The Cost Of Permission Culture: Or Why Netflix Streaming Library Sucks Compared To Its DVD Library
from the first-sale-is-important dept
Why can't movie-streaming sites deliver the selection of movies that customers obviously want? This was the question posed by a recent New York Times column, comparing undersupplied services like Netflix with unauthorized platforms like Popcorn Time. The answer, the Times explains, is windowing—the industry practice of selling exclusivity periods to certain markets and platforms, with the result of staggered launches.But the Times fails to ask a more fundamental question: why do streaming sites have to listen to Hollywood's windowing demands in the first place? After all, while it's clear why the studios like windowing—they can sell the same rights over and over once the promised exclusivity periods expire—it doesn't seem like a very good deal for users. Those users get access to a smaller selection, higher prices, and fewer choices between platforms and services. It should be astonishing that a company that once had to maintain and transport a staggering inventory of fragile plastic discs is able to offer less when its marginal cost dropped to near zero.
The problem is that, unlike earlier movie-rental options, streaming rights fall fundamentally within a permission culture. Netflix is a great illustration of what's gone wrong here. It's gone from having a nearly unrivaled catalog of films available to rent to being the butt of Onion jokes. What happened: It shifted from a system where nobody had a veto power over its operations, to one where it had to get permission and make deals with Hollywood. Sometimes it's difficult to find the concrete costs of living in a permission culture, but the decline of Netflix's selection is an important cautionary tale.
It's especially clear when you look at how Netflix upended the movie rental market in the first place. In one way, it suffered from a major competitive disadvantage: competitors like Blockbuster had locations near people's houses. As long as those stores had the movie you wanted, you could be watching within hours—not days—of deciding on a title.
But Netflix was able to experiment with different price points and subscription models and, crucially, it could try those without first convincing any incumbents. Both Blockbuster and Netflix's DVD-by-mail service relied on the first sale doctrine, meaning they can buy physical copies of movies, and then resell or rent at any price they like. No royalties, no licenses, no contracts—with physical media, once a rental company has bought the copy, the copyright holder is basically out of the picture.
You can see how this is great for users. Companies can experiment to find the things that people like best, and have the power to make decisions based on their users' needs and wants. Movie studios still got paid—these rental companies were buying lots and lots of copies, after all—but couldn't exert control over the rental businesses, which could then compete on their merits.
Rightsholders hate not having this control. So the first sale doctrine gets attacked over and over. From Nintendo's suing Blockbuster in the 80s to Universal's "revenue sharing agreement" with Redbox, and through to more recent cases like Kirtsaeng v. Wiley in the Supreme Court, rightsholders have tried to restrict the first sale doctrine in physical media. And when it comes to digital media, consumers have even more of an uphill battle.
When the ranking member of the House Subcommittee on intellectual property is calling the principle of "you bought it, you own it" an extreme view, there's something seriously wrong here. Furthermore, the Netflix example shows that the problem isn't confined to the books, movies, records, and games that we own; it limits the kinds of services that can ever be created.
With a commercial product like Netflix, we can feel those costs today. But more troubling are the costs we will feel tomorrow, in a decade or a century from now, if we make a transition to digital media without keeping the first sale doctrine intact. Copyright has already cost us crucial elements of our cinematic and literary history. Those costs will compound if librarians, archivists, and enthusiasts aren't allowed to care for their own copies.
As Matt Schruers over at the DisCo Project notes, studio practices have ensured that no option so far can be convenient, comprehensive, and lawful. Netflix Instant is a great service for what it is able to offer, but in a permission culture it is broken from the start.
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Filed Under: copyright, first sale, permission culture, streaming
Companies: netflix
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*It used to work so well and was extremely profitable.
*The careers of many industry executives was built around clever manipulation of the windowing model.
Those are very powerful reasons for keeping something around. Of course, there are some downsides:
*Windowing does not make nearly as much sense give a global internet
*It is no longer as profitable as it used to be. In fact, it is probably reducing profits.
*It encourages piracy.
*Its existence may threaten the survival of the industry in its current form.
For inbred corporate insiders, none of those reasons are good enough to change a way of doing business that you know and love.
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Luckily, places like Amazon and YouTube and Netflix and Hulu are starting to create their own content and take the market away from the incumbents, hopefully as big internet savvy businesses they will accept the internet and how it works rather than fight it.
