MegaUpload shut down

Post Reply New Topic

I think all this SOPA/PIPA/ACTA nonsense, coupled with the Megaupload shutdown, will indeed help the Pirate Parties around the world become more popular if they play it right. They've got to do a little marketing and link their cause to what's been going on in the news.

I hope the Pirate Parties around the world start doing just as well as the original Swedish one off the back of this. That'd be excellent indeed.

Because the business model doesn't work on that scale. If everyone was doing the same thing, then the revenue stream would be trivial compared to the input costs.

One Canadian, Kyle MacDonald, was able to trade a single red paper clip for a house in a series of fourteen trades. But what if we all tried to do the same thing? The value of each and every trade was tilted in MacDonald's favour, but the economy cannot produce enough value to make that work on a universal basis.

Nonsense. Netflix charges a few pounds/dollars a month for unlimited film and TV streaming. Why can't some other site do it for free, legitimately, but jam the site with ads like Megaupload? If it got the traffic it'd be profitable.

https://plus.google.com/u/0/111314089359991626869/posts/HQJxDRiwAWq

Yeah I've seen this link being passed around today. The story seems plausible. I do think that at least an element of the motivation behind the shutdown of Megaupload was that the entertainment industry don't like the competition. It made life easier for independent artists, after all, and if it was about to take the business of mainstream artists too, then of course they're gonna abuse their power to get rid of it.

The first impediment is licensing. Netflix can provide their service for a small subscription fee because of a few factors:

1) They offer mostly older content on which the royalties are lower; but I would expect that the largest volumes of torrenting (excluding porn, of course) are newer releases, or as yet unreleased television broadcasts that Netflix cannot afford to buy within its cost model.

2) The absence of external ads means that Netflix does not run into sponsorship conflicts with its suppliers. How will major motion picture distributors feel about having the viewing of their products sponsored by "Russian-girls-with-massive-knockers-want-to-meet-you!" dot com?

The second problem is that's a pretty hefty, "if," that you're positing. Sure Netflix has a significant reach--but how many advertisers does it take to produce $96 CAD worth of revenue per subscriber on an ongoing basis? Advertisers pay anywhere from $0.005 to $0.08 per hit for an internet ad. Given the breadth of reach of Netflix, that number is likely to be low (although viewer preferences might allow for some moderate amount of targetting). Assuming a penny per hit, that means every subscriber needs to be hit by 9,600 ads per year, or somewhat over 180 ads per week in order to replace the subscription revenue on a gross basis (that doesn't account for the internal cost of sales, which is probably going to eat about 30% of that amount).

The model works for a site like facebook or megaupload, because they don't have to pay for their content. They create a framework (which is capital intensive, to be sure), but then users fill it and advertisers are happy to pay for it because the price point is so modest. A few hundred million users means that even at a fraction of a penny per hit, the revenue stream adds up fast without significant charges against that revenue beyond the fixed costs.

Now suppose that Netflix' content was as current as, say, Megaupload's was. Imagine how much revenue would be needed in order to put that material on Netflix--especially material, like TV series, that is not yet released, or movies that are the subject of recent release. The business model breaks down very fast at that point.

Online adveritising makes a lot more than what you suggest, first of all. I made £100 from a few months of running a small blog. Some clicks made me £1. I'd also like to point out that a big company endorsed by the MPAA would be in a position to negotiate upfront deals with advertisers directly rather than accept take small click through payments.

There are already people who make a living from blogs, YouTube videos, and all sorts because ad revenue can make a lot of cash if you've got a lot of traffic, as Megaupload has also proven quite effectively.

Now, royalties obviously create higher costs, but at the same time, new releases bring about a higher click rate for the pages themselves as well as ads. A lot of targeting would be possible if people are required to make an account - knowing someone's film tastes can do a lot to help targeting. And if a film maker doesn't want a porn ad next to their films, they can specify as such. You can even do that in AdWords, it wouldn't be a problem in an operation like this.

In the UK, Netflix charge £5.99 a month for unlimited streaming of all their content. I am confident that an ad-based model would make more than that per customer all things considered.