Project and content management for Contemporary Authors volumes
WORK TITLE: Streaming, Sharing, Stealing
WORK NOTES: with Michael D. Smith
PSEUDONYM(S):
BIRTHDATE:
WEBSITE: http://www.smithtelang.com/
CITY:
STATE:
COUNTRY:
NATIONALITY:
https://www.heinz.cmu.edu/~rtelang/rahul_res.html * http://www.heinz.cmu.edu/faculty-and-research/faculty-profiles/faculty-details/index.aspx?faculty_id=104 * https://www.linkedin.com/in/rahul-telang-99b134/
RESEARCHER NOTES:
PERSONAL
Male.
EDUCATION:Birla Institute of Technology and Science, Pilani, India, B.E., 1994; Indian Institute of Foreign Trade, New Delhi, India, MBA, 1997; Carnegie Mellon University, M.S., 1999; Carnegie Mellon University (Tepper School of Business), Ph.D., 2002.
ADDRESS
CAREER
Heinz College, Carnegie Mellon University, Digital Media Research Center, Pittsburgh, PA, codirector.
AWARDS:Sloan Foundation Industry Study fellowship; NSF CAREER award for his work on economics of information security.
WRITINGS
Contributor to journals, including Management Science, Marketing Science, Information Systems Research, MIS Quarterly, and Journal of Marketing Research.
SIDELIGHTS
Rahul Telang is a professor of information systems at Carnegie Mellon University. Together with fellow Carnegie Mellon professor Michael D. Smith, he has written Streaming, Sharing, Stealing: Big Data and the Future of Entertainment, about the massive changes in the film and TV industries.
In Streaming, Sharing, Stealing, Telang and Smith relate how in “the old days,” executives would approve a pilot for a show, order a few trial episodes, and broadcast them at the same time every week on television sets. Then along came House of Cards, a program produced by Netflix. Netflix bought the program sight unseen and gave it a two-year initial run. Instead of running it on a once-a-week basis, Netflix released all thirteen episodes of the first season at the same time, allowing viewers to watch on their TVs, computers, tablets, and phones. The experiment was wildly successful, leading other companies, such as Amazon, Hulu, and others, to follow suit and leaving the more traditional companies to scramble in an attempt to catch up. Because of the Netflix experiment with House of Cards, the whole TV industry was turned upside down. Telang and Smith discuss how everything is affected in not only the TV industry but also books and music and how Netflix, along with Amazon and Apple, is changing the face of media in the world. The major players in these industries are scrambling to adapt in order to survive.
A Publishers Weekly reviewer found the book lacking in perspective and taking a one-sided approach and wrote: “Readers would be better served by a more balanced and updated view of traditional industries’ problems and possible solutions to them.” Financial Times Online contributor Jane Wild had a more positive reaction to the book and commented: “In one sense, Streaming, Sharing, Stealing highlights what the seasoned marketer has always known: the immense value of knowing your customer. Yet this study of the triumph of data is still much needed, as evidenced by the many executives who refuse to believe that the age of ‘gut instinct’ and the ‘taste maker’ has passed. The upshot for businesses is clear: change is happening and the way to ensure your business survives is to be ready to adapt and take bold decisions—just as Netflix did with its one hundred million dollar bet on a series the industry said would never work.”
A contributor on the Now Appearing Web site wrote that Streaming, Sharing, Stealing “does offer a little hope for the beleaguered publishers and studios as long as they can change their mindset—but it also seems likely that they will be like Kodak in the photography business, leaving it too late.” The reviewer added: “If you are interested in the media and how the digital age is threatening the old world and transforming our entertainment environment, you need to read this book.”
Bob Morris, writing on the Blogging on Business Web site wrote that “Smith and Telang have much of value to say about how and why data analytics and Big Data have transformed the entertainment industry and leveled that playing field.” Morris continued: “This is a “must read” for C-level executives in organizations that are currently ignoring or underutilizing what Big Data can help them to accomplish in terms of profitability, of course, but also sustainable relationships with customers as well as with highly-valued employees.” Morris concluded: “Streaming, Sharing, Stealing is a brilliant achievement. Bravo!”
