The cable industry was already struggling last year, when a record number of cable customers "cut the cord" and flocked to over the air or streaming alternatives. That was before a pandemic came to town. Now, with some sports on hiatus and folks desperate to cut costs, the trend has only accelerated, to the point where 6 million Americans are poised to cut the cord this year alone:
"By the end of this year, 31.2 million US households will have cut the cable TV cord in aggregate. And 6.6 million households will cancel their pay TV subscriptions. By 2024, more than one-third of US households will have cut the pay TV cord."
The first quarter of 2020 alone saw more than 1.8 million users cancel traditional cable -- a record. That's fairly impressive for a trend cable industry executives (and the folks at places like Nielsen paid to tell them what they want to hear) spent years trying to pretend wasn't happening, then tried to downplay it as something only losers do. Late last year, a lot of cable executives made headlines by trying to claim the shift was coming to an end. Charter CEO Tom Rutledge, for example, offered up this prediction last November:
"I think in aggregate they’re going to slow down,” said Rutledge. “Because I think most single-family homes have big TVs in them and that’s where you get sports, that’s where you get news, that’s where you get live TV like this. It’s still going to be under price pressure. I’m not saying the category isn’t under pressure. But I think the rate of decline will slow."
It didn't slow. And there was absolutely no indication a slowdown was coming, even before Covid-19 came to town. The number of folks still paying for traditional cable has now dropped 22.8% from pay TV's peak back in 2014. But by the end of 2024, analysts expect that fewer than half of US homes will subscribe to a traditional pay TV service. That is, I believe, the opposite of "slowing down."
To be clear, the cable TV sector still lays claim to 77 million subscribers in the United States, even though that's a drop of 7.5% year over year (another record). And many of the biggest companies (like AT&T, Verizon, and Comcast) should be fine, given they can just jack up the price for broadband thanks to regional monopolies over internet service. But with competition heating up in streaming, and consumer financial headaches likely persisting throughout 2020, downplaying or ignoring one of the biggest trends in TV history is no longer an option for some of the least liked companies in American industry.
You may recall that back in January Netflix took something of a public pounding for pulling an episode of Hasan Minhaj's Patriot Act, after Minhaj went hard at Mohammad bin Salman. Netflix pulled the episode inside of Saudi Arabia when the country claimed the episode violated the kingdom's internet laws, which mostly revolve around keeping any criticism of the Saudi royal family off of the internet. Critics in America and elsewhere slammed Netflix for kissing the Saudi family's ring, while still others pointed out that the episode was still available on Netflix's YouTube page, including in Saudi Arabia. Some even argued that Netflix knew that all of this would be Streisanded, actually getting the episode more attention in Saudi Arabia that way.
Such strategic moves to hold to moral values doesn't appear to have been reality, however, as Netflix CEO Reed Hastings recently came out and publicly washed his company's hands of any kind of value-based stance.
‘We’re not in the truth-to-power business. We’re in the entertainment business.’
That’s Reed Hastings, chief executive of Netflix Inc., defending a decision earlier this year to pull an episode of comedian Hasan Minaj’s “Patriot Act,” which was critical of Saudi Crown Prince Mohammad bin Salman, keeping it from airing in Saudi Arabia.
“We can accomplish a lot more by being entertainment and influencing a global conversation about how people live than trying to be another news channel,” Hastings said Wednesday in an interview at the New York Times’ Dealbook Conference.
I can't say I know for sure exactly who is supposed to be the intended audience for Hastings' remarks, but sure as hell hope the creative public is listening. For content creators, Netflix has made it abundantly clear that it will not support disruptive art in the face of authoritarian criticism. Given how much of art and content is specifically designed to speak truth to power, and given just how squishy many governments legal justifications for censorship are, the future is certain to be filled with these types of take down requests. Do artists really want to utilize such a platform for expression?
Making all of this even more frustrating is where Hastings decides the lines should be drawn, which only serves to throw all of this into more confusion.
Hastings added a caveat on how far he would go: “If they can came to us and said you can’t have gay content, we wouldn’t do that. We would not comply with that.”
What the hell? I'm all in favor of supporting the rights of the LGBT community, but there are plenty of governments out there that are unfriendly to that community, to art made by and about that community, and plenty have laws against such expression. You know, like Russia, for instance. Why is Netflix willing to defy Mother Russia on "gay content" (weird phrase), but Hasan Minhaj's mainstream criticism of MBS's actions somehow are ripe for censoring?
