Free TV on the Web Faces Pushback
Two interesting stories in the New York Times yesterday deserve a second look. One suggests there’s big pushback against the idea of all cable content becoming free on the web, and instead there may be a subscription model taking its place, where you have to buy access on a monthly basis to see programs.
“Free is not sustainable” was the line that caught our eyes. It has interesting implications for the Hulus and TV.coms of the world.
The second, posted a few hours later, describes an experiment in Milwaukee where Time Warner Cable is trying out an onlne subscription servic for HBO.
Well, there are apples, oranges, and lemons being scrambled here.
First of all, the principal thrust of this discussion is not original made-for-new-media content, but simply move-over of conventional content. Putting move-over content on the web for free torpedoes the economic arrangements with cable companies. Thus, the proposal for limiting online access to this kind of content to those who are already cable subscribers.
What we’re still not seeing is an economic model for original made-for-new-media content. Whether that online content finds an economic base of some kind, and whether that base is free, advertiser-supported distribution, or paid subscriptions, or something else, still remains to be seen.
VG
I was visiting with friends from high school and one of the group said she watches moste movies online…for free…somekind of site allows movies new movies. some are the real deal some are a guy in a theatre with a camera…illegal of course but i don’tknow if those viewing it are committing a crime or not.
i was intrigued as to what would she do if she were charged per view or per movie….”no way i’d pay for something on the internet. i’ll wait til it’s free somewhere else on the net…they’ll figure it out.”
I realize this is anecdotal but i have always thought that some viewers will be willing to pay for a subscription but most who enjoy it now would not.
just passing it along.
Marisa, you’re talking about good, old-fashioned piracy, and that problem isn’t going away any time soon. It’s easy to search a film title and discover dozens of bit torrent sites from around the world streaming movies. And, like you, many folks (or civilians) have also told me that they wouldn’t pay to watch movies on the internet. (There are exceptions, like Jaman, that seems to be doing okay–and is legal/licensed content).
But I agree; most I’ve talked to wouldn’t pay for what they’re now getting for free.
This discussion of piracy is at the core of what is threatening the industry now. Despite international litigations against some sophisticated sites (Piratebay.com being the most recetn), the studios will tell you that the level of piracy is so high and abuse so rampant that the only reason they created sties like Hulu was because they could not compete against the free content pirates. Their hope was that ad supported streaming and the offering of clip editing, no matter how low the revenue stream, would bring eyeballs to their site and ultimately back to the programs point of origin, ie, their networks. They are losing the fight right now. The tv/film industry teeters on the brink of the same fate as the recording industry and radio. This is the cultural shift I have written about in the past. Neither the platforms themselves nor the employers nor certainly the employees are the problem. The real cancer on our industry is THE CONSUMER. The consumer’s sense of entitlement to free content. To date, no industry technology has been created to defeat piracy without crippling the core value of the internet. You can offer pay service, but the consumer resists it at every turn.
ghost….just to be clear…i’m not good enough techwise to even start to search for movies/tv programs nor would i. Piracy and i don’t find it fun to watch stuff on my computer for very long.
i was curious and wanted to know just how people felt about watching TV and film on a computer. As i said, it’s not my prefrence besides maybe watching a clip or short segment of a news program that i missed.
I wasn’t surprised that , my friends say, their kids do it alot. but they also said the kids only do what is free.
so once again, we’re at the same place…no profit for studios, no resids for actors.
I made it clear about piracy but it had no effect on my friends….it’s part of life as far as they see it. somehow, music downloads that cost money seems ok for them…
4&5 Imho, Consumers are also our Audience and Fans or at least Friends. The problem as I see it, is also the economy (no money and everything costs too much) as well as that young to youngest viewers (8 to 30) have been somewhat spoiled by studios as you pointed out. The consumer entitlement you mention, I feel has been partly caused by the general entertainment media’s focus on $$$$ salaries of the hottest celeb actors and athletes. The Audience doesn’t have a clue what day rates are for regular working actors – they think everybody is trucking home the Benjamins as soon as they win American Idol or Survivor, etc. PR flaks and “lifestyle” reporters emphasize and promote the disconnect. Doesn’t get us closer to resids but I believe that it’s part of how we got here.
