The present and future of post production business and technology

In a January article “Apple pushing TV Networks to slash prices on iTunes” and more recently “Apple to offer $1 TV shows in April” Business Insider/Silicon Alley Insider suggest Apple are pushing the price of programming through iTunes down, with the goal of selling “some shows” for 99c.

This is absolutely a step in reality’s direction but it still prices individual programs at well above the traditional income-per-viewer that networks have traditionally received, and way above what it would cost for an average viewer via a cable or satellite subscription.

At 99c, the content owner would get 65c per download as Apple take 35% and pays for the bandwidth (at about 10c a GB).

65c per viewer per show is right at the top end of what the big four networks have been able to command from advertising: per show, per viewer. (Even the Superbowl only gets 85c average per viewer per 3 hours show).  At the other end, the big four get a low of 25c per viewer per show.

But not all television is “big four” nor is it always worth the network premium. Take one of my favorite shows: The Daily Show with Jon Stewart. The best research I can find is that Comedy Central pays Stewart’s company about $5 million a year or $32,000 each for the 160 shows a year that are produced. The Daily Show has an audience of around 1.5 million viewers according to Wikipedia and other sources. Cost of production to Comedy Central is just about 2c per viewer.

Presumably Comedy Central are turning a profit between the 60c per subscriber per month they get from cable carriage and whatever advertising revenue is generated across the 5 or so showings of each episode.

And yet, through iTunes that show is currently $1.99 or 99c per episode if you buy a season pass for 20 episodes. (One of the few cases where a season pass gives significant savings). It’s still too much.

If Jon Stewart’s company sold direct through iTunes at, say, 10c an episode (because once watched it has little future rewatching value, unlike episodic drama or comedy) then gross revenue would be $150,000 per show or $97,500 after Apple’s cut. (Apple’s bandwidth cost would be around .6 of a cent in SD, or $8550 leaving Apple $43950 gross profit on the sales.)

On the other end of the equation, the content creator (Stewart) gets $97,500 or three times the income for the same show as working for Comedy Central brings.

So, while 99c TV shows are a step in the right direction there’s still a long way to go before Internet, on demand, video reaches fair price parity with traditional revenues. This is not an opportunity for the existing entrenched players to dramatically increase their margins: it will kill the nascent future.

On October 31 last year Edo Segal wrote an article on TechCrunch with the title For The Future Of The Media Industry, Look In The App Store. The article is definitely worth a read but this jumped out at me:

But the entertainment industry has a vested interest in the success of this new type of convergence, as within it lies the secret to its continuing prosperity. The only way to block the incredible ease of pirating any content a media company can generate is to couple said experiences with extensions that live in the cloud and enhance that experience for consumers. Not just for some fancy DRM but for real value creation. They must begin to create a product that is not simply a static digital file that can be easily copied and distributed, but rather view media as a dynamic “application” with extensions via the web. This howl is the future evolution of the media industry.

It brings together some of the thinking I’ve been doing on how to challenge the loss of revenue from direct consumption or from advertising revenue when digital files of programming and music are so easily shared and copied. Techdirt.com like to summarize their approach as CwF + RtB = financial success: Connect with Fans and give them a Reason to Buy some scarce goods. Many musicians are already doing this and the results are summarized in the article The Future of Music Business Models (and those who are already there).

I agree that CwF + RtB is part of the future: we can’t charge for infinitely distributable digital goods but we can charge for scare goods (or services) promoted by the music.

But I’m not as sure that will work in the same way for the “television” business, which I define as being “television style programming professionally produced” even if it’s never broadcast on a network on cable. Certainly it will be possible to sell merchandising around programming, and everyone is encouraged to do that.

I’ve also written and presented – as long ago as my Nov 2006 keynote presentation for the Academy of Television Arts & Sciences – that producers and viewers have to be more connected, even to the extent of allowing fan contributions.

Well, last night I had something of an epiphany that bought together Edo Segal’s thoughts and my own as I contemplated the implications of the recently announced Apple iPad.

