Over the last couple of weeks, I’ve looked at availability of movies and TV shows that came out in the past year. But what about movies that came two years ago? Are those more available today than they were a year ago? Let’s look at the data.

2010: Box Office Winners availability

A year ago, I went through the list of box office winners and looked at their availability online. I pulled the information again in January 2012, a full year after the initial data set. The 2012 data looked like this:

Aggregate Rental data

When you tally it up, the rental only chart (excluding movies you can purchase) looks as follows:

The data seems to show that hits from over a year ago are still difficult to get. Netflix fares best, capturing 26% of the titles but pay-per-view services like Amazon, iTunes, and Vudu turn in a paltry offering with only 15% of the 2010 box office winners being available for rent on these services.

So, having run the data for 2 years in a row, are we seeing improvements in the market?

The picture here actually shows something fairly disastrous to people who hope that things are improving in terms of availability of movies along the long tail. While Netflix turns in a stronger performance, more than doubling availabilities of 2010 box office winners from 10 to 26, all other online services are seeing availability drop by 31% or more. This means that almost one third fewer 2010 box office winners are available this year as rentals as compared to last year. The strategy here seems to call in question the existence of a long tail in terms of media availability as far as rentals are concerned.

While the cost of storing a movie is a marginal one, it appears studios prefer to not make titles available as rentals online. There is some humor in the fact that whatever corner DVD rental place is still in existence near your home probably has a higher selection of available titles from 2010 than could be found last year because ALL 2010 box office winners are now available on DVD.

Aggregate Rental and Sales data

So, with a strong suspicion that sales numbers may be better, let’s see what happens if we had movies that may not be available for rent but can be purchase (ie. are more expensive to get)

The first one notices here is that the number of titles legally available online is still relatively low a full year after all the titles have been released. While DVDs have come out, legal online streaming services online offer a bit over half of the 2010 box office winners, with Amazon having the most extensive catalog. The availability of legal movie streams, when compared to DVD, is still a challenge.

But have things improved since last year? To figure that out, let’s look at the availability of the same titles over the last couple of years:

My initial hunch was that we would have seen improvements in the sales of legal streams from one year to the next, just as we would would have seen for DVDs because of availability.

But the picture is actually surprising as the availability of legal streams for 2010 box office winners has dropped in the last 12 months. On their face, one might expect sales of legal online streams to see patterns similar to sales of DVDs, even if they would trail the plastic medium. But what’s surprising here is that it appears studios have decided to pull their movie catalogs back offline.

There is still a long way before legal online streaming matches DVD sales as it appears movie studios are still addicted to selling pieces of plastic than they are to selling movies in any form available.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Streaming held back. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Last week, I looked at the availability of 2011 movie box office winners as legal internet streams. The results seem to incense Netflix supporters, who pointed out that the comparison was unfair because Netflix was more focused on TV fares. This week, I turn my attention to availability of popular TV shows as internet on-demand streams.

Approach

As I did a year ago, I pulled the data from Deadline.com’s Broadcast series ranker and cleaned it up. I took out every live and reality TV shows as the archival value of such show is limited since they are primarily marketed as “events” and, as such, loose most of their value to the viewer after the initial broadcast.

Where part of one of the seasons was available, I gave the service a partial availability. Where seasons prior to the 2010–2011 years were available, I did not give credit if the 2010–2011 season had no availability because I was focusing the effort on availability of last year’s shows.

From a service standpoint, I focused on services that allowed for streaming to most internet-enabled television. This meant that Netflix and Hulu were the main subscription based offerings and Amazon on-demand and iTunes were listed as pay-per-view services.

The list

With­out fur­ther ado, here’s the list of top 2011 TV shows avail­able for stream­ing on the internet:

While it is fun to check if your favorite show is available or not, the real interesting trending data only comes when you re-group the information. For this purpose, I looked at two different sets of data: first, I looked at whether all the episodes of the 2010–2011 season were available for a given series. Then I re-ran my research, giving full credit to the service for having “some” episodes from that season.

The results were as follows:

As one would expect, the pay-per-view services are doing better than the subscription based ones but what is surprising is how little content is actually available on the subscription-based services: Hulu only offers some episodes of half of the most popular shows, while Netflix barely has any offerings, clocking in with just above a third of the shows having some kind of stream.

