Tidal Sued For Unpaid Royalties And Cooking The Streaming Counts

from the welcome-to-the-club dept

It's been no secret that Tidal, Jay-Z's foray into the music streaming business, hasn't exactly had the success it was supposed to have. In the wake of all the angry sentiment about just how much other streaming services were paying musical artists, Tidal positioned itself as artist-friendly, the option for fans that want to make sure musicians get paid. It sounded great, except now Tidal finds itself joining the club of streaming services facing legal action over artist royalties.

Over the weekend, Yesh Music Publishing and John Emanuele (of the duo American Dollar) filed a lawsuit against Tidal for $5 million. The lawsuit claims that Tidal licensed at least 118 songs by American Dollar without the group’s permission and hasn’t paid the royalties it owes for streaming the songs. The complaint also says Tidal is “deliberately miscalculating” its per-stream royalty rates and failing to send reports to the American Dollar about streams of their songs.

If this all sounds incredibly familiar, it should, because these are the same accusations leveled against the other streaming services. This particular action is similar to David Lowery's suit against Spotify, in that it appears to revolve around mechanical licenses for compositions used in streaming music. While Tidal will likely argue that it properly licensed the works via its agreement with the Harry Fox Agency and via Section 115, it's not exactly settled that streaming services are covered by Section 115. Under Section 115, Tidal would serve a "notice of intention", or NOI, in order to get the license if it is unsure of whom it should be paying royalties to for a given composition. Tidal, like many streaming services, works with a third party to manage their licensing and NOIs for them (more on that in a moment). Indeed, the suit directly claims that no NOIs were filed, but sadly doesn't include the Exhibits in that PDF so that the reader could determine exactly which compositions are in question in this case.

Defendants failed to serve NOIs or timely NOIs for Plaintiffs’ and the Putative Class’ Copyrighted Compositions. Defendants’ failure to serve NOIs before the start of distribution precludes the creation of a compulsory license, and it does so both as to copies distributed prior to service and as to copies distributed thereafter. The tremendous power granted to Defendant under Section 115 is balanced by the strict obligations regarding notice. Defendant intentionally failed to adhere to its Section 115 obligations, while enjoying all of the benefits afforded by Section 115.

The filing goes on to acknowledge that Tidal has a third-party administrator managing the royalty payments and serving NOIs for them. That third-party is the Harry Fox Agency, the same company that was involved in Lowery's Spotify suit, along with a company called Music Reports. The suit claims that Tidal's ownership is named on the suit because those ownership entities "know full well that Harry Fox and Music Reports do not even try to serve NOIs...or calculate proper mechanical royalty rates unless expressly directed."

On top of this, the suit claims that Tidal is being shifty with how royalties are both calculated and reported.

Defendants’ systematic underpayment of royalties was done in several ways. First Defendants deliberately miscalculating the per-stream royalty rates by including millions of streams Defendants do not pay royalties in the calculation. This diluted the paid per-stream rate for royalty payments by up to 35%. Next Defendants systematically undercut the calculation of mechanical royalties to Plaintiff and the Putative Class by illegal deals with equity investor partners 65. Finally, Defendants failed to serve monthly detailed reports as required by the statute.

Tidal, as expected, is pointing back to the third-parties as being responsible.

TIDAL is up to date on all royalties for the rights to the music stated in Yesh Music, LLC and John Emanuele’s claim and they are misinformed as to who, if anyone, owes royalty payments to them. As Yesh Music, LLC admits in their claim, TIDAL has the rights to the Master Recordings through its distributor TuneCore and have paid TuneCore in full for such exploitations. Their dispute appears to be over the mechanical licenses, which we are also up to date on payments via Harry Fox Agency our administrator of mechanical royalties.

The entire catalogue in question streamed fewer than 13,000 times on TIDAL and its predecessor over the past year. We have now removed all music associated with Yesh Music, LLC and John Emanuele from the service. This is the first we have heard of this dispute and Yesh Music, LLC should be engaging Harry Fox Agency if they believe they are owed the royalties claimed.

Except, again, nobody seems to agree on whether or not Section 115, the basis for the compulsory license, applies to streaming sites like Tidal.