As a brief aside, I find the iPad to be pretty much exactly what I was expecting (although I thought maybe a webcam for video chat) and interesting. Although I don’t see where it would fit in an iPhone/Laptop world, I can see plenty of uses particularly for media consumption. (For example a family shares an iMac but each of the older children have their own iPad for general computing, only using the iMac for essays etc.)

But the iPad doesn’t really lend itself to static media consumption as it has been: where the producer sends stories fully finished and complete to viewers who passively consume. That’s when the import of Edo’s comment struck: there is more of a future in media consumption for those producers who create the whole environment.  This has definitely been done by many movies and shows but usually with more of a consumption-of-information about the show, rather than a rich interactive experience where fans of the show are as important as the producers.

The future of independent production and media consumption is an immersive environment (website, or better yet and iPad app) with:

• Content
• Community (forums, competitions)
• Access to the wider story, side stories or “back story” in various media formats
• Character blogs
• Cast and crew blogs
• Fan contributions and remixes.

Such an experience would be almost a cross between a typical television program and a video game environment. Sure programming is part of what can be consumed on the site; but there are competitions, games, back stories; additional visual material edited out of the program source, with additional shooting, using technologies like Assisted Editing.

Any unauthorized distribution of content will only be distribution the content, not the experience of the program in its full glory.

Now, there’s no particular reason why this couldn’t be largely done on a website, but it is as an immersive iPad app that I think it will really be fantastic. The iPad is very immersive and tactile. It presents no “border” (i.e. browser window and other computer screen elements) to distract from the programming. It begs to be interacted with because holding it in place to watch a 22 or 44 minute show doesn’t appear to be going to be all that great.

There’s one more selling point for the iPad: it allows in-app sales, so some of the “reasons to buy” can be sold very transparently without even leaving the app’s environment. Avatars, screen savers, certain games or activities might carry a small charge. Yes, even the media itself (or some of it) could carry a small transaction charge. Smooth, frictionless sales in an environment optimized to engage people in the story of the show.

Apple’s iTunesLP format is a very small start in this direction by building a micro-site for the album artwork. This is very powerful because it supports most modern web technologies in a tight package and interactive features (all, b.t.w., without Flash but looking a lot like Flash).

Edo has some further good ideas and I recommend reading the article at the top of this post.

So apparently some author comes up with a figure that online unauthorized distribution is costing the book publishing business $3 billion a year. (Once again repeating the totally bogus argument that each download is a lost sale but that’s for another post.) One has to question the independence of the study when the writer works for a company presenting a “solution” to the problem they identify, but let’s leave it for the moment.

This is only the tip of the iceberg. There’s another industry that costs the book publishing business $100 billion a year in lost sales: libraries. Using the same methodology as the study in the cited publisher’s weekly article above, this blogger calculates that libraries have cost publishers $1 Trillion dollars in the last decade.

So, if we’re going to solve the book “piracy” problem in a way that really helps publishers, we’ll have to close all the libraries. After all they’re costing publishers more than 30x more than any unauthorized distribution does: even if you calculate that unauthorized distribution with totally bogus methodologies.

In fact, photocopying also costs the print publishing industry billions of dollars a year, so we should regulate their use. In fact, if the RIAA/MPAA want a “three strikes” rule, then it should be applied to everything.

A three-strikes rule (as introduced in France) would mean that if an unsubstantiated assertion from a record-company-appointed “watchdog” is made against an IP address, the account would be cancelled and the user taken off the Internet. (Note: this is without judicial process; without any proof that the account holder did the download; with a system that has accused dead people of “piracy” or any other legal process we normally hold as being important before issuing punishment. At least there has to be a trial!)

So, if this is a good idea for music or movies (like they’re some “special” category) then it obviously should be carried through to protect print publishers as well.  According to “Freedom to Tinker” it would work like this:

The government sets up a registry of accused infringers. Anybody can send a complaint to the registry, asserting that someone is infringing their copyright in the print medium. If the government registry receives three complaints about a person, that person is banned for a year from using print.
As in the Internet case, the ban applies to both reading and writing, and to all uses of print, including informal ones. In short, a banned person may not write or read anything for a year.
A few naysayers may argue that print bans might be hard to enforce, and that banning communication based on mere accusations of wrongdoing raises some minor issues of due process and free speech. But if those issues don’t trouble us in the Internet setting, why should they trouble us here?
Yes, if banned from using print, some students will be unable to do their school work, some adults will face minor inconvenience in their daily lives, and a few troublemakers will not be allowed to participate in — or even listen to – political debate. Maybe they’ll think more carefully the next time, before allowing themselves to be accused of copyright infringement.
In short, a three-strikes system is just as good an idea for print as it is for the Internet. Which country will be the first to adopt it?

