16 Comments

Summary:

Here’s a novel idea for Hollywood: Instead of forcing other countries to adopt ever tougher copyright laws, help services like Netflix and Hulu to launch operations overseas. And forcing U.S. consumers to authenticate before they can watch TV online might not be the smartest idea either.

pirate

Every few months, Hollywood is making yet another push for stronger copyright laws and more restrictive trade agreements. First, there were SOPA, PIPA and ACTA, and now there is the Trans-Pacific Partnership (TPP). But new data from Ericsson’s ConsumerLab research unit shows that Hollywood may have gotten it all backwards. The most successful weapon in the fight against piracy aren’t new laws, but better services.

Case in point: Less than 15 percent of U.S.-based online video viewers use file sharing for their movies and TV show fix, according to Ericsson’s TV & Video Consumer Trend Report 2012 (PDF). Netflix on the other hand is used by around 55 percent. Hulu, websites of TV networks, iTunes and Amazon’s VOD offering are also more popular than piracy.

Compare that to Spain, where legal services are still in their infancy: Spanish online video users primarily access their shows and movies through “other means,” which likely stands for unlicensed streaming sites. File sharing is also hugely popular, and being used by more than 30 percent of all users. Licensed services on the other hand are far less popular, with none of them attracting more than 15 percent of all users.

So what should Hollywood do to fight piracy? One easy fix would be to license more content to Netflix and its competitors, and put up fewer restrictions on accessing this type of content.

However, in the U.S., the industry is actually moving into the opposite direction: Last fall, Fox began delaying access to its TV shows on Fox.com and Hulu.com for people who can’t authenticate themselves as subscribers of affiliated pay TV providers or Hulu Plus. It’s difficult to draw conclusions about the effect of these measures from Ericsson’s numbers, but it’s notable that both Hulu’s numbers and the use of TV networks’ websites went down when compared to 2011. Piracy and “other” means to access content on the other hand grew slightly.

It’s too early to tell whether the industry’s love affair with TV Everywhere is driving viewers back to piracy – but on a global level, the message seems clear: Instead of forcing countries to adopt ever stricter copyright laws, Hollywood would be well-advised to help services like Netflix and Hulu with their international expansion.

Photo courtesy of (CC-BY-SA) Flickr user Richard Masoner / Cyclelicious.

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  1. lowestofthekeys Tuesday, August 28, 2012

    This solution has been staring them in the face for the past several years.

    Unfortunately, back then they lacked the foresight to see how innovation could successfully combat piracy. Hopefully they’ll learn this time around.

  2. This article got it exactly right! Wish the industry would listen…

  3. It sounds easy but there are decades of rights issues that need to be sorted out before you can “enter a market”. This takes time.

    There is also a huge amount of industry inertia still focused on BDU’s as they still pay a majority of licensing fees. Why deal with Netflix or other OTT service when that will just piss off the BDUs? The money Digital is throwing around now, while growing, isn’t even close to what BDUs are paying.

    There is also complacency. Why fix it if it aint broke? Content providers are still happily selling their stuff to broadcasters. Why change? No one else is stepping up with more money. OTT services still have not wedged themselves into the value chain.

    As for piracy, when you have an oligopoly, as the BDUs have in most countries, you don’t give your customer’s selection, features and service, you sue them if they try to get those elsewhere. They have both the law on their side, after decades of lobbying, and a long list of industry associations willing to take on the task.

    Also, take note, that Netflix’s model is looking more and more like a BDU’s than an innovative digital startup. Exclusivity contracts, content creation, etc… I would say that Hollywood would be well advised to help up and coming digital services in order to foster innovation in the field and create a profitable business model for all. Selecting one or two of the top digital services to deal with only creates another oligopoly and all the drawbacks that comes with it.

    1. Dear Timekeeper,

      Im a student currently studying copyright laws and the internet. Thank you for your comment, but i would like to know what is a BDU and what is OTT?

  4. It’s stunning how articles like this never even begin to talk about the economics of these deals. “License to Netflix!” the bloggers all say, without any recognition or understanding of whether that deal would be economic for the guy who invested the cash to create the content. It’s so oversimplified and unsophisticated.

    What makes you think Netflix is willing to make a fair deal for Spain? Lovefilm has a ton of infrastructure – why don’t they play there?

    Like every other economic system in the world, there has to be a mix of both free market and structure. It’s absurd to tell the people on one side of the economic exchange that they should “forget” about having any legal structure protecting them.

    1. Exactly. It’s very easy to say “just license to Netflix” when you don’t truly understand the complexity of running a content business.

    2. where’s the “like” button? a “like” for Muddy and a “like” for Jeremy…

  5. If they can’t milk it for money, they will not budge. I use to be active downloading shared movie files but that was 6 years ago. No longer worth the time and hassle not too mention illegality of the practice.

  6. markleiser.phd.law Tuesday, August 28, 2012

    Reblogged this on #Hashtag – Thoughts on Law, Technology, the Internet, and Social Media and commented:
    Aug 28, 2012 – 11:31AM PT
    Hey Hollywood, forget SOPA, ACTA & TPP. Embrace Netflix instead

    Here’s a novel idea for Hollywood: Instead of forcing other countries to adopt ever tougher copyright laws, help services like Netflix and Hulu to launch operations overseas. And forcing U.S. consumers to authenticate before they can watch TV online might not be the smartest idea either.