But the larger lesson in all of this is just how certain a thing it is that any new service that is in any way disrupting will be targeted and vilified. Keep in mind that Tidal was supposed to be the artist-friendly streaming service for music -- the one that artists would be excited to work with, rather than those other guys. And here we are, not terribly far from the birth of the service, finding the same attacks from artists on it as were levied against the incumbent streaming services. Either the artist-owned Tidal tried to be artist-friendly but couldn't because of the insane nature of music licensing, or the artist-owned Tidal found being so-called "artist-friendly" to be impossible in the modern era of music services. Either way, the cure for this isn't more vilification of streaming services, it's getting copyright and licensing on sane, stable ground.

Filed Under: american dollar, compositions, compulsory licenses, copyright, john emanuele, mechanical licenses, noi, section 115, streaming
Companies: harry fox agency, tidal, yesh music publishing

Grammy's Can't Get Streaming Or Audio Right, But Assure You That Free Spotify Is Kinda Like ISIS

from the say-what-now? dept

We already wrote about how CBS fucked up internet streaming of the Grammy's on Monday night, but a few folks have sent in the various stories about how Grammy's boss Neil Portnow did his now annual whine about how evil tech companies don't pay musicians enough, and how if we don't start giving musicians more money ISIS will win and the 12 year old who just performed on piano might starve or something. The crux of his talk was to whine that when people stream a song it might earn those associated with the music "a fraction of a penny" and somehow that's unfair:

"So, what does hearing your favorite song mean to you?" asked Neil Portnow, the president of the National Academy of Recording Arts and Sciences, which awards the Grammys.

He then explained that when people use streaming-music services, the artists and others behind those songs earn "a small fraction of a penny" per song.

"Isn't a song worth more than a penny?" he asked, as the audience cheered. "You bet. Listen, we all love the convenience and we support technologies like streaming that connects us to that music. But we also have to make sure the creators and artists — like Joey over there — grow up in a world where music is a viable career."

Behind him as he said this, was this fabulous clip art visual aid (seriously, can't the Grammy's come up with something a little better as a graphic?) And, yes, there was a weird reference to ISIS and the Paris attacks as a reason for paying musicians more. While there may have been applause inside the theater, the line seemed to flop everywhere else:

...did the RIAA guy just slam Spotify and ISIS in the same sentence?? #GRAMMYs

— ToddInTheShadows (@ShadowTodd) February 16, 2016

grammys have now turned into a spotify attack ad

— josh lewis (@thejoshl) February 16, 2016

Oh my god. This anti Spotify ad at #GRAMMYs is so ridiculous.

— Christina Warren (@film_girl) February 16, 2016

Oh the #GRAMMYs just took a turn down anti-streaming. Doesn't Joey deserve more than a penny? C'mon Larry & Mark!

— Danny Sullivan (@dannysullivan) February 16, 2016

What would the Grammys be without Neil Portnow berating a portion of its audience?

— Chris Barton (@chrisbarton) February 16, 2016

Not sure what that guy at the Grammys is talking about—when I was a kid CDs were 8 for a penny and artists did great pic.twitter.com/FA91DwI5vV

— Dan McQuade (@dhm) February 16, 2016

Of course, the whole penny thing is misleading and ridiculous. It's emotional bullshit that Portnow is using because the truth makes the recording industry who pay his salary look terrible. And it's this: streaming actually pays artists more per listener than other forms of music acquisition. Multiple studies have shown that when you figure out the cost per listen, streaming is higher than radio, CDs or paid downloads. Sure a fraction of a penny sounds like a small amount, but the missing implicit suggestion is that the streaming companies like Spotify are making much more than that per stream. They're not. Spotify pays significantly more than half of their revenue towards licensing (and often the reason musicians aren't getting paid is because the record labels are keeping most of it from the artists.

It also ignores how free streaming services have actually helped bring revenue back into the music industry by decreasing piracy rates drastically and getting people to move to legal options. Demanding ever higher rates only serves to cause these kinds of companies to fail. And all that will do is drive people back to totally unauthorized services where artists and copyright holders don't get any money directly.

Of course, this is the way things always work for the legacy recording industry. They see a new technology -- a technology they didn't support, don't understand, and fought against initially -- suddenly making them some money and they start demanding more and more and more until they kill the golden goose. They do this over and over again. Remember how ringtones were suddenly making the industry money? They kept demanding more money for them, and no one cares about ringtones any more. Or how about music video games? Once again, the record labels started insisting that they weren't getting paid enough, and look at what happened to those games?