The incumbents have lost the war against piracy no matter how many times they claim they are winning, it is easier today to access content than it was even yesterday.
Hopefully thepiratebay browser will be released soon with the anonymity it brings to sharing content well partial anonymity.
With the ruling in the EU against ISP's retaining data about your browsing habits i am sure Piracy will only benefit.
Once the content creators realize how they are being left behind and how people are getting their content and other content that competes with them easier and cheaper or for free they have no option but to compete, if that means jumping ship and doing deals with the internet behemoths we shall see. All we really have to understand at this point is that the money-ship that was copyright that benefited a few people is sinking and the people on-board trying to protect their income stream are doing anything they can to stop the sinking, sadly for them but happily for us it is like they are.
Content controllers are almost history and will be removed from the picture in one foul swoop when Torrenting is legalized and they have no option but to compete with free. They can do whatever they want they can scream and cry and collapse in on themselves threaten to stop creating content or distributing it in any way...There will always be people to replace them, and jobs they threaten, well, I would like to see how they create movies or anything without labor and paying people, they might find that though they dismiss the people doing the physical work refusing to pay them will only result in one thing, people looking elsewhere to work and taking their experience with them.
And one thing that will never change, people will invest in movies for cinemas, cinemas make the investors a hell of a lot of money and they will not stop creating for cinemas, those that do will be doing so at their peril of becoming irrelevant as others fill the gaps they leave behind.
I cannot personally wait for the collapse of the copyright system and the new era of free content online, it will force many businesses to actually compete instead of ripping people off. TV will change forever and cable will have to start providing something that really attracts people not the 1000 channels and nothing to watch.
Broadband providers will be forced to provide the service they advertise, but refuse to provide they will be forced to enlarge the pipes and allow more data to flow and if they try to overcharge well new ISP's will be popping up everywhere.
Content creators will have to look for a way to monetize their content, maybe think about costs instead of charging millions for 30 minutes of content, but they will do it there is a lot of money in content this website has proven again and again that free can make money.
Sorry for the rant i am just pissed that i have to live through this and it cannot be resolved quicker than it is.
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That's the thing that far too many people don't understand about copyright, and it gives undeserved legitimacy to the current system: if people think it's sticking up for the rights of content creators, then it's a good thing, right? But when people understand that it's actually enabling publishers to exploit the content creators along with all the rest of us, their attitude changes fast.
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Either Netflix (or other service) has permission to deliver to their subscribers the products they're requesting or Netflix doesn't. How it gets there shouldn't be a matter for debate.
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It shouldn't, but it is, and the reason it is so is because of the interpretation of the law in physical land vs on the internet (like everything else.) For physical land, the mailman is delivering a piece of plastic. The piece of plastic contains a copy of the movie which has been licensed ahead of time to the owner/possessor of the piece of plastic. On the internet, there is no piece of plastic, and thus, the producer limits their license to allow for it to be distributed only during particular times/reasons.
Congress will need to fix the law to prevent the copyright maximalists from differentiating the two (which they won't, because their paymasters don't want the current system to change.)
What would be really interesting is to see Hollywood's current model for online distribution pushed into the physical realm (which they've already tried to do a number of times, to limited success.) Imagine Hollywood having a system in place where that piece of plastic wouldn't work if an exclusive window was entered or if the movie was deemed to be no longer worth distributing. DRM at its worse. I suspect that is really what AACS is about...not preventing piracy, but enforcing windowing in a physical medium (hence the required callback mechanism when a Bluray is played.)
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Artistic megalomania not required.
With a piece of plastic there is NO LICENSE. You get to do what you want with your copy because it is your personal property. There is no license of any sort (explicit or implied). THAT is why the Netflix mailer system works.
There is none of this "license" nonsense.
It's just Netflix using it's personal property as it sees fit.
No "permission" is required because this is stuff that was settled in favor of individual property rights over 100 years ago.
It all get's fouled up once you go "fully digital" because you no longer have physical property anymore or any of it's characteristics. Moguls love it when they get to benefit from property rights concepts but hate it when it might benefit anyone else.
The idea that my personal property is subject to any sort of implied "permissions" damages us all, even the Moguls.