BIOCRIT
PERIODICALS
Publishers Weekly, July 18, 2016, review of Streaming, Sharing, Stealing: Big Data and the Future of Entertainment, p. 203.
ONLINE
Blogging on Business, http://bobmorris.biz/ ( September 19, 2016 ), Bob Morris, review of Streaming, Sharing, Stealing.
Financial Times Online, https://www.ft.com/ (September 11, 2016), Jane Wild, review of Streaming, Sharing, Stealing.
Now Appearing, http://brianclegg.blogspot.com/ (August 16, 2016), review of Streaming, Sharing, Stealing.
Rahul Telang/Michael D. Smith Home Page, http://www.smithtelang.com (May 3, 2017).
Professor Telang’s research interest lies in two major domains. First is on Digital Media Industry with a particular focus on digitization of songs, movies, TV and books is affecting the incentives of content provider, content distributors as well public policy challenges in terms of innovation and copyright. In particular, he has examined the issue proliferation of distribution platforms including online piracy and its impact on traditional music, movies and books industry.
Recently, he is investigating the role of social networks on music diffusion, technology adoption, and employee job search. Some of his prior work explored the challenges of interaction of multiple platforms (web portals vs telephony for customer service; SMS and voice for cellular phones). He was the recipient of Sloan Foundation Industry Study fellowship for his work in this domain and is a co-director of Digital Media Research Center at the Heinz College. His work is also funded extensively by industry participants including Google.
His second area of work is on economics of information security and privacy. He has examined the issue of vendors’ incentives to improve the quality of their products and role of policy making and standards in changing these incentives. His earlier work explores the challenges of vulnerability disclosure and how competition and policy making affect these patch release decisions. Recently, he is examining the role of data breach disclosure laws on identity thefts. He was the recipient of NSF CAREER award for his work on economics of information security.
Dr. Telang has published extensively in many top journals like Management Science, Marketing Science, Information Systems Research, MIS Quarterly, and Journal of Marketing Research. He is on the editorial board of Management Science and ISR. He has organized many conferences and workshops and many of his papers have received top honors at journals and conferences.
Faculty Details
Photo of Rahul Telang
Rahul Telang
Professor of Information Systems; PhD Program Chair
Email: rtelang@andrew.cmu.edu
Personal Website
Courses
Ph.D. Seminar II
Information Security Policy & Management
Advanced Business Analytics
Affiliations
PHD
PhD: Information Systems
PhD: Public Policy
Media Links
_newMedia
Biography
Professor Telang’s research interest lies in two major domains. First is on Digital Media Industry with a particular focus on digitization of songs, movies, TV and books is affecting the incentives of content provider, content distributors as well public policy challenges in terms of innovation and copyright. In particular, he has examined the issue proliferation of distribution platforms including online piracy and its impact on traditional music, movies and books industry. Recently, he is investigating the role of social networks on music diffusion, technology adoption, and employee job search. Some of his prior work explored the challenges of interaction of multiple platforms (web portals vs telephony for customer service; SMS and voice for cellular phones). He was the recipient of Sloan Foundation Industry Study fellowship for his work in this domain and is a co-director of Digital Media Research Center at the Heinz College. His work is also funded extensively by industry participants including Google.
His second area of work is on economics of information security and privacy. He has examined the issue of vendors’ incentives to improve the quality of their products and role of policy making and standards in changing these incentives. His earlier work explores the challenges of vulnerability disclosure and how competition and policy making affect these patch release decisions. Recently, he is examining the role of data breach disclosure laws on identity thefts. He was the recipient of NSF CAREER award for his work on economics of information security.
Dr. Telang has published extensively in many top journals like Management Science, Marketing Science, Information Systems Research, MIS Quarterly, and Journal of Marketing Research. He is on the editorial board of Management Science and ISR. He has organized many conferences and workshops and many of his papers have received top honors at journals and conferences.
