Category Archives: Media Consumption

Why is “three strikes” such bad idea?

In case you haven’t heard, The RIAA/MPAA and their international equivalents, are working desperately to make ISPs kick people off the Internet if they are accused of file sharing more than three times. (Three strikes and you’re out.)

There are so many things wrong with this idea it’s hard to know where to begin. Firstly, there’s no current legislative support for file sharing P2P being illegal and the RIAA, despite suing thousands of  people, hasn’t obtained a conviction. (It obtained one conviction but the judge himself overturned it when he discovered that “making available” was not a crime, contrary to his comments to the jury during the trial.)

Then there’s the methodology. These organizations are seeking to implement three strikes merely based on their accusation. No legal due process, no right of appeal. We already know that these same clueless organizations have been very, very wrong in the past, attempting to sue people who had no computer (but may have paid for an account) or other blunder. No other place in law, particularly in a “innocent until proven guilty” legal system, allows – effectively – conviction upon accusation. There is no right of appeal.

Finally, there are already copyright laws in place that provide the protection that the copyright owners feel they need. They have it. It just has this teeny tiny shortcoming that the copyright owner has to prove   that the accused actually committed the “crime”. They’d have to actually prove the case to a suitable legal standard.

Fortunately, although France’s ruling body enacted three strike legislation. That legislation was rendered Unconstitutional by the French Constitutional Council (their highest court). This is in line with the European Parliament who also ruled against three strikes laws as has the UK.

The real problem isn’t file sharing because it turns out file sharers are also those industries’ best customers and the piracy can actually help sales, but rather there’s an industry that’s changing in a way that means there is less and less need for the role that the RIAA or MPAA’s members once played.

Instead of doing the hard work of trying to find a new business model they expect governments, ISPs and just about everyone else to help maintain the one that is heading for obsoleteness. Of course it doesn’t help when the make up totally bogus numbers to support their contention as to how much is being lost to “piracy”. (I’d call it free promotion.) 

Even actually studies manage to be spin-doctored beyond control, even exaggerating the number 10x, and yet no reporter or journalist checked them for accuracy, leaving the thorough debunking of the numbers to non-professional journalists. (This is why I don’t care about the news industry as it is; they’re notoriously inaccurate.)

The solution isn’t to try and prevent piracy, because it’s not possible. It’s time to realize that you can sell abundant goods at premium prices. What you have to do is to find where there’s scarcity that can attract premium prices. The role of abundance and scarcity is the subject of another post.

Why do we want advertising again?

Somewhere in my feeds today I found a link to a blog I’d never heard of: A Working Library. An article called On Advertising caught my attention, probably because it expressed my thinking better than I’ve been able to articulate: 

“There is no end to this, in that short of eviscerating the content all together (and removing any impetus the reader might have to visit in the first place), our attention to the advertisements is always waning. Sadly, our attention elsewhere also suffers and declines; instead of staying still to read, we skitter from place to place, like frightened prey assured the predators are near.

So, let’s stop pretending, shall we? Any economy which charges ever less for ever more intrusive ads will eventually be successful not in creating wealth but in driving the readers away, until the only ones left to heed the ads are all the other ads, the cell phones searching in vain for a target market among the cellulite.”

Are we really sure this is the way to fund new media? The only way according to ‘common wisdom’. If it is, combined with the precipitous drop in advertising expenditure in recent months and a dismal outlook in the future, then new media is doomed. 

Fortunately I don’t think traditional advertising has much role in new media or new television. Integrated, relevant product endorsement or placement; pay for download or view or subscriptions are much more likely in a world where producers and audiences are disintermediated.

It’s very important to keep in mind that the single most successful model for online distribution has been Apple’s pay-for-download iTunes Store (and lately rentals) by a several billion dollar margin over advertising support for new media projects. As I’ve said before, the advertising supported viewing of Dr Horrible’s Singalong Blog returned negligible income but served to promote the iTunes download or DVD.

Perhaps I have a higher-than-usual aversion to advertising, but I do think we need new models. I have no confidence that the mass-market advertising model we inherited from the “Mad Men” of Madison Avenue has any relevance in a fragmented audience. 

Research shows that “relevant” advertising is more acceptable than any other form (to which I have to say “well d’oh”) and truthfully I appreciate seeing information-rich advertising when I’m looking for a product. Other than Googles Adwords text ads, I don’t see any attempt to target advertising. Even so I rarely follow those links because the informational links are where I go.

That’s why integrating products or services into the programming, or building branded webisodes around the main project seems to me to be far more viable than running a traditional 10, 15 or 30 second ad before or after the main content. The consumption model is different so there’s no reason to believe that old models will carry forward.

But personally, I’d still rather pay a producer a fair price for the content and skip the advertising completely.

How much will you pay to watch ads?

Of course, if I ask the question like that “How much will you pay to watch ads?” most people would immediately respond with “nothing” or something close to it. However most people already pay to watch ads on cable television. You pay the cable company a fee but the majority of channels you can get without paying another, additional fee, all have advertising.

In some of my presentations on the subject of the future of Television, I like to point out that the advent of cable is when Americans started paying twice for Television: once with your attention to the advertising (which was supposed to be enough) and again with cash to your cable company for the privilege of a clean signal and no outdoor antenna.

At least with the cable company you know what you’re going to be charged ahead of the game and you’re not charged specifically for each commercial you watch. You will if those same companies move to capped or tiered bandwidth on your Internet connection. With caps along the lines so far proposed by Time Warner (50 GB a month) a couple of movies downloaded every week (or the equivalent TV watched on Hulu, or YouTube et al.) will soon put you up to that limit. Then, every single advertisement you’re forced to watch will be adding to your bandwidth bill directly.

Capped bandwidth is not necessary and will cause a crippling effect on the growth of video on the Internet (of all kinds). It’s not for nothing that Australia – with very low bandwidth caps – is a broadband backwater in international terms, even compared with the USA. To meet the demand, the cable companies need to invest in their infrastructure just like any other business. If they don’t, let’s find an alternative because the only thing stopping a truly competitive business is the lack of competition.

In most places there is, at best, a duopoly of Internet suppliers: a cable company and (if you’re close enough) a telecommunication (a.k.a. phone) company. Duopolies get comfortable and start to think they’re running the business for themselves and “customers” are a rather unavoidable nuisance. Throw WiMax, 4G cellular or other technologies into the mix and we’ll have real competition. With real competition, all need for a discussion about “Network Neutrality” will evaporate: none of the competitive organizations can afford to be the only one throttling their network.

Without real competition, start to think about paying for watching ads – not only at SuperBowl time but all year round. Ads you don’t care about for products you’ll never be interested in buying, but that you’ll pay for anyway.