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Re: Artistic megalomania not required.
actually, you are wrong. The discs that rental services are lending out are a lot more expensive, because they have a specific license attached to them that allow rental (but not resale).
The big issue with sale vs. license is that the movie studios want to have it both ways, They want to have the advantages of sale and license, while forcing the disadvantages of both on the customers.
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Re: Re: Artistic megalomania not required.
But there is nothing that requires rental services to use those discs. They can buy normal retail discs just like you or I and rent them out all they want without incurring any licensing or other legal problems. So in the big picture, this isn't a license issue at all.
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Re: Artistic megalomania not required.
If that's true, then why are services that allow DVDs to be backed up and easily played back through an archive always being sued? Even breaking the CSS code or region code to play back the movie you "own" is technically illegal and they almost had someone thrown in jail for writing code (DeCSS) to play it back on Linux when they refused to licence it to an open source system. That's not to mention all the pre-DVD methods they tried to use to block you from playing your own movies in an unapproved manner (e.g. Macrovision).
If you think this is only a problem with physical media, you're deluding yourself.
"The idea that my personal property is subject to any sort of implied "permissions" damages us all, even the Moguls."
However, I agree with this wholeheartedly.
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Re: Re: Artistic megalomania not required.
That's the real problem here. It's not just that you don't have any rights without a physical object but that plenty of people (including yourself) are hard at work undermining everyone's personal property rights too. Not only are "meatspace" ideas not being applied to "cyberspace" but people are trying to push things the other way.
Clueless nitwits constantly repeat corporate propaganda.
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Re: Re: Re: Artistic megalomania not required.
You know that copyright notice that everyone ignores or skips past at the beginning/end of every DVD you buy? That's the licence. Read it some time. You'd be amazed at what you're supposedly not allowed to do with that physical item you thought you owned. Most people ignore the restrictions as much as the notice itself, but it's there and technically enforceable by law (though until Napster et al provided full visibility about how many people ignore those warnings, they didn't bother going against individual infringers).
"There are technological measures that have been given the force of law by corporate lobbying."
To protect the LICENCE from being broken. There's no other reason for copying restrictions, region restrictions, etc. other than to "protect" the "licence". The DMCA might be a half-assed tool to try and make the licence enforceable, but I have VHS tapes with the same warnings, and similar warnings on paperback books.
We might not agree with the existence of the licence, but it's there.
"that plenty of people (including yourself) are hard at work undermining everyone's personal property rights too"
Oh, this should be good. Explain why you think *I'm* doing that. Is it because I don't pirate, or because I circumvent the restrictions I think shouldn't exist by, for example, using VLC to skip warnings and bypass region codes?
"Clueless nitwits constantly repeat corporate propaganda."
Indeed they do. But that doesn't mean that the idiotic licences and restrictions don't exist - half the problem we have here is that they're very much real. Yes, even on that bit of plastic.
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Re: Artistic megalomania not required.
Really? Try opening up your own neighborhood theater in your back yard, where you play your DVDs on a big screen TV and see what happens.
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It's not your property, it's a licensed item. The terms are restricted to home use only and enforceable in court.
The only ones with any property rights are the rightsholders. That alone is an argument for restricted copyright terms. Imagine being arrested for screening a 40 year old movie in a large hall and inviting your friends and neighbors to watch it. Not fair, is it?
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A system should exist for movies and TV shows after 3 or 10 years. Anyone can stream them if they pay a reasonable license fee. Of course the reasonable part of the equation will be the most difficult.
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I agree that the reasonable will be the difficult part, because what the entertainment industry considers reasonable will be anything but.
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My evolution
If and when the Netflix offerings no longer contain anything of interest to me, I'll move on to... nothing whatsoever. So, in my case anyway, the more the production companies do to reduce the Netflix streaming library, the less of their stuff I will watch until, eventually, they'll have lost me as a customer completely.
I literally can't think of a single movie or TV show that is so compelling that I'm willing to suffer any inconvenience to see.
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Re: My evolution
But, I'm someone with wide tastes and enjoys foreign language and older movies as much as new blockbuster releases. I still buy discs, but they're far more likely to be cult video releases with lots of extras from companies like Arrow and Blue Underground than they are to be anything remotely related to Hollywood. Whereas 10-15 years ago, I'd often blind buy the latest VHS or DVD without thinking. I got burned too many times with crappy movies or double-dipping, so the studios' own actions lost them a regular customer. I'm probably not alone, yet they seem to think that preventing easy access to legal content is the answer...