Representative Publications:
Anuj Kumar, Rahul Telang, “Product Customization and Customer Service Costs: An Empirical Analysis”, forthcoming, Manufacturing and Service Operations Management (MSOM).
S Romanosky, R Telang, A Acquisti, “Do Data Breach Disclosure Laws Reduce Identity Theft?”,forthcoming, Journal of Policy Analysis and Management (JPAM).
Michael Smith, Rahul Telang (2010), “Competing with Free: The Impact of Movie Broadcasting on DVD Sales and Internet Piracy”, MIS Quarterly, 33(2), 321-338.
Ashish Arora, Rahul Telang, Hao Xu (2008), “Optimal Policy for Software Vulnerability Disclosure”, Management Science, 54(4), 642-656.
B Danaher, S Dhanasobhon, M Smith, R. Telang (2010), “Converting Pirates without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy”, Marketing Science, 29(6), 1138:1151.
Anindya Ghose, Michael Smith, Rahul Telang (2006), "Internet Exchanges for Used Books: An Empirical Analysis of Product Cannibalization and Welfare Impact", Information Systems Research (ISR), 17(1), 3-19.
Education
PhD, Information Systems, Carnegie Mellon University (Tepper School of Business)
Working Papers
Estimating App Demand from Publicly Available Data
Garg, Rajiv and Telang, Rahul, "Estimating App Demand from Publicly Available Data" (2012)
ssrn.com/abstract=1924044
To Be or Not To Be Linked on LinkedIn
Garg, Rajiv and Telang, Rahul. “To Be or Not To Be Linked on LinkedIn: Job Search Using Online Social Networks” NBER Summer Institute Working Paper 2012
http://ssrn.com/abstract=1813532
http://users.nber.org/~confer/2012/SI2012/PRIT/Garg_Telang.pdf
Converting Pirates without Cannibalizing Purchasers: The Impact of Digital Distribution on Physical Sales and Internet Piracy
With the rise of Napster, BitTorrent, and other tools facilitating Internet piracy, rights holders have understandably become very concerned with the development of strategies to mitigate the impact of piracy on sales. These tools fall into three general categories: litigation, countermeasures, and competition. The literature has addressed the effectiveness of the first two anti-piracy strategies. In this paper we address the third strategy using NBC’s decision to remove its content from Apple’s iTunes store in December 2007 as a natural shock to the legitimate supply of digital content. To address this question we collect two large datasets from Mininova and Amazon.com documenting the levels of piracy and DVD sales for both NBC and other major networks’ content around this event. We then analyze this data in a difference-in-difference model and find that NBC’s decision to remove its content from iTunes is causally associated with a 19.99% increase in the demand for NBC's pirated content. This is roughly equivalent to an increase of 92,612 downloads a day for NBC’s content. Moreover, we see no change in demand for NBC’s DVD content associated with this change.
(Download)
Impact of Software Vulnerability Announcements on the Market Value of Software Vendors - An Empirical Investigation
Researchers in the area of information security have mainly been concerned with tools, techniques and policies that firms can use to protect themselves against security breaches. However, information security is as much about security software as it is about secure software. Software is not secure when it has defects or flaws which can be exploited by hackers to cause attacks such as unauthorized intrusion or denial of service attacks. Any public announcement about a software defect is termed as ‘vulnerability disclosure’. Although research in software economics have studied firms’ incentive to improve overall quality, there have been no studies to show that software vendors have an incentive to invest in building more secure software. This paper uses the event study methodology to examine the role that financial markets play in determining software vendors’ incentives to build more secure software. Data is collected from leading national newspapers and industry sources like CERT by searching for reports on published software vulnerabilities. It is shown that vulnerability disclosures lead to a negative and significant change in market value for a software vendor. On average, a vendor loses around 0.6% value in stock price when a vulnerability is reported. This is equivalent to a loss in market capitalization values of $0.86 billion per vulnerability announcement. To provide further insight, the information content of the disclosure announcement is used to classify vulnerabilities into various types.