When trying to access full seasons, the data is even worse, as Netflix offers full seasons on only 9 (or 18%) of the top 50 shows, while Hulu gives you access to the 2010–2011 season for 18 shows (or 36%). The amusing thing is that Hulu appears to give you access to as many full seasons as Netflix has as partial ones. The data shows that if you want access to popular TV shows via subscription, you’re better off going with Hulu than you are going with Netflix.

What seems to be hurting those services is the fact that CBS, one of the large TV networks has decided to go it alone when it comes to their own shows and show them on their own sites instead of making them available to stream aggregators.

Another interesting thing is that Netflix seems to pick up cancelled shows more readily than any other service. In my research, I found that if a show had been cancelled over the last year, it was more likely to be available on Netflix than on any of the other services.

On the pay-per-view side, Amazon and iTunes have now reached parity, as both service offer 43 (or 86%) of the shows on either per-episode or per-season fees. Their pricing seems to be roughly the same, with shows average between $.99 and $3.99 per episodes and full TV seasons passes going for $20.99 to $40.99. I would not be surprised if next year, we saw those services having the full set of shows available for instant streaming.

Breaking it down

Looking at the distribution, one might wonder how each of the services fares on sub-sets of the overall group. Furthermore, in terms of getting a better sense of trends, if is useful to overlay this with last year’s data and see whether progress has been made:

Overall, it looks like top 10 shows are less available onall-you-can-eat  subscription-based services this year than they were last year, while there is an increase in availability on pay-per-view services.

Netflix continues to trail other services in terms of making full seasons available and it seems it is a gap that will not narrow any time soon as Hulu, Amazon, and iTunes continue to aggressively grow their catalogs. In fact, the big story in this graph may be the big push Amazon is making in adding new titles to its streaming library. It has now matched Apple’s iTunes store in terms of offering, closing the gap it had last year.

When looking at partial availability, we are still seeing some differences:

Here, Netflix appears to have actually list some ground when it comes to the top 10 list, while all the other players have made substantial progress. This may point to another weakness for Netflix moving forward. Also of note is that while Apple used to be the go-to source for all TV series, Amazon has closed the gap in the last year, establishing itself as a strong second player in the market.

Conclusion

Many people look to online TV streams as the key to increasing the number of people cutting the cord from their cable companies and moving to internet-only offerings. This year’s data seems to indicate that it is now possible to do so but that the costs associated with such a strategy may not necessarily represent a huge saving for people who consume a lot of TV content.

The greatest amount of available content in terms of legal online streams can be found on pay-per-view services and subscription-based services like Netflix and Hulu still have some ways to go before providing a TV-like selection (this may explain why both of them are starting to turn further in the direction of producing their own content). However, viewers who watch only a few select show may be able to get this content from services like Amazon and Apple iTunes for a fee.

People watching this space should pay closer attention to Amazon’s aggressive push in this arena. As the company continues to expand its digital offerings, it seems to have earmarked video as one of the areas in which it is willing to go big and it has quietly grown its catalog over the last year.

Meanwhile, while Hollywood is trying to push for laws against online piracy (things like SOPA and PIPA), creating frictions with the tech community in the process, maybe it should focus on making content available through legal channels first, before complaining that people are stealing content. One of the reason people may be drive to piracy is the lack of availability of the content through legal means. Fill that gap, and you will see substantially less piracy of content happening on the internet.

Next week, I’ll take you through last year’s box office winners and how available those are. There are more surprises there, I promise; so stay tuned.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Legal streams for 2011 TV hits. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

A year ago, I looked at the availability of recent blockbuster hits in online stream and discovered some interesting patterns in online stream offerings. This year, I’m doing the same with the 2011 list of box office hits. The great news is that we appear to see some progress.

2011: Box Office Win­ners availability

For each movie of the top 100 movies at the box office, I pulled data on for streaming info on Netflix, Amazon on Demand, iTunes, and Vudu. I also pulled up availability of DVDs to use as a yardstick in terms of overall movie availability. The final chart looked like this:

But the information, in a raw form, doesn’t really tell us much. To get a better sense of where we are, we need to re-aggregate the info.