After all, if it’s fair to have people cut off the Internet (and their life) based on three unsupported, unproven assertions from anyone, it should apply to everything. Right? It should apply to the children of Record Company executives (who apparently only got a “talking to” from their father -wish I could find a link to that story).

This is, of course, after the RIAA and MPAA have totally failed to establish that they have had any loss from piracy. (The biggest grossing movies were mostly pirated before release from within the studio.) Study after study (sorry Adage login required) after study shows that those who download music are the biggest buyers of music, but facts have never gotten in the way of idiot assertions from these organizations.

So, either we apply “three strikes” under some reasonable regime that would require the record company or movie studio to actually do what the law requires and identify the person at the account and prove that they uploaded a file as “making available” is not established legal precedent in any jurisdiction; or we’ll allow a regime where anyone can be accused of “piracy” by any other person without proof or the need to follow established law.

Which are you going to support?

One way or the other I’ve been thinking of what a “new media studio” would be like; how will people be paid; what would drive consumer demand; and all the rest that goes with a theoretical construct of a “replacement” for what we have now. Practically speaking, it’s more likely to evolve with many ideas in parallel, than come in one sudden upheaval that creates a new greenfield.

Although, as an aside from my main theme, I look ahead two years to when the actors’, writers’ and directors’ contracts come up for renewal. My feeling is that they’ll either have negotiated a settlement before the contract runs out, or we’re in for an apocalypse.

Remember that this a purely theoretical construct so I’m forgiving myself for not having every detail covered. What set me thinking, horrible-though-it-is was Demand Media. Wired’s article The Answer Factory: Demand Media and the Fast, Disposable, and Profitable as Hell Media Model is really a nasty kick in the mouth for production skills: essentially “quality” has no place in this (highly profitable) production line, where costs have been driven down by competitive pressure. It is probably the dystopian future we were warned against when the industry became “democratized”.

Fortunately I don’t think it’s feasible for television-like content. (I’ll just call it Television, but I mean the sort of content that people watch on networks, cable channels, or off a satellite or even via Hulu.) For a thousand reasons I’ll bet at a minimum a more complex production process and higher demands for writing skills. Even relatively successful Internet Shows often have underdone production values from lack of quality writing, lighting or sound. (And some are excellent in all three because they have been made by “old school” folk.)

But let’s step back and apply some of the principles and see what might come of it.

Based on audience demand

Instead of basing program ideas on  some ‘gut feeling’ of a producer or executive we can take a lesson from the Demand Media case and design shows tailored to specific audience demands. Demand Media have algorithms that watch search terms and derive future “shows” as answers to questions people are asking ‘now’.

I’m sure there are ways of tackling similar challenges for TV shows. Monitor social media interactions for the types of comments being made about shows; use that data to derive algorithms to direct existing shows and find ideas for shows that will have an audience, and the business model for that audience would also be known. (See below, Funding it All)

Production Line

Everything becomes a production line. It’s going that way now, but the whole process needs to not be recreated anew for each show. In a greenfield model, employment is constant with people moving from show to show as they come and go; moving from one creative grouping to another.

Everything is standardized: production gear, cameras, record formats, etc. Standard workflows, controlled by the studio.

Talent

Talent would be mostly staff – from writers, production crew, actors, editors, audio post – paid decent salaries and with good benefits. Everyone would get a decent salary with a flat salary structure (instead of the enormous salaries for some) but would also share in the studio profits. Everyone is motivated to make it work.

Talent (across the board) is nurtured in their craft advancement based on merit. (Implicit in advancement is the concept that people will leave, unless the studio always grows.)