(Download)
Optimal Policy for Software Vulnerability Disclosure
Software vulnerabilities represent a serious threat: most cyber-attacks exploit known vulnerabilities. Unfortunately, there is no agreed-upon policy for their disclosure - white-hats who discover vulnerabilities, security mailing lists and CERT follow different ad-hoc policies. This paper develops a framework to analyze the optimal timing of disclosure policy (time given to vendor to patch the vulnerability). Disclosure policy indirectly affects how the speed and quality of the patch that a vendor develops, and thus CERT and similar bodies acting in the public interest can use it to influence behavior of vendors and reduce social cost. This paper formulates a game-theoretic model involving a social planner who sets disclosure policy and a vendor who decides on patching. It is shown that vendors always choose to patch later than a socially optimal disclosure time. The social planner can optimally shrink the time window of disclosure to push vendors to deliver patch in a timely manner. The basic model is extended in a number of directions, most importantly, allowing for the proportion of users implementing patches to depend upon the quality of the patch, which is itself a choice variable for the vendor. The paper provides a decision framework for understanding how disclosure timing may affect vendor’s decision and in turn, what should a policy maker do.
(Download)
An Empirical Analysis of Cellular Voice and Data Services
Cellular telephony and associated data services has been a major social phenomena for well over a decade now. It has changed the way - in some countries more than others - in which people communicate. In many countries in Northern Europe and Asia, its penetration rates are very high and in others less so but in all cases it has engendered change at multiple levels - socially as noted and in terms of market structure and competition with the established Incumbent Local Exchange and Inter Exchange service providers. However, there has been little work published in the academic literature on user consumption of cellular voice and data services. This has been due to the unavailability of longitudinal data at the individual user level on their consumption of voice and data services. We have such data from a large cellular service provider in Asia. Demand for voice and data services is influenced by the tariffs or "service plans" offered by firms. In our analysis we empirically estimate the drivers for cellular services how demographic and plan characteristics affect the user choices. We first provide a theoretical model and then provide insight into consumption patterns over a one year period of cellular voice and data services and relate it to service plan design.
(Download)
Sell First Fix Later: Impact of Patching on Software Quality
This paper presents an economic model of fixing or patching a software problem after the product has been released in the market. Specifically, a software firm’s trade-off in releasing a buggy product early and investments in fixing it later is modelled. It is first shown that patching investments and time to enter the market are strategic complements such that higher investments in patching capability allow the firm to enter the market earlier. Just as the marginal cost of producing software can be effectively zero, so can be the marginal cost of repairing multiple copies of defective software by issuing patches. It is shown that due to the fixed cost nature of investments in patching, a vendor has incentives to release a buggier product early and patch it later in a larger market. This result is contrasted with other physical good markets. Thus, it is shown that a monopolist releases a product with fewer bugs but later than what is socially optimal. The model is extended to incorporate duopoly competition and show that in competition, the high value firm always enters earlier than the monopolist. Ironically the firm offering greater value to customers releases a product that initially is of lower quality (more bugs), but provides the greater value by releasing early (so customers can use the product sooner) and by investing more in patching so it can provide better after-sale support to its customers.
(Download)
Competition Between Internet Search Engines
This paper develops a model of vertical differentiation in the Internet search engine market. A key property of the model is that users who try out one engine may be dissatisfied with the results, and consult another engine in the same session. This residual demand allows lower quality engines to survive in the equilibrium. We consider a two-period game between an incumbent and an entrant who enters in the second period. Since users prefer to try out a higher quality engine first, the demand for an engine is discontinuous in quality, depending on whether the engine has high or low quality. We take into account brand loyalty for the incumbent. The interaction of brand loyalty and a cost advantage for the entrant determines which engine has higher quality in equilibrium.
(Download)
Rahul Telang is professor of Information systems and Management at the Heinz College at Carnegie Mellon University and at the Tepper School of Business (Courtesy).
