EU Study Confirms: Hollywood's Site Blocking Campaign Is A Total Failure

from the well,-duh dept

If you go all the way back to when the RIAA shut down Napster, you may recall that within just a short while, Gnutella launched, providing a more distributed system that became the core of a number of file sharing programs, which ended up growing much, much larger than Napster. It's the classic hydra situation: you cut off one head, and eight more (or even more than that) come back in return. It's a message that has been obvious since the days of Napster... and yet it's one that the legacy entertainment industry and its friendly politicians still can't seem to grasp. It's why we've always said that the industry would have been so much better off looking for ways to embrace and work with the leading providers in the space, rather than shutting them down.

But, clearly, they don't get it. As the Sony email leaks showed, "site blocking" is still considered a top priority for Hollywood, even though it doesn't take a genius to realize that it doesn't work.

Now we can add some more evidence: the European Commission itself decided to do a study looking at what happened after the website kino.to was shut down, and shows that it was a complete failure if the industry was looking to stop people from consuming unauthorized videos. As we've seen before with other site blocking efforts and over-enforcement, there is a very brief impact in decreasing access to infringing works, and a very, very small increase in sending traffic to licensed offerings -- but that only lasts until alternatives come along, usually within weeks.

The overall impact on stopping access to unauthorized videos? Basically none whatsoever. And, by scattering users out to a variety of new sites, it made it even harder for the industry to track what people were doing. In the case of Kino.to, it took all of four weeks for people to find new places to go:

The results from our empirical analysis show that the shutdown of kino.to led to a significant but short-lived decrease in the usage of unlicensed video streaming websites. Unsurprisingly, this effect is particularly large for individuals who were using kino.to previous to its shutdown, with decreases of more than 30% in overall piracy consumption during the four weeks directly following the intervention. We nevertheless observe that consumption of pirated content increases again following the fourth week after the shutdown. This increase is driven both by substitution towards existing alternative unlicensed platforms and by the entry of new platforms following the shutdown.

You can see how this works pretty easily in the following graph. Yes, there's a very brief decline in unauthorized streaming, but then it goes right back to about the same level... and appears to be generally climbing upward: As for helping convince the users to suddenly start paying for content? A tiny, tiny effect that also does not seem to last:

Second, we find limited substitution into consumption of licensed offline video content, proxied by visits to specific types of websites. Our results show that consumers do not increase their visits to websites of movie theaters or to DVD-related Amazon webpages. However, we find a small increase in clicks to licensed online video services (such as Maxdome, Lovefilm, and iTunes) after the shutdown, providing evidence that the intervention was successful in converting part of kino.to's users toward legitimate video consumption. Perhaps more importantly, we also find that heavy kino.to users disproportionately increase their visits to websites of licensed video services. This substitution was nevertheless undermined by the existence of alternative unlicensed streaming websites, which allowed consumers to rapidly transfer their consumption of copyright infringing videos from kino.to to other platforms. In particular, we document a large increase in clicks to the second-most popular platform - movie2k.to - directly after kino.to disappears. Only five weeks after the intervention, we also observe the entry of a new platform - kinoX.to - which manages to quickly appropriate a significant share of the unlicensed video streaming market at the expense of movie2k.to and the other smaller platforms. These results reflect both the high elasticity of supply to the shutdown, and the fact that consumers face little difficulty in switching from one platform to another.

And, the end result is the basic hydra effect, where the audience fragments:

Third, we assess how the shutdown affected the overall structure of the market for unlicensed video streaming. While the market was largely dominated by kino.to before its seizure, the intervention triggered an increase in competition between alternative platforms, ultimately resulting in a much more fragmented market. After the shutdown, the market was evenly split between movie2k.to (the second largest player at the time of the shutown), kinoX.to (kino.to's substitute), and a remainder of 12 websites which cumulatively account for one third of the market. We also observe that concentration of demand decreases after the shutdown, and that consumers diversify their unlicensed movie consumption more as opposed to concentrating it on a single platform.

Again, you can see the impact of this hydra effect right here: Some may argue that this is the intended impact, and that if these sites have a smaller audience it makes them less sustainable, though there's little evidence to support that.

It seems that a much clearer message from this study is what many of us have been saying all along: taking down sites does not change what people want. And if the industry itself is failing to serve the public and music and movie fans in a compelling and convenient manner, then other providers will come in and do it instead, whether or not it's legal. And that's where the audience will go. The more the industry fights against this, the harder it becomes for the legacy industry to figure out ways to work with the leading providers to build a legitimate service. Instead, it just pisses off people and sends them further and further away. That can't be good for business.

