Cable Giant Spectrum On Quest To Outlaw 'Insane' Streaming Password Sharing

from the you're-own-worst-enemy dept

For years, streaming video operators like HBO and Netflix have taken a relatively-lax approach to password sharing. Netflix CEO Reed Hastings has gone so far as to say he "loves" the practice, and sees it as little more than free advertising. Execs at HBO (at least before the AT&T acquisition) have made similar arguments, arguing that young users in particular that share their parents' password get hooked on a particular product via password sharing, then become full subscribers down the road. In short, they see it as added value for the consumer, and have repeatedly stated it doesn't hurt them.

On the other side of the equation sits Charter CEO Tom Rutledge, one of the highest paid execs in media. He, in contrast, has long complained that he views password sharing as "piracy", and has consistently promised to crack down on the practice. Rutledge and his fellow executives gave a particularly rousing "get off my lawn" lecture at a media event a few years back:

"There’s lots of extra streams, there’s lots of extra passwords, there’s lots of people who could get free service,” Rutledge said at an industry conference this month...“It’s piracy,” Connolly said. “It’s people consuming something they haven’t paid for. The more the practice is viewed with a shrug, the more it creates a dynamic where people believe it’s acceptable. And it’s not."

Except it is acceptable. For one, most of these services include password sharing as part of their business model; they include limits on the number of simultaneous streams that can be running under any one account to prevent sharing from undermining too many new sales. And the companies that have been embracing the practice say they've seen no negative impact from it. Again, it's free advertising and a consumer-friendly practice that's factored into the business model. It's certainly not, as Rutledge has often suggested, synonymous with "piracy."

Undaunted, Rutledge has been trying to build a coalition of industry allies focused on stomping out the nefarious practice of password sharing. And as the company strikes programming deals with partners, it's ensuring that a ban on such sharing is part of the process. One big partner in this initiative is Disney, which is expected to put the kibosh on password sharing when it launches its new Disney+ streaming service this fall. All the while, Charter executives are running around calling the practice of password sharing "insane":

"Ultimately our goal is that we can get an alliance of a large enough group of programmers and operators to protect the value of the content that people produce and the content that we distribute and we pay for,” Chris Winfrey, Charter’s chief financial officer, said last week at the Bank of America Merrill Lynch 2019 Media, Communications & Entertainment Conference in Beverly Hills.

Winfrey severely criticized programmers that turn a blind eye to the practice of password sharing, claiming such practices are “insane."

“To think that it doesn’t impact the way we get paid, it does,” Winfrey said. “And it conditions the entire marketplace to think that content should be devalued, it should be free, and that’s the way it is and I shouldn’t have to pay for it. It’s our firm belief that we’d be growing and growing significantly [if it wasn’t for password sharing]."

Except it's not "free," for the reasons outline above. And while you might gain some additional revenue by banning password sharing, you might also lose subscribers to companies that actually value making consumers happy. Charter Spectrum is, if you'd forgotten, statistically one of the least liked companies in America for a long list of reasons, from mindlessly jacking up prices to providing some of the worst customer service of any company, in any industry in America (think about that accomplishment for a second). Blaming all of its problems on the fact people occasionally share streaming TV passwords reflects the entitlement mindset that's pretty common in the too big to fail, government-pampered telecom and broadcast sector.

Filed Under: password sharing, streaming, tom rutledge
Companies: charter, hbo, netflix, spectrum

The Great Hack Wasn't A Hack And Big Tech's Problems Aren't Really About Big Tech

from the symptoms-not-the-disease dept

There must be some irony in the fact that the well-hyped documentary film about Cambridge Analytica/Facebook, called The Great Hack was released by Netflix -- a company who really is kinda famous for trying to suck up as much data as possible to build a better algorithm to keep you using its service more -- and potentially violating people's privacy in the process. I know it's ancient history in terms of internet years, and everyone has decided that Facebook and Google are the root of all internet/data evils, but back in 2006, Netflix launched a contest, offering $1 million to anyone who could "improve" its recommendation algorithm over a certain threshold. It took a few years, but the company awarded the $1 million to a team that improved its algorithm -- though, it never actually implemented that algorithm, claiming that the benefits "did not seem to justify the engineering effort."

