No Shit: Groundbreaking Study Shows That Giving People 12% Of The Video Content They Want Doesn't Magically Stop Piracy

from the you-don't-say dept

When it comes to offering good legal alternatives to piracy in the entertainment industry, there are two types of arguments people make. One is that these alternatives, if properly done, will reduce the rate of piracy within a population set. The other is that these streaming options are great revenue sources regardless of the impact on piracy within the population and that increased revenues are all that really matter. What virtually nobody has argued is that if a streaming service barely gives people anything they want, even if that service is free, that piracy will cease to be.

And, yet, researchers from Carnegie Mellon University and Universidade Catolica Portuguesa sought to disprove this non-claim anyway in a recent study.

The researchers used a piracy-tracking firm to get a sample of thousands of BitTorrent pirates at the associated ISP. Half of them were offered a free 45-day subscription to a premium TV and movies package, allowing them to watch popular content on demand.

To measure the effects of video-on-demand access on piracy, the researchers then monitored the legal viewing activity and BitTorrent transfers of the people who received the free offer, comparing it to a control group. The results show that piracy is harder to beat than some would expect.

Subscribers who received the free subscription watched more TV, but overall their torrenting habits didn’t change significantly.

This summary sounds quite damning, particularly for those that would argue that good legal alternatives can reduce piracy. In this case, a free temporary subscription to a streaming service barely had an impact at all. The researchers found that overall TV consumption went up a few points and reduced torrenting practices by a few points. Neither change was a significant one. So what gives?

The video-on-demand service in the study had an average “fit” of just 12% with people’s viewing preferences, which means that they were missing a lot of content. But even Netflix, which has a library of thousands of titles, only has a fit of roughly 50%.

Right, except 50% is a fairly big jump from 12%. Even accounting for the gifted streaming service being free and Netflix carrying a cost, a streaming service that has 12% of what a consumer wants is only barely discernible from useless. The power of Netflix is in how much content it has and, by virtue of its quantity, how much the average person will find on the service that matches their tastes. What this is actually showing is how much damage is done by content providers cutting exclusive deals with streaming services and fragmenting what could otherwise be one-stop streaming services. The real question is what happens when a streaming service actually has the content people want. It's a question this same study actually answers.

“Households with preferences aligned with the gifted content reduced their probability of using BitTorrent during the experiment by 18% and decreased their amount of upload traffic by 45%,” the paper reads.

A nearly 20% reduction in torrent behavior over this short a sample period is really good. It's so good, in fact, that it should be the feature outcome of this study. A streaming platform that is strong on the content people want can cut piracy by a fifth in forty-five days. How is that not the headline?

The rest of the study makes much of how little the pirate households said they'd be willing to pay for a streaming service like Netflix, something like $3/month. This is presented as evidence again in refuting a claim that nobody made: piracy won't magically go away just because there's a good streaming service. But all this result really shows is that these people were never going to be reasonable targets for customership to begin with. Netflix has had a huge adoption rate where available and its been another pure revenue stream for content creators. Who cares what the habits of a bunch of people who can't even manage to pay $3/month for Netflix are? They aren't important. Or, at least, they can't be nearly as important as all of the people who are paying their Netflix subscriptions, resulting in revenue for content creators.

So, will good legal alternatives pop up to reduce piracy? Probably, if they're done well. Will they ever stamp out piracy completely? Nope. Does that matter? Not if the only focus is on making content creators more money, because the focus in that regard should be on making streaming options as successful as possible, which is not what the content companies are doing.

Why they aren't is the real mystery here.

Filed Under: competition, copyright, licensed services, piracy, studies, video

Verizon Will Graciously Now Let You Avoid Video Throttling For An Additional $10 Per Month

from the you're-welcome dept

Back in February you might recall that a little something called competition forced Verizon Wireless to bring back unlimited data plans it had spent the last few years insisting nobody really wanted. But the plans nobody wanted or needed wound up being so immensely popular, they caused some very modest slowdowns on the Verizon network. As a result, Verizon announced last August that it was getting rid of its truly unlimited plan, and replacing it with a series of even worse "unlimited" plans that throttled every video touching the Verizon network. For good measure, Verizon proceeded to ban 4K video streaming entirely.