Given that, it seems like it would make a hell of a lot more sense for the industry to focus on providing what people want rather than wasting so much time, effort and money into trying to shut down the sites they don't like.

Filed Under: copyright, eu, eu commission, hollywood, hydra, site blocking, streaming
Companies: kino.to, kinox.to, movie2k.to, mpaa

Court Issues Highly Questionable Restraining Order Over Anyone Even Remotely Related To Streaming Mayweather/Pacquiao Fight

from the that's-not-right... dept

Last week, we wrote about HBO and Showtime teaming up to pre-emptively sue two websites that publicly claimed they were going to live stream video footage of the Floyd Mayweather/Manny Pacquiao boxing match that happened this weekend. As we noted, it seemed odd to sue someone for infringement prior to the copyrighted content even existing, but as some helpfully noted, US copyright law includes a weird provision, 17 USC 411(c), which notes that when you're talking about works where "the first fixation of which is made simultaneously with its transmission," then "the copyright owner may, either before or after such fixation takes place, institute an action for infringement" given a few, pretty basic, conditions. In other words, while rare, the law does allow for just that sort of lawsuit for anticipatory infringement.

Thus, it shouldn't be too surprising that the judge, in fact, granted the request for a temporary restraining order on the two sites in question, boxinghd.net and sportship.org. Frankly, I have no idea if either one of the sites carried through on their promise to stream the fight this weekend, though I imagine it would be fairly dumb of them to have actually done so. From a cursory check, as I type this, it appears both sites are completely offline, so perhaps they both just shut down rather than deal with the threats from HBO and Showtime (or, perhaps, just moved to alternate domains).

However, as EFF points out, the court's temporary restraining order issued in the case goes way, way beyond just restricting those two sites, and raises some really serious concerns. Specifically, the restraining order didn't just restrict those two sites from showing the streams of the boxing match, but basically anyone who is sent the order:

Each and every one of the Defendants and their agents, servants, employees, officers, attorneys, successors, licensees, partners, and assigns and all those acting in active concert or participation with any of them, including any and all service providers who receive notice of this Order, are temporarily restrained and enjoined...

As the EFF points out, this is de facto SOPA -- allowing copyright holders to simply point at a site they don't like, claim they're "bad" and basically order them off of the internet by merely sending a copy of the restraining order:

You may not feel much sympathy for the websites in question. But this kind of site-blocking, without real legal process, is essentially one of the worst parts of the ill-conceived, long-dead Stop Online Piracy Act (SOPA) being brought in through the courtroom back door. HBO got an order to block content against those who act as intermediaries, even though they have nothing to do with the alleged illegality of the sites, are simply providing normal business services, and almost surely had no notice that they were about to be enjoined.

This is not the way our legal system is meant to work, and the good news is that it actually doesn’t. Federal Rules only allow courts to issue injunctions against those who truly are in “active concert or participation” with bad actors. We doubt that those who offer hosting services and video delivery, without more, can properly be considered in “active concert or participation” with the unauthorized streamers.

As the article above points out, it may not seem all that sympathetic considering these kinds of sites, but take it a step further. As we already discussed, whether or not these sites actually streamed any parts of the fight, the fight was widely streamed -- but via Twitter's Periscope service. And, under the terms of this order, if HBO or Showtime had sent this order to Twitter, it could be found to have violated a court order despite not even remotely being a party to the case!

I don't care what you think about those who might have streamed the fight in an unauthorized way, you have to admit that there are clear due process concerns when a court pushes such a broad order, that ties the hands of those who might not even have been aware of the court case at all, let alone that it was legally restricting their ability to operate (in a way that might also be technically impossible). Yes, this may have been convenient for HBO and Showtime, but it's difficult to see how that temporary restraining order is even remotely constitutional (or sensible).

Filed Under: due process, floyd mayweather, free speech, lawsuits, manny pacquaio, restraining order, streaming
Companies: hbo, showtime, twitter

Forget, Mayweather v. Pacquaio: The Big Fight Was Apparently Hollywood v. Periscope Streaming

from the oh-make-it-stop dept

Remember, just last week, when HBO and Showtime were flipping out about a couple of streaming sites promising to broadcast live streams of the big Floyd Mayweather/Manny Pacquiao fight? Apparently, they had the wrong target.