Aggregate rental data

Looking at the rental market, we can now see the aggregation providing us a clearer picture

The data shows that Netflix appears to be missing the Flix part of its name when it comes to streaming, as it offers only 5 of the top 100 box office winners of 2011. By comparison, pay-per-view seems to be doing a better job at making top hits available for streaming, with the numbers declining as you go deeper into the list. So top movies seem to be widely available this year (in fact, 64 percent of the top 25 movies were available for streaming only 9% short of what’s available on more traditional formats like DVD).

Another interesting thing to note here is that the data seems to be relatively consistent across online pay-per-view services with Amazon, iTunes, and Vudu apparently getting access to the same movies, leading one to think that there is little differentiation between those products (of note: Vudu has actually tried to differentiate on offering by providing 7.1 surround sound and 3D movies to available TV sets.) With prices across those services being roughly the same (movies are renting for $3.99 to $5.99 on average), there is a question as to how those services will be able to provide a differentiated experience in the future.

But the big advantage of doing this again this year is that we can compare the information against last year’s data and see if progress has been made:

The story here isn’t that pretty for Netflix, which has lost substantial ground from last year’s position, offering less than half of the hits it used to offer last year. If you think of their recent moves towards creating original content, it appears that Netflix is slowly moving away from its initial strategy of providing online streaming of movies on a subscription basis and moving more to a model more akin to that of a TV network.

Another interesting development here is that online streaming seems to be some losing ground compared to DVDs. One could assume that, as a new technology, online streaming would be gaining ground on DVDs but that doesn’t appear to be the case. Granted, we only have a couple of data points so next year’s data will provide us with a better understanding as to whether hollywood is trying to slow down the progress of online streaming.

Sales Data

If we are witnessing such a slow down, one of the reason may be that movie studios are looking to maximize revenue coming from sales.

The first interesting item to show up here is that we are now seeing remarkable consistency in availability of titles on streaming services. However, the availability of legal movie streams is still trailing the availability of movies on DVDs. This gap seems to be less pronounced when it comes to the top of the list than when ones goes further back into the box office records.

Once again, looking at how availability this year compared to last year’s availability provides some interesting information:

As opposed to online rentals, sales of streaming movies seem to be gaining on sales of DVDs, with an increasing parity in availability of movies as bits (streams) or plastic (DVDs). This appears to confirm the suspicion that movie studios are trying to protect their sales revenue at the expense of promoting pay-per-view.

Conclusion

The past year has seen an increasing alignment in the libraries of titles offered by online streamers in an on-demand basis. At the same time, we have seen Netflix apparently abandon its strategy of offering popular movies on a subscription basis. Next week, I will look at whether Netflix’s efforts are getting more focused on television streams or whether we are seeing them pull back across the board in terms of availability of more recent content.

We are also seeing Hollywood now treating online as more equivalent to DVD sales, offering titles for sale online at roughly the same rate as they do on DVD. Let’s hope that this trend continues to hold and that the industry sees the wisdom of providing online streams in an earlier release window. A few independent movies have done simultaneous releases online and in theaters this year and Hollywood has a potential to increase its revenues if it were to increasingly go in that direction.

Two sets of data only provide a small view into an overall trend but I promise I will continue growing the data set and revisit those numbers next year, giving us a better sense as to whether there is any changes in this segment of the media distribution puzzle.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Where the hits are streaming in 2011. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

As a reminder, this is what the 2010 aggregate data looked like:

But one question that was left unanswered was whether there was a bias in the data selection as it presented data that was specific to a single year. So in order to assess the strength of the different services, I decided to look at the data for the 5 previous years, hoping to discern a pattern. However, because it’s a lot of data to crunch, I decided to limit my research to top 10 over that time (in data point, this means a universe of 60 titles or 240 data points.).

2009

So let’s start with the  2009 data:

And here, something interesting happening. Not only did Netflix not fare that much better but all of the other rental services fared much much worth.

I was now very intrigued. Was 2009 an unusual year or was there a pattern here? Were older title getting less available as time went on?

In order to answer those question, I decided to pull a lot more data, going all the way back to 2005 so I could have 5 year’s worth of data to look at.

2008

2008 seems to be marked by a departure from the concept of renting movies online, with only 1 title (the Dark Knight) being available across all the services. Netflix does not even have access to that one, ending the year with no box office topper in its offering. Apple has a clear advantage over its competitors in the selling of titles.