It's one thing to negotiate different payment structures, but the constant whining and bullshit about "fairness" when "fair" appears to be something like 200% of any revenue any music tech company makes is beginning to wear a bit thin, don't you think? Once again, these are the same people who fought tooth and nail against any of these technologies, and now that they actually got built AND are helping the industry and musicians actually make some money, these same talking heads whine that it's not enough? Really? Go build your own damn technology service, and you'll quickly discover that it's not that easy. And then maybe they'll stop whining with bullshit claims. But that seems unlikely. The whining never ceases. And yet they call fans "entitled"?

Filed Under: fairness, grammy's, neil portnow, rates, royalties, streaming
Companies: spotify

CBS Streaming Service Chokes On The Grammys, But YouTube Takedown Apparatus Works Just Fine

from the not-really-innovatin' dept

CBS had the perfect opportunity over the extended weekend to show that the company had evolved and was ready to embrace the modern streaming era. CBS had announced that users could watch the Grammy Awards live online on Monday Night -- but only if customers signed up for a trial of CBS' $6 per month "All Access" streaming service. And while not necessarily a bad promotional idea on its surface, it appears that CBS choked completely on the opportunity, with numerous customers reporting that they couldn't even get the stream to start:

Wow. @CBS All Access lasted about 30 seconds before totally crashing. Cool product.

— Dashiell Bennett (@dashbot) February 16, 2016

Some of the problems were thanks to the fact that users eager to watch the stream didn't live in the service's 130 launch market territory. CBS ultimately indicated that the problems that occurred with the stream were thanks to their systems being unable to determine user location, effectively causing the company's authentication systems to implode for many users:

"Some users experienced temporary difficulty accessing the live online feed of the Grammys. Our location services provider had a brief issue verifying user location. That issue has since been resolved and all users are back online,” a CBS Interactive spokesman said."

And while technical glitches happen, this is the same company that has waged war on companies trying to deliver a more innovative, efficient and modern TV viewing experience for decades. This behavior has included suing and whining about Aereo; suing to stop Dish's Hopper ad-skipping technology (and ignoring editorial firewalls over at CNET to hurt said product in the press); whining about Netflix; suing Star Trek fans for expressing their fandom; and constantly threatening to bury over-the-air TV behind the cable paywall unless everybody does exactly what CBS wants.

And indeed, while CBS couldn't get its own streaming service to work, the company's copyright shutdown apparatus worked perfectly well, so that fans of the awards show couldn't watch it anywhere:

@brianstelter and CBS just shut down a bunch of streams on YouTube pic.twitter.com/veGfbj6j7Y

— Austin Blumenfeld (@apblumenfeld) February 16, 2016

CBS' Grammy live stream is a disaster but instead of fixing it they're taking down all the YouTube streams and now I'm missing it 😒

— Abby Dockum (@AbbyDockum) February 16, 2016

So in short, CBS has fought tooth and nail to stop other companies from offering a next-generation viewing experience. And when presented with the opportunity to highlight why CBS should be considered the innovation gold standard, the company tripped on its shoelaces and fell flat on its face. Perhaps CBS should stick to the space in which it's clearly the most innovative: being anti-innovation.

Filed Under: all access, grammy's, streaming, takedowns, tv, tv streaming
Companies: cbs, youtube

Sony Music Issues Takedown On Copyright Lecture About Music Copyrights By Harvard Law Professor

from the getting-meta dept

Oh, the irony. First pointed out by Mathias Schindler, it appears that a copyright lecture about music copyright done by famed copyright expert and Harvard Law professor William Fisher has been taken down due to a copyright claim by Sony Music. Fisher is well-known in copyright circles and has long advocated for a major reform to copyright to effectively spread a compulsive license to other uses, effectively legalizing file sharing, but with systems in place to still have artists paid. He's detailed versions of this proposal in his book, Promises to Keep: Technology, Law, and the Future of Entertainment. That said, this takedown appears to have nothing to do with that whatsoever.

The lecture itself appears to be a part of his online course, CopyrightX, which is available under a Creative Commons Attribution 4.0 License. Thankfully, on the CopyrightX website, there are downloadable versions of the lectures, so I was able to download and watch the full lecture to see what the takedown was about. If you want to follow along at home, the lecture is the third one in section 3. Section three goes into detail on the "Subject Matter of Copyright," and the third lecture is about... "Music." You can download it here.

