How four Microsoft engineers proved that the “darknet” would defeat DRM

Re:How four Microsoft engineers proved that the “darknet” wo... by tptacek on Friday November 30, 2012 @01:25PM (#4854581)

I'm not sure you followed my comment (based on how you quoted it). The choice isn't between "piracy" and "no piracy". It's between:

"a la carte access either to HBO Go or to individual episodes of GoT as they're released" and

"access to episodes of GoT as they're released only via a subscription to a pay TV service with HBO".

The latter business strategy demonstrably works for HBO today. The former strategy is not only unproven, but based on the math, unlikely to succeed.

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Re:How four Microsoft engineers proved that the “darknet” wo... by btilly on Friday November 30, 2012 @01:31PM (#4854616)

Economic theory says that either a bundling or an a la carte pricing strategy can work on its own for information goods, but if some are doing one and others are doing the other, there will be a ruinous price war. See http://www.dtc.umn.edu/~odlyzko/doc/price.war.pdf for details.

Due to historical circumstance, the content providers are stuck on the bundling strategy. Consumers seem to prefer a la carte. Any startup that tries to deliver what consumers want, given established providers and the economic theory, is going to fail.

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Re:How four Microsoft engineers proved that the “darknet” wo... by tptacek on Friday November 30, 2012 @01:40PM (#4854678)

That assumes that the cost structure to producing viable content is the same for a la carte providers and bundled providers. But the cost structure isn't the same. A la carte providers can invest in just a few high-quality titles, and the most compelling titles aren't necessarily the most expensive. Bundled pay-TV is also by design stuck with an expensive "spray and pray" model.

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Re:How four Microsoft engineers proved that the “darknet” wo... by josephlord on Friday November 30, 2012 @02:43PM (#4855057)

But while cable has and needs billions of dollars of revenue they will offer billions for exclusive access to whatever content is deemed compelling (sports, Game of Thrones, HBO generally).

A la carte providers just can't compete in the exclusive bidding war yet and the value of exclusivity is worth more than the incremental revenue of a la carte sales. There will be a point at which cable penetration could be small enough that these effects change but it has a long way to fall before it gets there. In the UK Sky has massive amounts of top class exclusive content on under 50% household penetration and they are still growing and strengthening their position.

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Re:How four Microsoft engineers proved that the “darknet” wo... by tptacek on Friday November 30, 2012 @09:31PM (#4856599)

Do I have to concede that HBO and new a la carte content producers are in a bidding war? I don't follow this market that closely, but I follow it a bit, and the sense I get is that there's a threshold price at which any producer has a good shot at securing high-quality marketable content: good shows get cancelled, or never picked up at all, all the time.

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Re:How four Microsoft engineers proved that the “darknet” wo... by josephlord on Saturday December 01, 2012 @10:20AM (#4857835)

Quite a lot of what we might regard as good content (with niche rather than mass appeal) could be helped by this but it won't free the big budget mega-hits any time soon.

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Re:How four Microsoft engineers proved that the “darknet” wo... by DigitalJack on Friday November 30, 2012 @01:29PM (#4854604)

you are right, for some reason I read "piracy costs less than HBO"

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