Just a few weeks earlier, we had noted that Hollywood seemed to be losing its mind over the latest round of livestreaming apps. Never mind that livestreaming apps have been around for ages, but because there were two new shiny ones (Periscope, which is owned by Twitter, and Meerkat), suddenly it was a "big deal" again. Especially when it came to sporting events. We'd already discussed the NHL's silly ban on reporters, saying they couldn't use Periscope. All of that came together this weekend in a collective mess.

First, many of the big pay TV providers experienced outages, meaning that people who paid $100 to see just this one fight found themselves completely locked out. Looking for a solution, they turned to Periscope. And they apparently found what they were looking for. And, it probably didn't help that Twitter (again, owner of Periscope) CEO Dick Costolo tweeted the following, claiming "the winner is... Periscope." Of course, as some pointed out, he may have really been talking about the fact that HBO itself used Periscope to show inside Pacquiao's dressing room before the fight -- which seems like a pretty good way to use the technology. However, if this ever leads to a lawsuit, expect that tweet to be an exhibit of an out-of-context claim by HBO/Showtime that Twitter was somehow "inducing" infringement on its platform.

Either way, given how popular the bogus storyline is that there's some sort of existential struggle between Silicon Valley and Hollywood, the resulting news story practically writes itself. Once again, we hear of big bad technology completely tearing down pure hearted big copyright holders, and how "something must be done!"

It will be absurd for Twitter to mount the defense that it complies with any takedown notices filed over copyright-infringing content. Because by the time the compliance occurs the livestream is already over, the company is going to need to figure out a better way to combat piracy on the fly. Periscope may require something like Google’s Content ID system, technology capable of identifying forbidden streams in an instant, and maybe even converting them to transactional opportunities for legal alternatives to the content in question.

Wait, it would be absurd for Twitter to say, "Look, we comply with the law, what else do you want us to do?" Why? Why is it Twitter's responsibility here? Why not the promoters of the show to make sure that their partners supplying the paid streams actually have technology infrastructure in place that works? Or why not Showtime and HBO for creating additional reasons for people to sign up for its service, rather than signing on to one of the Periscope streams?

Why, again, does Hollywood always seem to (1) blame the tech industry for its own failures and (2) then demand that the tech industry magically stop what is unstoppable? Why not, instead, recognize that the technology is really useful, that people like it, and look for ways to take advantage of that? Why not offer an official Periscope stream or partner with others who are Periscoping on their own to offer different/better commentary? There are many things that they could do to embrace things rather than complain about it (or threaten to sue).

Technology keeps advancing. Pretending that you can stop that technology is not a productive path towards the future. Hollywood keeps having to relearn this lesson with every new major technological advancement. It tried to stop the radio, the television, cable TV, the photocopier, the VCR, the MP3 player, the DVR, YouTube and more. One day, you'd think they'd learn that this is a bad strategy.

Filed Under: copyright, dick costolo, floyd mayweather, livestreaming, manny pacquaio, streaming, takedowns
Companies: hbo, periscope, showtime, twitter

When Analyzing Cord Cutting Options, Most TV Analysts Continue To Pretend Piracy Simply Doesn't Exist

from the giant-pink-mutant-vampire-elephant-in-the-room dept

With the arrival of services like Dish's SlingTV, Sony's Playstation Vue, and looming standalone offerings from HBO and Showtime, 2015 is finally the year that Internet video finally starts gaining some serious traction. As such, we're now seeing oodles of breathless analysis focused on what this means for you and whether now is the time to cut the cord. Usually in these fluffy pieces, there's a heavy emphasis on the fact that once you've subscribed to all of these streaming services, you're probably paying the same as you already paid for traditional cable. Gosh -- it's almost as if the same people responsible for setting absurd cable TV rates are setting streaming video rates!

But there's one recurrent theme among TV sector analysts that has always annoyed and amused the hell out of me in equal measure. Almost all of the "cord cutting" analysis I've read -- whether it's a local news outlet, the Associated Press or a major paper -- goes out of its way to pretend that piracy doesn't exist. As in, when discussing the options available to consumers, piracy isn't even mentioned as a commonplace practice. Since the pay TV sector competes with piracy (even though they've long been loathe to admit it), that always strikes me as immensely myopic.