Production

Put production in inexpensive facilities, either purpose built (long term) in inexpensive locales (low cost counties) or in excess facilities from a declining (declined) old industry.

I see a lot of standing sets and green screen, and frankly a lot of synthetic sets.

Again with standardized production gear, all matching grip and common set modules for set construction. Work on the model of Southwest, JetBlue and Virgin America: one standard service, in standardized aircraft with much simplified maintenance and costs for spares.

Standardizing on common equipment, workflows, formats and outputs would save production and post huge amounts of money. Equipping with modern gear that has great quality at affordable prices taking advantage of all the cost reduction of the last decade.

Production will require talent. We need it to “look and sound like Television” because that’s where a large market is at (if we’re in a greenfield remember). It will still need to be lit well; recorded well and finished to a high standard, but I would argue that the most profitable approach would be to go to the least expensive “good enough” solution. And by “good enough” I do mean that it has to be good, but maybe for this type of content, shooting with a Viper might be “more quality than we need to pay for”. But AVC-I or direct ProRes acquisition with a KiPro makes for high quality and efficient pipelines that maintain “good enough” quality.

Apply that concept across the range of production departments: good enough, but not luxury.

Promotion and Audience Building

I think there are a lot of lessons from the independent film producers who have learned how to build audiences, and it’s something I’ve presented on before. It will be more building and nurturing fan bases and involving them in the process as much as possible.

Funding it all

Ah yes, the million dollar question. Or multi-billion dollar question if we’re talking an alternative to the current Television industry. Of course, I don’t have any definitive answer because, well frankly, there won’t be one. As was obvious at Distribution U, there are many avenues to funding a program:

• some audiences will want to pay directly, and that’s a viable business model as I’ve demonstrated before, for even quite small audience sizes;
• less expensive productions make it easier for one advertiser (a.k.a. brand in recent discussion here) to sponsor the whole show (Mark Pesce’s Hyperdistribution model)
• use the show to promote merchandise, live performances, or other scarce good.

In one part of my mind I think a model like this could actually work. In fact I’m sure some variation on this is part of Jim Louderback is attempting with Revision3 and Kip McClanahan is attempting with On Networks. I suspect that no-one is going as radical as Demand Media, and I hope no-one ever does.

Although I attend a number of conferences a year – often as a speaker – I mostly find that they go over ground that I either already know, or have heard the panelists/speakers go over before. In fact in 2008 there was one conference that I found extremely valuable – The Conversation organized in part by Scott Kirsner, who’s CinemaTech blog should be on everyone’s reading list.

So, naturally when Scott teamed with Peter Broderick on the Distribution U conference I signed up immediately. The conferences, held last Saturday, Nov 7, was a one day overview and summary of what people are doing to promote their independent films. While my primary interest is in the (as yet undeveloped) field of “independent television”, there were a lot of lessons from Distribution U (link is to Scott’s wrap up).

For me, the concentrated day helped me consolidate a lot of the thinking I’ve been doing on distribution over the last 3 or so years and helps me build on some of the thoughts I’ve been sharing via the (free) Supermeet 2009 magazine (How to grow an audience for your independent project) and via sessions at Digital Video Expo and other places.

Trying to summarize my eight pages of notes (a new conference record for me).

Scott Kirsner’s “scene setting” session started by pointing out how all technology innovation is immediately rejected by “the established players” – Edison hated projected film because he feared (accurately) that it would kill his profitable Kinescope business. We still see this happening today. His primary point is that “participation and engagement” with audiences is a crucial tenet of modern audience building – a term I prefer over “distribution”.

Another primary theme, from both Scott and Peter, is that the distribution for every project will be different, because the primary (or starting) audience will be different and what attracts one audience will not attract another. In modern distribution the “primary” audience for any project is one that is already engaged, in some way, by the topic or content. That helps get word-of-mouth buzz going and the audience can spread. Targeting a specific audience is easier (and cheaper) than trying to build a generic audience.

Another primary theme is that revenue comes from all sorts of places, not just “traditional” ones. A revenue mix seems to be the new normal for independent projects.