Fast forward a few months, and Verizon has now introduced a new "solution" to the company's own caveats. Starting on November 3, Verizon will be graciously allowing you to pay them an additional $10 per month to lift these arbitrary and artificial restrictions:

"The company said on Wednesday that it would offer the option for consumers to stream 4K quality video -- if they're willing to pay $10 extra a month. The option becomes available on Nov. 3.

The nation's largest wireless carrier by customers walked back its move from two months ago, when it introduced several new variants of its unlimited data offering -- but restricted video to only 720p quality. The cheapest version of the plan reduced video down to DVD quality. The carrier faced backlash from some consumers who complained about the quality cap.

Charging you more money to obtain the truly unlimited connection you used to enjoy has become pretty standard procedure. In 2016, Sprint began throttling video, games and music unless users paid them an additional fee. The vagueness of our existing net neutrality rules opened the door to this kind of behavior, and once the FCC belatedly began realizing these kinds of arbitrary limitations could be used anti-competitively late last year, Trump and FCC boss Ajit Pai had arrived on the scene, eager to gut net neutrality rules entirely.

The problem is that once you open the door to carriers building arbitrary restrictions as to what you can do on the network -- and charging you arbitrary fees to get around them -- it will never stop. Investors demand their improved quarterly returns, and the pressure will be unyielding to use these kinds of arbitrary restrictions to nickel and dime consumers in perpetuity. And with the looming Sprint T-Mobile merger reducing sector competition, and the Trump administration acting as little more than a mindless rubber stamp for the interests of the sector's biggest carriers, there's not going to be a whole lot in place to stop it.

Filed Under: net neutrality, throttling, unlimited, video
Companies: verizon

AT&T Spent Hundreds Of Billions On Mergers And All It Got Was A Big Pile Of Cord Cutters

from the synergies,-yo dept

Over the last few years AT&T and Verizon have been desperately trying to pivot from stodgy, protectionist old telcos -- to sexy new Millennial media juggernauts. And while this pivot attempt has been notably expensive, the net result has been somewhat underwhelming. Verizon, for example, spent billions to gobble up AOL and Yahoo, but its lack of savvy in the space has so far culminated in a privacy scandal, a major hacking scandal, a quickly shuttered website where reporters couldn't write about controversial subjects, and a fairly shitty Millennial streaming service even Verizon's own media partners have called a "dud."

AT&T's efforts have been notably more expensive, but just as underwhelming. The company first decided to shell out $70 billion for a satellite TV provider (DirecTV) on the eve of the cord cutting revolution. And the company's putting the finishing touches on shelling out another $89 billion for Time Warner in a quest to gain broader media and advertising relevance. That was paired with the launch of a new streaming service, DirecTV Now, which the company hoped would help it beat back the tide of cord cutting.

But things aren't really working out quite like AT&T planned. The company's stock took a beating last week after it acknowledged it would be facing a 390,000 reduction in pay TV subscribers this quarter. AT&T, in an 8K filing with the SEC, tried to partially blame hurricanes for the mass exodus occurring at the company:

"The video net losses were driven by heightened competition in traditional pay TV markets and over-the-top services, hurricanes and our stricter credit standards. The decline of traditional video subscribers negatively impacts our Entertainment Group revenues and margins, resulting in an adjusted consolidated operating income margin that will be essentially flat versus the year-ago third quarter."

Unmentioned is that AT&T also lost 351,000 pay TV subscribers the quarter before, as the company gets hit harder by cord cutting than most pay TV providers. One of the real reasons for these departures? While AT&T was willing to spend hundreds of billions on megamergers, it has spent the better part of the last decade (especially in places where poor people live) neglecting necessary network upgrades. As a result, in countless markets Verizon & AT&T users on last-generation DSL lines are switching to cable providers for faster broadband, and bundling cable TV service that's priced cheaper than broadband alone.

In short AT&T neglected its core business in order to daydream about matching Google or Facebook's ad revenues, but (so far) lacks the core competency to jump the gap from telecom to Silicon Valley-esque Millennial marketing. Both AT&T and Verizon have spent so many years operating as government-pampered protected duopolies, they believed they could pivot on a dime, ignoring that years of regulatory capture left them with only a few key skills: charging too much for too little, lobbying to thwart competition and bullshit.