2007

The amount of titles available for rent on non-Netflix services increases a little for the 2007 catalog (Netflix continues to be a non starter) and the number of titles for sales seems to be pretty consistent across all services.

2006

iTunes and Vudu have back-catalogs that allow for 90 percent coverage when it comes to purchasing the titles. Amazon brings up the rear with a respectable 7 titles. What’s interesting here is that there seems to be a clear divide between sales and rental availability.

2005

2005 appears to be another equalizing year for non-netflix VOD services. However, it doesn’t mean that they are great, in that only 6 out of 10 titles are actually available.

Conclusion

With all that data in place, we can get a clearer picture of what’s available:

As far as Netflix is concerned, the trend doesn’t get better as you head back in time. In fact, the data suggests that their streaming catalog gets worse as time goes on. While it is true that the company has only recently started getting into the streaming business, they will need to do a lot of work in order to catch up to their competitors. The fact that their business model is radically different (Netflix takes a membership/all-you-can-eat approach while its competitors allow for a-la-carte purchases, more in line with traditional TV-based video on demand services) may also make life more difficult for them.

On the bright side, it appears that 2009 was a strange year as far as the other services are concerned and there are more titles available for rent as you go back in time, with the possible exception of the Apple iTunes store, which tends to favor selling over renting. All the players will need to do more work, however, if they want to broaden their appeal as none of them could deliver half of the available box office winners over a 6 year period.

Another interesting trend is the relative consistency in terms of availability: Amazon, Apple, and Vudu all appear to have access to the same times and, for the most part, they also all seemed to be denied access to the same titles. I’m not sure whether this points to fairness in the market or some kind of manipulation in the movie industry but it’s an interesting phenomenon worth noting.

All and all, if video on demand is to serve as a core component of the cord-cutting phenomenon (the idea that people are abandoning cable TV for online streams only), there is still much work that needs to be done.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Where the hits are streaming — historical view. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Last week, I looked at which legal streams were available for movie box office winners . This week, I investigate how internet VOD services are faring when it comes to offering top rated TV shows.

Approach

The first part of my investigation was to find data that presented the top TV series on television in the United States in 2010. Surprisingly, that data was not that easy to get but Deadline.com had a list of the top shows that could be used.

Because news shows, variety shows, sport shows, and reality TV shows seem to lose their freshness once aired, I decided to remove them from the list as I assumed the demand for such show on VOD would probably be limited over time. All this cleaning up allowed me to format a list of the top TV series which I could then use for research.

Because TV seasons change in the middle of the year, I’ve looked to include seasons that ended in 2010 and seasons that started in 2010. If only one set is available, this is noted in the table. If both seasons are available, I put in Yes.

I picked Netflix and Hulu as the first two services to look at because they have positioned themselves as alternative ways to watch the shows. I also included data from Amazon VOD, and iTunes as both of them are trying to sell either season pass or per show purchasing to their users. I did not include the individual station’s websites sites (eg. ABC.com, NBC.com, CBS.com, Fox.com, etc…) because most of them are only accessible via computers and a high number of them have started blocking devices which were trying to offer access to their content from a TV screen. For the same reason, I focused on Hulu Plus content instead of the web-based one only.
It is important to note that TV episodes on Amazon and iTunes are available in different formats, either on a season-pass basis, per episode rental, or per episode purchase.

I’ve capped the list at 50 titles because, from a trend standpoint, the data seem to be roughly the same at top 50 and top 75.

The list

So without further ado, here’s the list of top 2010 TV shows available for streaming on the internet:

Let’s total this up to see how the different services did:

One of the first interesting trends to notice is that Hulu Plus seems to offer more recent episodes when it does but Netflix seems to offer older ones that are not available on Hulu. Oftentimes, the two offer different selection on the same show, allowing users with subscriptions to both services to get wider coverage. Yet, Hulu only offers a bit over one third of all the big rating getters last year and Netflix offers only one out of five of those series on a partial basis.

Current seasons seem to be a strength area for Hulu Plus and a substantial weakness for Netflix. This may be of some significance as far as the cord-cutter trend is concerned. A question one could pose here is whether cord-cutters want fresh content or not. If the latter is the case, then Netflix may provide enough. On the other hand, if cord-cutter expect to be able to get relatively recent shows on their TV, they will either have to check the Hulu Plus listing or purchase the episodes on an individual basis.