For example, the audience (and revenue) for Brian Terwilliger’s One Six Right has come from pilots, because the film is really about the romance of flying small planes and should appeal to every pilot in America. One Six Right has made money: (corrected after comment from Scott Kirsner)

• selling DVDs directly (9,000 in the first 9 days it was available);
• selling the soundtrack on CD (30% who buy the DVD also buy the CD of music unknown other than in the documentary);
• selling posters signed by the 24 year old filmmaker (so far $30,000 from sale of posters)
• listing (and selling) the DVD and merchandise through a catalog for pilots (Sporties);
• selling through Amazon (where apparently the tip is to keep supply to Amazon low, which keeps them from deep discounts and keeps the sale price high);
• selling a calendar (people pay to have the project’s promotion on their walls);
• deals with local general aviation airports for local premiere’s;
• giving the show to public television while retaining 4 x 15 second spots before and after the show to promote the DVD and merchandise;
• creating a half hour “making of” special that builds the documentary out to a 2 hour or 90 minute package and selling that to Discovery channel. This sale apparently covered the original budget, on top of all the income from all the other revenue-generating activities, which is substantial.

I don’t know the budget for 161 right but some quick math shows that the initial DVD sales and calendar sales account for about $210,000 in revenue alone.

In fact, engagement with the audience starts at the very beginning of the project, rather than after production is complete: build an audience as you build the project and neither is more important than the other. Starting early builds an audience for the project and it builds anticipation.

Peter Broderick focused on “Hybrid Distribution” – don’t throw out all the “old” methods but adapt them and slice up the rights to the filmmaker’s best advantage. Never give anyone more rights than they need, and always retain direct sale rights for DVD and digital downloads. Although Peter gave a lot more examples at the seminar, his 10 Principles of Hybrid Distribution article provides an excellent overview.

I really appreciated the depth of examples that Scott and Peter provided, and the willingness to “talk numbers”. In most cases we got specific examples of the revenue from each type of activity surrounding the production.

Scott Kirsner will be speaking on “Building Big Audiences and Generating Revenue in the Digital Age” in San Francisco on Tuesday Dec 1 and I recommend you go if you have any interest in the subject – it’s based on his book Fans, Friends, and Followers (my copy is on the way and I’m looking forward to reading it).

I think this quote from Lisa Seward of Mod Communications summarizes the changes best:

You used to use your budget to buy an audience. Now you have to invent ideas to attract an audience.

The quote comes from an excellent presentation, referenced by myself and Larry Jordan already, The Audience is always right.

I’ve had an inordinate interest in how the news industry, particularly newspapers, are faring in the Internet age. It’s only relatively recently I realized why I thought that was even relevant to the fields I study – among them what is going to replace (or grow in parallel with) the current model of “Television”. Then it struck me…

Television is to newspapers and magazines what movies are to music.

In the music and movie models we’ve been used to, there is a direct transaction – payment is made to buy music (on disc or download) or to pay to view a movie (in a theater or by buying a DVD). This is a fundamentally different model than Television, where the content is “free” in return for your “attention” to advertising. Advertising supports both Television and newspapers and magazines.

Yes, people pay a small amount for newspapers and magazines, but that is nowhere near the cost of producing the magazine. Newspapers and magazines (I’ll just say “newspapers” from here but I include magazines) are heavily subsidized by advertising or they can’t survive. (Consider how many magazines have been closed in the last year all attributed to the “loss of advertising revenue”). Given that I don’t believe advertisers are coming back, what are the implications of the music experience for movie distribution, and the newspaper experience for television distribution. Without distribution there is no production.

The music industry has found that “infinite goods” – those that can be produced for close-to-zero (a digital copy) – has changed the market. Classic economics tells us that the sale price will trend toward  incremental cost of a sale. For music that’s zero or close to it because there is no scarcity. Scarcity, again classic economics tells us, is what drives up price: no scarcity and the price drops toward the marginal cost of producing the copy. (Yes, classic economics ignores the cost of production.)

The movie industry is finding some of the same dynamics happening, except that the movie industry has an advantage: the primary product is not the movie, but the “going to the movies” experience. Clearly the movie-going experience is more important than the movie otherwise attendance would have dropped dramatically as the quality of picture has dropped. Instead movie attendance is up despite audiences being treated like criminals with bag searches and, in some theaters, full body, airport-style scanners.