So it has become a sort of ritualistic entertainment for me to watch writers go miles out of their way not to acknowledge piracy for fear they might be seen as condoning it. And as streaming options increase, stories breathlessly warning consumers that they won't save money with Internet video (if you conveniently ignore that piracy is a real thing) are simply everywhere. It's like they're being built on an assembly line in Topeka.

One specific case in point is a well-circulated bit of analysis over at the Wall Street Journal, where author Geoffrey A. Fowler proudly proclaims that despite recent progress in streaming options, cable TV still "beats the Internet." To prove his point, he offers up this handy graphic explaining that you'll still wind up paying a ton of money if you subscribe to every Internet video service under the sun: Yes, "what's missing" are all the things millions of people are pirating. But we can't mention that because -- why? We'll be smitten by the gods? It's now standard practice in the media to pretend that piracy doesn't exist, then pretend that none of your readers are smart enough to notice your glaring omission. Seriously, even the barest mention of piracy is mysteriously absent from an ocean of similar stories, all claiming to give viewers a full accounting of the TV viewing options in 2015. There are simply countless examples of this, where authors profess to be asking the hard questions about cord cutting without mentioning the giant orange elephant standing in the corner:

"But there's one whopping big question that nobody's asking: Can you replace cable with streaming Internet TV and get the same experience — and save money? After all, if you can't make the switch without missing your favorite TV shows and saving money, then what's the point?"

Except they can! Through piracy! One gets the sense that media outlets feel like if they so much as even acknowledge that piracy is a real thing -- they'll somehow be taken as advocates for piracy. It's as if piracy is some kind of angry and strange Lovecraftian god, and even mentioning its name will invite unspeakable terror upon the local village. And it's not just the media -- I've seen countless professional firms paid millions to analyze the state of the pay TV sector similarly just pretend that piracy doesn't exist -- in large part because tracking these users can be difficult to impossible. As such, it's best to just pretend piracy doesn't exist and isn't even worth trying to monitor. Nobody will notice, right?

If you were to do an honest analysis of cord cutting options in 2015, you'd note that most cord cutters are doing everything and anything to avoid skyrocketing cable rates. That may involve subscribing to Netflix and Amazon Prime streaming, but it also may include using BitTorrent and a Plex media server to pirate all of their favorite HBO and Showtime shows. I don't advocate this behavior (did I need to say that?), but if you're seriously going to discuss the current state of pay television (and how we can improve it) -- ignoring the standard practice of millions of frustrated, potential customers strikes me as a very peculiar type of willful blindness. It's a form of willful, collective obliviousness that only helps the cable industry pretend that piracy isn't a useful metric in determining just how badly they're failing to meet consumer demand.

Filed Under: competition, copyright, cord cutting, media, piracy, streaming, tv, video

Both The NFL And MLB Look To Expand Streaming Offerings By Ending Local Blackouts

from the bye-bye-cable dept

Bear witness to the genesis of a new era, fellow sports fans. I've begged and pleaded in the past for the major professional sports leagues to take the harness off of the ability to stream games. Even as the trend of cord-cutting has progressed along nicely, I have always argued that the only dam keeping a flood of cord-cutters at bay has been professional sports broadcast deals. Those deals have almost universally been saddled with local blackout restrictions, making streaming games all but useless for the majority of fans. The past few years, however, have seen inched progress towards wider availabitily for streamed offerings. The NBA's most recent contract went out of its way to make sure streaming is expanded, for instance, not to mention the deal Dish and ESPN made to make the cable channel's broadcasts more accessible for streaming. But those were baby steps, too often leashed by a cable subscription requirement.

But, now, the NFL is finally dipping its toe in the streaming waters. Please understand that, even if this is just another inch gained for streaming, this is a huge deal.

On Monday, the NFL announced the Oct. 25 regular season game between Jacksonville and Buffalo will be put up for bid on national digital platforms. The game is being played in London, meaning the broadcast will begin at 9:30 a.m. ET and 6:30 PT. That's not exactly prime time for U.S. fans, or broadcast television, but it is 'prime time' in China, where the NFL is struggling to gain a toehold.

"It's a one game test. We will evaluate fan feedback," NFL spokesman Brian McCarthy said via an email exchange. "It's too early to tell about the future [of streaming games]. Will test this season with the one game and evaluate after."