But, perhaps more interesting, was that while the contest was ongoing, some computer scientists de-anonymized the dataset that Netflix had released, leading some to point out that the whole project almost certainly violated the law. Eventually, Netflix shuttered its plans for a follow up contest as part of a legal settlement regarding the privacy violations of the original.

So, perhaps feel a bit conflicted when Netflix's vaunted algorithm recommends "The Great Hack" for you to watch.

This is not to say the documentary is not important, but it does highlight our troubling desire to immediately point fingers and describe certain things as "evil." Even the name -- The Great Hack -- is ridiculously misleading. Nothing Cambridge Analytica did involved a "hack" in the way most people think of the word. Yes, you could argue that it was a "hack" of the larger system -- using Facebook's platform in a way that was not intended, but easily done, but it didn't involve any technical proficiency. Just a willingness to use the data that way.

But, it's interesting to me to see the press rush in to use the documentary as the exclamation point to the narrative that's become popular these days: that Silicon Valley is too obsessed with collecting data as a business model. Janus Rose, at Vice, has a big piece that describes the movie as a condemnation of "surveillance capitalism."

The real “great hack” isn’t Cambridge’s ill-gotten data or Facebook’s failure to protect it. It’s the entire business model of Silicon Valley, which has incentivized the use of personal data to manipulate human behavior on a massive scale.

Emily Dreyfuss at Wired, paints a similar portrait:

In that way, The Great Hack is a modern horror story. The villain is Cambridge Analytica, yes, but also Facebook, and all the systems that let people become manipulated by the digital psychological clues they leave through their lives. It's terrifying because it's true.

Natasha Lomas at TechCrunch, points out that Netflix is revealing "the defining story of our time" in the transactional nature of data on social platforms:

But in displaying the ruthlessly transactional underpinnings of social platforms where the world’s smartphone users go to kill time, unwittingly trading away their agency in the process, Netflix has really just begun to open up the defining story of our time.

Oddly, none of them mention Netflix's algorithm and history. Ah, right. Because the narrative these days is Facebook/Google/Silicon Valley. Netflix has mostly migrated south to Hollywood. And, Hollywood and the media industry have no history at all of "manipulating" the public. Nope, no history of that at all.

None of this is to absolve Silicon Valley and the big tech companies -- who really have done a piss poor job of thinking through the consequences of basically anything they've done, but forgive me for being marginally skeptical when the same industries that have a long history of pushing propaganda and trying to manipulate audiences in one direction or another suddenly start clutching pearls at the new kids on the block.

And if you want to point fingers, there are lots of directions they could go as well. All the internet haters seem to have glommed onto Shosana Zuboff's term "Surveillance Capitalism" as a sort of shibboleth to the savvy to show that you know (you know) those internet companies are truly evil in their hearts. But taken to its logical extreme, one might as well blame Wall Street. When you have a company, say, like Pinterest, that tries to avoid social media "growth hacking" then Wall St. punishes it. Witness the ongoing freakout through the past few months from Wall St. as it grapples with Alphabet/Google's revenue growth slowing.

If companies are constantly being told that they have a "fiduciary duty" to increase the stock, and Wall Street flips out any time they can't keep growing at insane, unsustainable rates, is it any wonder that all of the incentives lead us to a place where companies focus heavily on growth?

Again, this is not an excuse. It's all a problem. But we don't solve large societal problems by picking off one symptom of the disease that's really just a link in a larger societal chain. Surveillance capitalism is a symptom. Abusive data practices are a symptom. Propaganda and political grandstanding are symptoms. There are big societal problems at the root of all this -- but very few seem to be interested in exploring what they are and how to deal with them. Instead, we just get one part of the surveillance capitalist propaganda machine to convince everyone that another part of the surveillance capitalist propaganda machine is the problem. And, because that bit of propaganda is successfully manipulative and compelling, lots of people buy into it.

The narrative is here and it won't be changed.

Now, what does Netflix recommend we watch next?