Professor Telang’s is broadly interested in how Information and Communication Technologies (ICTs) and associated digitization of information impact consumers, business and policies. Within this thread, his interest lies in two major domains. First is Digital Media Industry with a particular focus on how digitization (and associated piracy) in copyrighted industries is affecting the incentives of content provider, distributors and users. His research is directed towards understanding and shaping an optimal copyright and intellectual property policy in the Digitization Era. He was the recipient of Sloan Foundation Industry Study fellowship and a number of Google Faculty awards. He is a co-director of a center IDEA (Initiative for Digital Entertainment Analytics). He has worked extensively with industry and policy makers on variety of issue surrounding digitization of Media. He also does extensive consulting on this topic and has a book coming out.
His second area of work is on economics of information security and privacy. His key interest is in understanding the incentives of various parties (users, firms and hackers), why markets fail, how to create a useful policy framework and how to measure the effectiveness of such policies. His work explored the controversy surrounding vulnerability disclosure, vulnerability markets and their role in generating optimal outcomes. Recently, he has been examining the role of data breach disclosure laws on identity thefts. He was the recipient of NSF CAREER award for his work on economics of information security. He is also part of Cylab and Institute for Infrastructure Protection (I3P). Currently, he is working on a large NSA funded project on examining home users’ security and privacy behavior.
Some of his other work has explored the role of broadband in schools, ICTs in for form of EMR (Electronic Medical Records) in hospitals, and so on.
Dr. Telang has published extensively in many top management and policy journals like Management Science, Marketing Science, ISR, MIS Quarterly, Journal of Industrial Economics, Journal of Policy and Management, and NBER chapters. He held senior editor positions at ISR (Information Systems Research) and MIS Quarterly. He has organized many conferences and workshops and many of his papers have received top honors at journals and conferences. He has generated large external funding over the years for many of his projects.
Currently he is also the director of the PhD program at the Heinz College.
Education
PhD (Industrial Administration (Information Systems)), Graduate School of Industrial Administration (Tepper School of Business), Carnegie Mellon University, 2002.
Thesis: Consumer Choice of Internet Search Engines: Empirical and Analytical Framework
M.S. Industrial Administration (Information Systems), GSIA, Carnegie Mellon University, 1999.
MBA, Indian Institute of Foreign Trade, New Delhi, India, 1997.
B.E. (Electrical and Electronic Engineering), Birla Institute of Technology and Science, Pilani, India 1994.
A DPAA Q&A with Rahul Telang of Carnegie Mellon University
By Barry Frey October 21, 2016 Video Everywhere -- DPAA Archives
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Barry Frey, who as President and CEO of the Digital Place Based Advertising Association (DPAA) will be hosting the 9th annual Video Everywhere Summit on October 27 in New York, recently interviewed some of the event's featured speakers on a variety of topics. Here is his interview with Rahul Telang, Professor of Information Systems, Carnegie Mellon University.
Barry Frey: What media do you consume on a daily basis?
Rahul Telang: I love reading newspapers and watching sports on TV.
Barry: What are the biggest changes you foresee for the advertising business over the next five years?
Rahul: It will become more precise and merge more seamlessly with the content. I also foresee more and more content going behind paywalls as traditional ad driven models will falter.
Barry: Tell us a bit about your book.
Rahul: The book, “Streaming Sharing and Stealing: Big Data and the Future of Entertainment,” provides an intuitive explanation as to why the industry has always been dominated by a few large firms, and identifies the key challenges faced by the industry and why are these challenges are different than in the past and where the industry is headed.
In particular, we argue that platforms (like Netflix, Amazon, Google) not only have deep customer level data and the skills and culture to make data-driven decisions, but also are increasingly getting into content production and will pose significant competition to traditional incumbent players who lack the skill and access to such rich data.
Barry: What is your favorite new app?
Rahul: I am an avid golfer and use “swing by swing” quite a bit.
Barry: Tell us a bit about your upcoming speaking appearance at the Video Everywhere Summit.
Rahul: This will be my first time and I'm very excited to learn and talk about how users, firms, content and ads interact and where the future is headed.