The smart people in the music industry have also realized that the business model they grew up with – where Record Companies actually had a role to play – is no longer viable. (When you have to sue your customers to “keep control” of your product, you have acknowledged a total failure of business model and you should be allowed – encouraged even – to go out of business.) So they’ve been deriving new business models that use the non-scarce good (the recorded music) to promote scarce goods – like concerts, experiences and merchandise.

Music, and movies, will continue to have “direct pay” models but they won’t be the same as in the past. (Nor should anyone who has two working neurons think the models can remain the same.)

It is newspapers and television that I’m worried about. The current models for both are unsustainable. Advertising revenue has dropped dramatically partly because of the current economic conditions, but long term because advertisers have better alternatives than renting some irrelevant eyeballs for 30 seconds at a time with a message that’s irrelevant to 99% of the audience who aren’t ready to buy your product right now.

Newspapers once provided a valuable service(s) that have been replaced by better models online. Craigslist has effectively killed the cash cow of classified advertisements because it’s a better model (free, instant). No-one really needs a newspaper to learn the session times for the local movies (available online) nor really, to decide what car they’ll buy next.

People, by and large, don’t need newspapers for news either. Not that most newspapers did that much “reporting” anyway. Surveys of typical local newspapers showed that they often have as few as five or six “real” stories (researched and written by staff reporters) not sourced from elsewhere. Most “news” comes from Associated Press, Reuters, people-in-foreign-countries, press releases, etc.

Worse, most newspapers (and television news) do not really vet their stories, taking away one of the major claims that we “need” professional journalists because, unlike bloggers, they “fact check”. (Really CBS? Who “fact checked” last night’s industry-lacky piece full of major errors on 60 Minutes?) It’s hard to make the case that the majority of professional journalists actually fact check anything. (Quick quiz – in any news story that you’ve been involved with and then seen the reporting, has it ever been completely accurate? Never in my experience, never.)

So, when the impetus for “demand” drops, and the money to produce evaporates because even the advertisers have a better way to do things, newspapers will, of necessity, die. That does not mean that great journalism will die, but it will be funded differently and have very different forms.

Television, including basic cable, is facing the same challenges: advertising revenue is drying up and unlikely to come back to previous levels, meaning the whole model is probably broken. Not this week, not next year, but long term Television as we know it is being destroyed by this lack of advertising revenue; the failure of the “players” to adapt business models, and that audiences for any given show are much smaller because there are so many choices.

What we’ve known as Television will have to evolved into a model that allows for “any program, any time, any device for a fair price” (i.e. a return that is similar to the return from advertising, not an attempt to get a 4x return as the Networks currently do with iTunes et. al).

I suspect that will, like with the Record companies and Movie Studios, leave the Networks out of the picture as middle-men imposed between producer and audience.

I don’t (yet) know what that model is going to be, or indeed if there will be only a single model, but the transformation of a nearly-70 year old business model based on scarcity (broadcast licenses) has to evolve when that scarcity no longer exists. And it no longer exists.

Over the last two years I’ve been thinking extensively, and speaking on, about funding new media. (Want me to come speak on the subject at your group – email me!) It’s become increasingly obvious that advertising probably isn’t the way the majority of media will be funded in the future.

In the (relatively brief) period of mass media – Television, newspapers, magazine and radio – the publisher or license holder built an audience and then sold that audience to advertisers to push unrelated products and services to the audience who mostly didn’t care. With 70% of Americans desirous of paying to avoid advertising (counting me among them) you have to wonder how long the tedium of irrelevant advertising will be tolerated by audiences.

Even the web is a horrible experience unless you are smart enough to enable ad blocking and Click2Flash (Flash blocking in webkit displays system wide – OS X only afaik). With those two add-ons enabled the web doesn’t burn my eyes with the pain of flashing, jumping, irritating distractions. If my failure to ruin my experience of a site by blocking the ad sends the site off the net, so be it. I didn’t ask for the advertising.