Separately, the NFL said it's going to drop its so-called blackout rule, which prevents local broadcasts of games if they're not sold out 72 hours before kickoff. NFL media executive Brian Rolapp said the league is "testing alternative ways to distribute games," The NYT reports, and acknowledged the obvious: "The world is changing very quickly."

If this seems like a small step, you don't know how savvy the folks in the NFL's media department are. They absolutely know where the trends have us all heading regarding media consumption and I can promise you they are keenly aware of how many people are currently watching streaming NFL games on illegitimate sites. The most consumed sport in the United States doesn't turn on a dime, but the league also doesn't put up this kind of test balloon without having a fairly certain idea of how it's going to play with its customers. Assuming the quality, cost (free?), and accessibility of this test game is anything remotely comparable to, say, baseball's MLB.TV offering, expect this to end up as an insanely successful test-run. I'd actually say that this test game feels more like the NFL looking for an excuse to jump fully into a streaming offering than some kind of fact-finding mission. After all, you only drop the blackout rule in conjunction with expanding streaming if you expect the locals to run with the offering full-force. And they will, I assure you.

The NFL's DirectTV and network deals mean streaming won't explode immediately, but everyone can see what the NFL is doing to position itself for the future.

Given its agreement with DirecTV and television networks -- the NFL signed $27 billion worth of contracts in 2011 -- the league will be restricted on what it can offer online, at least in the near term. But the NFL is "a master of dicing and splicing content in order to extract the greatest value," [media analyst Walt] Piecyk says. "It's not like they're committing to put a bunch of games [online] but I think they want to get more comfortable so if Google or Apple or Amazon comes down the pike and says 'we want to buy a larger chunk of games' they can get comfortable on tech front."

And speaking of MLB.TV, reports are that professional baseball is due to get its own expanded streaming offering. The MLB.TV service has long been the standard in sports streaming, with no other league offering really even coming close. The problem, however, was that local games were blacked out, so the service was only useful for out-of-town fans or die-hard baseball fans that will watch any MLB game any time it's available (me, for example). If recent reports are to be believed, however, MLB is looking to take a small step to changing the blackout rules for streaming.

Major League Baseball is expected to announce in the next few days a deal with a national distributor, like a wireless provider, to stream local games of every MLB team, a source close to the situation said Thursday.

To stream games of the New York teams, fans would have to be a customer of the distributor and pay for the YES Network or SNY, the regional sports networks (RSNs) that carry Yank and Met games, respectively. The price to stream has not yet been set.

This is an imperfect first step, of course, particularly as it carries with it the anchor of either a cable subscription, a specific wireless device provider, or both, but it's an important step in the right direction. It's something akin, actually, to the DirectTV deal the NFL has, except that it's more mobile and more widely available on a variety of devices. You should also expect any deal MLB signs for this streaming to be less locked in than the NFL/DirectTV deal, because, again, everyone knows where this is all heading. And, if the reports are true, even the television broadcasters are resigning themselves to reality.

Talks between MLB and Fox Sports, which owns 15 RSNs, including YES; Comcast, which owns six, including a minority stake in SNY; and DirecTV, which owns four, have been on-again, off-again for more than a year. The talks have accelerated in the last two weeks, and both sides are optimistic a deal will be reached before Opening Day, April 6. Under that agreement, fans would deal directly with their pay-TV provider.

Is it as perfect a solution as simply working out deals to unleash the local broadcasts on the MLB.TV stream that customers have been watching all the non-local teams on? No, absolutely not, but this first iteration's imperfection will only catalyze MLB to go the correct route in the future. Because the trends are clear: streaming is up and cable subscriptions are down. Even if the NFL and MLB don't get this right the first time, they will absolutely be forced to get it right in the near future.

Either way, one eventual reality is coming ever-closer to fruition: cable television, and perhaps television as a whole, may soon be over.

Filed Under: blackouts, sports, streaming
Companies: mlb, nfl

Apple's Attempt At A TV Revolution Runs Face First Into Comcast Corporation

from the the-TV-revolution-will-not-be-televised dept

For years now, media reports have suggested that Apple has dreamed of offering a disruptive broadband TV streaming service that rattles the status quo. The problem for Apple (and countless companies before it) has been that the broadcasters in charge of said status quo haven't historically been willing to budge on the kind of flexible licensing needed to make this dream a reality. That has resulted in year after year of Apple TV service rumors that never materialize as Apple repeatedly ran face first into licensing negotiations. Similarly, cable operators, wary of Apple getting the same kind of power it now wields in the music industry and losing set top revenues, haven't been keen on Apple's proposals for Apple-made set top boxes.