To its credit, AT&T was at least willing to take a risk and launch DirecTV Now, a streaming alternative. And while the company did manage to add 300,000 streaming customers on the quarter, those users pay a fraction of what traditional cable TV customers do - and AT&T still saw a net loss of 90,000 pay TV users. Still, most other incumbent pay TV providers have responded to the cord cutting threat by raising cable TV rates (ingenious!) or by pretending to keep pace via the launch of streaming alternatives that are intentionally designed to be underwhelming, lest they cannibalize more lucrative legacy customers.

One of the core problems here is that Wall Street isn't satisfied with ISPs simply doing a good job and making a reasonable profit. The relentless, myopic need for quarterly improvements has companies like AT&T and Verizon trying to use megamergers and vertical integration to magically elbow their way into markets it's unclear they lack the competency for. And only after mindlessly cheering these deals do some Wall Street analysts realize some of these arrangements don't even make coherent business sense given the current market climate:

"Though the company partly blamed recent hurricanes for these trends, MoffettNathanson analyst Craig Moffett notes that weather was only the third of four reasons that AT&T listed. “Heightened competition in traditional pay TV markets and over-the-top services” came first. In other words: cord cutting. “It is becoming increasingly clear that the wheels are falling off of satellite TV,” he writes, meaning that Dish Network might announce similar results."

In an ideal world, AT&T would realize its core competencies (building and maintaining wireless and fixed-line networks) should take priority. That $70 billion spent on buying a doomed satellite TV company could have gone a long way in shoring up broadband service that in many regions still doesn't even meet the FCC's base 25 Mbps definition. But in the world we live in that's simply not sexy enough for Wall Street, and the need to grow simply for growth's sake will likely result in AT&T making even more expensive deals of dubious net benefit down the line. Next up: Waffle House?

Filed Under: broadband, cable, competition, cord cutting, dsl, mergers, satellite, tv, video
Companies: at&t, directv

Disney Pulls Content From Netflix As Users Face An Annoying, Confusing Rise In Streaming Exclusivity Silos

from the drowning-in-monthly-fees dept

On one hand, the increasing number of independent streaming services is certainly a good thing. This increase in competition is finally starting to apply pressure on incumbent cable TV providers to offer greater programming flexibility and to compete on price, even though many cable and broadcast execs falsely believe they can ignore the threat and do the exact opposite. But as everybody and their mother jumps into the streaming game, we're facing a new threat: the rise of fractured exclusivity silos that make consumers hunt and peck to obtain their favorite programs.

Case in point: if you're a fan of a particular program in the modern streaming video age, you first need to check to see if that program or film is available on any of the half-dozen services you may subscribe to, be it Hulu, Netflix, Amazon, CBS All Access, YouTube TV, or any of a myriad of other options. That in and of itself can prove fatiguing on your patience -- and wallet if you're trying to save money over traditional cable. You've then got to see if that content is still actually available, since content licensing results in titles being added and removed in what are often illogical availability windows, adding another layer of confusion.

Now, things are poised to become even more complicated in that regard. Wanting to cut out the middleman, many broadcasters (like CBS, FX or AMC) are busy pursuing their own streaming services, pulling their content from existing available services and forcing users to sign up for yet another monthly subscription. For example, if you want to watch CBS's upcoming new Star Trek: Discovery TV show, your only option will be to sign up for CBS's $7 per month All Access service. Don't want or can't afford another service? Your option is to either go without -- or to pirate the program. Guess which option many choose?

A more recent case in point: Disney announced this week that the company would be pulling its content from Netflix in order to launch its own streaming video service:

CEO Bob Iger told CNBC's Julia Boorstin Disney had a "good relationship" with Netflix, but decided to exercise an option to move its content off the platform. Movies to be removed include Disney as well as Pixar's titles, according to Iger. Netflix said Disney movies will be available through the end of 2018 on its platform. Marvel TV shows will remain. The new platform will be the home for all Disney movies going forward, starting with the 2019 theatrical slate which includes "Toy Story 4," "Frozen 2," and the upcoming live-action "The Lion King." It will also be making a "significant investment" in exclusive movies and television series for the new platform.