Another interesting note is that while many episodes are available for rent on iTunes and for sale on Amazon, the price difference tends to be pretty substantial with Amazon selling rights to own for $.99 per episode while Apple charges the same amount for the right to rent (they tend to charge $2.99 per episode for the right to own).

Breaking it down

If you want some of the series (let’s say one season but not the other), here’s what the data looks like:

… but if you want full coverage (ie. both the 2009 season that ended in 2010 and the 2010 season that bleeds into 2011), the data looks as follows:

Conclusion

Looking at the total numbers, the subscription model offered by Netflix and Hulu Plus seem to offer a relatively slim selection. However, the costs associated with purchasing season pass for every show one follows could get prohibitive (in the research, it appeared that shows averaged between $30 and $60 for a season pass).

All told, the Video On Demand services appear to have room for improvement. While Apple has an early lead in terms of overall coverage, its iTunes store is also the more expensive one, giving Amazon an opportunity to expand its footprint by selling titles at a lower price. In terms of availability, however, Apple seems to hold a very solid lead over its competitors.

The subscription model offered by Hulu Plus and Netflix, however, still have a long way to go if they are aiming to truly be disruptors.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title The 2010 state of Internet VOD: TV. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

There’s been a lot of discussion lately about how Netflix is in the process of moving from a DVD distribution company to primarily a streaming service. The question, though, is how close this future truly is.

In order to assess their progress, I decided to look at how many of the 2010 top box office earners were on the service. Figuring that we also needed a yardstick to compare Netflix offerings against, I took the top three online streaming services and got the data for each of them (generally speaking, rentals are around $3.99 to $4.99 and purchases seem to be around $14.99).

First, I pulled up the Box Office data and then put each title in the search engine for each of the services. I also looked up DVD availability from both Amazon and Netflix to ensure we had a yardstick we could measure against in terms of online vs. offline availability of titles. The assumption here was that some box office hit might not be available in either form due to the fact that they were recently released. I also made a decision to reject titles that are available on a pre-order basis as it is not yet possible to watch them. For future reference, all this data was pulled together the third week of January 2011.

2010: Box Office Winners availability

Once I did all this work I had a table for the  2010 box office numbers winners and it looked like this:

Aggregate Rental data

When you tally it up, the rental chart looks as follows:

The first thing one notices here is that Netflix seems to have a long way to go before having any claim to strength in that particular arena. With only 9 percent of the top 100 2010 movies, Netflix seems to come on the short end of the stick when it comes to making streams of box office winners online. In a future post, I will examine whether this is because their strength is more in older titles than in recent ones but, as far as the data currently show, the subscription model offered by Netflix would probably have a hard time fighting with a premium cable TV movie channel.

The story gets more interesting when one starts looking at the Video on Demand data for services like Amazon on demand, iTunes, and Vudu. My selection of those particular services was largely due to the fact that they are available in systems that can connect to your television. For example Amazon is available on the Roku box, iTunes is available on AppleTV, and Vudu is available on the Boxee box.

What I consider to be the most striking finding in this is the relative consistency of offerings across the board. None of the VoD players seem to have any particular advantage over the other. All of them batted in the 45–50 percent range, as far as the 2010 hits are concerned. By comparison, just under 75 percent of the movies were available on DVD at the time I did this research, giving DVDs a 1/3rd advantage over VoD at this time. One can only hope that the trend will go to that gap closing over the next few years.

Sales Data

Another interesting point is the closing of the gap between DVD and Vod when it comes to availability of titles on an ownership basis:

Here, the data seems to show increased availability of titles on an ownership basis as opposed to a rental one. The VoD services performed 10 percent better on availability, coming much closer to the number of titles offered over DVD.

Conclusion

While Netflix has been heralded as the leader in online streaming, the reality on the ground is much more complex. The Netflix model is predicated on an all you can eat model but if what you want to eat is a movie that was in the top 100 at the box office last year, viewers are left with only crumbs. The rental model offered by other internet based streaming companies is more in line with the traditional video on demand offerings available on cable television and the data seems to highlight that Hollywood is more comfortable with that model than it is with the Netflix one. This could present a strategic challenge for Netflix as it tries to negotiate more streaming contracts.