Filed Under: algorithms, data, growth, influence, innovation, privacy, recommendations, surveillance capitalism, the great hack, wall st.
Companies: facebook, google, netflix

Netflix Sees First Subscriber Losses Ever

from the adapt-or-perish dept

Netflix has certainly enjoyed its flight to the top of the heap of the streaming space, now streaming video to 60.1 million US subscribers. That's more than pay TV giants like AT&T or even Comcast, who've done their best (via usage caps and lobbying shenanigans) to unsuccessfully hamper Netflix's meteoric rise.

But there's some indication that the company may have started to reach its high water mark. Netflix this week revealed it lost 130,000 subscribers last quarter, the company's first quarterly subscriber loss in history. The losses come despite Netflix having spent $3 billion on programming last quarter, and another $600 million to market its its wares. The loss was quick to rekindle memories of Netflix's bumbled Qwikster, price hike debacle from back in 2011:

"Investors had been forgiving about the spending and the debt -- so long as customers grew at record rates. But the loss of subscribers in the U.S. was the first since the Qwikster debacle, and it suggests Netflix may be running into price resistance or the limits of the addressable domestic market. The company has forecast it can reach as much as 90 million customers in the U.S., compared with 60.1 million currently."

In a letter to investors, Netflix downplayed the rise of streaming competition, blaming the losses on its own price hikes and a fairly underwhelming content slate during the quarter:

"Our missed forecast was across all regions, but slightly more so in regions with price increases. We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions (while our over-forecast was in every region). Rather, we think Q2’s content slate drove less growth in paid net adds than we anticipated.

Given all the premature hand wringing and predictions of doom that surrounded Netflix after the Qwikster face plant, anybody suggesting Netflix will suddenly start to free fall is likely jumping the gun. Netflix's third quarter kicked off with the launch of Stranger Things season three, which will likely help drive subscriptions skyward again. And Netflix executives also seem to be slowly realizing that throwing around billions of dollars for mediocre international content at a mind-boggling scale may not be the winning strategy they originally surmised.

That said, this is only really the beginning of Netflix's challenges. Giants like Disney, AT&T, and Comcast are all rushing to pull their growing slate of TV shows and movies from Netflix and shift them exclusively to their own new streaming platforms. Studies suggest that nearly every broadcaster will launch their own streaming service by 2022. That's not only going to create greater losses due to competition, but the added cost and confusion of so many exclusivity silos is going to likely drive a significant number of users back to piracy, something the streaming sector hasn't really figured out yet.

In other words, despite a lot of pearl clutching Netflix is likely to clear its current hurdles. It's the rise of an ocean of streaming exclusives (especially by telecom providers given the death of net neutrality) and a shift back to piracy Netflix will really need to worry about over the next five years.

Filed Under: competition, prices, streaming, subscribers
Companies: netflix

AT&T Breaks Another Merger Promise In Making 'Friends' Exclusive

from the who-could-have-predicted-it dept

Last year AT&T defeated the DOJ's challenge to the company's $86 billion merger with Time Warner thanks to a comically narrow reading of the markets by U.S. District Court Judge Richard Leon. At no point in his original 172-page ruling (which approved the deal without a single condition) did Leon show the faintest understanding that AT&T intends to use vertical integration synergistically with the death of net neutrality and neutered FCC oversight to dominate smaller competitors and tilt the entire internet ecosystem in its favor.

While the DOJ lost its original case, it was quick to appeal late last year, highlighting how within weeks of the deal AT&T had jacked up prices on consumers and competitors like Dish Network, which says it was forced to pull HBO from its lineup because it could no longer afford the higher rates.

Critics of the merger had also pointed out how AT&T would likely use the deal to increasingly make content exclusive to its own service, making it harder for competitors to access it. If you'll recall, this was something AT&T CEO Randall Stephenson also insisted wouldn't happen when addressing a Senate antitrust subcommittee pre-merger:

"Nor is there any reason to believe we could use Time Warner programming or AT&T networks to hurt related markets. Simply put, it would be irrational business behavior to do so. Time Warner's programming is more valuable when distributed to as many eyes as possible. Moreover, in order to have great programming, it is imperative that we attract great creative talent to develop it. The best way to attract that talent is through widespread distribution of Time Warner content."

Of course this week AT&T announced it would be taking content like Friends and making it exclusive to its own streaming platforms, including its new looming HBO Max service:

"AT&T will start restricting some Time Warner shows to its own streaming service, despite previously telling the government that it would distribute Time Warner content as widely as possible.