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Re: Re: My evolution
Agreed. Really, there's more stuff I'm interested in on Netflix than I have time remaining in my life to watch.
"But, I'm someone with wide tastes and enjoys foreign language and older movies as much as new blockbuster releases."
And I think this is the answer to the mystery you point out. When I've talked with people who say Netflix has nothing, what they invariably mean is that Netflix doesn't have much of the most current stuff. Which is true. For me, that doesn't matter -- there is nothing magical about the current stuff. The stuff that is a couple of seasons (or years, or decades) old is just as good or better as the most recent titles, and the majority of it is "new to me". For some people, though -- although I have a hard time understanding why -- it seems to matter a great deal. Different strokes and all that.
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I'm perfectly happy browsing through the hundreds of movies in my Netflix queue and there's a vast wide world of movies out there to explore.
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Re: Popcorn Time
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http://chaoslife.findchaos.com/netflix
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Permissions Clause
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Re: Permissions Clause
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Not if they simply allow Netflix to stream them. They'd be beholden to Netflix in the same way that the music industry inadvertently depends on iTunes and the publishing industry on Amazon for much of their distribution.But, Netflix is the household name in the industry so simply offering a half-assed alternative of their own making isn't going to cut it either.
Plus, I suspect it's the same thing that gets people so bitchy about Spotify and Pandora - while they get paid, they don't get paid *enough* and they think they can still get physical purchase prices for digital rentals somehow...
"You'd think that would be the ideal scenario for them."
You'd also have thought that they'd realise that putting patronising lectures in front of legal purchases, crappy DRM solutions like Ultraviolet and unworkable region coding schemes don't translate into more money or reduced piracy and in fact just piss off legal consumers. Alas...
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I think this is a critical point because it's also exactly why they hate the internet itself and are working so hard to eliminate the aspects of it that threaten their monopoly.
Remember, the studios don't really make their money from making movies. They make their money from distributing movies whether they make them or not. The internet allows filmmakers to effectively distribute their art without involving the studios. That is an existential threat to them.
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(Then again, I think the error message "we've only got 30 copies of this movie, and they're all currently in use" would probably annoy the heck out of me.)
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If your local library supports ebooks, you will see that error message if you wish to checkout a popular book. I got tired of it and just don't checkout anything from ebook libraries anymore.
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You see it as a cautionary tale, Hollywood sees it as a win.
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https://en.wikipedia.org/wiki/Permission_culture
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Missing the point
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Re: Missing the point
I personally don't have any kind of issue with windowing itself. What I do have an issue with is all the crap that is used to enforce it. My attitude about it is pretty much the same as my attitude around piracy: I'm against it and don't have an issue with companies trying to minimize it. I do have an issue with the specific things they do to minimize it, though.
It's all about the collateral damage.
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Re: Missing the point
To *attempt* to maximise revenue. It no longer works like it did, mostly because it's so artificial and consumers recognise this. It's a big driver toward piracy as much as sales.
"which is the only responsible option for executives running publically held companies"
I disagree.
"hey simply need to pay for the negative cost of producing the first print"
Which they can do using many methods, many of them less expensive than the added cost of a theatrical run. Lots of people never go to the cinema, you're not getting more money from those people jsut because you make them wait 6 months before they can see your movie.
"The quality of streaming content being offered"
...is perfectly fine for most people. I hear many complaints about Netflix, but picture quality is never one of them. Not everyone wants or need a HD copy.
"And the only way to enjoy full quality Blu-ray is via physical disc."
So? Again, not everyone want or needs that. Some people watch your movie on a phone or portable TV where Blu makes no difference, and they are happy with that.
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Jackass.
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Very Entertaining
Self Reliance has taught me to do virtually everything offline. I use the web for simple e-mail communications and research. That's it. Never rely on the Internet much less on "streaming" technology (more like streaming money out of your wallet into corporate hands). Imagine every time you turn a screen on, you Pay someone. That's what the future of this technology holds.