While DVD is still the king of the roost, the gap between DVD and online streams is slowly closing. The list I’ve created here can serve as a baseline against data next year to assess whether more titles will be made available. There also appears to be a preference in the film industry towards making titles available for sale instead of rent. I believe that this may be a short-sighted view as rental models can generate more income over the long run. It will be fascinating to see how all this develops.

Update: A more recent version of this post is now available.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Where the hits are streaming. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

1. Many are made, few succeed

Every year, tens of thousands of movies are made around the world. Only a small set makes it to the big screen. The rest ends up on alternate distribution circuits (straight-to-DVD, for example).

On the internet, thousands of startups are launched yearly. The vast majority may get a headline or two but fail to get substantial traction. As a result, they do not get funded and live on as walking zombies are die a quiet death.

2. Special investors

A lot of startups kick off with a friends and family round, getting friends (and family) to invest in the initial development of a startup. Once a prototype is built, they can then try to get money from angel investors, and then venture capitalists.

Many independent movies follow the same line, with friends and family funding some initial effort (when the director is still unknown) and later features being funded by producers, and then move on to direct studio investments.

In each case, the investor class brings more than money to the table, generally adding some of their own valuable network and knowledge of what works to the venture, and increasing its chance of success.

In each case, there are particular stars that one wants to associate with but those are generally very selective in who they work with and get to pick only projects that interest them.

3. Talented team + visionary leader are key

Every investor will tell you that the key to a successful startup starts with the quality of the team. They look for founders who can cover the product management role and the technical role in order to define, develop, and manage products that are loved by customers. In many case, leaders with a established track record (one or more successful startups under their belt) tend to have an easier time getting the support needed to launch a new venture.

In the same way, movies generally happen because a director has the vision to put a solid story together and bring on the appropriate people to help them realize that vision. Producers look for directors who can tap the zeitgeist or present a story that will resonate with the public. For directors with established track records (one or more successful movies under their belt), producers are willing to be more flexible and give them more control.

4. Money does not equal success

Hollywood has a long history of belly-flops: some movies receive huge amounts of money to pay for stars and special effects and end up crashing at the box office as audiences reject them.

In the same way, the amount of money raised by a startup has little to do with its potential success. The 1990s told us that the amount of money a company raises can actually have a negative impact on its potential for success.

The challenge, in each case is that the higher the budget, the higher the expectation of higher returns.

5. Distribution is key

The movie industry talks a fair amount about distribution, ie. what studio is distributing the movie, on how many screens a movie is shown, what other distribution channels are being used (theater, on-demand, DVD, streaming, cable TV, network TV), etc… They work hard to protect the way in which the distribution channels are set up and see that as a competitive advantage.

A failure in one of the distribution channels can lead to reduced hopes for all the others ones, thus reducing audiences, and therefore revenue.

In the startup world, how one acquires customers, across which platform (the web, mobile, social networks, etc…) is an essential part of the success of a product. Fail to attack the appropriate distribution channels and you might fail to gain customers.

A failure in one of the channels can be recovered from but can have a substantial negative impact on the product, which may reduce the number of customers, and therefore revenue.

6. Pushing boundaries

A successful movie redefines what people thing of as the movie craft. Whether it is Orson Welles’ use of previously unused camera angles in Citizen Kane, George Lucas’ use of special effects in Star Wars, the Wachowski’s brothers use of bullet time in the Matrix, or James Cameron’s use of 3D in Avatar, successful movies can push the boundaries of what is being done technically, creating new level of expectations from audiences.

Characters, editing, story-telling are all other components in a director’s bag of tricks to push boundaries. Think of any important movie in history and you will find something that was done in a radically different way from before (eg. use of color in the Wizard of Oz, the editing of the shower scene in Psycho, or the frenetic pace of the car chase in The French Connection).

Successful startups, in the same way, force us to reassess how to use a piece of technology. Whether it is Apple doing point and click on the first mac, Amazon delivering exactly the book you wanted to your door, Google providing the best search results you’ve seen, or Facebook helping you reconnect with your friends, any successful company started presenting something that didn’t exist before.

The challenge, of course, is to push far enough but not so far that the audience does not follow.

7. A slew of imitators

When a movie is successful, it is generally followed by a lot of imitators who try to cash in on its success. For example, following the success of Avatar, an increasing amount of movies are adding 3D, hoping that it will help them at the box office. Another example is the slew of action films that added bullet time scenes after the Matrix came out.

