Will Content Company Greed Destroy The Pay TV Business?

from the it's-getting-there... dept

While we've noted that the various studios, such as NBC Universal have, in the past, laughed off the idea that people would ever cancel their cable TV service in favor of just getting their content online, they're clearly waking up to the problem. That's why they freaked out about services like Boxee, despite the fact that Boxee is just a TV-optimized browser for legal content. Still, Saul Hansell, over at the NY Times, gets to the heart of the matter, by noting that the content providers have kept jacking up their prices to cable providers, and those costs keep getting passed on to users. Right now, it hasn't been a clear problem, as subscribers have increased, but the costs keep getting higher, and it's eventually going to drive customers to seek alternatives. We've seen this in the past, of course: Hollywood execs try to squeeze more and more out of people now with no thought for how that will impact revenue in the future. That's not a very good way to run a business, and the TV content providers are going to start discovering that sooner rather than later, if they don't start paying attention.

Filed Under: cable companies, content, internet, tv

Techno Slap Chop Informercial Remix... Infringement Or Brilliant?

from the welcome-to-the-world-today dept

Xanthir writes in to point to this Guardian article about viral videos that highlights the "Rap Chop" video that's currently got over a million views on YouTube. If you haven't seen it (and I hadn't), it's basically taking a silly infomercial for an "as seen on TV" chopping device, which you can see here: ... and remixed it into a techno tune, with some music, cuts and (of course) Autotune to turn the guy's voice into music, and you get this: As both Xanthir and the writer at the Guardian note, after watching the remix, they felt like buying the device. Either way, once again, we're seeing the convergence of a few different topics we tend to talk about here, including the creativity of remixed content and the benefits of making advertising into really good and desirable content, so it doesn't even feel like advertising. And, of course, there are copyright questions. The video is almost certainly infringing on the original, but it's yet another example where it would be a bad idea to try to enforce the copyright (and it doesn't look like the company has even tried to do so, which is good).

Filed Under: advertising, content, copyright, remix, slapchop

Bad Business Advice: Always Look To Charge For Content

from the if-you-want-to-fail... dept

A few people have sent in the NY Times story supposedly about the "free vs. paid" debate that quotes some business school professors giving what appears to me to be awful advice:

Eric J. Johnson, a professor at Columbia Business School, said he had been amazed by media companies repeatedly adding free online services, like on-demand video. "Before you add something to your site, you should say that if consumers really want it, that should be part of a package that you could charge for."

That's looking only at one side of the equation and is doing so in a dangerously short-sighted way. Rather than saying "hey, if people want this, we should charge for it," why not actually look at the larger ecosystem? Why not recognize the added value that can be added if it is free and how that can enable other business models? The problem is that professors like Johnson are basically pushing the idea that a media company is a "content company," rather than a company that's building a community. It focuses on the belief that the content is the final product. It's not. It's never been the final product. If you have open and available content, that allows users to make it more valuable by sharing it, spreading it, annotating it, commenting on it and building off of it. You can't do that when you put it behind a paywall. Content behind a paywall is less valuable to most people. So why would people pay for content that is less valuable?

The problem is focusing so much on the product rather than on the real benefit. Having the content free enables so much else. And if you focus on charging, all it does is open up an opportunity for others to step in and provide that value, and sap away the "paying" users. Focusing just on the pay question and ignoring the value side of the equation is a recipe for trouble.

So, rather than the NY Times "debate," perhaps check out what the site Hypebot did, which was note that the "debate" is already over. It's not about whether or not there should be "free" content, but that the economics and the market are clear: it will be free. So, with that in mind, it put together a whole series of thoughts from different folks about ways to embrace "free" as a part of larger business models. There's plenty of good stuff to read there.

Glenn Peoples, at Billboard, also picked up on the discussion, which is great, though I'd like to challenge one thing he wrote, complaining about Chris Anderson's take on "free":

Anderson did not draw enough distinction between marginal cost -- which in the case of digital distribution is zero -- and average cost. When Anderson writes that "the marginal cost of digital information comes closer to nothing," what he means is the marginal cost of distributing that digital information. There are significant costs in recording music. The cost of creating a brand and inducing awareness, other considerations Anderson understates, are both unavoidable and considerable. An insignificant cost of creating and distributing one more digital file does not reflect the amount of investment to be recouped.

While I don't want to speak for Chris, he and I have certainly talked about these things, and I believe that Peoples is misstating Chris' point on all of this. As we've discussed here before, no one is ignoring the cost of creation or the cost of those other things. We're simply stating the economic fact that none of those things matter in terms of final price. This isn't how we want things to be. It's how economics works. Price is influenced by marginal cost. That's it. Price is not influenced by fixed costs (or average costs). That's not because of what Chris says or what I say. It's how a market works, no matter how anyone thinks things should be.