The lecture itself is 24 minutes long, and the vast majority of it is dedicated to creating and explaining this chart, which shows (partially) the messy nature of music copyright licensing today (as a side note, I really appreciate that Fisher is so thorough as to include under the table "payola" as a part of this chart): However, towards the very end of the lecture, Fisher does play a few sound recording clips to demonstrate a point around cover songs and compulsory licenses (along with his personal opinions on the quality of Stevie Ray Vaughn v. Jimi Hendrix). The clips played are all versions of the Jimi Hendrix classic song Little Wing. You've heard it. In the lecture, Fisher plays approximately the first 45 seconds of the song, from 17:44 in his lecture to 18:31. Then, to demonstrate specific points about cover songs, he plays approximately 15 seconds of a cover by Santana and Joe Cocker. Then about 35 seconds of a version by Stevie Ray Vaughn, and finally about 40 seconds of a version by The Corrs. By my count, a little over 2 minutes of the entire 24-minute video are music clips.

Let's be clear here: this is unquestionably fair use. It's not entirely clear to me if this was an explicit takedown or merely a YouTube ContentID match, but either way there is no reason for YouTube to have allowed this to be blocked. If you run through the four factors test of fair use, all four suggest that it's fair use. The purpose and character of the use is clearly for educational purposes, which the fair use part of the law explicitly calls out as an example of fair use. The "nature" of the work is a song, but that seems to have little bearing here on the fair use question. The amount and substantiality of the portion taken was fairly small -- basically just enough for Fisher to make his point showing the differences between the songs and how that applies to the compulsory licenses issued for cover songs. And, finally, the effect of the use upon the potential market is nil. No one is listening to Fisher's lecture as a "replacement" for going out and getting the Hendrix song, or any other version of Little Wing. And I don't think there's a huge "market" in "licensing music to copyright lectures."

In fact, considering how frequently we hear the RIAA and other copyright system supporters (especially within the recording industry) arguing that what the world really needs is better education on copyright issues so that the public better understands it, it seems particularly stupid to issue a takedown over a free lecture explaining music copyright. But, of course, no one ever suggested that the recording industry is particularly intelligent in how it goes about fighting its peculiar war.

This story is reminiscent of when Warner Music issued a DMCA takedown on a presentation by another famed Harvard Law professor, Larry Lessig. Similar things have happened a few times to Lessig, including one case where Lessig sued in response, seeking a declaratory judgment of non-infringement along with damages under DMCA 512(f), which forbid "misrepresentations" in filing DMCA notices. That case eventually settled, with the record label (an Australian label called Liberation Music) paying a sum of money that went to the EFF. It's unclear what Fisher will do in this situation, but I imagine that as this story begins to get attention, both Sony Music and YouTube may want to reconsider the original move to take down the video.

Filed Under: contentid, copyright, dmca, education, lesson, music, streaming, subject matter, takedown, william fisher
Companies: harvard, sony music, youtube

NHL Streaming Service Descends Into Blackout Hell; NHL Threatens Anyone Trying To Circumvent Blackouts

from the puck-that dept

While we have written quite a bit about major professional sports leagues marching towards expanded streaming options for viewers, and while each league is making progress in that direction, not all of the leagues are equal in how they're going about it. The NHL has been by far the least progressive in this arena, which is somewhat strange given how much more progressive it has been on other issues of modernity. On streaming, however, there seems to be some flip-flopping, with the league banning the use of services like Periscope by journalists, but then seeking to piggyback on baseball's fantastic MLB Advanced Media product to get better streaming to its viewers. The entire point of increased streaming options is to get the product out to as many people as possible, grow the fanbase, and ultimately rake in more money via increased viewership.

Which is what makes is supremely odd to see the NHL fail so hard recently with its streaming product and react to that failure by menacing anyone who might try to route around it. If you weren't already aware, a recent upgrade to the league's NHL.tv product appears to have instituted a refreshed round of blackout rules for games at the exact time when other leagues are attempting to minimize the impact of blackouts. Per Deadspin:

We’ve been getting tips all week from frustrated NHL.tv customers who installed NHL.tv’s new upgrade this week, only to see the entire service dissolve into an malfunctioning mess of blackouts. At pretty much any time when games are on, the @NHLTVSupport account’s mentions are full of hordes of complainers and angry people trying fruitlessly to be able to watch games on the platform they paid $160 for.