Technically, of course, it’s not all advertising that’s horrible, just irrelevant advertising. Like watching a 45 minute show on Hulu and seeing the same fabric softener ad five times!!!! And Hulu has the temerity to complain that I’m using ad blocking! People don’t really mind relevant advertising, but so little of it is! In fact, for me about 99.9% of advertising is irrelevant. In maybe 200-300 hours of in-car listening to KNX1070 (LA News radio) I’ve heard one ad that was relevant (Windscreen chip repair). That is the only ad that doesn’t carpet KNX wall to wall! (Figures!)

So, I have a fairly hard-and-fast rule that I don’t buy from anyone who advertises to me. Send me junk mail, go out of my purchase consideration list.

Anyhow, I’m not alone. Not only is advertising losing its effectiveness, it turns people off (and yes, I have references for every assertion I make, I just don’t want to clutter the blog) and that’s just not going to be a way to build an audience.

But there’s a much bigger problem. There’s not enough advertising for any “new media” and “old media” is losing advertising support in dramatic amounts.

But most relevant of all. Advertising in someone else’s show makes no sense. The biggest advertising brands would be much better off with branded entertainment, where they would pay for the content and integrate the advertising. American Academic Mark Pesce, now at the Australian Film, TV and Radio School, coined the term “Hyperdistribution” where a single sponsor integrates ads relevant to the show’s audience and in the style of the show, and then it’s distributed anywhere and everywhere it can be. P2P and Bittorrent distribution is welcomed!

My friend Cirina Catania worked on a very successful series of branded media (online video) for Chivas Regal and I believe that this is the direction of the future: useful, interesting content that is, in some way, relevant to the brand and hooked back to the brand. Why torture audiences with irrelevant advertising when you can entertain them and still get the brand message across in a relevant way?

I’m clearly not the only one that thinks this. I recently found a great presentation called (correctly) The Audience is always right. Check it out and then make a comment.

Just lately I’ve been dealing with a content aggregation site (or two) that had articles from this blog listed in their articles directory. Worse still is that the site is designed to distribute articles to other sites. I don’t mind the idea: if a writer wants wider distribution, then it probably makes sense to syndicate the article there, than have it sit in obscurity.

I had to fight fairly hard to get my articles out of their system because I had not put them in that system and didn’t want the articles syndicated wildly. Now I do have some syndication organized (if you’re reading this on Toolfarm, thanks) but I don’t want this content distributed anywhere I haven’t directly authorized.

The articles were removed but only after I re-served the DMCA takedown notice on the owner of the domain name, as the normal site admins were not acting in according with the provisions of a DMCA Takedown notice. (I actually thought I’d have trouble when I realized, from the domain registration, that the company was actually in Israel, which isn’t actually covered by US Copyright law! Fortunately they did the right thing.)

We were talking about this over dinner and I realized I had a double standard going on. Not necessarily a bad thing but any internal inconsistency is alway s worth examining.

I was remarking that I am fairly certain there’s at least one school or college that’s using my HD Survival Handbook as a class text, which is not exactly being used in accordance with a single-user license that is the normal purchase. (BTW, we’re always happy to do very attractive bulk pricing for anyone that wants to reuse in a school or commercial organization, as we did recently.) But the thing is I wasn’t particularly upset by it. Sure, I would prefer that they made an arrangement with us for official distribution, but the thing is, I didn’t have any proof that they were doing something wrong. There may be a way that just the teach uses the work as a reference.

If I had actual proof put in my face – such as a student saying that the HD Survival Handbook was actually on a student-accessible server at her college – I would have to act. (In that case I sent a nice email to the original purchaser at that college stating what the student had said and he immediately made it right.) When I say “have to act” I actually mean it. Should an author not act on flagrant breach of the licensing conditions, there are circumstances where the author can lose the copyright exclusivity.

So I was struck with my apparent double standard. I am less worried about meticulously keeping the commercial writings only to those who purchased, than I am about these thoughts being widespread.  Partly that was because the instance with the aggregation site did not have link-backs to this site – the uploader had substituted links to their site, and the content was misused – wrong tags and confusing descriptions. My name even appeared on an article I didn’t write! But it’s also because a lot of what I write here are the beginnings of my thinking about something, or they’re going to be (or have come from) commercial writings.

