation. They are instinctively protective of their core businesses. Thirty years ago, Universal sued Sony for creating the Betamax. Luckily, they failed and today we have a US $25 billion DVD industry. The good news is AnyClip enhances every distribution window.  Every one. We don’t compete. We complement.

And that’s important, because DVD revenue is dropping for the first time since the format’s introduction. Piracy and Internet video-on-demand from the likes of Amazon, Netflix and iTunes are changing consumption patterns. Economic realities have forced audiences to reassess their entertainment spending.

One way to stanch the bleeding in the Home Video Market is to reinvigorate the value locked in our memories. Short of innovation, the motion picture industry will continue to see declining revenue and audiences will get fewer new magical moments.  Why? Because Quentin Tarantino and Ridley Scott will be given smaller budgets. Does anybody really want to deprive Peter Jackson of the budgets required to make another Lord of the Rings?

Many powerful Hollywood people have told us that AnyClip is amazing but impossible. Some very smart industry executives are rooting for us to succeed but worry about the legal landscape. At its best, the digital rights marketplace is byzantine.  These executives are right to be concerned. For the sake of the movie industry’s wonderful and talented people, and the billions of fans around the world, we certainly hope we can find a way to work within the law to create great opportunities for all.

And this includes AnyClip.  While we will be a smaller participant in any transactions that occur between content owner and consumer, we believe this business will scale just fine. It’s the greatest content that has ever been made etched in the memories of everybody on Earth. We think “reliving movie moments” is a huge market. We are the catalyst for what will be a high-growth legal clip economy.

Our fourth co-founder is the former CEO of Sony America Mickey Schulhof. Mickey knows the pitfalls as well as the upsides of media innovation having introduced the CD and Playstation to North America. He always tells me that if it weren’t for naysayers, we wouldn’t have revolutionary companies.

“Sometimes you just have to do things, Aaron,” Mickey told me when I first described AnyClip.  It’s time for the curtains to open.

Entrepreneurial Lessons from David Ben Gurion

Three weeks ago, I visited David Ben Gurion’s grave.  Ben Gurion, Israel’s first Prime Minister, chose to be buried near his retirement home on S’de Boker, a kibbutz in the Negev  — a beautiful, desolate endless stretch of rocky hills and sand.  His final resting place overlooks a Grand Canyonesque valley facing a great expanse of the rocky desert that symbolizes the challenges of this complex region.

David ben Gurion

David ben Gurion

I was there for inspiration.This field trip, after two days of wall-to-wall meetings and big party, was the vision of one of the founders, investors, and directors of AnyClip Erel Margalit.  Erel is the founder and leader of Jerusalem Venture Partners.   He has crafted a venture firm that is so distinctive from the dozen other firms with which I’ve worked, that I’m almost feel we need a new category name.  The firm is part classic  ($780mm under management and big returns in telecommunications and semiconductors), part IdeaLab (Erel reminds one of Bill Gross’ legendary entrepreneurial restlessness), and part Ben Gurion – a determined, persistent, driven believer in all that Israel could be.

After a few months getting to know Erel, I realize now that it is no accident that he has located his firm, and, more importantly, his sprawling entrepreneurial campus in Jerusalem.   Israel’s Tel Aviv-oriented high tech community views Jerusalem the way those who are based in Palo Alto would view Bakersfield.   Only an hour by car, most of my Tel Aviv Internet friends tell me they never, ever venture to Jerusalem.

Erel runs the prominent JVP in a place that has been deeply rejected by the cosmopolitan, modern and increasingly affluent high-tech community in Israel.    But Erel has and will stay his ground.  His will to remake Jerusalem fuels his life.  He knows he can blend the ancient with the modern.  On a once broken down set of warehouses, near a defunct train station, JVP has created an incubator, office park, state of the art theater, and restaurant complex.  To see pictures of it only 5 years ago is to realize why people think Erel is “totally crazy.”

