Kim Dotcom’s Just Getting Started

Self-styled digital Robin Hood Kim Dotcom’s highly effective PR machine successfully secured him vast media coverage this week for the launch of his new locker service Mega, which as the Register’s Andrew Orlowski correctly points out, isn’t actually anything particularly new or innovative.  But in some ways that doesn’t even matter. Kim Dotcom matters most to media companies now because he is a focal point of anti-media-establishment sentiment.  He’s the plucky start up taking on the fat cats of the media industry.  Except of course that he’s done a pretty impressive job of establishing himself as an fat cat too as this and this reveal. Ironically Kim Dotcom has made his money using the same assets as the media fat cats: i.e. music, movies and TV shows.  The difference being that Kim Dotcom doesn’t finance the creation of the content. But Dotcom’s supporters are willing to turn a blind eye to his play boy ways because it is all done while sticking a proverbial finger up at the old guard

But all this is old news and obscures why the media industries should actually be afraid of Kim Dotcom, very afraid.  Dotcom has the vision for a differentiated consumer experience that no other ‘piracy’ innovator has yet had.  Prior to his much publicized FBI raid and the closure of Megaupload.com, Dotcom was on the verge of launching a new, interactive, multimedia content service called Megabox.  It didn’t happen, but – judicial wrangles permitting – it will, and will likely be built upon the foundations of the newly launched Mega.

Piracy Cold War

To date file sharing (by which I mean all forms of unlicensed content downloading and uploading, not just P2P) has been in a secrecy arms race with the media industries.  Every time the media industries have caught up with file sharing, the networks and services have devised new means of evading policing and enforcement.  Although media companies have always inherently been trapped in reactive mode, unable to set the terms of engagement, this strategy has nonetheless been highly effective at keeping file sharing services on the back foot.  As with the cold war two super powers have expended vast resources staying still, investing heavily in being armed to the teeth.  The net result is that piracy has continued to grow but hasn’t been through any transformational innovation in years.  Also the sites and services have become progressively more complex and sophisticated to use and navigate. Pushing them slightly further away from the mainstream.

But what happens when someone finally decides to innovate the file sharing user experience?  When someone scales down the combat zone investment and focuses instead of delivering a great user experience in the way that licensed services do.  That is when media companies need to start worrying.  As I wrote back in February last year:

The nightmare scenario for media companies is that the pirates turn their attentions to developing great user experiences rather than just secure means of acquiring content.  What if, for example, a series of open source APIs were built on top of some of the more popular file sharing protocols so that developers can create highly interactive, massively social, rich media apps which transform the purely utilitarian practice of file sharing into something fun and engaging?  If you though the paid content market was struggling now imagine how it would fare in the face of that sort of competition.

Kim Dotcom has the requisite combination of vision and balls to take piracy through a user experience revolution.  If he does then piracy will become a vastly more worrying adversary for media companies than it currently is.

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6 thoughts on “Kim Dotcom’s Just Getting Started

  1. I sit here wondering, if Kim Dotcom really does bring on ultimate convenience via innovative file sharing user experience, where the heck does that leave Spotify and co. (aka the new establishment battling piracy) ?

    I mean it took almost a decade for majors to figure out a way to fight the convenience of free (piracy)… now they have to beat piracy topped with a good UX

  2. Mark, I get that but I still dont understand why services like Dropbox are not classified the same; illegal exchange of copyrighted material is really not a rare use case there. would love to hear your thoughts.

    Assaf

  3. Assaf – it all comes down to how they are used. Media companies and their trade bodies have divisions that track activity across all these platforms and when one starts to become a key source of pirated copyrighted content, then actions begin.

    To date Dropbox seems to have become well established in the enterprise and SMB sectors with predominately professional use. However there is clearly also a degree of illicit activity too.

    What will determine whether Dropbox finds itself in the sights of the media industries is:
    a) the level of illicit activity
    b) Dropbox’s actions to deal with notifications (If Dropbox is effective and willing to takedown infringements and actively polices then it will likely find itself sailing in calm waters)

    Fares – you raise a really interesting and important point: the music industry has been fighting a rear guard action against piracy for years but the rules of engagement have remain unchanged since Napster first emerged i.e. the threat is people getting content for free. But just as the legitimate digital market has moved beyond ‘dumb downloads’ into richer music experiences, now it is actually surprising that the piracy sector hasn’t reclaimed the innovation initiative. If/when it does then you are right, it will be a hammer blow to the legitimate sector. Differentiating on convenience and quality of experience are crucial assets for licensed stores and services right now.

  4. ‘What if, for example, a series of open source APIs were built on top of some of the more popular file sharing protocols so that developers can create highly interactive, massively social, rich media apps which transform the purely utilitarian practice of file sharing into something fun and engaging?’

    Isn’t that what OpenEMI does?

  5. Pingback: Kim Dotcom?s Just Getting Started

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