It's a disappointing stance for Netflix to take. Although, to be fair, bowing to authoritarian regimes has become something of a fad lately.
Back in 2015, we wrote about a really dumb trademark dispute between a financial services firm and two Major League Baseball teams, the Washington Nationals and Chicago Cubs, over the letter "W." This insanity went on for years, with the MLB teams claiming there would be some sort of customer confusion in the public between professional baseball teams and a company that provided money management.
At the end of November, the Nationals and Cubs filed an opposition with the Trademark Trial and Appeal Board against Starwood Hotels & Resorts Worldwide. The Nationals and Cubs are apparently upset with Starwood’s pending trademark application to register “W” in connection with “Entertainment services, namely, planning, conducting and hosting music festivals, concerts and performances by musical groups and individuals.”
Starwood claims to have started using “W” in connection with the aforementioned services as early as January 2005. The Nationals and Cubs could care less. They say that if Starwood gets its wish of registration, then Starwood will be given permission to confuse people into thinking that its services are in some way approved, endorsed or sponsored by the Nationals and/or Cubs.
This is the type of situation that calls for people to recognize the subtle differences and to keep their eye on the ball for trademark law, which is customer confusion. Yes, all three trademarks in question are versions of the letter "W." Yes, all three entities in question are in some segment of the entertainment industry, two being baseball teams and the third wanting to use its trademark for music concerts and performances. That, however, doesn't equate to Starwood's use somehow resulting in public confusion. Just to be clear, this is one of the many iterations of hotel logo we're talking about.
Really makes you think of the Cubs and/or Nationals, right? And, with just a brief moment of thought put into this, it becomes clear that fear of confusion makes no sense. A member of the public is going to go to a Starwood property to see a concert, see the "W" logo, and... what? Think the Cubs are affiliated with the concert? Or maybe the Nationals? Both? These baseball teams are somehow putting on concerts at Starwood properties?
Fortunately, the general consensus appears to be that the MLB teams aren't going to prevail.
This seems like a stretch of a case for the Washington Nationals and Chicago Cubs, since Starwood is very widely known for its “W” brand of hotels and no reasonable person is confusing said hotel brand with the baseball clubs. Further, Starwood already owns trademark registrations for the “W” brand, including one in relation to providing hotel services, food and beverage and bar and cocktail lounge services. Unless the Cubs and Nationals are also going to attempt invalidating those registrations, this new opposition seems half-hearted and destined to fail.
A massive (1300+ pages) collection of US Army Entertainment Liaison documents pertaining to the military branch's relationship with movies, TV shows and videogames has been liberated by SpyCulture. Within its pages are the military's assessments of various pop culture works, as well as official non-responses to more controversial works.
Generally speaking, the US Army Entertainment Liaison office believes most of what crosses its desk furthers the Army's interests. There are lots and lots of supportive assessments contained in the document, with the most common being "Supports Building Resilience" -- a phrase that covers everything from military-friendly documentaries to American Idol. Another popular assessment is "Supports Modernizing the Force," something the Liaison Office has applied to blockbuster franchises like The Avengers.
It especially has some love for an unnamed Activision videogame with a pro-military edge, even though it did express its reservations about China being depicted as a military foe. (Apparently, it's only acceptable to consider China a cyber-foe...)
However, it was less than pleased with a FOIA request from Kotaku covering the same territory, which it felt would "jeopardize" its ability to enter into new partnerships with videogame production companies.
On more controversial topics -- like the Oscar-winning Hurt Locker -- it chose to remain officially silent.
LTC [redacted] was interviewed by the Australian Broadcasting Corp's morning radio program and the New York Times on the Oscar nominated "The Hurt Locker." While reporters tried to bring the Army into the fray of the ongoing debate, we kept our messages broadly focused on why we support or not support film projects, and our mission of this office "to educate the American public through entertainment media."
A better tack would have been to point out to the press that Hurt Locker's depiction of military action was about as credible as 2012's Battleship, a movie the Liaison Office found to be a Pretty Good Thing overall in terms of pro-military positivity ("Supports Broadens Understanding and Advocacy").
The office must be commended for its rarely-flagging cheerfulness. Even reality TV bottom feeders have a silver lining.