That doesn't mean you ignore the fixed costs or the average costs. Obviously, you do need to pay attention to those for the sake of making sure there's an ROI where you need it. But that's where you look at your overall offering rather than focusing so narrowly on just the content. So if you can take the content (as you can) and make it free, and use that to drive up interest and value in other scarce products you can sell, then that's where it matters. And, as for the question of "the costs in recording music," we (here at Techdirt) have certainly addressed that at great length: the creation of content is in fact a scarce good. And you can charge for it -- and many have. Jill Sobule is a perfect example of this, getting people to pay to create a new album. Other models work as well, including having brands help pay for the creation of music. There are lots of models that work -- and they don't conflict with or negate the fact (not opinion) that the content itself will have its price driven towards free.

Filed Under: business, business models, charging, content, economics, free

How Should You React If Someone Uses Your Content Without Crediting You?

from the questions,-questions dept

We here at Techdirt certainly take something of an extreme position when it comes to reusing our words: we won't even stop you if you don't give us credit. But, mostly, that's because we recognize that taking credit for someone else's work is likely to backfire on you, damaging your reputation, and we believe that in the end, you'll regret it. Still, that doesn't make it enjoyable when we see someone trying to pass off our work as their own, so I can certainly understand the reaction of people who get quite upset when it happens. Still, even if you get upset, that doesn't mean you should immediately fly off the handle and threaten legal action. There are much more measured ways to approach it.

For example, Brian points us to a blog post by the folks at Common Craft, who have noticed that many mainstream media sources are using their video about how Twitter works without any credit whatsoever. The content itself is under a Creative Commons non-commercial, no-derivatives license, which it seems clear most of the media properties in question are breaking. Only one (ABC/Disney) actually seems to have followed through on the licensing terms. But still, what's impressive is that Common Craft still takes a very low key approach to it, first noting that perhaps the media's use is "fair use," and then saying:

I'm not writing to make a big hairy deal about the use of the video. The truth is, we're not sure what's appropriate or what to expect

And then asks the community what they think and how they should respond... while also naming the offending parties (NPR, CNN, CBS and KOMO News in Seattle). No matter what you think of the situation, or what Common Craft should do, I think it's fantastic to see yet another case of someone taking a much more measured and reasonable approach to such things, rather than immediately going into "threat" or "cease-and-desist" mode. Personally, I think that the approach they've taken makes the most sense: simply make your community and your fans aware of the situation, and then watch as they help police it for you -- alerting news organizations (most of whom probably didn't even realize they should have credited the video) of their mistake.

Filed Under: attribution, common craft, content, credit

Three Checkboxes To Get People To Pay For Content?

from the pick-two-of-three dept

Jon sends in one of the more amusing opinion pieces written about conditions needed to get people to actually pay for content, written in the Guardian by Paul Carr. You have to get past the drunken bar fight part (which is what makes the article amusing) to the theory, which is that to get people to pay for content, it needs to hit at least two of the following three conditions:

1. An experience that can't be replaced anywhere else for free.
2. Making the purchase incredibly easy (key point: the real "cost" is price + hassle, so lowering the hassle factor is like dropping the cost)
3. At the end, the buyer actually "owns" the purchase, rather than just "accessing" content.

It's definitely an interesting theory -- built mainly off of looking at the success of Tapulous and its iPhone apps. However, I'm not convinced that these three conditions actually will work in the long run. I think they can absolutely work in the short-run, however. The first point, for example, only works so long as the content can't be replicated by others. That's not really true of something like a video game. Either someone can figure out a way to copy it, or even taking unauthorized copying out of the equation, someone else can come up with a similar game and offer it for less (or even free, using a different business model).

The second point definitely does make sense. People absolutely are willing to pay for convenience... but, again, that second point goes away if the first point isn't there. That is, no matter how hassle free the buying process might be, if the experience can be substituted by a free option, then the ease of the buying process probably doesn't matter too much.

The third point is also somewhat in dispute. I do agree that if people are paying for "content," it's important that they get some sort of ownership and control over it, but I actually think that there's something to paying for access, depending on what that access is. Access to content? Eh. Access to people, however... is quite different.

So, while I'm not convinced that these three checkboxes work, it still makes for an amusing and worthwhile read if you're trying to understand these sorts of business models.