WarnerMedia, the division AT&T created when it bought Time Warner, today announced a new online streaming service called "HBO Max." HBO Max will debut in the spring of 2020 and include exclusives that will no longer be available on other streaming platforms."

On its surface this doesn't seem like that big of a deal. After all, Friends is an old show, and most users probably won't care. And it's certainly not the only show getting this treatment (Comcast NBC Universal just made The Office exclusive to its streaming platform, and Disney is also pulling Netflix content for exclusive use on its own looming Disney+ service). But more broadly, the more essential content AT&T makes exclusive to its own platform (especially and likely inevitably, HBO), the more difficult it will be to compete with AT&T. Knowing AT&T, there's going to be far more exclusives where this came from.

This is all before you even get to net neutrality and AT&T's domination in broadband, which has allowed it to behave anti-competitively in different, even more problematic ways (like only imposing arbitrary usage caps if you use a competitor's service). Letting companies like Comcast NBC Universal and AT&T Time Warner dominate both the conduit and the content will ultimately result in a universe of headaches for competitors and consumers alike. And Judge Leon's failure to see (or acknowledge) this will be a "gift" that keeps on giving for the next decade.

The other major problem these ongoing exclusives have is they increasingly force consumers to hunt and peck through a growing, cumbersome list of subscription services just to find the content they're looking for. And if subscription price and ease of use isn't managed carefully, it's simply going to drive frustrated users back to piracy. And when that happens, history suggests these companies will blame everybody and everything (ban VPNS!) but themselves for it.

All of that said, I'm not sure banning exclusive content deals is the answer. What would be at least part the answer for maintaining healthier markets? Finally realizing that endless media consolidation and mindless mega-mergers are generally harmful to the media and telecom sector (as now AT&T owned HBO and DC comics employees are just starting to figure out post merger). And that the long list of promises made in the ramp up to such super unions are almost always uniformly empty. There are fifty years of data for clear supporting evidence, especially in telecom.

Filed Under: content, friends, lies, mergers, promises, silos, streaming
Companies: at&t, hbo, netflix, time warner

Netflix, Which Has Previously Touted Its Ability To Compete With Piracy, Joins Australian Antipiracy Efforts

from the about-face dept

We have for some time been covering the rapid expansion of antipiracy and site-blocking efforts in Australia. Between the movie and music spaces, these efforts have been spearheaded by a couple of local entertainment groups, such as Village Roadshow and Music Rights Australia, and the typical suspects from the US, such as the MPAA, RIAA, and various movie and music studios. The ramping up of those efforts continues to date, with recently updated copyright laws being used by those groups to request massive site-blocking for torrent and streaming sites, with the courts generally rubber-stamping all of them.

To date, a glaring non-combatant in all of this has been Netflix. And that hasn't been some huge surprise, either, given that Netflix has long had a history of touting its own ability to both compete with piracy and make use of its cultural effects, and the rest of the entertainment industry painting Netflix as some kind of problem for the industry itself. And, while Netflix's tone on piracy has certainly begun to change, that made it somewhat jarring to learn that the company was suddenly diving into the Australia anti-piracy fray with both feet.

Over the past two years, many of the world’s largest torrent and streaming sites have already been blocked, but the work is far from done. A new application recently submitted at the Federal Court of Australia requests ISPs to block dozens of websites.

The complaint comes from Village Roadshow as well as several other prominent movie companies such as Disney Enterprises and Universal City Studios. For the first time, Netflix Studios has joined in as well, as Computerworld notes.

As stated, Netflix is now a part of the MPAA, which perhaps explains why it is now in on these enforcement efforts. This appears to be something of a move of solidarity with the industry, as the focus of this particular complaint is pretty heavy on sites accused of distributing Asian content.

Interestingly, the court order has a strong focus on Asian content. Several of the targeted sites, such as BTBTT and 123kubo.org, are predominantly popular in Asian countries. In addition, the list also includes many anime sites such as Animeultima.to and Ryuanime.com.

The latter is likely due to the fact that the Australian distribution group Madman Anime Group is listed as one of the applicants as well.