Ghost Hunters – Mr [redacted]
SyFy will highlight the academy on one of their Ghost Hunters episodes and feature Quarters 100 (Superintendent’s House) and Scott Barracks. Both have had stories of supposed spiritual activity. This program draws 2.5-3 million viewers for a first time airing and they travel across the country and internationally to some of the most famous and historical locations in the world. While not typical, it allows West Point the opportunity to reach a unique and untapped audience for this special segment.
West Point Academy: Come for the intense discipline. Stay for the hauntings.
Rather charmingly, the office also makes sure top brass stay abreast of its Facebook page's traffic.
There are also some notes detailing a visit from the Inspector General in regards to any participation the office may have offered during the production of Zero Dark Thirty.
Representatives from the DoD IG visited OCPA-LA on 30 April. The purpose of the visit was a spiral increment of the DoD ID investigation into DoD’s support of the film titled “Zero Dark Thirty”. The US Army did not support the movie “Zero Dark Thirty”. Specifically the DoD IG’s focus was on DoD Agencies and Military Services regarding the release of DoD classified and/or sensitive information to the media. The questions asked by the DoD IG team were about procedures and policies concerning the interaction between DoD employees and the media when the subject is concerning DoD sensitive and/or classified information or programs. OCPA-LA operates by the public affairs tenant “practice security at the source.” This is most applicable to the US Army’s support of documentary films. OCPALA does not have any classified material nor do we have the means to store classified material. The DoD IG team appeared to be satisfied with the procedures and policies implemented by OCPA-LA.
Elsewhere in the report, the G.I. Joe movies "support maintaining our combat edge," Michael Bay gives the office a first look at the Transformers 3 ("an apolitical blockbuster") script to ensure the movie can be all it can be ("expressed his desire for us to 'help (him) make it better'") and a Nicholas Sparks' movie becomes a way for the Army to meet chicks engage an under-served market.
The main character, played by Channing Tatum, exudes the Army Values and honorably and realistically portrays an Army Soldier to a predominantly female audience. The reviews have been very positive especially among women.
If you're planning on wading through the document, be aware there's a lot of duplication as pending projects are carried forward month-to-month with only a very occasional update. That being said, it's a fun read that meshes pop culture with jingoism in a way that almost makes it seem that there's no better way to support the troops than sitting on the couch in front of your TV.
Almost exactly three years ago, Mike wrote up a post that discussed Planet Money pulling together five economists with differing political views to see what they could all agree on. The result was several policy ideas that appeared to transcend politics if economics was the driving motivator instead of any kind of partisanship. The whole post is awesome, and has influenced my thoughts on economic policy and taxes to a large degree, but I came away from it with one general concept firmly in mind: tax what you want to discourage, don't tax what you want to encourage, and never tax innovation or the future.
A ruling by Chicago’s Department of Finance allows the city to add an extra nine percent tax onto “electronically delivered amusements” and “nonpossessory computer leases.” In an odd combination, buying a subscription to streaming media, such as Netflix or Spotify, would qualify, as would using a cloud computing platform, such as Amazon Web Services. Each would be subject to 9% tax; Chicago is the first major American city to levy a tax on either streaming services or cloud computing services.
Amusement taxes in and of themselves generally violate the concept I highlighted in the opening. After all, if you're a municipality, taxing fun is essentially saying you want less fun. But what makes this re-write of the amusement tax already on the books silly is that it is purely a money-grab. Here's what happened: the amusement tax in Chicago worked primarily to collect revenue from book stores, music stores and movie rental stores, which are obviously becoming increasingly in short supply as consumers move to online stores and streaming services like Netflix and Spotify and Amazon for all of the above. This is actually a good thing from a public interest standpoint for a variety of reasons: less pollution from physical products, more efficiency in the marketplace, the opening of more creative outlets for members of the city, and more access to more content from more places and devices, meaning a more robust economic marketplace. The future, in other words, although increasingly the present as well. And Chicago wants to tax all this, effectively discouraging its use, in order to collect an additional $12 million a year.
Chicago, mind you, is in the hole for roughly one hundred times that amount.
Cities with amusement taxes have lost revenue as more people forgo book stores, record shops and video rental stores in place of online outlets. But $12 million isn’t going to be much more than a drop of water in the bucket of the city’s $1 billion operating shortfall.
Fighting the future doesn't even yield much of a reward, so why do it at all? Don't tax what you want to encourage and tax what you want to discourage. This makes it look like the city of Chicago really wants a tax policy to make the city operate like it was 1995.