Just about a year ago, the Wall Street Journal ran a story stating that Apple was in negotiations with Comcast regarding an internet TV service that would get priority over Comcast's network. One year later, and a new Wall Street Journal report notes that while a new Apple TV service is finally slated to launch this fall (and the Apple rumor gods really, really mean it this time), it's going to likely be without Comcast/NBC Universal content. Why? Apple insiders claim Comcast is stringing the company along to delay Apple while it focuses on its own efforts:

"For now, the talks don’t involve NBCUniversal, owner of the NBC broadcast network and cable channels like USA and Bravo, because of a falling-out between Apple and NBCUniversal parent company Comcast Corp., the people familiar with the matter said. Apple and Comcast were in talks as recently as last year about working together on a streaming television platform that would combine Apple’s expertise in user interfaces with Comcast’s strength in broadband delivery. Apple came to believe that Comcast was stringing it along while the cable giant focused on its own X1 Web-enabled set-top box, the people said."

While what business arrangements Comcast engages in is of course the company's prerogative, this sort of thing is certainly fodder for those worried about Comcast's growing power post Time Warner Cable merger. Whether it's raising rates on Netflix via interconnection, using NBC to withhold licensing agreements, imposing broadband usage caps or refusing to authenticate HBO Go on the Playstation 4, there are plenty of ways Comcast can constrict internet video's growth -- without running afoul of our new net neutrality rules.

Meanwhile, Apple's pretty clearly realizing the company needs to ease off of its own (often draconian and bizarre) control demands if it's going to get a foothold in the broadcast and TV industry, as the sort of success and control Apple enjoys in wireless simply isn't going to be replicated in cable without some major concessions. Insiders suggest Apple's willing to go the extra mile to get cable operators and broadcasters on board, including sharing more viewer data than Netflix traditionally does:

"The company is willing to share details on who its viewers are, what they watch and when they watch it to entice broadcast networks and others to go along with the service, sources said...Apple, which is known for tightly controlling its ecosystem, is taking a more hands-off approach with programmers, such as letting them decide whether they want to air ads. "They’re allowing a lot more decision-making by the content owner," said one source familiar with the talks, adding that Apple has told potential partners, "It’s up to you, whatever you guys want to do."

Despite a decade of the cable and broadcast industry fighting internet video tooth and nail, 2015 actually appears to be the year internet video gains meaningful traction anyway. Whether that's through Dish's Sling TV, HBO Now or Sony's Playstation Vue, we're finally starting to see some broader choices when it comes to TV packages and pricing. As for Comcast getting in the way of this progress, it's very possible the FCC and DOJ may approve their merger but impose some conditions that they play nice. Of course whether those conditions are intelligent, meaningful or actually enforced is another question entirely.

Filed Under: apple tv, control, internet, streaming, streaming video, tv
Companies: apple, comcast

Why Are Some People So Intent On Making Netflix More Like Traditional TV?

from the when-evolution-isn't-good-enough dept

If you recall the responses to Netflix's botched DVD unit spinoff attempt or the outrage over those price hikes from a few years ago, there were many folks who expected Netflix to implode long before it became the powerhouse it is today. According to the latest Nielsen data, roughly 37% of all households now have a Netflix account, and the company plans to reach 200 countries by the end of this year. Netflix has largely revolutionized television, yet for some reason there's a contingent of folks who just can't stop complaining that Netflix should be more like traditional cable.

Case in point, Wired complained a few years ago that Netflix wasn't complete until it implemented a channel surfing feature, because having the choice of a mountain of different options was apparently too difficult. Similarly there's been seemingly endless lamentation over the last few years about how Netflix's choice to release seasons all at once is bad because it kills the "water cooler marketing buzz" created as office workers prattle about each week's show plotlines. Of course, as noted previously, people apparently love to binge watch, and there's absolutely nothing wrong in giving the people what they want.

Still, the idea that Netflix isn't "cable enough" never seems to go out of style. The latest example comes courtesy of Rex Sorgatz over at The Message, who not only laments that Netflix has destroyed the "water cooler" chatter that helps drive show marketing buzz, but complains that Netflix's release style ensconces him in a cocoon of spoiler paranoia, from whence he's unable to hold any conversations about TV programs without spoilers:

"But you see the problem: We can’t talk about buzzy Netflix shows because our schedules are out of sync. The rough expectations for knowing if your friends are on episode 12 or episode 1 have been destroyed. Netflix thinks it has performed a noble act by releasing the entire season en masse, but it has actually wreaked havoc on the best part of television: talking about television."