Just sayin.
One would think the studios would put their focus and dollars on finding a technological prevention – to stop CD’s from being duplicated or ripped/downloaded….but as soon as they would, some hacker will find it amusing to breaking that prevention mechanism. The real issue is here – how do the producers protect their wares, and how do we, the creatives, get our share? Are we to go backward 40 years where – because of the greedy entitlement of the users who refuse to pay for product – cause a downward stream of revenue and stopping us from residual payments?
Not to point out what’s obvious to anyone who’s followed tech/web content developments, but the model to emulate would seem to be the porn industry.
They’ve been delivering, and earning, on web content for years and until only recently have not seen anything even resembling a downturn. Always up. And my friend in the “Adult” industry tells me it’s not piracy, or even the proliferation of new sites that’s causing economic suffering.
It’s the economy, stupid.
Matt,
This is kinda long, but then that’s what sermons are.
You need to be very, very careful about pointing the finger at consumers as the root of the problem because, if you alienate them, you will be driving away the very people you need to make your business model, any business model, a success. The music industry, where five years of litigation against tens of thousands of consumers, is the object lesson in this regard, and they STILL don’t have a real good grasp of the concept.
You also need to temper blanket statements about what the consumer believes they are “entitled†to. The success of pay services like HBO, and the relative infrequency of cable-related theft-of-services prosecutions show that the public, to a very large degree, really does understand the difference between what is there for free and what must be paid for.
The true problem has been that the public believes that exhibition of non-premium content IS already free. They don’t believe they “pay†for what they see and hear on their radios or TVs. The idea that their attention has intrinsic value that someone else will pay for is far too abstract a concept to get the traction you need to change minds about something so basic.
We may eventually get to the point where the Internet attracts sufficient eyeballs to support an ad-based business model, but I doubt it, because TV and radio have succeeded with that idea because they are working within a technological system that restricts a consumer’s choice. There may be 500 different TV channels on your cable service, but there are still “only†five hundred different TV channels. Your radio choices are limited to the number of signals that fit into the AM and FM band without interfering with each other. You can put on commercials in that environment because the consumer will accept them as part of the environment, and they know if they change the channel, they’re only going to find the same advertising thing somewhere else (and that included PBS pledge weeks), unless they pay extra for the privilege of premium content/no commercials on HBO, etc.
The Internet doesn’t play by those rules. There are no arbitrary limits on the number of possible outlets for content. There are no large financial barriers against anyone joining in with their own outlet. With no restriction on choice, there is always going to be a substantial risk that someone, somewhere, will make content available for free exhibition, either legally or illegally, and that is where the current content businesses (and those who work within them) have met, and will always meet, their competitive match.
When faced with that kind of perception, you can either do what the music business did, and beat your consumers over the head until you get tired and/or antagonize large numbers of them to the point where they openly rebel, or you can work with the concept and channel your energies into finding a business model that LOOKS LIKE it is giving content for free.
How?
Remember when Disneyland used to sell those ticket books with the A, B,C, D and E tickets? They thought they were ending up ahead of the game because people didn’t use up all the tickets they bought. But then a smart guy figured out they were wrong, and they changed their business model by jacking up the price of general admission and making it seem to the visitors like all the rides were free. Besides making more money than ever before, Disney discovered that people were going home with nothing but happy memories instead of a pocket full of paper reminders they hadn’t taking full advantage of what they had paid for.
There’s no reason the same thinking couldn’t be applied to the Internet, the biggest amusement part in the universe. Collect a fee at the door from everyone who wants in, even if they never set foot on the TV and movie “rides,†and there will be more money than imaginable available for producers and performers (and directors, writers and everyone else who looks to exhibitions to make money).