If you like PC games, chances are you already know all about GOG, or Good Old Games. The GOG website has done more to extend the life of gently-aged games by building a platform for old games that will work on new machines while having one singular principal dominate their products: there shall be no DRM. Digital Rights Managment seems like it's always existed and has equally never worked, what with cracks, hacks and other methods for getting around games that employ DRM being available almost immediately after games get released. It's a losing strategy. GOG, on the other hand, has made their insistence on DRM-free games a winning strategy for themselves, for customers, and even for once-apprehensive publishers. DRM certainly hasn't disappeared from the gaming industry, but GOG's working experiment has gone a long way to reduce its use.
They're starting small, launching with a handful of independent documentaries for $5.99 a piece in hopes of eventually branching out to studio films and television shows. The folks at GOG are pushing hard on the "DRM-free" angle here too, promising that nothing they sell will be saddled with the copyright restrictions you might get while buying a TV show on iTunes or Amazon.
"Most of [the studios we spoke to] admit that DRM does not protect anything, all protections are cracked on the day of the release of the movie or even before and that there is no DRM that can protect a movie against piracy," said a GOG representative in an e-mail to Kotaku. "The whole industry knows DRM is just smoke and mirrors and it does not work, so why not abandon it?"
Why not indeed? Though streaming is becoming a dominant method for viewing content, there still must be a market for the ownership of movies and television shows. DRM from the likes of the current marketplaces serves no end except to annoy actual customers, while pirated versions of pretty much everything already exist for those not willing to do right by content producers. What GOG did for games certainly seems like it should work for movies and TV shows: remove the annoyance and provide a clean and slick market for DRM-free show/movie content. As they said, they're starting small, but if this is successful we might finally start to see a landslide of a perception-change when it comes to DRM.
Interestingly, it seems that talks for a wider catalog are proceeding more successfully than I might have expected.
"These are very smart people and they see that the anti-piracy measure does not work at all," said a GOG rep in an e-mail. "We realize that the movie industry is much older than the gaming industry and it moves slower, with caution. As such, we'll get started with some real examples to show that it works–hence our first batch of 20 documentaries."
What also interests me is how the documentaries for this pilot program are all focused on gaming and internet culture, arguably attractive to a demographic that might be most knowledgeable about piracy and perhaps more willing than the general population to pirate content. If they can be successful there, I'd argue the rest of the general public ought to be a cinch. Get on board with this, studios. Someone is trying to save you from yourselves.
For years, we've argued that the role of middlemen in the entertainment industry has been changing drastically. Most were built up on the basis of being gatekeepers: choosing who would get to go out and perform to the world, and using that gatekeeper status to (1) put themselves (the middlemen) in the center of everything and (2) demand nearly all ownership and profits from the results. But the new world is one in which gatekeepers are obsolete. The natural limits of things like broadcast television or movies are fluttering away thanks to the internet and all the technology that allows anyone to be a creator. That doesn't mean that middlemen aren't necessary any more. They absolutely are. But their roles are as enablers, not gatekeepers. They have to put the content creators back in the center and accept that they don't have full control, and they don't get to keep 85 cents of every dollar earned.
Famed comedian Patton Oswalt took to the stage at the "Just for Laughs Comedy Conference" in Montreal recently and made this point brilliantly in the form of two "letters." (Thanks to Pickle Monger for calling this to our attention.) The first letter was to fellow comedians -- more or less telling them to take control over their own career. They had to stop looking for the gatekeeper to come along and pick them, and take charge. Here's just a snippet, but the whole thing is worth reading:
[Following a brief description of his very successful career] But if you listened very carefully, you would have heard two words over and over again: “lucky” and “given.” Those are two very very dangerous words for a comedian. Those two words can put you to sleep, especially once you get a taste of both being “lucky” and being “given.” The days about luck and being given are about to end. They’re about to go away.
Not totally. There are always comedians who will work hard and get noticed by agents and managers and record labels. There will always be an element of that. And they deserve their success. And there’s always going to be people who benefit from that.
What I mean is: Not being lucky and not being given are no longer going to define your career as a comedian and as an artist.
The second letter addresses the gatekeepers quite directly. Again, a snippet, though you should read the whole thing:
You guys need to stop thinking like gatekeepers. You need to do it for the sake of your own survival.
Because all of us comedians after watching Louis CK revolutionize sitcoms and comedy recordings and live tours. And listening to "WTF With Marc Maron" and "Comedy Bang! Bang!" and watching the growth of the UCB Theatre on two coasts and seeing careers being made on Twitter and Youtube.