Filed Under: content, paying for content

The Hulu/Boxee Battle Continues To Go Back And Forth

from the give-it-up-hulu dept

On Friday morning, we wrote that Boxee had come up with a workaround to get Hulu content accessible again via Boxee. Basically, it just started accessing the content via Hulu's RSS feed: which is exactly how the RISS feed was meant to be used. It's just that the Boxee software would act as the "reader" of choice. It was difficult to see how Hulu could complain without appearing ridiculous: it would effectively have to say that only certain RSS readers could use it's feed... and that's exactly what the company did. By Friday evening, Hulu had a technical block in place. Of course, it didn't take long for Boxee to figure out a workaround to that block, and supposedly (at the time I'm writing this) the service is back -- though, Boxee has now added a little indicator to its software to let you know whether Hulu is accessible or not...

Everyone knows that Hulu's content partners are actively trying to block Boxee, but it's extremely difficult to see what their complaint is. Boxee is simply a different browser, accessing the content exactly as the companies offered it. Users of Boxee can still access Hulu on their computer, it's just in a less friendly UI. All this really does is make plenty of legitimate TV watchers decide to go elsewhere for the content. It simply makes no sense to say Boxee can't access Hulu. It would be like CNN denying mobile web browsers from accessing its site.

Filed Under: content, tv, video
Companies: boxee, hulu

The Goldilocks Argument For Regulating Online Content In Canada

from the too-much,-too-little dept

The attempts by some Canadian TV writers and actors to get Canadian regulators to regulate internet content is seen by many as pretty ridiculous. The arguments make almost no sense, and seem to center on the idea that there's so much content online, that no one can find Canadian content unless (a) ISPs pay extra to fund it and (b) certain sites are forced to promote Canadian content. What's never explained is what's wrong with option (c): make good content that people want to see. That option would solve all the other issues.

That said, Rob Hyndman points us to a great analysis showing just how ridiculous it is to think that the CRTC needs to regulate online content:

Once upon a time there were only four or five television channels. Hardly anyone had the money to broadcast a television signal, and if anyone did, there were only so many spots available on the dial.

In such a world of "spectrum scarcity," it was argued, government regulation was essential to ensure a diversity of content--and, in Canada, to ensure that some of that content was Canadian. Or as the cultural nationalists had it, to make it possible for Canadians to "tell ourselves our own stories." This was the world in which the CRTC was born.

Flash forward 40 or 50 years, to a very different world. Not only are there now hundreds of conventional television channels catering to every conceivable taste, but with the advent of Internet broadcasting the constraints of cost and spectrum have disappeared. There are literally hundreds of thousands of Canadian websites, each of them, post-YouTube, potentially a broadcaster in its own right. It is now possible for any Canadian with a video camera and a laptop to transmit to every other Canadian. And the cultural nationalists' response? This just makes the case for more regulation.

It's a great point, and it's something I call the "goldilocks argument" for regulation. The original content regulations were because there was "too little" content that could be delivered over TV. Thus, there "needed" to be regulation to ensure that in that limited and scarce space, that some of it would be Canadian. But the argument now is the reverse. It's that there's "too much" content online, and thus it's hard to find good Canadian content (apparently, some people up north haven't discovered Google). So, the argument seems to be that the CRTC is needed to make sure the content is "just right" whether there's too little content or too much content available.

Filed Under: canada, colin mochrie, content, internet, regulations
Companies: crtc

Associated Press Considers Locking Up Its Online Content

from the hello,-opportunity dept

You can almost hear Reuters, CNN, UPI and a few others laugh maniacally over the news that the Associated Press is considering locking up its content. The Associated Press has a pretty long history of not having much of a grasp about how the economics of information works online, and this is the latest evidence. It wouldn't happen for a while -- because many online sites, including Google, have deals with the AP to present its content online for free. But, if the AP suddenly forced all partners to lock up their content, a couple of things would happen pretty quickly: other sources, such as those listed above, or new startups, would quickly jump into the void, thrilled that their largest "competitor" dropped out of the space. Yes, the AP is slightly different than those other players, in that it's a collective of newspapers sharing content, rather than a truly separate operation -- but functionally, they serve similar purposes. CNN, in particular, has made it clear that it would like to take on the AP with a wire service -- and having the AP lock up its content would make much easier for them.

Also, I know we point this out every time some clueless news exec claims that users need to pay, but it's worth mentioning again: nowhere do they discuss why people should want to pay. Nowhere do they explain what extra value they're adding that will make people pay. Instead, they think that if they put up a paywall, people will magically pay -- even though the paywall itself is what takes away much of the value by making it harder for people to do what they want with the news: to spread it, to comment on it, to participate in the story. Until newspaper execs figure this out, they're only going to keep making things worse.