But come visit.  It’s all there and thriving.  On campus, there all kinds of interesting companies largely focused on consumer media — a category that has played a distant 4th or 5th Israel’s obsession with the telecommunications, security, and energy that generated huge returns in for JVP and other Israeli firms.  My company AnyClip sits across from Double Fusion (Second to Massive in in-game ad sales) and across from The Animation Lab –Israel’s attempt to replicate Pixar.

Erel is a maverick venture investor. He plays by a set of rules that are deeply grounded in his faith that an entrepreneur can do anything.  You can stumble and he’ll ask what’s next?  He doesn’t like to “prune his portfolio.”   David Ben Gurion created a country.   So what are you doing that’s so tough?  Erel  applies this Jobsian  faith in the invention and reinvention of companies  to the political and economic future of Jerusalem.  He sees hope where almost all see despair.  On the eve of the Israeli elections a couple of months ago, I listened to  Erel talk about his vision for Jerusalem:

I imagine a city that houses companies and office parks that are owned exactly 50/50 by Israelis and Arabs.  I see startups that sit next to each other that blend Jewish and Arab founders and are owned by a multicultural syndicate of investors.  Jerusalem will become the cultural and arts capital of new pan-regional festivals that celebrate all cultures.   Through the opening of Jerusalem, Israel will open and together with the Palestinians, it will become a gateway to the region.  Israel wil transform from the R&D center of world to it’s creative hub in close cooperation with the Palestinian inhabitants.  Diversity will be seen as a source of strength rather than weakness.  Finally, we will have  flights from Damascus and Riyadh to Jerusalem.

Each time I recount Erel’s vision of the new Jerusalem to family, friends, and colleagues they shake their head at me like he (and me for even recounting) are living in fantasy world.  Hope has been decimated for many Zionists.   Intifadas, suicide bombs, rockets falling on both sides instill despair and cultivate vitriol.  Jews pride ourselves on not falling into the cycle of hatred towards Arabs that is so morally vacuous and intellectually specious, but these past 15 years have emboldened the ignorant racists among us.   And while it’s understandable (how would you feel if your mother/brother/father/sister/wife was killed drinking coffee at a roadside café) it has created a sense of futility that betrays the ideals of Israel’s first entrepreneur.

On my journey into the Negev, I learned David Ben Gurion would not have wanted vitriol.  He craved progress.  This was a man who spoke of the importance of developing Solar Energy in the 1950’s!   He learned 9 languages because he believed he couldn’t read the great works of other cultures in the translation.   He located his Zionist ideals in a broad, compassionate view of humanity.  Erel’s own words about Ben Gurion transformed into a meditation about Jewish history that tried to put the ancient and the current into context.  There was a more nuanced presentation of why the political situation is so challenging.  But the intractability does not deter him.  Nor would it have frustrated Ben Gurion, who probably would have been excited by the prospects of flights from Damascus to Jerusalem.

As Erel spoke, I thought about how I ended up in this desert with this collection of entrepreneurs who were making semiconductors to enable high definition video on mobile phones or challenging SAP with a user-friendly ERP solution.   What made us come here?   Israel is only 60 and it’s been a relatively challenging go of it so far.  It was as if we stood at Monticello near Jefferson’s grave before the Civil War.  Who knew what would happen to the United States then?

Israel remains an entrepreneurial experiment and joining the process is intoxicating.   AnyClip, like so many startups, will attempt the theoretically impossible.  But we’ll do it with a better chance than a young David Ben Gurion had of creating a Jewish state on a tiny sliver of landed surrounded by Arabs on every side.
As one of the internet’s most thoughtful intellectuals  Fred Wilson wrote recently, “sometimes you just have to take a leap of faith.”

The AnyClip Plot

Imagine a web service where you can find every moment of every film in pristine quality.  You can search by dialogue, tag, actor, or any possible data source you can name.  You can cut any moment of less than 2 minutes and post it, send it, tweet it to anybody anywhere in the world.