Our careers don’t hinge on somebody in a plush office deciding to aim a little luck in our direction. There are no gates. They’re gone. The model for success as a comedian in the '70s and '80s? That was middle school.
He goes on to talk about how they can stop being gatekeepers and start actually helping (first by being "fans") but then goes on to point out why the gatekeeper role is gone in a very simple fashion:
We can just walk away.
You know why we can do that now? Because of these. (Oswalt holds up an iPhone)
In my hand right now I’m holding more filmmaking technology than Orson Welles had when he filmed Citizen Kane.
I’m holding almost the same amount of cinematography, post-editing, sound editing, and broadcast capabilities as you have at your tv network.
In a couple of years it’s going to be fucking equal. I see what’s fucking coming. This isn’t a threat, this is an offer.
It's an offer so few gatekeepers have been willing to take up.
I think it's great that Oswalt is saying this stuff. For the last few years, as Louis CK has revolutionized various parts of the comedy industry (as we've detailed here), it's been interesting to see how other comics have reacted. I keep hearing about how comedians want a "Louis CK deal," -- which is a deal like the one that Louis got for his show on FX (where he basically has full control over every aspect of the product). The problem, of course, is that no one else wants to give out such a deal -- and even if other comedians got it, many wouldn't know what to do with it. Because of that, I've heard some suggest that there isn't much to learn from Louis, since his situation is one of a kind.
I think Oswalt is much more on the right track, though. Of course, the answer isn't just in "getting the Louis CK deal" or even just copying exactly how he released his last comedy special. It's in recognizing the larger point of Oswalt's keynote: that the old rules and old gatekeepers are meaningless. You can forge your own path, and whereas you used to have to work within the confines of the system, nowadays you have lots of options. Every opportunity is there.
While it seems like US politicians keep insisting that Wikileaks' release of State Department cables has put people in harm's way -- despite a lack of evidence to support that -- some are pointing out that at least some of the cables actually show that some of what the US is doing in the Middle East has been quite effective. Prashanth points us to the news that one of the leaks showed that American TV and movies in Saudi Arabia are actually "are doing more to dissuade young Muslims from becoming jihadists than virtually anything else." As the cable noted: "Saudis are now very interested in the outside world and everybody wants to study in the US if they can. They are fascinated by US culture in a way they never were before."
Of course, the same politicians blasting Wikileaks as a "terrorist" organization can't admit that some of the leaks are actually showing that some of what the US is doing is working quite well. As Prasanth notes in his own blog post, if US politicians were smart, they'd use cables like this to play up evidence that they're doing some things well:
I feel like this is along the lines of winning the people's "hearts and minds". The reason why this works is because as opposed to state-sponsored propaganda (which is pretty obvious when shown), this more subtly shows what's so great about the US.
Finally, I think this report is a great send-up of all the politicians who are equating Wikileaks with terrorism. Quite the contrary: while a lot of what it shows is what we've done wrong (and of course these politicians will hypocritically call for press freedom in other countries yet repress it here), it also shows a lot of what we've done right. Why not publicize that more?
Let's take a step back to explain this. We've discussed, in the past, that the way China operates its "Great Firewall" is not by explicitly banning anything. Instead, it simply puts liability on third parties such as ISPs and says they'll take the blame and face the consequences for any "bad stuff" that is allowed through to Chinese users. As MacKinnon notes, this is really "intermediary liability," or (obviously enough) putting the liability for actions on an intermediary to force them to try to curb the behavior of end users. In this way, the Chinese government can claim that it doesn't censor the internet and there's no such thing as a "Great Firewall," because it doesn't exist as a single thing. It's just that the government will punish ISPs who don't block "bad stuff."
But this "intermediary liability" is a big deal, because under any common sense approach to things, you should never blame an third party/intermediary for the actions of end users. And yet, that's exactly what the entertainment industry has been pushing. One of the key components being pushed for the internet section of ACTA is the idea of expanding "secondary liability" or "contributory copyright infringement" or whatever they want to call it. In reality, it's the same intermediary liability that China uses to have ISPs censor content. The idea is that if you put the liability for file sharing on ISPs, then they will be forced to figure out ways to stop it -- just like ISPs in China are forced to create their own censorship campaigns.