So, again, there's something of a all-for-one and one-for-all flavor to all of this. Still, being a member of the MPAA doesn't require Netflix to join in on these legal efforts at site-blocking. As is typical in these complaints, the torrent and streaming sites are painted as having only one purpose: to commit copyright infringement. On that basis, the complaint seeks the blocking of 86 websites.

But the new part of this is Netflix's involvement. Why it suddenly feels the need to join the ranks of those seeking site-blocking is an open question, particularly when it has built a business model out of being more convenient and reasonable an option than piracy itself.

Filed Under: australia, copyright, piracy, site blocking
Companies: mpaa, netflix, village roadshow

Despite Spielberg's 'Get Off My Lawn' Moment, The Oscars Won't Ban Netflix

from the protectionism-by-any-other-name dept

A few months back Steven Spielberg had a "get off my lawn" moment in demanding that films from Netflix and other streaming services be excluded from Oscar contention. The sentiment isn't uncommon among old-school Hollywood types who see traditional film as somehow so sacred that it shouldn't have to change or adapt in the face of technological evolution. It was the same sentiment recently exhibited by the Cannes film festival when they banned Netflix films because Netflix pushed back against absurd French film laws (which demand a 36-month delay between theatrical release and streaming availability).

We'll note that shortly after Spielberg's rant, he could be found pushing streaming services at Apple, which suggests a dash of...inconsistency in his arguments. Regardless, Academy members don't appear swayed by Spielberg's request, and have announced that current rules for Oscar contention will remain unchanged. More specifically the Academy will retain "rule two," which says a film is eligible to be considered for an Oscar so long as it has a seven-day run in an Los Angeles area theater. So sayeth the Academy:

"The Academy’s Board of Governors voted to maintain Rule Two, Eligibility for the 92nd Oscars. The rule states that to be eligible for awards consideration, a film must have a minimum seven-day theatrical run in a Los Angeles County commercial theater, with at least three screenings per day for paid admission. Motion pictures released in nontheatrical media on or after the first day of their Los Angeles County theatrical qualifying run remain eligible.

“We support the theatrical experience as integral to the art of motion pictures, and this weighed heavily in our discussions,” said Academy President John Bailey. “Our rules currently require theatrical exhibition, and also allow for a broad selection of films to be submitted for Oscars consideration. We plan to further study the profound changes occurring in our industry and continue discussions with our members about these issues."

Some of that was likely impacted by the DOJ's odd (given its apathy on countless antitrust issues across a universe of sectors) letter warning the Academy that such a ban might run afoul of antitrust enforcers.

Amusingly, the New York Times has subsequently published a piece largely fueled by anonymous friends of the director, attempting to strongly walk back Spielberg's original efforts to have streaming services banned from contention. The piece tries to suggest that Spielberg's opposition to streaming has been largely overhyped and misreported, despite his clear, documented preference for a rule change that would have kept services like Netflix from winning awards. In talking to the Times, Spielberg's anti-streaming positioning has softened dramatically:

"I want people to find their entertainment in any form or fashion that suits them,” Mr. Spielberg said in an email in response to queries from The New York Times. “Big screen, small screen — what really matters to me is a great story and everyone should have access to great stories.

“However, I feel people need to have the opportunity to leave the safe and familiar of their lives and go to a place where they can sit in the company of others and have a shared experience — cry together, laugh together, be afraid together — so that when it’s over they might feel a little less like strangers. I want to see the survival of movie theaters. I want the theatrical experience to remain relevant in our culture."

Sure, ok. The problem is that simply wanting to preserve the traditional brick and mortar film experience is one thing. Taking active, protectionist steps to prevent streaming competitors from winning awards or fairly competing with them is something else entirely. The consumer is driving this particular train, and if consumers ultimately decide they no longer want to go to a physical location and overpay for popcorn and sticky floors that's their prerogative. It's how competition, and evolution, works.