In addition to the surprise blackouts suddenly rearing their ugly heads, it appears that NHL.tv is having trouble working across certain devices for whatever reason. Chromebooks in particular appear to be affected, but other devices render the stream into a pixelated hell-scape. This is particularly problematic for a sport that relies so heavily on high-res viewing in order to follow the puck and the action in an arena where color differentiation is much more limited than with other sports.

But adding insult to injury is the all-caps threat clause the NHL slid into the update.

IF YOU CIRCUMVENT OR ATTEMPT TO CIRCUMVENT ANY BLACKOUT RESTRICTION OR OTHER USE RESTRICTION: YOUR SUBSCRIPTION WILL BE SUBJECT TO IMMEDIATE TERMINATION AND A CHARGE OF ONE HUNDRED DOLLARS ($100.00) FOR EARLY TERMINATION WILL BE APPLIED TO YOUR CREDIT OR DEBIT CARD; YOU MAY BE SUBJECT TO LEGAL ACTION; AND THE NHL RESERVES THE RIGHT TO REPORT SUCH MISCONDUCT TO APPROPRIATE LAW ENFORCEMENT AUTHORITIES.

Lovely. So a product that doesn't appear to work as advertised, served up to a customer base that appears to have been ill-informed about the blackout rules subsequently put in place for the product, is now on notice that doing anything to address this beyond waiting for the NHL to get their shit together will lose their subscription, be charged a fine, and be reported to the authorities for legal action.

Not exactly the best way to win over existing and new customers, NHL, particularly given that you're the league that can least afford to lose any fans.

Filed Under: blackouts, hockey, streaming, video
Companies: nhl

Time Warner Eyes Hulu Stake, Wants Service To Remove Current Seasons Of Shows

from the don't-innovate-too-much dept

We've discussed for years now how Hulu is hamstrung by the fact that it's owned by the traditional cable and broadcast industry. Owners 21st Century Fox, Disney and Comcast/NBC have gone out of their way to ensure the service is never too disruptive -- lest it hurt the traditional cable cash cow. And that's been the cable industry's mantra for years now -- crow ceaselessly about how you're "innovating," while simultaneously trying not to innovate too much, lest your customers realize your legacy TV service is absurdly expensive, inflexible, and outdated.

As the industry has slowly realized that it can no longer just pretend cord cutting doesn't exist -- things have improved slightly, with Hulu making a renewed effort to invest in original programming and dramatically broadening its content catalog to better compete with Amazon and Netflix. The company has also listened to consumer complaints and now offers an ad free version -- while placing fewer ads in the ad supported option. Hulu is also attracting new investors, with reports that Time Warner is looking to give a $2 billion cash infusion in exchange for a 25% stake.

But while Time Warner isn't making it a condition of the deal, the company is making it clear that it would like to see Hulu pull current seasons of shows in a misguided belief that it can turn back time:

"Time Warner believes that the presence of full, current seasons on Hulu—or anywhere else outside the bounds of pay-TV—is harmful to its owners because it contributes to people dropping their pay-TV subscriptions, or "cutting the cord." In the discussions about taking a 25% equity stake in Hulu, Time Warner has told the site's owners that it ultimately wants episodes from current seasons off the service, at least in their existing form, although that is not a condition for its investment, according to the people familiar with the discussions.

The problem is that Time Warner would join Comcast in sharing the delusion that you can be both simultaneously disruptive and innovative on the streaming side, while still magically preventing traditional cable customers from noticing and cutting the cord. Comcast was barred from meddling in matters of Hulu management as a condition of its acquisition of NBC, but it's a condition Comcast largely ignored. It's also a seven year condition that will expire shortly after Time Warner seals its new ownership stake, meaning a double dose of myopic, backward-looking leadership at Hulu at precisely the wrong time.

Though many in the insular cable industry ecosystem like to pretend otherwise, it's simply no longer a debate: consumers are increasingly cutting the cord and migrating to cheaper, more flexible viewing options. Traditional TV customers get 194 channels, but they only watch, on average, about 17 of them. 16% of consumers cut the cord last year, while 23% of consumers engaged in "cord-trimming" (reducing their overall cable package) in some way. 57% of those asked, unsurprisingly, say that price is the biggest reason they're looking to shake things up.