And, of course, this isn't even hypothetical. We've got some real world examples. That's because much of the early language in ACTA was modeled on the "free trade" agreement that the US pressured South Korea into signing. That included such intermediary liability for ISPs when it came to copyright infringement, and guess what happened? First, the country felt it needed to start kicking people off the internet based on a "three strikes" plan, just to satisfy the treaty. Then service providers quickly started banning all sorts of activities, including any music uploads and many video uploads. After all, it's not worth it for the service providers to be liable, so they block the ability to upload all sorts of content. And, of course, with such liability there, others went even further, with some service providers even banning advertisements for any kind of website that could allow copyright infringement, because of the fear that, via such intermediary liability, they may get blamed just for allowing an advertisement that pointed to a site that could be used for copyright infringement.
When you look at the details, it's incredibly similar to the way in which China crafted its Great Firewall. Impose such secondary liability that puts the responsibility on a third party, and and watch those third parties basically lock down all sorts of additional things, just to be safe. Of course, the old school entertainment industry doesn't mind, because preventing you from communicating isn't their problem. They don't see the internet as a communications platform anyway. They're hoping it's the next broadcast medium, and clearing the decks via a Great Firewall an intermediary liability system works right into those plans. The more you look at the details, the more it looks like the entertainment industry is doing everything possible to encircle the internet to make it appear more like a broadcast entertainment medium, rather than a communications medium.
Someone once told me that Viacom's top lawyer, Michael Fricklas, has been known to read Techdirt on occasion. I have no idea if this is true, but it still is interesting to watch him give a lecture to some Yale law students where he offers a somewhat nuanced position on copyright issues (thanks to JJ for being the first of many to forward the video to us), but which repeatedly seems to leave out certain pertinent facts:
He starts out by saying that he's a strong supporter of fair use, and doesn't like the idea of having to get licenses for creating new works -- but is concerned about the "exact copy" problem. So, basically he's in favor of fair use for creating new works, but not direct distribution.
He discusses copyright vs. free speech -- and insists that there's no "tension" between the two (despite many recent studies suggesting the exact opposite). Of course, he does a bit of a twist there, by saying that copyright is pro-free speech because it creates incentive for speech. The problem with this statement is that while that's the theory, the evidence for it is somewhat lacking. However, there is tremendous evidence of cases where copyright is used to stifle speech -- and of all the massive extensions and changes in copyright laws over the past 200 years, almost all have served to stifle more speech than they have encouraged.
He then trots out the industry's own numbers claiming how much copyright contributes to the economy, even though those numbers are based on a variety of questionable assumptions, including the idea that all content covered by copyright is only created because of copyright. Along those lines, he also credits copyright for things like the iPod and the Kindle, saying that no one's buying those devices just to look at them. This is correct -- but note the trick. He did not say that it was content that drove the iPod and the Kindle, but copyright. He's wrong. It's content. Not copyright.
He notes that some say that "unlicensed IP" might drive this innovation, but he favors "sustainable innovation" (as if anyone doesn't). And then he makes this odd statement:
"A more sustainable innovation is one where, if you make an investment, you have the opportunity to make a return."
Now, that's a great (by which we mean, useless) statement, because it's obviously true. Who would ever deny that? But it's a sneaky and disingenuous statement, because it implies something that's simply not true: that without copyright or without restrictive licensing, the investors do not have an opportunity to make a return. As we've shown over and over again, plenty of content creators who "free" their IP have not only made a return, but have made a better return than they did under older models that relied on copyright. But it's a sneaky trick that's often used by folks in this debate. You set up this strawman argument and then knock it down, despite the fact that no one ever made the argument, and you argue that something is fact (that you can't make a return) when it's empirically false. It's frustrating that this argument still gets made and people should really start calling the folks who make it out whenever they state such falsehoods.
Later, he talks about the "losses" from piracy, insisting that the findings come from a "sophisticated" analysis, not just from counting all downloads as lost sales. Of course, these numbers came from the same study process that led to some results that even the MPAA (of which Viacom is a major member) had to later admit were bogus. This is also the same "sophisticated analysis" that includes ripple effects in one direction only, so it's actually double, triple, quadruple, quintuple counting some numbers, while totally ignoring how those numbers actually help the industry in other ways. So, sorry if I don't take those loss numbers seriously, no matter how "sophisticated" he thinks they are. They're not. They're only "sophisticated" in how misleading they are.
