AnyClip’s Open Letter to Hollywood

At startups, strategies evolve.  So do their entrepreneurs

Only 6 months ago, I became the CEO of a startup called PopTok, a company that had some interesting insights about the film business, but a strategy that would not work.  AnyClip was born from the vestiges of this company and we swiftly adopted the idea that we would create a platform than enabled anybody to find “any moment from any film ever made instantly and legally.”

Successful managers solve problems for their customers in order to create  measurable economic value.  In our case, we believe the best method to stanch YouTube users’ blatant copyright infringement violations was to build a more comprehensive and useful service for reliving film moments.  This service will operate as a gigantic lead-generation mechanism for  the legal consumption of full-length and short-form video-on -demand .  We adapted our rhetorically catchy  vision –any moment from any film ever made — so that we would inspire  the studio ecosystem to embrace a new form of library discovery . AnyClip combats the looming piracy crisis that threatens to irreparably harm the movie industry.

During the summer, we were accepted into TechCrunch 50 — a conference that echoes the film industry by billing itself as the “Sundance of Startups.”  In order to launch at TC50,  AnyClip  had to abide by their rule of complete secrecy.  Only our investors and employees knew we were selected.  This meant that we could not share our prototype with any of our constituencies including content owners.

The TechCrunch guidelines presented a conundrum.  I wanted to use their platform to publicize our company’s strategy.  However,  I also worried that we would neglect a fundamental principle of running a startup –  treat your customers better than anybody on Earth.  How would the studios feel about us demoing the service without allowing them to preview it?

In general, we have been very warmly received by our partners in Hollywood for which we are gratified.  Actors, directors, agents, managers and studio executives demonstrate optimistic intrigue about  a legal database of movie moments that promotes the rich heritage of film.  That said, the industry expects AnyClip to adapt to its cultural norms .  Even giving a demonstration of our service with film clips requires the permission of the studios.  Legally, these demos are well-protected by the fair use statutes, but invoking them is clearly considered disrespectful.   That was ignorant, and I’ve had to adjust my thinking.  Hollywood has a business culture that asks for permission.  Internet companies tend to use legal arguments to justify their business practices and damn the values of  the traditional industries that preceded it.

Perhaps total disruption with potential legal justifications can work (see the Digital Millienium Copyright Act and so-called ISPs YouTube, MetaCafe Daily Motion, Veoh, and my old company Bolt ) , but I neither condone nor intend to deploy these practices. Finding any moment from any film ever made is a seductive economic proposition only if it discourages piracy and promotes the legal consumption of content.

I love films.  I want the movie industry to thrive so people like Spike Jonze and Peter Jackson can continue to make magical moments for me to watch and relive.  AnyClip is designed to grow the home video market (VOD, BluRay, DVD etc) by creating discovery and search capabilities that were not technically possible even a few years ago.

Imagine a comprehensive database that ensures that every watched scene  is one click away from a purchase or rental of the full-length film.  Consider YouTube and IMDB with a rich, searchable, and legal database to integrate into their sites .  AnyClip can do much to help grow the industry, but only if we earn the trust of the rights holders without compromising the needs of their audiences.

These are AnyClip’s challenges. We have to start somewhere and at the beginning we will not be able to license entire libraries.  But make no mistake, the rediscovery of every film ever made is our vision.  Massive legal consumption of every film ever made is our dream.

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.

Follow

Get every new post delivered to your Inbox.