On one hand, if you really like Disney content, this may not be a horrible thing for you. On the other hand, if you're only interested in a few Disney titles but already feel you pay for too many streaming services, you could find yourself annoyed. Users are, it goes without saying, cutting the TV cord because they're tired of the poor value proposition traditional cable TV represents. It's not entirely clear you can call it real pricing evolution if you replace one bloated, giant cable bill with an ocean of smaller charges that ultimately cost you the same if not more than your old cable TV subscription.

And while it's not entirely clear how many monthly fees and subscriptions users are willing to tolerate, it is abundantly clear that broadcasters and cable companies intend to push their luck and figure out the answer. Not many seem to realize that should they push too hard and cordon off content into an ocean of annoying exclusivity silos, the end result will drive users back to the simplicity of piracy. And that's a particular shame given all the work it took to wean consumers off of file trading services like BitTorrent and on to "legitimate" monthly streaming subscriptions in the first place.

There's a fine line here as we shift from traditional cable to over the top streaming, and it's precisely the kind of line the traditional cable and broadcast industry loves to trip face-first over.

Filed Under: content, movies, silos, streaming, tv, video
Companies: disney, netflix

Moral Panics: Don't Blame Facebook Because Some Guy Posted His Murder Video There

from the get-a-grip dept

As you've probably heard by now, on Sunday a horrific act of violence happened when a clearly disturbed individual apparently decided to (1) randomly murder an elderly man walking down the street, (2) film the entire process from searching for the guy, approaching him, talking to him and then shooting him, and (3) upload it to Facebook for people to see. The police initially reported that he streamed the murder live, but it was later clarified that, while he had streamed some other commentary live earlier in the day, the murder was filmed separately and then uploaded. Still, as happens all too often in these situations, people are immediately jumping to the moral panic stage and asking, as Wired did quickly after, what kind of responsibility Facebook should take. The title of the article says that Facebook "must now face itself" for streaming the murder -- but then seems to have trouble explaining just what it needs to face (perhaps because... there isn't anything for it to face).

And when the manhunt is over, and the grieving begins, so too will Facebook’s soul-searching.

Facebook is not the first media company to struggle with the prospect of unwittingly broadcasting violence shortly after being uploaded. When news anchor Christine Chubbuck killed herself on live TV in 1974, the station was unable to stop the event from airing, but never showed the footage again. The number of viewers who actually saw the event was minimal. Facebook has taken similar steps, pulling Stephens’ video shortly after it was posted. “This is a horrific crime and we do not allow this kind of content on Facebook,” the company said in a statement. “We work hard to keep a safe environment on Facebook, and are in touch with law enforcement in emergencies when there are direct threats to physical safety.”

Uh, right. So... what else does anyone expect Facebook to do? It's not like it can magically stop murders. Or stop people from initially uploading or streaming a murder video. Yes, it can (and does) take those down, and it can (and does) block re-uploading. But to pin this on Facebook seems... really, really weird. It's almost as if whenever there's a murder people want to find someone or something else to blame other than the person doing the killing.

The article kind of admits, later on, that expecting Facebook to do anything is impossible... but that just raises the question of why write a whole article asking what Facebook should do if the answer is "uh, it can't and shouldn't do anything."

Facebook, of course, is a decentralized system, with millions of freelance “reporters” with unfettered access to the public. By the time the company removed the video, thousands had already watched it, and it lives on in other corners of the internet. Meanwhile, the company has resisted calls to use its algorithms to censor videos like this before they are ever posted–not just because it does not want to be accused of violating speech rights, but also because training computers to identify real-time or recent murder is hard. Facebook has long relied on an army of humans to scour videos uploaded to its site. With videos, and especially Live videos, that job goes from hard to impossible—not even Facebook employees can watch a video before it posts.