Filed Under: movies, oscars, steven spielberg, streaming
Companies: netflix

DOJ Warns Academy That Being An Anti-Streaming Luddite Could Violate Antitrust

from the get-off-my-damn-lawn dept

So roughly a month ago you might recall that Steven Spielberg had a "get off my lawn" moment in demanding that Netflix films be excluded from Oscar contention. The sentiment isn't uncommon among old-school Hollywood types who see traditional film as somehow so sacred that it shouldn't have to change or adapt in the face of technological evolution. It was the same sentiment recently exhibited by the Cannes film festival when they banned Netflix films because Netflix pushed back against absurd French film laws (like the one requiring a 36-month delay between theatrical release and streaming availability).

You'll notice there's never much solid supporting evidence supporting these banning recommendations; just some vague arguments that films from streaming services can't be considered good because these companies push back against traditional and often counterproductive business tactics that haven't aged well in the internet era (like those antiquated release windows). And while Netflix's catalog certainly has its share of duds, there's an ocean of awards for films like Roma that suggest the entire sentiment is little more than old man protectionist nonsense.

Granted shortly after Spielberg's comments about how terrible streaming services were, Spielberg came out in breathless support of Apple's new undercooked Apple+ streaming service, suggesting that perhaps streaming services aren't so bad if Steven's backing them.

Curiously however, Steven's grumpy vision of a streaming-free oscars may not come to fruition. Reports this week surfaced that the Department of Justice has actually told the Academy to tread carefully in terms of excluding streaming services from contention, as they could run afoul of antitrust guidelines:

"According to a letter obtained by Variety, the chief of the DOJ’s Antitrust Division, Makan Delrahim, wrote to AMPAS CEO Dawn Hudson on March 21 to express concerns that new rules would be written “in a way that tends to suppress competition.”

“In the event that the Academy — an association that includes multiple competitors in its membership — establishes certain eligibility requirements for the Oscars that eliminate competition without procompetitive justification, such conduct may raise antitrust concerns,” Delrahim wrote."

While that's actually makes some since for the DOJ, it's an odd issue to single out given all the other massive monopoly problems facing the US in the wake of years of eroded antitrust enforcement. After all, the DOJ just showed how feckless and toothless US antitrust protections are when it did a face plant in trying to stop AT&T's $86 billion merger with Time Warner, a deal that immediately resulted in significantly higher prices for both consumers and competitors alike.

So while the DOJ is correct in that the barring of Netflix and other streaming platforms from streaming contention is idiotic and anti-competitive, it's an interesting problem to be singling out given how useless and apathetic US antitrust enforcement has been on a wide variety of monopoly problems facing the US tech sector, from the cornering of ad markets to the vertical integration issues caused by telecom giants controlling both the content and the conduit to the home.

Filed Under: academy awards, doj, hollywood, movies, oscars, steven spielberg, streaming
Companies: apple, netflix

Netflix Asks Court To Dismiss Chooseco's Lawsuit For All The Obvious Reasons

from the this-adventure-sucks dept

You will recall that Chooseco LLC, the company behind the Choose Your Own Adventure books that people my age remember with such fondness, decided quite stupidly to sue Netflix over Black Mirror's audience-influenced production called Bandersnatch. The lawsuit is silly for any number of reasons, including that the whole thing rests on a character in Bandersnatch mentioning a CYOA book as the inspiration behind his fictional video game coupled with the fact that the film (a third medium) lets viewers choose how the story progresses. How Chooseco thinks any of that legal pixelation resolves into an actual trademark or copyright violation is anyone's guess, because it most certainly does not. Storytelling mechanics are most definitely not protectable as intellectual property. On top of that, Chooseco subsequently announced its own licensed deal with Amazon for Alexa. The timing of it all sure seems to indicate that Chooseco might have wanted to send Netflix a thank you for revitalizing interest in its products, rather than filing a lawsuit.

But since the lawsuit was filed, it was only a matter of time before Netflix tried to have it tossed.

But lawyers for Netflix argue the phrase is common and simply “a reference to the book’s narrative device”.

It also dismissed claims by Chooseco of similarities between the border of a game by fictional video game developer Tuckersoft and its own book covers. Netflix said there was “nothing distinctive” about the publisher’s borders and the designs were in any case “markedly different”.