It's not an enviable position for the traditional TV industry to be in. To seriously combat cord cutting, it needs to offer a more flexible product at a lower cost -- something that (with a few "skinny bundle" exceptions) it absolutely refuses to do. What we get instead is turf protection (broadband usage caps), a boat load of denial and failed "me too" services like Comcast Streampix that, thanks to fear of cannibalizing the legacy cash cow, are neither here nor there. The problem is, if Hulu isn't willing to offer what consumers want, Netflix, Amazon, or some other company certainly will.

Filed Under: cable tv, disruption, ownership, streaming, streaming tv, tv
Companies: comcast, hulu, time warner

Netflix Mocks NBC's Obsession With TV Ratings Systems Built For A Bygone Era

from the the-wailing-of-the-dinosaurs dept

Last week, NBC executive Alan Wurtzel boldly claimed that Netflix and YouTube weren't threats to traditional cable. His only evidence? Data purchased from a company named Symphony that guesstimates Netflix's closely guarded viewership numbers. That data actually showed Netflix's viewership numbers for its original series are impressive, but found that viewership wanes a little once users get done binge watching. That's it. The data didn't really support Wurtzel's claim that Netflix doesn't pose a threat to traditional cable, NBC was just boasting that it had figured out Netflix's viewership tallies.

Symphony was born out of the well-documented failures by Nielsen to track consumer viewing on new platforms, and not only tracks every viewing habit of some 15,000 Netflix customers, but also uses GPS data to track where these customers are viewing the content. It's a welcome improvement for an industry that spent the last decade paying for data that only told it what it wanted to hear: namely that cord cutting and Internet video weren't a serious threat.

And while trying to understand your competitors makes sense, it's hysterical how Netflix's hidden viewership numbers seem to drive traditional broadcasters absolutely crazy. You'll recall that CBS threw a similar hissy fit last year, clearly upset that Netflix doesn't have to adhere to traditional ratings metrics because it's not an ad-supported legacy service.

Netflix chief content officer Ted Sarandos also spoke at the same Television Critics Association meeting, and first highlighted how it's telling that NBC took its allotted time at the meeting to obsess over Netflix:

"Given what is really remarkably inaccurate data, I hope they didn't spend any money on it," he said of the numbers. "There's a couple mysteries at play for me. Why would NBC use their lunch slot to talk about our ratings? Maybe because it's more fun than talking about NBC ratings. … The methodology doesn't reflect any sense of reality we keep track of."

But then Sarandos went on to make what's probably the biggest point (and one CBS and NBC clearly don't understand): the existing ratings measurement system doesn't matter when you're not reliant on traditional advertising.

"I can't even tell you how many 18-49 users we have … we don't track them," he said. "Those sample sets don't give you a lot of information when people are watching thousands of shows [on Netflix] around the world. Somewhere in the world, every second of every day, someone is pressing start on a Netflix original. … There is not an apples to apples comparison to Netflix watching and any Nielsen rating."

Sarandos noted that the specific numbers — Wurtzel had 4.8 million adults 18-49 watching Jessica Jones, followed by Master of None (3.9 million adults 18-49) and Narcos (3.2 million adults 18-49) — wouldn't even be relevant to his business if they were true. "The ratings themselves have no specific impact on the business," he added. "If we were spending a lot of money on shows people weren't watching, they will quit. People are finding value in how we're spending our content dollars … if they're watching today, tomorrow or seven days from now."

As for NBC's claim that binge watchers always return to watching TV in the "way god intended," Netflix noted in its quarterly letter to shareholders (pdf) that "our investors are not as sure of God's intentions for TV, and instead think that Internet TV is a fundamentally better entertainment experience that will gain share for many years." Obviously the histrionics by broadcast executives surrounding Netflix obfuscating its viewership numbers originate in jealousy; jealously that Netflix gets to operate under a new paradigm where traditional ratings are less important, while legacy sector executives have to stare at charts like this one:

The collapse of broadcast TV ratings. How close to zero before we stop talking about "broadcast", "TV" & "ratings"? pic.twitter.com/4IWnkNAe1J

— Chris Anderson (@chr1sa) January 18, 2016

And while it's great that the traditional cable and broadcast industry is finally cooking up viewer measurement systems that challenge its long-held delusions about cable's infallibility, the petty sniping at Netflix really isn't all that flattering and isn't going to help them compete anytime soon.