There are probably some other ways to make money from the wild and wooly Internet, but this one has the advantage of already working in regard to streaming Internet music broadcasts. Nearly $20 million in performance royalties were paid out to recording artists in 2008. An equal amount went to the owners of the copyrights on those recorded performances. Those numbers are only going to grow. That revenue stream didn’t exist before 2002. (It was actually established by law in 1996 but took six years to set up the infrastructure to collect and distribute the money.)
The license fees paid by individual webcasters are quite low, and, as you can imagine, there is a lot of pressure by the major record labels to jack up the fees high enough to kill the industry in its crib. In all likelihood, however, the concept of paying a percentage of webcaster revenue (with a reasonably low floor for the non-profit and hobbyist stations that make a lot of otherwise underplayed music available) into the royalty pool will continue to work for the foreseeable future. Even the labels, who are willing to call a pirate anyone who disagrees with them, have dialed back the rhetoric.
The real charm of this kind of “pay at the door†scheme is that we are slowly but surely approaching the day when real content “piracy†becomes anachronistic. There will be no need to “steal†a copy of a movie or TV show when it is legally immediately available at any time for viewing anywhere in the world. People who make their living at the intersection where music and technology meet have a utopian concept called the “celestial jukebox.†In its simplest form, the jukebox is the cyberspace equivalent of the old Robert Klein comedy routine about “Every Record Ever Made†You want to hear Kiri Te Kanawa? Her entire discography is available, all the time. So is Woodie Guthrie, and the Bulgarian Women’s Chorus, and the Sex Pistols. You don’t have to download anything, thereby avoiding clogging up your computer’s memory with all that content. You just punch the jukebox buttons and it plays whatever you want to hear, whenever you want to hear it.
If it works for music, and there’s no technical reason why it wouldn’t, it can work for TV and movie content. Think about it as a “Celestial Nickelodeon,†going back to the original meaning of the word. There won’t be any piracy because there won’t be anything to steal, and paying at the door (via say a monthly bump in your ISP fee) means everyone is legal.
Give up the convenient and inflammatory piracy imagery and work on finding a way out that suits everyone.
What’s the ratio of SAG to AFTRA contracts for porn actors? Don’t tell me–it’s mostly gone AFTRA this season…
But there’s a difference, I think, for the consumer’s eye when watching online porn or online non-porn.
Most porn is viewed, you’ll pardon the expression, in short spurts, and not often in long-form. And most computer users don’t have high speed connections and suffer much buffering as video fully downloads (making the picture quality of most online porn not much different from a quarter’s worth of old-fashioned 8mm film looped in a projector down in the local red-light district).
Agreed that the porn industry has figured a way to make money off something people want, but its clear that (most) people want non-porn for free.
Marisa, to answer one of your questions directly; i don’t like watching anything on the computer, except for short clips, whether it’s Porn or Knut the polar bear ;
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Admin. Snarky Comment: I think porn is all “theatrical” and AFTRA doesn’t do theatrical.
And I should’ve added: I also don’t like to READ anything long-form on the computer, either. Not novels, not Mulhooey, not nothin’ long-form. Ditto with video content.
Ghost…LOL…’PORN’???? HAD TO LAUGH…
never even thought of that….!!!!
you are too much!!
Neil,
Truth is, the porn industry is now up in Sacramento lobbying (yes, they do have lobbyists) for piracy protection, as their revenues are down almost 50% from just 3 years ago. It appears file sharing among entitled perverts is just as big, if not bigger, issue.
I wasn’t being a proponent of porn, (not that there’s anything wrong with that…) just pointing out how far ahead of the curve on internet money-making the industry has always been.
They are taking hits now, but according to my friend it was always the “subscription” model they used that made it viable. Monthly fees to access whether you watched 2 minute clips or stayed logged in 24/7. And it worked well for years.