Barry: The Presidential election winner will be...?
Rahul: I hope America chooses the better candidate (Hillary).
The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillage.com/MyersBizNet, Inc. management or associated bloggers.
Streaming, Sharing, Stealing: Big Data and the Future of Entertainment
263.29 (July 18, 2016): p203.
Copyright: COPYRIGHT 2016 PWxyz, LLC
http://www.publishersweekly.com/
Streaming, Sharing, Stealing: Big Data and the Future of Entertainment
Michael D. Smith and Rahul Telang. MIT, $29.95 (232p) ISBN 978-0-262-03479-1
Smith and Telang examine the market structures and competitive strengths and weaknesses of traditional book publishers, recording labels, and movie studios in light of challenges from industry disrupters. They argue that "a converging set of technological and economic changes" are "threatening to shift the foundations of power and profit in these important industries." The fact that the threat has already manifested gives the book a feeling of old news, and the authors' prescription--that traditional megacorporations should run their businesses more like Amazon, iTunes, and Netflix--is likely to be viewed as distasteful medicine by a patient who's not convinced he's ill. Examples and case studies include sheet music, rock 'n' roll, Netflix's House of Cards, e-books, Microsoft's Encarta encyclopedia, Hulu, and the 2004 standoff between Amazon and Melville House. While illustrative, these and other examples mostly feature technology companies' wins at the expense of traditional companies. The book's example of a success story among traditional companies--casino giant Harrah's Entertainment--comes from outside the creative industries. Readers would be better served by a more balanced and updated view of traditional industries' problems and possible solutions to them. (Sept.)
Source Citation (MLA 8th Edition)
"Streaming, Sharing, Stealing: Big Data and the Future of Entertainment." Publishers Weekly, 18 July 2016, p. 203. General OneFile, go.galegroup.com/ps/i.do?p=ITOF&sw=w&u=schlager&v=2.1&id=GALE%7CA459287577&it=r&asid=0ba112112cbed5b955a3cdb320e6cd71. Accessed 28 Mar. 2017.
Gale Document Number: GALE|A459287577
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Review: ‘Streaming, Sharing, Stealing’, by Michael D. Smith and Rahul Telang
TV and film networks need to move away from ‘gut instincts’ to use data
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Podcast: is an MBA worth it?
Data day: authors Michael Smith and Rahul Telang show how the success of 'House of Cards', starring Kevin Spacey, upended the film and TV industries © Bloomberg
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September 11, 2016
by: Jane Wild
When the makers of the US version of House of Cards were pitching their series to television networks they were sure they had all the makings of a hit. The only problem was that none of the networks they approached wanted to take the risk of funding a pilot, let alone the series, because according to conventional wisdom in the industry, political dramas were not successful.
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But streaming service Netflix analysed data on its 33m subscribers to discover that many were fans of lead actor Kevin Spacey, director David Fincher and had rented the original BBC series. Those data were proof enough for Netflix to dispense with a pilot and instead offer $100m upfront for two series — a decision greeted with scepticism in the industry, but which turned out to be inspired. The programme has proved incredibly popular with audiences and critics alike and its fifth series is due for release next year.
The story demonstrates the role that data now play in entertainment industry decision making — Netflix was even able to produce several trailers targeted at its various audience categories.
It shows how the balance of power is shifting away from film, TV and music businesses, traditionally the biggest and most powerful, towards such entities as Netflix and Amazon — those that distribute content.
Streaming, Sharing, Stealing charts the history of film, TV and music industries, going back a century to show how developments in technology and changing consumer habits have created a period of unprecedented change for them.
The book, by two professors at Carnegie Mellon University, offers many lessons for executives in the creative industries, as well as serving as a case study of the challenges faced by any industry grappling with disruptive forces.
It is packed with examples, from the nimble-footed who reacted quickly to adapt their businesses, to laggards who lost empires.