You can access this service on any digital platform web, mobile, television etc.

This services allows you to relive every iconic moment you have ever experienced in your film-watching life no matter where you are.  Scenes pop into your head and you can instantly find, share, collect, distribute or any other verb you can possibly imagine.

Technical challenges abound for this service.  Extracting metadata, serving, editing and the panoply of technology elements create a thicket of problems none of which are insurmountable.

The real issue for AnyClip is that Hollywood wants to get paid and consumers (everybody thinks) want everything for free.  How do we find ways to get digital consumers to spend money for content?

Today, Fred Wilson will give a talk on disruption to arguably the most disruptive company in media history — Google.  For Fred, there are six words to consider when making a quality web service:  global, social, open, mobile, playful, intelligent.   How would the movie studios would fair under such scrutiny.

In certain ways, the movie industry is among the most zealous in the world when measured against these business values.   Global filmmaking has arrived and content is exported throughout the world.  It’s hard to think of a more playful industry and for all of the hand wringing that goes on among culture afficionados, plenty of thoughtful, intelligent, moving content originates and is developed by big movie studios.   While the studios don’t create many social services, they create much of what we talk about in social situations.  Movies are social.  Eventually the industry will figure out mobile.  They have proven their ability to adjust to new mediums many, many times.

BUT THE STUDIOS ARE NOT OPEN.    They believe that they should closely harbor what they own and get paid in advance by consumers and businesses who want to experience  or use their content.   And they absolutely disapprove of “playing” with the content.  They are playful, but only until the movies are completed and then, please, please don’t try to change or edit these works.  Openess is deeply foreign to Hollywood, but vital to the success of latest wave of Internet hits (MySpace, Twitter, and even Google) come to mind.   This tension is the opportunity for AnyClip.

I am an Internet executive, but also an aspiring filmmaker.  I want people to see my film, pay for it, and I surely don’t want consumers to steal it.  Still, I will put 100% of the content on the Web in different stages because for The Aaron Cohens to build an audience, the film and its marketing must be open, global, playful, intelligent, mobile, and, most importantly, social.   Surely, these “six words to live by” are the cost of entry for AnyClip.  We must execute on these values.

But will the studios connect and embrace this vision?

This is the narrative tension at AnyClip.

Scene One.  Take One.

The Problem of Piracy

For the past six weeks, I’ve been creating a new business plan for a platform that legally aggregates, distributes, and monetizes movie scenes.   We’re calling this new company AnyClip and you can read about it here and here.

Today YouTube is providing a  valuable service to consumers by hosting a massive number of movie clips.  Type in a line of dialogue and there’s a pretty good chance you will find the clip you want.  Sure, the quality varies, the clip length is fixed, and the scene you’re looking for might not be there, but according to our internal anaylsis YT alone is showing  1-2 billion movie clips a month.  Demand is there.  Obviously, we think this vertical on YT could be better or we wouldn’t try to do what we’re doing.  Studios make more or less nothing in revenue from YT and one executive told us they are so scared of union litigation that they escrow the trickle of legitimate revenue they receive.  I really believe YT will be AnyClip partner one day, but what really worries me is the proliferation of piracy.

Clips are  proliferated throughout the various torrent sites so it’s possible to find more or less whatever you’re looking for provided you don’t mind inconvenience or sacrificing on quality. In my anecdotal conversations in Israel, Sweden, the UK, and more recently,  United States more and more people are finding illegal downloading to be the preferred method of media consumption.

Consider the company I visited in Sweden where the employees laughed when I mentioned the idea of buying a DVD.  Or the lunch I had  in Jerusalem this week with a 30-something woman who was stunned to know I didn’t know the brand of the biggest piracy service for Israelis.  In our office and among colleagues throughout my professional life exists a rich understanding of the free content sites and services that host stolen content.