In the same way, when a startup breaks new grounds, it is followed by a slew of imitators. So the success of Facebook led to a lot of people talking about their products being social. Or the success of GroupOn has led to many clones popping up.

It’s a normal part of the innovation cycle but unfortunately, few of the clones end up being as successful as the original.

8. Cultural impact

“Frankly my dear, I don’t give a damn.” “Make my day!” “These are not the droids you’ve been looking for.” Take the red pill or the blue pill. Each of those phrases and concepts started in movies and eventually moved to be short-hand in the cultural discussion. Because successful movies are seen by the masses, and because they are inherently part of the culture, their success impacts the culture as a whole.

“Google this.” “Friend me.” “It’s like he’s the mayor of this place.” In the same way, successful startups have a social impact that goes beyond the use of the actual application and turn to become defining terms in themselves. My friend Anil likes to say that his blog is about how technology is making culture. The only difference of opinion I have with his statement is that good technology is about making culture. And sadly, there’s also a lot of bad technology out there (see point 7)

9. Success is not a straight line

James Cameron initially conceived of Avatar in the mid-1990s but felt the technology wasn’t there to do it so he went on to do other movies. Indiana Jones was initially supposed to be a James Bond like character but evolved to what we now know over weeks and months of discussion. In many cases, the most successful movies do not follow a straight path but go from a germ of an idea to the final product by taking several shifting turns.

In the same way, the initial Google was looking to sell search engines in the corporate space. Facebook was initially a student directory at Harvard. But over time, they figured out the appropriate business model and moved to become the leaders they are today.

10. Past is not future

The final similarity between the two is that past success is no guarantee of future results. Most successful movie directors have, at one point or another, stumbled, delivering a movie that just didn’t work for the audience. George Lucas direct “Howard the Duck,” which was a huge bomb at the box office. Steven Spielberg directed “Hook”, a Peter-pan retelling that couldn’t find an audience.

In the same way, Mark Pinkus, the founder of Zynga, had trouble getting his previous company, Tribe, off the ground. Evan Williams, who now heads Twitter, previously ran a podcasting company called Odeo that was not that successful.

In each case, though, an important factor prevailed: whether it is in movies or in the start-up world, the founders didn’t get discouraged by the failure and went back to work until they finally figured out the right model. And that is what eventually made them great.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Ten ways in which startups are like movies. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Understanding iTunes LP and iTunes Extras

For the near future, Apple’s dominance in the mobile entertainment market will remain uncontested. Entering its 8th year, the iPod has successfully morphed from an interesting new player in a small category into an all-purpose platform spanning the breadth of the audio consumer electronic landscape, portions of the mobile phone business, and while its AppleTV business is still lagging, the introduction of iTunes LP can easily be seen as part of a revamp for that platform.

The company talked a fair amount about the ability to add extra content to music tracks, forming an experience that is much more akin to that of a music LP. But let’s stop for a second and think of what a stereotypical Apple customer might look like? Somehow, the immediate image that pops in my mind is not someone who was born prior to the late 70s.

Sure, now that the iPod line has established itself as the dominant line in the portable entertainment consumer electronics world, one can see a lot of people over 40 sporting the devices but truth be told, most of Apple customers are probably younger and, to them, LPs are either something that belongs in a museum or falls in the category of music snobs. The sit-back experience and add-ons that came with most LPs is not how they have ever experienced music and it is highly probable that they will not change their behavior because Apple believes that retro is cool.

The music experience is more of an ambient one, where the track itself is the thing and where even music videos have mostly fallen by the wayside (YouTube killed the video star?) In today’s short attention span world, extra attachments to media exists in two places: on DVD and on BluRay disks, technologies best experienced when dealing with a TV screen.

In fact, when delving into the details of the iTunes LP specification,developer Jay Robinson discovered the following:

The LP frame seems to have a width and height of 1280×720. This is nice, but means I get ugly scrollbars all over my 13″ MacBook screen.

The resolution seemed interesting as I remembered it from somewhere but had to think about it for a few minutes (I’ll get into that in a the next paragraph) but it was fascinating to me that one would experience ugly scrollbars on a MacBook. Say what you want about Apple products, ugly is not something that generally comes to mind. In find, the fact that things were ugly on a computer monitor immediately gives us clues into where Apple may be going next. Since we can safely assume that Apple would not push something ugly out the door, we can also assume that the 1280x720 resolution is no fluke. And since it looks ugly on a MacBook, we may think of where else this type of media can be consumed.