Currently, Facebook relies on other Facebook users to flag videos that need to be taken down. But that means that someone has to watch the horror before others can be spared it. The onus falls to the viewers, not the company, to determine what is appropriate, what should be shared, and what should be flagged for removal. Traditional media companies have finely-wrought guidelines and policies to help them make these decisions, but Facebook depends on us to do it.

But even after basically admitting that this is an impossibility, the article still then says:

And now it might very well be time for the company to roll up its own sleeves and get to work.

And get to work doing what exactly? Again, Facebook isn't going to stop a murder. And I don't care how good the AI gets, it's unlikely any time soon to say "hey, that video is some person killing another person, don't stream that." There is no sleeve rolling to do on the Facebook side of the equation and even exploring this question seems silly. Yes, senseless murders and violence lead people to go searching for answers, but sometimes there are no answers. And demanding answers from a random tool that was peripherally used connected to the senseless violence doesn't seem helpful at all.

Filed Under: facebook live, murder, platforms, responsibility, video
Companies: facebook

AT&T, Verizon Feign Ethical Outrage, Pile On Google's 'Extremist' Ad Woes

from the manufactured-outrage dept

So you may have noticed that Google has been caught up in a bit of a stink in the UK over the company's YouTube ads being presented near "extremist" content. The fracas began after a report by the Times pointed out that advertisements for a rotating crop of brands were appearing next to videos uploaded to YouTube by a variety of hateful extremists. It didn't take long for the UK government -- and a number of companies including McDonald's, BBC, Channel 4, and Lloyd's -- to engage in some extended pearl-clutching, proclaiming they'd be suspending their ad buys until Google resolved the issue.

Of course, much like the conversation surrounding "fake news," most of the news coverage was bizarrely superficial and frequently teetering toward the naive. Most outlets were quick to malign Google for purposely letting extremist content get posted, ignoring the fact that the sheer volume of video content uploaded to YouTube on a daily basis makes hateful-idiot policing a Sisyphean task. Most of the reports also severely understate the complexity of modern internet advertising, where real-time bidding and programmatic placement means companies may not always know what brand ads show up where, or when.

Regardless, Google wound up issuing a mea culpa stating they'd try to do a better job at keeping ads for the McRib sandwich far away from hateful idiocy:

"We know advertisers don't want their ads next to content that doesn’t align with their values. So starting today, we’re taking a tougher stance on hateful, offensive and derogatory content. This includes removing ads more effectively from content that is attacking or harassing people based on their race, religion, gender or similar categories. This change will enable us to take action, where appropriate, on a larger set of ads and sites."

As we've noted countless times, policing hate speech is a complicated subject, where the well-intentioned often stumble down the rabbit hole into hysteria and overreach. Amusingly though, AT&T and Verizon -- two U.S. brands not exactly synonymous with ethical behavior -- were quick to take advantage of the situation, issuing statements that they too were simply outraged -- and would be pulling their advertising from some Google properties post haste. This resulted in a large number of websites regurgitating said outrage with a decidedly straight face:

"We are deeply concerned that our ads may have appeared alongside YouTube content promoting terrorism and hate," an AT&T spokesperson told Business Insider in a written statement. "Until Google can ensure this won’t happen again, we are removing our ads from Google’s non-search platforms."

"Once we were notified that our ads were appearing on non-sanctioned websites, we took immediate action to suspend this type of ad placement and launched an investigation," a Verizon spokesperson told Business Insider. "We are working with all of our digital advertising partners to understand the weak links so we can prevent this from happening in the future."

Of course, if you know the history of either company, you should find this pearl-clutching a little entertaining. In just the last few years, AT&T has been busted for turning a blind eye to drug dealer directory assistance scams, ripping off programs for the hearing impaired, defrauding government programs designed to shore up low-income connectivity, and actively helping "crammers" by making scam charges on consumer bills harder to detect. Verizon, recently busted for covertly spying on internet users and defrauding cities via bogus broadband deployment promises isn't a whole lot better.

That's not to say that all of the companies involved in the Google fracas are engaged in superficial posturing for competitive advantage. Nor is it to say that Google can't do more to police the global hatred brigades. But as somebody who has spent twenty years writing about these two companies specifically, the idea that either gives much of a shit about their ads showing up next to hateful ignoramuses is laughable. And it was bizarre to see an ocean of news outlets just skip over the fact that both companies are pushing hard into advertising themselves with completed or looming acquisitions of Time Warner, AOL and Yahoo.

