OnLive: Faster broadband will lead to greater piracy

Steve Perlman, CEO of OnLive, has told a packed conference session at this year's DICE Summit that he sees the common belief regarding a greater penetration of faster broadband leading to a swifter uptake and better revenues for downloaded content is incorrect - and that in fact it will more likely lead to a greater level of piracy instead.

He added that the music and video industries - which have already suffered or are in the process of suffering - had made this mistake, and that the videogame industry should take note of the lessons learned.

"Stop just a minute - that was something that the music folks thought, that the video folks thought - the pirates are always one step ahead of that."

"Music was the first 'now' media," he explained, noting that the business was devastated because it was unprepared for the consumer requirements, while video is in the midst of that transition now - "Are they the next music industry?" he asked.

He went on to explain how traditional entertainment experiences were tied to physical media - people would ask "What CD is that?" as opposed to "What band is that?", and talk about "watching a DVD tonight" instead of "watching a movie".

But now that vernacular is changing, so that today if somebody talks about a new band they've heard, there's no assumption of physical media - that instead the music could have been heard on iTunes or MySpace, and you wouldn't think to ask to "borrow" that content, presumably looking for a link to it instead.

And the same is true for video, he added: "I don't know anybody that watches live TV any more, it's all time-shifted."

The big issue, he claimed, is that "physical media is in rapid decline," while even "downloaded media is past its peak," referring to the decline in BitTorrent.

He referred to Apple's revelation that the iTunes and App Store business is a "bit over break even," according to the company's CFO Peter Openheimer speaking in January this year.

But videogames are a "different beast," he said before launching into a demo of the company's cloud gaming system, now in beta testing, comparing the hardware used to today's living room consoles.

"The lowest-capability server we have right now is many more times the capability of an Xbox 360," he said, adding that the company would upgrade them every six months, pointing out that the consumer will not need to invest in that hardware.

The DICE Summit is ongoing this week at the Red Rock Resort in Las Vegas. More content from the event is available on our special DICE page.