Filed Under: streaming, tv ratings
Companies: nbc, netflix, symphony

56% Would Drop ESPN In A Heartbeat If It Meant Saving $8 A Month On Cable

from the goodnight,-sweet-dinosaurs dept

Over the last year, ESPN's decision to laugh off cord cutting has truly come home to roost. The company has had to engage in numerous "belt tightening measures" after losing around 7 million subscribers in just two years. Where are these subscribers going? Many are cutting the TV cord entirely. Others are opting for so-called "skinny bundles" that pull pricier channels like ESPN out of the core cable lineup, moving them to additional, premium channel packs. Companies like Verizon that have experimented with skinny bundles have been rewarded for their efforts with with lawsuits from ESPN.

But there's every indication things will be getting worse for our friends at Disney and ESPN.

A new study commissioned by BTIG Research and analyst Rich Greenfield (registration required) found that 56% of those surveyed would happily ditch ESPN if it meant saving them $8 a month. 60% of females say they would ditch the channel for the $8 discount, while 49% of males would do the same. And while ESPN could pursue a standalone streaming service, 85% of those polled say they wouldn't subscribe at $20 a month, even if it bundled in all of the additional ESPN channels such as ESPN 2 and ESPN 3.

And there are some additional problems with ESPN pursuing a standalone streaming platform. ESPN's recent lawsuit against Verizon revealed that many of the channel's contracts with cable operators restrict them from breaking ESPN out of the core cable bundle; a provision that is nullified if ESPN offers a streaming version of its own. So ESPN could accelerate its own evolution in the face of cord cutting and go straight to consumers, but (at least initially) it would greatly accelerate the company's losses as more cable operators pull ESPN out of the core channel lineup.

The problem is effectively that ESPN has enjoyed more than a decade in an artificial bubble, where, thanks to the inflexibility of cable offerings, users were stuck paying for a channel they never watched. In that bubble, ESPN had no real motivation to adapt, and now the check is coming due thanks to internet video. But with the playing field changes, Greenfield's quick to note that even as a standalone option, there's simply no way that the financials work out (at least nowhere near the level ESPN's used to):

"The reality is that ESPN would likely have to charge dramatically more than $20/month/sub in a direct-to-consumer model, given the dramatic reduction in penetration rates..."The math for a direct-to-consumer offering for a basic cable network does not work, especially for channel(s) with very high monthly fees embedded within the current MVPD bundle. Disney cannot take ESPN direct-to-consumer and they know it, whether they admit that publicly or not. Furthermore, if the multichannel video bundle frays faster than expected and the TV ad market continues to weaken, ESPN's future growth prospects are dim, at best."

As The Weather Channel can attest, there's obviously going to be some casualties in the cord cutting revolution. As some companies like The Discovery Channel have been realizing, one way to ensure customers don't flee under the new paradigm of consumer is to focus on quality, a mysterious new frontier for broadcasters used to getting paid an arm and a leg for delivering the bare minimum.

Filed Under: a la cart, bundles, cable, cable tv, cord cutting, streaming, tv
Companies: disney, espn

VPN Providers Laugh Off Netflix's New Futile War On VPNs

from the Whac-a-mole dept

Last week, we noted that the press spent much of the week hysterically claiming Netflix was waging a massive new war on VPNs and proxies to crack down on out-of-region viewing. Of course if you bothered to actually read Netflix's blog post on the subject, you'd note that Netflix wasn't actually implementing anything new. It was simply taking the same, modest attempts to block VPNs it has been using for several years into the 130 countries it just expanded into. These are, it should be noted, the same systems that Netflix's Neil Hunt just got done telling CES that they don't actually work:

"It’s likely to always be a cat-and-mouse game. [We] continue to rely on blacklists of VPN exit points maintained by companies that make it their job. Once [VPN providers] are on the blacklist, it’s trivial for them to move to a new IP address and evade."

So yeah, Netflix knows a war on VPNs and proxies is futile, it's just trying to placate broadcasters in new partner countries. Those broadcasters are (quite correctly) nervous about Netflix coming to town and utterly demolishing the kind of power and influence they've enjoyed for a generation or more. As we saw in Australia, many of these companies aren't really familiar with what competition looks like and don't really understand how technology works, so they've been pressuring Netflix and governments to wage war on VPNs -- as if this is going to somehow save them from the looming Internet video revolution.