The healthy box-office numbers have obscured the deteriorating DVD revenues this Spring, but there are real problems with the movie business models as the classic revenue windows give way to the highly disruptive cocktail of globalization, broadband, piracy, and a generation of consumers who see no connection between free downloading and theft.

Recently, I spent time with a Big six Hollywood studio executive who told me that he was preparing to fight the Obama administration on Net Neutrality.  His argument was that we need government intervention to stop piracy and that TARP resources were being deployed to increase broadband access with no preferential treatment to the companies who “do the right thing.”  An investment in broadband, he argued, was an investment in piracy.

The conventional wisdom in the Internet industry is to wax rhapsodic about free and  open platforms and to be all-in supportive of net neutrality to encourage innovation.  Truthfully, this is my own belief as well.  In general, I think it’s as foolish to believe that broadband regulation will stop piracy as it is to believe anti-marijuana laws stop people from getting baked.

However,  “there’s nothing wrong with Piracy,” is morally bankrupt.    If you are excited to see Star Trek this week you should think about whether this film will make a $100mm in profit $200 or $500mm in profit.  The smaller the amount, the less Paramount will have to invest in the next film.  Unlike musicians Hollywood directors and special effects mavens cannot simply go out and tour to recoup their lost music revenue.

Consumers and Hollywood studios  are at an inflection point.    It’s vital that we find ways to create services that consumers love while simultaneously generating revenues for the people and studios who provide such magical content.

Funny Passover Schtick

This comes courtesy of Heeb Magazine which I really love.  Nice tribute to Woody Allen and his rhythms.  Still, at 5 minutes it shows how difficult it is to make really consistently good comedy.  Especially animation.  You have to be so crisp to be good.  Makes me appreciate Family Guy and South Park all the more.

Why we Need Newspapers

I read some really dumb stuff in the newspapers today.  More than anything I’m bothered by the Wall Street Journal’s slouch towards the New York Post.  The WSJ’s big headline today is that Jesse Jackson might be a part of the Illinois political scandal.  It’s the entire above the fold article space.  Come on, how exactly how does this affect the corporate sector?  It doesn’t.  But Murdoch wanted a prize brand to influence American politics.  The downside is that we are losing one of the great private sector institutions in America and the newspaper that discovered the Enron crisis.  We need the vigilant WSJ. Meanwhile, they are taking their dwinding journalism resources and covering Illinois to combat the NYT liberal bias.  Yeah, that’s a good differentiation strategy Rupert.

So unfortunately, we turn to the paper that really typically covers poltical scandals for a superb distillation of the country’s economic crisis.  Check out Steve Pearlstein’s colunm in the Washington Post.  You may have to register.  It’s worth it.  He makes a great case for why Sam Zell, Robert Rubin, and other business leaders are hiding behind Perfect Storm excuses.  Without the Post and other papers, we will have fewer and fewer paid journalists who have time to write such thoughtful columns.  I tried to get at similar arguments in some of my blog posts, but most bloggers do not have the time to be as thoughtful.  While there are an increasing number of professional bloggers, newspapers play a vital role in our society and that’s why they have to figure out how to survive.

Thanks Steve Pearlstein and thanks to my mother, Carla Cohen, for turning me onto the piece.  I read a lot of newspapers, but typically I’m only on the Post site for Redskins news.

Sam Zell Hammered in Washington Post

Thanks to my old friend Betsy Befus Feigin, I’ve been forwarded this savage attack on Sam Zell on the WashingtonPost.com.    I’m disseminating the information because I want my readers to have it.  I want to think and read more about the Tribune situation before I publish anything myself.     There is no question leveraging employee pensions to raise debt to buy a company is ethically quesitonable.  Mgmt  gave employees stock when Zell bought company, but the stock is way behind the debt and now with bankruptcy will be wiped out along with Zell’s stock.  But the Tribune issues are nuanced and deserve and will get more scrutiny on YallaGuy.

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