Has Netflix really done that? Really? It seems to me Netflix is giving people what they want -- a whole lot of content to be consumed on whatever schedule people see fit. As Frank Underwood himself noted in 2013, dumping an entire season at once gives viewers the power to do whatever they want. Still, Sorgatz proceeds to argue that this is a "problem" in desperate need of fixing, and as such, he's offered this solution:

"This, I propose, is what Netflix, Amazon, and HBO should do. They need to bring back the schedule, updated to modern lives. That schedule should be: Every day, a new episode is released, always at the same time, and blind to time zones. Imagine if House of Cards had played out over two weeks, like a mini-series...Can you imagine? The conversation around this viewing window would be massive, almost unbearable. Fans would feel compelled to catch up every night, so as to be involved in tomorrow’s discussion. And if you missed a day or two, catching up would be painless."

Except if you think about it, that actually solves nothing. If I'm able to watch the show on Tuesday night but you've got an evening cheese club meeting, I'll still spoil the show for you when we meet on Wednesday. Here's a crazier idea: we just accept that Netflix is very different from the traditional cable experience (which is still available if that's your preference by the way), and that this is a good thing? It seems so much simpler than endlessly complaining that Netflix isn't more like a cable TV industry most of us agree is in desperate need of a sharp kick in the ass.

Filed Under: internet, streaming, tv
Companies: netflix

Yes, Major Record Labels Are Keeping Nearly All The Money They Get From Spotify, Rather Than Giving It To Artists

from the who-are-you-blaming-now? dept

A small group of very vocal musicians has decided that the new target of their anger, after attacking cyberlockers, search engines and torrent sites, should be legal, authorized streaming services. They've decided that the payouts from these services are simply too low, even though almost none of these services are anywhere close to profitable, and most are handing out the vast majority of their revenue to copyright holders. The complaints are often nonsensical. Way back in 2012, we noted that the target of these musicians' anger appeared to be misplaced, as the CEO of Merlin (which represents a ton of indie labels) admitted that the real problem was that Spotify paid lots of money to labels and it was the labels not giving that money to the artists. Yet, rather than blaming their own labels (or their own contracts), these artists lashed out at Spotify and other streaming services. Just a few months ago, we covered this issue again, with even Bono admitting that the real problem was the lack of transparency from the labels.

And, it appears, there's a decent reason why those labels haven't been eager to be transparent: because they're keeping most of the money. The Music Business Worldwide site has the details on a new report put together by Ernst & Young with the French record label trade group SNEP, concerning where the money from streaming services Deezer and Spotify ends up. Spoiler alert: it's not with the artists. Here's the overall share of the 9.99 Euros that people pay for a premium account on these services: As you can see, the labels get the lion's share, with songwriters/publishers splitting 10% and the performers getting less than 7%. And, if you look at the specifics of the actual post-tax payout, you can see the contrast more starkly: The labels end up with nearly 75% of the total payout, with actual artists and songwriters left with the scraps.

Of course, since this project was paid for by SNEP, which represents the major labels, it then tries to spin this as being not only perfectly fair, but a good thing for the artists themselves. What, you say? How can that be? The report claims that 95% of that money that goes to the labels goes to cover all of the "expenses" those poor poor labels have to endure to record and... um... upload(?) the actual music. Sure, in the past, it may have been reasonable for the labels to take on large fees for distribution -- but that's when it meant manufacturing tons of plastic and vinyl and then shipping it to thousands of record stores around the globe. In this case, there's no manufacturing, and distribution is an "upload" button. Sure, there are some marketing costs, but the numbers ring pretty hollow (especially for many of the artists for whom the labels do little to no marketing).

So, again, rather than blaming these streaming services, it appears that perhaps they should be discussing things with the labels.