Again, policing hateful idiocy is absolutely important. But overreach historically doesn't serve anybody. And neither does pretentious face fanning by companies looking to use the resulting hysteria to competitive advantage.

Filed Under: ads, extremism, moral panic, pearl clutching, search, video
Companies: at&t, google, verizon, youtube

Mexican Government Officials Have Press Creds Withdrawn From Olympics Over Uploaded Cell Phone Footage

from the still-the-most-live-olympics? dept

We've been detailing the ridiculous lengths the IOC and other Olympics organizations go in bullying others with their super special intellectual property protections. It's always quite stunning to watch an event supposedly about fostering international cooperation and sporting devolve into a mess of commercial protectionism, speech-stifling threats, and the kind of strong-arm tactics usually reserved for members of organized crime groups.

But I will give these Olympic goons credit: they appear to consider their bullying a matter of principle, deciding not to go any easier on an entire group of Mexican government officials because one of them uploaded one video of one Mexican athlete to a social media account.

According to a report by Mexico’s Eluniversal, the Rio Organizing Committee has taken the decision to withdraw press credentials from Mexico’s National Commission of Physical Culture and Sports (Conade) following a copyright dispute.

The publication says that Conade violated licensing conditions put in place by the International Olympic Committee (IOC) after one of its members filmed the gymnast Alexa Moreno using a cellphone. The video was subsequently posted to social media. According to the Committee, Conade failed to obtain the necessary rights to broadcast Olympic content, so in retaliation nine Conade members, who work for the Mexican government, had their press credentials taken away.

Yes, why didn't this government person secure the rights to take a cell phone video of one of their country's own athletes competing in an event? Didn't he or she know that the Olympics operates in a time-bubble, where the things the rest of the world does every day, like upload short videos to Facebook, don't happen?

Making this more hilarious is that Conade is a government group specifically tasked with promoting athletics within Mexico.

While the Committee probably felt it needed to set an example, taking away the credentials of the Conade staff will be felt back home in Mexico. Conade is the arm of the Mexican government charged with promoting physical education and sport in the country. Before their punishment, they were also the conduit between the Games and their countrymen.

But while the Rio Organizing Committee punishes the whole of Mexico for the sharing of a single video, thousands of people are sharing recorded events at will on sites such as The Pirate Bay.

Because nothing says international cooperation like petulantly nixing the press credentials of a country's government representatives for uploading a single cell phone video while pirate streams and video sharing go on elsewhere unabated. Gold medal.

Filed Under: mexico, olympics, press credentials, social media, video
Companies: conade

Why Is The Copyright Office Lying To Protect The Cable Industry's Monopoly Stranglehold Over The Cable Box?

from the defenders-of-the-status-quo dept

"The Office's principal reservation is that, as currently proposed, the rule could interfere with copyright owners' rights to license their works as provided by copyright law, and restrict their ability to impose reasonable conditions on the use of these works through the private negotiations that are the hallmark of the vibrant and dynamic MPVD marketplace."

"Once a copyright holder has released their work to paying customers, like cable subscribers, those customers have their own set of rights: to view TV programs at home or on the go, to skip around within the programs as they wish, to search for and organize the programs and other content they’re entitled to see, and to choose tools that enable them to do these things.

The Copyright Office’s letter implies that cable and content companies could create new rights for themselves just by writing them into private contracts between each other: the right to control which “platforms and devices” customers can use, the right to limit time-shifting and other fair uses, and the right to “exclude” other software from a customer’s device. While private companies are free to negotiate conditions like these between each other, nothing in the law gives copyright holders the power to impose those conditions on the whole world, snuffing out the rights of users.

"Under the Copyright Office's analysis, the interests of consumers are irrelevant, and fair use is an obstacle to be overcome. This letter is another example of how the Copyright Office has become dedicated to the interests of some copyright holders -- as opposed to providing an accurate interpretation of copyright law."

Filed Under: competition, copyright, copyright office, fair use, public rights, restrictions, set top boxes, video