He does have a short discussion on RealNetworks' RealDVD offering, which he implies enables piracy -- even as he admits he wants the functionality, where he could move a copy of a legally purchased DVD to his hard drive for backup or other viewing, but says his "concern" is that people would do this with Netflix DVDs. He believes that the problem with this is that RealNetworks had to break the encryption put in place by the studios. Notice, again, what Fricklas conveniently leaves out. First, he leaves out the fact that it is already legal for people to make backup copies of content they legally own -- but, thanks in part to Hollywood lobbying, Hollywood itself can block that right, simply by putting encryption on something and then saying that you can't circumvent it without breaking the law (thank you, DMCA anti-circumvention clause). He also leaves out (conveniently) the fact that RealDVD doesn't actually "break" the encryption and that the resulting copy still includes DRM that prevents copies. The fact that he's "concerned" about the Netflix model is of no consequence whatsoever. McDonalds is "concerned" about Burger King, but that doesn't give them a legal right to block them from being in business.
Then he pulls out the ever popular "$200 million movie" myth, which I thought was a favorite of NBC Universal, but I guess Viacom is going with it now as well. It's not a myth that there are movies that cost $200 million. The myth is that people want movies that cost that much. No one watching a movie cares how much it costs. They want good movies, no matter how much they cost. I'm sure people would like some $1 billion or $100 billion movies as well, but that doesn't mean we need to grant Viacom extra special legal privileges to make sure it can make a $1 billion or $100 billion movie profitably. People like good movies. Viacom wants to make profitable movies. We agree. But the $200 million number is meaningless. There are ways to make good movies for both less and more than $200 million and there are ways to make profitable movies even in the face of piracy. The claim that piracy undermines the $200 million movie, which is some sort of "necessity," is simply not supported.
On top of that, he tosses out the debunked claim that if something is "free" it means it's devalued. That's simply not true, no matter how many times people repeat it. If it were true, and the content had no value, no one would want it. Value and price are two separate things.
Then, he discusses the "Kanye West" MTV Video Awards "Imma let you finish..." example, by talking about how Viacom used various filtering tools to pull that clip off of various "unlicensed" user uploaded video sites. But he also talks about how they drove people to use the official Viacom clip, which allowed them to "participate in the benefit" of the video. Now, that's interesting, and it's great that they put their own clips up and made them embeddable. But, again, it's important to note what he left out. In forcing everyone to view the content through Viacom directly, it also increased Viacom's own cost in terms of bandwidth. The advantage of letting others help host and distribute the content is that it actually eases that cost.
His discussion on kicking people off the internet via a "three strikes" mechanism is getting much of the attention on other sites, because he mentions, totally in passing, that suing users "feels like bullying." This may sound like a big deal -- and certainly some other sites (and industry lawyers) are making it out like a big revelation, but it's not. The movie industry has never sued individuals for such things -- only the recording industry has. And even way back in the Jack Valenti days, he talked about why he didn't like the idea of suing individuals. So, this isn't a shift in positioning at all. Rather, it's a repeat of the new silly strategy of some in the industry to try to pretend that kicking people off the internet is "consumer relief." Not quite. Shooting someone in the leg instead of the head is certainly "better," but I doubt that the person shot in the leg considers it "relief."
Towards the end of that discussion, though, he makes another interesting statement, saying that: "there's no way to deal with this problem other than to move viewing into licensed contexts." Except, that's not true. There are other ways. It's called setting up a business model where people actually do have a reason to buy things, whether they view the content in a licensed or unlicensed manner. I recognize he's on the legal side, rather than the business side, but the idea that the "only" way to deal with piracy is to attack it, rather than embrace it, is a position that the industry long ago should have learned was a mistake.
His final point is discussing how DRM "enables new business models," and he more or less dismisses criticism of DRM as really just being criticism of "bad" DRM (of which there is plenty). However, what struck me, was how none of the "new business models" he described actually required DRM at all. You could do them all in some way entirely without DRM. All the DRM does is add restrictions. Of course, rather than adding restrictions, why doesn't the industry focus on employing new business models that give users more and make them want to buy, rather than trying to enforce artificial limitations?
On the whole, it is an interesting video, and well worth watching, but it conveniently misstates or leaves out important facts throughout. Unfortunately, the Q&A session that follows the presentation wasn't included, so I have no idea if any of the students challenged some of his assertions or pointed out some of the points that he left out. Anyway, maybe we can hope that Fricklas is, in fact, an occasional reader here and can stop by to address those questions and omissions.