Filed Under: artists, contracts, copyright, distribution, music, record labels, revenue, streaming
Companies: deezer, snep, spotify

YouTube's Offer To Musicians Isn't As Bad As Some Believe, But YouTube Should Still Change Its Policies

from the things-can-be-fixed dept

Last summer, there was some kerfuffle about YouTube allegedly threatening to kick musicians off of YouTube if they didn't agree to license their music to the subscription service it was building. At the time, we wrote about how this was overblown. As we noted, anyone could still post whatever videos they wanted to YouTube, it was just a question of whether or not you would be in YouTube's partner program, which would allow the artists to use ContentID to monetize other people's videos and a few other features as well. After I wrote that, musician Zoe Keating, who I consider a friend, emailed me the details of her own struggle with YouTube over this issue, and how the deal being offered actually was pretty crappy for her. Late last week, she posted a similar discussion on her blog, asking what she should do about YouTube, because she wants to use ContentID, but doesn't like some of the other terms in the deal.

Zoe's post has since gone somewhat viral, with many people insisting that YouTube's terms are absolutely crazy. Of course, when you look at the details, the terms are not really that crazy. However, YouTube should change them. Let's dig into the situation to explain why.

Zoe's main concerns were these terms:

1) All of my catalog must be included in both the free and premium music service. Even if I don’t deliver all my music, because I’m a music partner, anything that a 3rd party uploads with my info in the description will be automatically included in the music service too.

2) All songs will be set to “monetize,” meaning there will be ads on them.

3) I will be required to release new music on YouTube at the same time I release it anywhere else. So no more releasing to my core fans first on Bandcamp and then on iTunes.

4) All my catalog must be uploaded at high resolution, according to Google’s standard which is currently 320 kbps.

5) The contract lasts for 5 years.

As she noted, if she didn't sign the agreement, her YouTube channel would be blocked -- though, as we explained in our post last year, and as Zoe added in an update -- she could take her existing YouTube channel out of the partner program and keep it up. However, in doing so, she would give up the ability to monetize her music under the same terms.

Why these terms aren't entirely insane: From my reading of it, YouTube's concern is that consumers who pay for YouTube's fee-based music service will be reasonably angry if there is music they can find on the good old-fashioned free side of YouTube, but which is not accessible after they pay. From a consumer experience standpoint, that is kind of a crappy situation. You could definitely see some subscribers who get frustrated. In fact, I'd bet that there'd be some blog posts somewhere of someone bitching out YouTube's paid service for not having certain music that was available on the site for free... and that post would likely go viral as well, with people talking about how crappy YouTube's paid service was. Also, it wouldn't surprise me if some enterprising copyright holder somewhere would come up with some sort of legal theory involving suing YouTube over this, saying that it now knows which tracks are unlicensed, and thus has to proactively take them down. That is, it's entirely possible that without these requirements, YouTube goes back to facing a massive copyright liability problem.

Why YouTube should change its terms anyway: These are truly edge cases. Most musicians do seem fine with being in the various services, but if they (like Zoe) want to just to make use of ContentID, but not release all their music on YouTube, that should be allowed. As Zoe has told me in the past, the thing she likes about ContentID is the ability to pick and choose what videos to monetize. Use her music in a school project -- and she just let's it go and is happy to see. Use her music in a big commercial feature, and she'll click the button and get some money out of it. But the ContentID portion should be separate from the "release my music" portion.

On top of that, the requirement to release all music on the service, combined with the similar requirement that you have to release the music on YouTube the same time as on any other platform, is unnecessary. Yes, YouTube wants to make sure that its catalog competes with everyone else's. And, fragmenting the music world with "exclusives" is generally a crappy experience, but there should be some reasonable way to allow Zoe to do things like offer up songs to her biggest fans on Bandcamp first. YouTube should be able to create terms that accommodate that, and it's a shame that the company won't do so.

In the end, most of the terms are not really that unreasonable. It only creates an issue in special cases where someone wants to do something a little bit different. YouTube is left with the choice of which crappy edge case it's going to have to make a mess of: either the one where a musician wants to do something a little different, or the one where some consumers might get annoyed that certain music isn't available on its service. YouTube went with option (a), but there's really no reason that the company can't be a little more flexible in designing terms that account for cases like Zoe's.

The other issue is that, once again, YouTube has done an absolutely dreadful job explaining itself. This is not the first time this has happened. In fact, it seems to happen with alarming frequency that when YouTube makes these kinds of policy changes, it doesn't do a good job (or any job at all) of explaining them to the public in a way that makes sense. Frankly, the company could do a much better job being open and transparent about the policy choices it makes and the reasons why it does these things, but for whatever reason, it chooses not to do so.

Filed Under: contracts, streaming, youtube, zoe keating
Companies: google, youtube