In a filing last week, the online broadcaster said: “No amount of further amendment will change Bandersnatch’s actual uses of the phrase ‘Choose Your Own Adventure’. Nor will amendment change the fictional ‘Tuckersoft’ company’s uses of the rounded color borders, let alone make them similar to Chooseco’s. Nor will amendment alter the First Amendment protection for such artistic uses, the protection for descriptive fair uses like the use of the challenged phrase, or the absence of any secondary meaning for the rounded color borders element of Chooseco’s trade dress.”

It's pretty much as we predicted. Netflix would like the court to acknowledge that pretty much everything Chooseco is complaining about that is included in Bandersnatch is not protectable, and that pretty much all the rest is protected as expression and art by the First Amendment. Frankly, it's hard to imagine how the court could argue differently, although there's always the chance the court might decided that these are issues best decided in the trial phase.

Which would be too bad, really. Lawsuits as plainly silly as this deserved to be tossed, not validated by full trials.

Filed Under: bandersnatch, choose your own adventure, fair use, trademark
Companies: chooseco, netflix

Steven Spielberg Demands Netflix Get Off His Damn Lawn

from the swimming-upstream dept

We've noted for years that there's a certain segment of the media and entertainment industry that despises Netflix. Some of this is based on a disdain for Netflix coming to town and throwing oodles of cash around, but a larger chunk is driven by those who simply don't like change but can't admit as much. A good example of that later motivator has been the Cannes film festival, which recently banned Netflix from participating in the awards.

When asked to explain why, festival head Thierry Fremaux couldn't really provide a solid answer, but did infer that what Netflix does can't be considered good because it doesn't adhere to traditional and often counterproductive business tactics (like antiquated release windows):

"The Netflix people loved the red carpet and would like to be present with other films. But they understand that the intransigence of their own model is now the opposite of ours,” Thierry Fremaux said."

This idea that Netflix is "demolishing tradition" runs deep in many entertainment industry circles. There's this pervasive belief that if you (gasp) allow longstanding entertainment and film industry models to change, you'll kill tradition and the inherent nobility of traditional film. Again, you usually won't see a whole lot in terms of hard data in these arguments; just these vague, nebulous charges that Netflix and other streaming services -- despite increasingly winning their own awards for programming -- are somehow disrupting the sanctity of traditional business models.

This disorder flared up again last week when reports emerged that Steven Spielberg planned to pressure the Academy to ban streaming services like Netflix from receiving any future awards:

"Spielberg, a current governor of the Academy’s directors branch, plans to propose changes to Oscars eligibility rules, arguing films that debut on streaming services or get a short theatrical run should qualify for the Emmys instead of the Oscars, according to IndieWire.

“Steven feels strongly about the difference between the streaming and theatrical situation,” an Amblin spokesperson told IndieWire. “He’ll be happy if the others will join [his campaign] when that comes up [at the Academy Board of Governors meeting]. He will see what happens."

Again, you'll notice in the stories covering this subject that little to no actual effort is made to explain why this should happen, just a vague, meandering argument that these services somehow upset the sanctity of the traditional film industry and the brick and mortar "theater experience." Often you'll see claims that streaming services are killing traditional theaters, but data usually doesn't support that claim. A recent study found that young viewers who stream a lot of content at home are more likely to go see films at the traditional, brick and mortar theaters Spielberg claims Netflix is somehow destroying.

Meanwhile, many of the things Netflix has disrupted needed disrupting, like dated release windows that no longer serve a functional purpose, and the elimination of geographical viewing restrictions that wind up annoying paying customers. Among Spielberg's concerns is, apparently, the idea that Netflix just produces "TV movies" that shouldn't be considered high-brow enough to win an Oscar:

"Once you commit to a television format, you’re a TV movie,” he continued. “The good show deserves an Emmy, but not an Oscar."

But Roma's performance at the Oscars rather quickly obliterated that argument, as have a number of high-profile Netflix successes over the last few years. What Spielberg's really engaged in is just vanilla protectionism driven by a fear of change.

Many were, understandably, quick to urge the Academy to open its mind to diverse opinions on this subject:

Netflix also offered a fairly pointed response to Spielberg's attempt to blackball the company from awards consideration:

Does Netflix produce a lot of crap? Yes. Does the company use cash to throw its weight around? Sure. So do traditional Hollywood studios (don't tell anybody). But the laundry-list of awards that Netflix has already won make it clear Netflix isn't just some parasite. It's just a disruptive presence to yet another legacy industry that's nervous about change. If Netflix is legitimately doing stupid things then focus on those. But this idea that it shouldn't qualify for awards because it doesn't adhere to dated technological norms is just more grumbly ranting from grandpa's front porch.