Consider Apple, which was struggling when Steve Jobs rejoined in 1997 and became its chief executive. Jobs pinpointed the failure: Apple relied upon third parties to sell its computers and staff in those shops were often happier to recommend the cheaper products of competitors. He hunted out market and demographic data to show where Apple could build its own shops in the most convenient locations and sell directly to its customers — a strategy that went against the grain at the time.
The book also offers insights for artists, film-makers and writers, pointing to how they can maximise what they earn and provide incentives that discourage piracy. The band Radiohead decided to bypass traditional music publishers when releasing their 2007 album In Rainbows. They made the tracks available to fans directly through their website, for any price they wished to pay, including nothing at all. It was the band’s most profitable album at the time.
Those that failed to recognise the changing climate include NBCUniversal, which took a gamble in 2007 to remove its TV shows from Apple’s iTunes player. However, viewers largely opted for piracy rather than following NBC to other digital outlets.
In one sense, Streaming, Sharing, Stealing highlights what the seasoned marketer has always known: the immense value of knowing your customer. Yet this study of the triumph of data is still much needed, as evidenced by the many executives who refuse to believe that the age of “gut instinct” and the “taste maker” has passed.
The upshot for businesses is clear: change is happening and the way to ensure your business survives is to be ready to adapt and take bold decisions — just as Netflix did with its $100m bet on a series the industry said would never work.
Streaming, Sharing, Stealing: Big Data and the Future of Entertainment, by Michael D. Smith and Rahul Telang, MIT, 232 pages
Streaming, Sharing, Stealing review
Because it's from a university press, I must admit I expected Streaming, Sharing, Stealing to be a somewhat dull economic textbook - but in reality it is a great read and a cracking business book, giving the clearest explanation I've ever seen of what is happening to three arms of the entertainment business - book publishing, music and TV/film - in the face of the internet/digital revolution.
In that sense the title is misleading, as it seems to suggest that a major focus is music sharing and piracy. This is certainly is covered, but is dismissed as the relatively easy part. Like most of the analysis in the book, here Michael D. Smith and Rahul Telang make sure that their views are backed up with as much experimental data as possible - and there appears to be good evidence that piracy isn't too big a deal, provided it's made easy to get access to legal digital versions in a timely fashion. It's where the publishers/networks either have poor online access or delay it til after, say, a DVD or hardback comes out that problems arise.
However, the main issue that Smith and Telang cover is the challenge that book and music publishers and the film studios/TV networks face in dealing with the internet giants. As the authors point out, the entertainment industries coped fine with new technology throughout the 20th century because they had control of the source material and distribution, and so were complacent when faced with the internet. But here, several major changes came together - Smith and Telang draw a parallel with the 'perfect storm' - and the old big names are potentially in trouble. The authors show how Amazon, iTunes and Netflix (as key examples) mean real trouble for those who used to pull the strings, particularly because of the newcomers' access to customer data, and ability to give customers what they are looking for, rather than just put out what they think customers might want and hope.
The analysis is often brutal and displays some outcomes from experiment that might surprise the publishers. For example, they found that when ebooks or digital versions of TV and film came out at the same time as DVDs and hardbacks, the overall take went up, but if they were held back to let more expensive DVDs and hardbacks have first shot - which was the traditional model used by most publishers and studios - digital sales plummeted, because digital users didn't buy the hardback/DVD instead, but either got a pirate version or just went for something else.
As well as individual lessons like this, the book does offer a little hope for the beleaguered publishers and studios as long as they can change their mindset - but it also seems likely that they will be like Kodak in the photography business, leaving it too late. As the authors make clear, it's not enough for individual publishers or studios to have their own online store, because few customers actually know or care who their favourite author/band is published by, or which network or studio produced what they want to watch. The only hope is if the content providers can band together and have a joint digital location with timely releases. But this doesn't augur well, as the the one attempt the networks have made, Hulu, has been shackled, forcing advertising and late releases on it.
If you are interested in the media and how the digital age is threatening the old world and transforming our entertainment environment, you need to read this book.
Streaming, Sharing, Stealing is available from amazon.co.uk and amazon.com.