And, right on cue, VPN providers are noting that what Netflix is doing may be annoying, but it's relatively trivial to bypass, since they can simply switch IP ranges and avoid Netflix blacklists:

"TorGuard is monitoring the situation closely and we have recently implemented new measures that can bypass any proposed IP blockade on our network. VPN users who encounter Netflix access problems are encouraged to contact us for a working solution,” he adds.

SlickVPN takes a similar stance and says that the static IP-addresses they offer are less likely to be blocked.

“We work tirelessly to ensure our customers have access to the entire internet. If we find that our IP addresses start to become blocked we’ll migrate to new IPs as needed. We also offer the option of static IPs which eliminates the problem entirely,” SlickVPN’s Greg Lyda says.

So in short, Netflix isn't really engaging in a massive new war on VPNs. It would be more accurate to say it's making a token effort to thwart VPNs it knows won't work, to appease necessary broadcast partners who don't really understand the technology they're whining about. None of this is to say that what Netflix is doing is good for the Internet or for its users, but it's a temporary hiccup on the path toward Netflix's eventual goal: uniform, consistent content licensing that looks the same in every country, instead of the bizarre, fractured content availability many of the new Netflix launch countries experience today.

Filed Under: geoblocking, proxies, streaming, vpn
Companies: netflix

No, The Internet Hasn't Destroyed Quality Music Either

from the panic-panic-everywhere dept

At what point will the music industry stop crying wolf? Remember that part of the reason behind the 1909 Copyright Act in the US was the arrival of the player piano, which some feared would put musicians out of business. Same with the phonograph. Remember, John Philip Sousa told Congress in 1906 how those darned "talking machines" were going to stop people from singing:

These talking machines are going to ruin the artistic development of music in this country. When I was a boy--I was a boy in this town--in front of every house in the summer evenings you would find young people together singing the songs of the day or the old songs. Today you hear these infernal machines going night and day. We will not have a vocal chord left. The vocal chords will be eliminated by a process of evolution, as was the tail of man when he came from the ape. The vocal chords will go because no one will have a chance to sing, the phonograph supplying a mechanical imitation of the voice, accompaniment, and effort.

And, of course, basically every other technological innovation was a threat of some sort. The radio was supposed to kill music. "Home taping is killing music" was a slogan! The RIAA undermined digital tapes and tried to limit CDs. It sued over the earliest MP3 players. It's sued countless internet companies and even music fans.

Through it all, the refrain is always the same: if we don't do this, "music will go away."

But, of course, throughout it all, music only expanded. In the first decade of the 21st Century, more music was recorded than all of history combined, and it's likely the pace has increased over the following five years as well.

And because of that, we've started to hear a new refrain from the same folks who insisted before that music was at risk of "dying" because of new technologies: that maybe there's more music, but it's clearly worse in quality. Some of this can be chalked up to the ridiculous pretension of adults who insist that the music of their youth was always so much better than the music "the kids listen to nowadays." But plenty of it seems to be just an attack on the fact that technology has allowed the riff raff in, and the big record labels no longer get to act as a gatekeeper to block them out.

However, as pointed out in an article in The Age down in Australia, not only is music doing phenomenally well these days, but a recent study suggested that the quality of music continues to increase as well. Now, obviously, quality is a subjective thing, so it's difficult to "measure," but here's what the report noted:

Yet all these years on we are still surrounded by music. It follows us throughout a day from our bedside to our commutes to our earphones at work to our drive home to settling into bed.

And an astonishing amount of it is new. A decade after the arrival of file sharing, US economist Joel Waldfogel charted what had happened in a paper called Bye, Bye, Miss American Pie? The Supply of New Recorded Music since Napster.

There is no doubt that recording companies are making less money since file sharing, he says. But that doesn't necessarily mean they are making less music, or even less good music.

Assembling data on the quality of songs from the "all-time best" lists compiled each year by Rolling Stone and other magazines he finds that the albums regarded as good tend to be recent, and increasingly so as the internet age wears on.

The good new ones aren't even by old artists. He says around half of the good new albums are by artists who only started recording since file sharing. It has neither killed new music, nor frightened people away from beginning to make music.

Now, there are reasonable quibbles with this methodology. You can say that of course newer lists of "all time" best music will weigh heavily more recent favorites, even if they might not truly last the tests of time. But, at the very least it does suggest that plenty of people (myself included) are still finding a ton of new music to listen to that we find to be just as good, if not better, than music from decades ago.

Filed Under: business models, internet, music, predictions, quality, streaming