Filed Under: awards, hollywood, internet, oscars, steven spielberg, streaming
Companies: netflix

Once Again, Sharing Streaming Passwords Is Not 'Piracy' Or 'Freeloading'

from the we've-been-over-this-already dept

We'll apparently have to keep making this point until it sinks in.

For years now, streaming video providers like HBO and Netflix have taken a relatively-lax approach to password sharing. Netflix CEO Reed Hastings has gone so far as to say he "loves" password sharing, and sees it as little more than free advertising. Execs at HBO have similarly viewed password sharing in such a fashion, saying it doesn't hurt their business. If anything, it results in folks signing up for their own accounts after they get hooked on your product, something you'll often see with kids who leave home, or leave college and college friends behind.

In other words, the actual streaming providers consistently say they see password sharing as a form of marketing. And most of these services have built in limits on the number of simultaneous streams per account that can operate at any one time, deflating much of the utility for heavy users looking to piggyback on others' accounts. That caps the phenomenon from operating at any scale that could prove truly harmful (say by 20 users sharing one Netflix account).

That doesn't stop folks from conflating password sharing with "piracy." You'll see older cable executives occasionally whine about this subject, not understanding how any of this works. You'll also see stories like this one pop up every so often, insisting these companies are losing "X" millions because they're not cracking down harder on password streams:

"As many as 1 in 5 people today are mooching off of someone else’s account when streaming video from Netflix, Hulu or Amazon Video, according to a new study from CordCutting.com. The report estimates Netflix could be losing $192 million in monthly revenue from piracy — more than either Amazon or Hulu, at $45 million per month and $40 million per month, respectively.

Millennials, not surprisingly, account for much of the freeloading."

Is there nothing we won't blame Millennials for? Poor souls.

Of course potential lost sales are not the same as guaranteed lost sales, as you don't know these users would necessarily sign up for service if they weren't allowed to share the account. Many might just actually pirate the content instead.

Meanwhile, calling it "freeloading" (as Techcrunch does) or "mooching" (as the study authors do) is also misleading. The account owners have signed off on the sharing, it's an idea that's built into the core business model, and the streaming operators themselves have repeatedly stated they're not only fine with it, but often see it as beneficial. Again, here's what Netflix said about the practice a few years back:

"We love people sharing Netflix," CEO Reed Hastings said Wednesday at the Consumer Electronics Show here in Las Vegas. "That's a positive thing, not a negative thing."...A lot of the time, he said, household sharing leads to new customers because kids subscribe on their own as they start to earn income."

And this is what former HBO exec Richard Plepler told BuzzFeed a few years back:

"It's not that we're unmindful of it, it just has no impact on the business," HBO CEO Richard Plepler said. It is, in many ways, a "terrific marketing vehicle for the next generation of viewers," he said, noting that it could potentially lead to more subscribers in the future.

"We're in the business of creating addicts," he said at a BuzzFeed Brews event in New York.

So if it's sanctioned and a form of free marketing, calling it "piracy" is arguably silly. Could you possibly make more money by being a hard ass about the practice? Maybe. But you'd cancel out the net benefit of ingratiating people to your brand and service. Is it possible Netflix and HBO begin cracking down on the practice now that the former is part of the MPAA and the latter is owned by legacy-minded AT&T? Probably. They likely just wanted to grow initial market share, then figured they'd clamp down on the practice later once they'd grown powerful.

But that still doesn't make password sharing "piracy" or "freeloading." And by cracking down on the practice you risk driving this accumulated base of would be customers to piracy instead, in which case you've arguably played yourself. Given that every broadcaster and its grandmother is expected to launch a streaming platform over the next few years, the market is about to be flooded with options. Being semi-casual about sharing could prove to be a competitive advantage, and being a hard ass could, again, either drive those customers you egotistically see as automatically "yours" to piracy, or to a more open-minded competitor.

Filed Under: losses, password sharing, piracy, streaming
Companies: hbo, netflix