Streaming, Sharing, Stealing: A book review by Bob Morris
Posted on: September 19th, 2016 by bobmorris
streamingStreaming, Sharing, Stealing: Big Data and the Future of Entertainment
Michael D. Smith and Rahul Telang
The MIT Press (August 2016)
An insightful discussion of the evolving nature and probable impact of Big Data
Decisions that concern Big Data do not involve IT issues; rather, they involve business issues and usually have implications and consequences that can have significant impact throughout the given enterprise. That is especially true of decisions made within the entertainment industry. Keep that thought in mind when working your way through the material provided by Michael Smith and Rahul Telang, especially when they are discussing companies that include (listed in alpha order) ABC, Apple, Amazon, Blockbusters, CBS, Encyclopedia Britannica, Funk & Wagnulls, Google, Harrah’s Entertainment, and Netflix.
Smith and Telang have much of value to say about how and why data analytics and Big Data have transformed the entertainment industry and leveled that playing field. “The interactive nature of online channels has changed everything. Companies like Amazon, Google, and Netflix don’t think about their customers in terms of broad demographic characteristics. They are able too use their data and their platforms to understand individual customer preferences. This, combined with the ability to control what content is shown customers based on those preferences, and the natural ‘winner take all’ nature of many online markets have given these new platform firms a great deal of market power.”
Moreover, “they have used this power to change the content is consumer by the audience, and change the business model for content distribution. This puts the platform companies =in an even more powerful position as con summers adopt and adapt to these new distribution models.” These brief comments by Smith and Telang help to explain why competition in today’s global marketplace has become more volatile, more uncertain, more complex, and more ambiguous than at any prior time that I can remember.
These are among the several dozen passages of greatest interest and value to me, also listed to suggest the scope of Smith and Telang’s coverage:
o House of Cards (Pages 3-10)
o BitTorrent (9-11 and 119-122)
o Beau Willimon (14-18)
o Recording industry (23-28)
o Book issues (31-34, 35-38, and 37-40)
o Differentiation of products (42-44 and 93-95)
o Encyclopedias on computers (51-58)
o Internet issues (64-70 and 128-131)
o Piracy (82-92)
o CBS (120-121)
o Peter Shutoff 106-108)
o Apple vs. NBC (117-121)
o Dominance of Apple (122-124)
o Baseball: Michael Lewis and Moneyball (133-0138)
o Google (141-145)
o Customer-level data (143-145 and 160-163)
o Netflix: Data-based decision making (145-150)
o Harrah’s Entertainment (155-163)
o Gary Loveman (157-163)
o Steve Jobs (175-177)
o Apple retail stores (176-178)
In Winner Takes All, Christina Brinkley explains how Steve Wynn, Kirk Kerkorian, and Gary Loveman used Big Data to achieve a competitive advantage for their casinos in Las Vegas. Smith and Tulane cover some of this in their book. Here are the key points:
o Obtaining the data needed requires a new reporting structure that threatens the status quo and its defenders.
o Information-technology systems are needed to process and evaluate data to determine customer preferences.
o The team must include members with strong quantitative backgrounds.
Loveman and his team at Harrah’s Entertainment found that 26 percent of its customers generated 82 percent of its revenue. Also, their most profitable customers were middle-aged adults and senior citizens who enjoyed playing slot machines. They were also able to predict the lifetime value of a new customer. These are revelations of incalculable value. There are similar stories in other organizations, several also included in the book.
These are among Michael Smith and Rahul Terlang’s concluding thoughts: “The overarching lesson for the entertainment industries is that, to succeed in the future, companies are going to have to control the interface with their customers (and the resulting data about their customers’ needs) in addition to controlling the production of content. That’s what we have been arguing throughout this book.” Entertainment industries include but are by no means limited to gaming. This is a “must read” for C-level executives in organizations that are currently ignoring or underutilizing what Big Data can help them to accomplish in terms of profitability, of course, but also sustainable relationships with customers as well as with highly-valued employees.
Streaming, Sharing, Stealing is a brilliant achievement. Bravo!