Filed Under: content, paywall
Companies: associated press

Canadian TV Industry: Please, Regulators, Make The Internet More Like TV... And Have ISPs Give Us Money

from the how-to-break-the-internet-in-one-easy-step dept

Last week, we wrote about how the Writers Guild of Canada was pushing government regulators to force ISPs to fund content creation, with a specific focus on promoting Canadian content and trying to tone down or keep out non-Canadian content from online sources. This seemed pretty ridiculous, but the Canadian Radio-television Telecommunications Commission (CRTC) is in fact holding hearings on the issue.

Perhaps the most ridiculous is Canadian comedian Colin Mochrie, who is making pretty much a mockery of the whole thing by whining about how Canadian content will get buried if ISPs don't pay extra to create and "broadcast" Canadian content. Perhaps Mochrie hasn't noticed, but ISPs aren't like TV networks. They don't choose what content they air. They are the conduit. Mochrie's complaints get more and more silly the further he goes:

Unlike television, when you are broadcasting through new media, the space for content is practically endless. However, being endless, content can easily get lost. So how do we make sure Canadians can find our own content? How do we make sure Canadian content is featured and given "shelf space"?

How about by making the content good so people want to see it no matter where they're from? Or, if he wants to go fund a website that just highlights Canadian content, he's free to do so. It wouldn't even cost that much, thanks to the wonders of the internet. And that's before Mochrie just starts making stuff up:

Most of what we do on the Internet falls under the definition of "broadcasting" and that percentage grows daily as we turn to our laptops, iPods and mobile phones to watch our favourite programs.

No, actually. Most of what people do on the internet falls under the definition of "communications." A small amount falls under "broadcasting," but even then it tends to be a lot more interactive than traditional broadcasting. The broadcasting companies have jumped onto the internet bandwagon (much too late, of course), but they should learn to adapt to the platform -- not force the entire platform to become TV 2.0.

Mochrie goes on to make the argument that basically anyone offering content in Canada needs to be regulated -- meaning forcing them to show Canadian content, and that ISPs and wireless operators should be forced to fund this content? Why? Who needs reasons! It's for the good of Canadian culture or something.

In the meantime, while we agree with ISPs like Rogers, who are protesting any such move, it is worth pointing out how hypocritical they're being as well. Rogers is protesting any such rule by claiming "We're a dumb pipe" who can't be expected to "regulate" the content shown over their network. However, as Michael Geist points out, when it comes to traffic shaping, Rogers has no problem claiming it's "smart" enough to figure out what to shape and block. So which is it?

This whole debate is rather silly of course. Starting to regulate content on the internet would serve to severely damage internet services and culture in Canada -- bringing all of the disadvantages of protectionist cultural policies and knocking out most of the benefits of the internet. Hopefully the CRTC knows better than to follow folks like Colin Mochrie.

Filed Under: canada, colin mochrie, content, internet, regulations
Companies: crtc

Content Is Advertising; Advertising Is Content... On SNL

from the blurring-boundaries dept

If you're in any business that relies on "advertising" for revenue, you need to stop thinking of it as advertising -- and start realizing that advertising and content are the same thing. All traditional "advertising" is content -- and if you want anyone to pay attention to it, it had better be good content. At the same time, all traditional "content" is advertising -- it's just a question of what it's advertising. But as more companies recognize this, we're going to see an increasingly blurry line between advertising and content. While some purists decry this situation, they shouldn't worry so much. It will improve both the overall quality of the "content" that you see all the time in two ways: it will allow for better financing of that content and it makes sure that the formerly "bad" advertising content isn't sustainable and goes away.

Reader James Thomas sends in an example of this blurring of the lines that occurred recently with Saturday Night Live. Apparently, on the SNL the night before the Superbowl, there were three skits "MacGruber" skits (a parody of the popular classic TV show MacGyver) each of which had a totally over-the-top promotion of Pepsi. That part may seem like traditional product placement (though, oddly over the top), but the interesting part was that the next night, during the Superbowl, NBC actually showed one of those sketches during a commercial break. In other words, the sketch itself was then repurposed as "commercial" content -- thus blurring the lines completely. I'm not sure how effective this was (personally, I don't find the MacGruber skits funny at all), but it does demonstrate some of how things are changing. If you did the same thing with content that actually was enjoyable, I could see it getting a much better reaction.

Filed Under: advertising, commercials, content, content is advertising, saturday night live
Companies: nbc, pepsi