720p?

1280 x 720 is the kind of 16:9 ratio that is found in a 720p high definition video mode. That mode has become more or less the default low end mode for high definition and is how most television broadcasts in the US and Western Europe are handled. It is also a format that most plasma or LCD TV can handle. But also of note is that it is the highest resolution format offered in terms of movies and TV shows sold through the iTunes store, and the highest resolution HD video resolution now supported by AppleTV players.

So we now have a clear sign that the iTunes LP content seems specifically formatted to be best experienced on a TV screen and it seems that Apple’s recommendation would be to use an AppleTV to do so.

And then, this week, Apple retired its low-end AppleTV and dropped the price of its mid-range (now entry level) offering by one third. Such a move is not just based on the idea of moving units but appears to represent a potential need for disk space and anyone who looked at the size of a DVD or Blu-Ray disk can attest to the fact that such video offerings can chew up space relatively quickly. And extras tend to add a fair amount too, which seems to increase the need for space if you are intent on renting or selling DVD or Blu-Ray like content via the Internet.

Add to this the general reluctance Apple has had to supporting Blu-Ray in their computer hardware platform (the main advantage of Blu-Ray, according to its advocates, is the ability to display video at a higher resolution format than 720p) and it seems Apple is gearing up for an assault on that category (especially since the problem of extras is now solved by iTunes Extras).

720p Recording

Meanwhile, on the Mac, the new operating system came out with a version of Quicktime that removed ability to support plugins for extensibility. While Apple is already a strong player in the video editing world, offering both professional (Final Cut Pro) and consumer (iMovie) tools, it is also interesting to note that they are starting to introduce light editing video capabilities directly into the operating system.

We already know that the iPhone 3G S can record video, a key feature of the offering, and we’ve just witnessed the introduction of video recording capabilities within the iPod Nano (and we can assume that it’s only a matter of time before the iPod Touch gets its own video recording capabilities) but here’s where it gets interesting: the iPhone 3G S could theoretically shoot 720p video as all the hardware to do so is there.

The rise of YouTube and the success of Flip cameras have shown Apple that a portion of the consumer market is interested in recording and viewing video. While the YouTube offerings tend to be generally of a lower video quality, the introduction of 720p as a default recording chipset in Apple’s offerings appears consistent with the company’s attempt to cater to a higher end whatever market it enters.

So it would seem to be a normal progression for Apple to eventually move its product lines to producing 720p content that can then be redistributed.

Today, that exporting can happen via synchronizing one’s iPhone’s GS or exporting content to iTunes, YouTube, or MobileMe from Quicktime X. MobileMe and YouTube appeared to make sense but why export to iTunes?

A user generated marketplace

The success of the iPhone as a development platform has surprised many, myself included. In the short span of a few years, Apple has created a marketplace that is rumored to be selling US$200 million a month’s worth of application software in increments of about a dollar. If you’re making 30 percent of that revenue by hosting the apps and handling the distribution, you might notice.

I would venture that there are now a number of discussions around Apple as to how to reproduce this phenomenon across other categories. With the rise of YouTube, Last.fm, MySpace, and other, Apple is now also witnessing the rise of the independent and while the company has had some success in bringing video content to the iTunes store, it has not been able to get the rich margins it is getting from the music industry (something the music industry now appears to regret) and from iPhone developers (who, for the most part, are not large companies) from TV and movie producers.

True, the company now offers rentals and sales of video content but what if it could open up a marketplace where every independent content creator could distribute content? What if independent movie-makers or musicians could sell directly through the iTunes store and provide content on all the apple platforms (TV, iPod, phone, computer) with a single click. I suspect that many would be willing to give up 30 percent of their revenue in order to get to that public.

The components all seem to be there and it seems to me that it won’t be long before Apple starts pushing the idea that we are all content producers (an old idea at Apple, which was at the source of their creating the iLife suite) and we can all make some money at producing that content. Having done so, Apple would not only have control of the music industry but could also assert itself in the TV and movie space.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Apple Storms Hollywood. You can follow him on twitter here or receive his weekly newsletter by subscribing here.