  7. Writing from Spain, I can say you get it all wrong.

    The reason for Spain’s high piracy level is purely cultural. There are legal pay services, but no one uses it because the generation that drives internet entertainment consumption has self-educated in the idea that content must be free, copyright is wrong and the user has the right to take whatever he/she wants, no matter what harm it causes. As you know, every time we purchased a blank DVD or cd or a copying machine the seller is forced to pay a compensatory levy to content owners, so companies have invested heaps of money to support that idea -content stealing is right, copyright is wrong- and it certainly has permeated deeply. It is easy to undertand why, it gives an alibi and a justification to copiers and pirates.

    This is not gonna change when more services are introduced. The ones avalaible should suffice and are trailing along in agony with only a testimonial number of subscribers.

    But your main proposal is also nonsensical: There is no need to choose between enforcing copyright and developing better services. Both can be achieved at the same time. It’s obvious.

    As most i-writers who tackle this issue you demonstrate a total lack of respect for content owners. Any decent person would accept that somebody that invest his money and his work in producing a film, a record, a book has the right to control its explotation and do it as he pleases. It is so obvious, in fact, that the right to have his moral and economic rights protected is listed as one of the fundamental human rights in the Universal Declaration of Human Rights, a text mentioned frequently but seldom read. You must certainly read it and write from there about content and services.

    1. As far as a lack of respect for content owners…call it a lack of respect for content *gatekeepers*. That lack of respect is well-earned based on their behavior.

      Content creators are granted some control in how their work is exploited, but only within limits. Specifically, they deserve that control only up to the point that it does not interfere excessively with the rights of others. Free speech, privacy, and similar rights are also encoded in the UDoHR, and should not be sacrificed for the sake of capricious. arbitrary, or excessive enforcement of IP rights. SOPA, PIPA, ACTA, and TPP were/are gross overreaches that threatened that balance.

      Content owners are welcome to pursue IP enforcement as part of their strategy, but they need to excercise temperance and choose their battles wisely. That means focusing on truly harmful activity (like commercial mass-distribution piracy), rather than inflicting DRM on everyone, trying to construct totalitarian IP regimes, and filing onerous lawsuits just to punish (mostly harmless) incidental home users engaged in non-commercial filesharing. It’s a matter of morality (respect your customers’ rights) and practicality (pursue what works).

      So far too many content owners have chosen their battles poorly. As long as that continues, they will continue to lose respect, and rightly so.

      1. I don’t see how your comment relates to the fundamental thesis of the original article. In case you’ve missed it, it’s that Hollywood should give up trying to protect his properties and bussiness from abuse and go for internet distribution instead.

        Anyway, I’ll offer you my thoughts, just in case:

        As far as a lack of respect for content owners…call it a lack of respect for content *gatekeepers*. There is no way you can distinguish gatekeepers from content creators or content owners. It is an artificial distinction made up to compensate lack of real arguments.

        “Gatekeeper” is meant to discredit some people I profoundly admire and that are certainly worth a million times more than those who use that “dirty” word against them. I admire Max Brod, Norman Granz or Ahmet Erthegun or Barney Rosset etc. etc. They have enriched my life offering me fab books, music and films. Can’t find anyone of their stature among “gatekeeper” toting critics. Beyond that, no matter the position a company or an individual has in the chain of creation, whether he/it deserves in your subjective opinion the “gatekeeper” monicker or not, he/it has the right to dispose of his property as he/it seems fit and no one can challenge that.

        ” they deserve that control only up to the point that it does not interfere excessively with the rights of others.” Sorry, I can’t process that. How can the right to dispose of their property as they see fit interfere with the rights of anybody else? With free speech or privacy? Probably you are referring to the secondary effects of laws designed to protect owners from unlawful uses or explotation. You are worried abour potential wrongs caused by a projected law, I am worried about real damages and real abuses to fundamental human rights that occur everyday and should be stopped. I am not worried about potential harm caused by a legislation. There is a full control system designed to avoid it. That’s why the police can search you, open your letters and listen to your phone conversations lawfully. There’s no arguing that those activities potentially endanger privacy and freedom of speech etc. I don’t see the problem.

        Content owners are welcome to pursue IP enforcement as part of their strategy, but they need to excercise temperance and choose their battles wisely. That means focusing on truly harmful activity (like commercial mass-distribution piracy), rather than inflicting DRM on everyone>/i> At this point I wonder who are you to say what the content owner should or should not do with his work and his property. Really, where does your authority come from?

        and filing onerous lawsuits just to punish (mostly harmless) incidental home users engaged in non-commercial filesharing Why should they condone individuals who abuse of their rights? Because you say so? There is no such a thing as “filesharing” You can not whare what does not belong to you. The file has an ower and he has licenced it to you on certain terms and you should respect that licence. If you don’t you are the guilty one, not the file owner who decides to sue you to protect his rights. Yes,it’s a matter of morality, only you do not seem to grasp the concept of morality.

        You’re right, freedom of speech, privacy, etc. are encoded in the UDoHR, and there is a whole legal framework to protect them. I wish there was a similar legal framework to protect content owners and creators who see their rights violated every minute. It is extremely unfair that it still doesn’t exist. Don’t you think so?

  8. This article in oblivious to the actual market. Matter of Netflix and Hulu spending money on content. Hollywood would welcome the revenue stream.

  9. and what did we learn from the music industry?

  10. Ribeekah Grant Thursday, August 30, 2012

    Let Hollywood go ahead and believe that it owns the licence to story telling. Bear in mind that every nation has its own story to tell too.

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