And then there's these idiots who so proudly proclaim they're "cutting cable" and going with some streaming tech instead--they're just substituting one thing for another, albeit cheaper it's still the same concept of peeing your money away. And you'll always be a slave to what They have Available as opposed to what You Want. Don't bitch about smaller selections, higher prices, and fewer choices once these things take off. Inevitably it'll be no different than your old cable service. Do things yourself and build your own library offline, if you want to be smart. At least when I first got cable, circa 1980, I was smart because that was when I got my first VCR (of many to come) and when blank tapes reached a record low of around a buck I stocked up. I taped, taped, taped all my favorite films and shows--and stored them (go ahead, make a crack about squirreling things away!). Now I have a library. Granted, grainy in places , but so what? For the stuff I Really care about I switch to my DVD collection. Some things will Never become available on DVD much less streaming. But I've got some of them... This is the logical way to go rather than Paying for each and every time you want to See something. I won't even mention certain intrusive factors which should spark paranoids to action but, hey, I'm not going there. Cell phones are worse and you Accept those. Maybe it's just me because, television shows in particular, I thought were Free--as in just having a TV set around you could tune them in and watch them and, during the dawn of the VCR age, tape them and play them back at your own leisure. To put it another way, it's a crime to Charge people to watch decades old TV shows! And believe me, that's where my prime interest lies: in the old stuff. And there lies another problem: Internet Access should be Free--and I don't mean wireless microwave-slow-cooking tech, either.
Oh, I can get new movies and series If I want through my own means and it'll cost me pennies, and it's got little to do with Internet access. And these people who trust things like "the cloud" and other online storage mediums are fools. Cutoff or restrict your access and you're screwed. A crash of their servers or storage mediums (through hacking or natural means) and you're screwed. But physically hold your favorite movie on DVD (or even tape) in one hand Now and it's Yours and it can't be taken away from you. Play it as many times as you wish without fear of some charge. That's true freedom, independence, and self-reliance--cutting out corporate crud.
Oh, yeah, streaming is the new way to go you'll read everywhere. I'm sure A Lot of businesses would also Love to do things for you as a Paid Service streaming income from you into their pockets. Lots of people would jump at the chance to wipe your ass for $100 a wipe.
That's what this is really all about. And they'll put a prestige tag on it, too, and the sheeple will do their thing, much like they get people to fork out big bucks for luxury cars and wastful SUVs they don't need. People will Boast about what they have and you don't So, you'll counter it by Becoming one of them.
Speaking of Online vs. Offline... You've got to be out of your mind to fall for these "virtual casinos" which are Not real casinos in the least. Basically you're handing your credit card over to an absolute anonymous stranger to play games--with you. These things aren't regulated and they can do whatever the hell they want to with you. Win, lose, hacked, whatever.
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Re: Very Entertaining
"And then there's these idiots who so proudly proclaim they're "cutting cable" and going with some streaming tech instead--they're just substituting one thing for another, albeit cheaper "
If you meet one of these "idiots" who claims that the price isn't a major factor that drives them to move away from cable, then fine. Otherwise... you're attacking people for exercising their freedom of choice and make a good financial decision? Really?
"And you'll always be a slave to what They have Available as opposed to what You Want."
So, same as every other medium? You've always been a "slave" to what your local stores stock, what your TV channels decide to show, what a studio decides to release, etc. But you attack people who move away from cable with its higher prices and lower choice as "idiots"? Plus, you seem intent on rejecting the very real possibility that what a streaming service offers and what a person wants are actually the same thing. My own main problem with Netflix is that I'll never have time to watch everything on my ever-growing to watch list.
"I taped, taped, taped all my favorite films and shows--and stored them"
So, you don't have any interest in watching anything produced in the last decade or two? No interest in watching a better quality copy than VHS can provide? Fair enough, but you seem rather intent on attacking people for making the choice that benefits them the most.
"A crash of their servers or storage mediums (through hacking or natural means) and you're screwed. But physically hold your favorite movie on DVD (or even tape) in one hand Now and it's Yours and it can't be taken away from you."
You seem confused about the concept of a rental service vs. a product you purchase. Streaming services are rental services, so your analogy is idiotic.
"These things aren't regulated"
This is an outright lie. Oh, the legal status of these services in the US does attract some shady players, but I can assure you that in Europe at least, the industry is highly regulated. Your problem would seem to be the laws that prevent the regulated services from servicing the US market, not the nature of online gaming as a whole.
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