Mostly, I think, it’s because the commercial products were written to be distributed widely. Plus, if there is a whole class or two that are using my work as their textbook, I’m still being compensated with reputation building. I’m not unhappy with the thought that a whole generation of student will grow up thinking that I provide accurate, understandable and useful information. I figure that will lead to some compensation some day. The portion that does pay for the downloads, and I like to think that’s the majority, make the project well and truly worthwhile, and frankly, I don’t think those students would have paid anyway! Whatever money a student has should be kept for the truly important things…

Here though, I’m writing as much to clear my thinking or have a record of something I’m fired-up about as anything. I don’t have advertising on the site and don’t expect it will be a commercial return. I do hope that it’s reputation building, and when you reproduce this work without authorization, you’re taking my reputation and using it for your own purposes. And I don’t like that.

PS

What I consider highly appropriate is to make reference to a post, summarize the main points – perhaps quote a paragraph or two – and then link to the permalink for the article here. (Click on the article headline and the URL will be the permanent link.) That type of use is a compliment.

Over at Techdirt, Mike Masnick wrote an interesting article suggesting that copyright on “art or music” may be unconstitutional. Now, I don’t expect the Supreme Court to rule that way any time soon – there’s not even a case before them – but it did make me wonder what would be different if copyright didn’t exist on film, television, music, architecture and other creative arts.

I thoroughly recommend reading Mike’s article, but the gist of the argument is that the Constitution provides for a “Limited Period” (originally 14 years, not 50 years past the death of the author) for “authors” (only, no descendants or corporate owners) “To promote the Progress of Science and useful Arts”. Useful Arts apparently being the business of invention in the language of the day. No mention of almost all our current copyright system.

We wouldn’t have the RIAA suing its best customers. The RIAA, MPAA and their kind around the world would have to work out how to compete, which is simple: provide a good product at a fair price and provide it conveniently. Without the crutch of copyright to protect a dying business model (and a highly profitable one, so it’s understandable they don’t want to adjust to the new reality) they would have to compete.

After all, television has been giving its content away pretty much since day one. Of course others (advertisers) pay for the privilege of interrupting the program with something irrelevant, which is why I’d rather pay a fair amount for my ad free copies, thanks.

If there was no copyright, then digital copies would abound, and content creators would either have to add value to their official (paid) version; or bundle advertising so closely with the show that it doesn’t appear like advertising. (In fact I believe the future of advertising is branded media, but that’s a post for another day.)

Of course, it can be done. iTunes and Amazon’s music store sell music that is fairly readily available via various P2P mechanisms. Every one of the 4 Billion songs Apple has sold has been available free.

Perhaps content could be free after a period of time, and people will pay for immediacy. This is the strategy the Direct TV hoped would give them more customers by showing Friday Night Lights on Direct TV before their outing on NBC. (See my earlier article on how the numbers stack up for new media, on how that program is being funded and what a fair price would be for a viewer.)

People will pay for convenience and simplicity – both reasons why iTunes has been such a successful model, despite charging way too much for television and movie content.

There are dozens of ways that television, and new media production, could fund itself if there was the necessity and they couldn’t fall back on copyright. In fact in my “Making a living from new media” seminar, I outline 13 different ways that free media can lead to a decent middle class income.

If “Hollywood” wasn’t covered by copyright, how different would it be?

A couple of days ago I talked about why a “three strikes” law is such a bad idea. It’s also a bad idea because it’s pointless and bad for the content creators and/or owners’ businesses.

On the other hand, even the threat of a three strikes law in France (ultimately struck down by their highest court as against human rights) immediately created a business opportunity for encrypted Virtual Private Networks (VPN). Not only that, but the Pirate Bay folks are also setting up an inexpensive VPN service for anyone that wants it. These services disguise the IP address of the downloader, so even if copyright owners tried to get an IP address to sue (not that you can sue an IP address, as many have found out in non-US jurisdictions) everyone using the service has the same IP address, not correlateable to any individual location. 

If that should ever become “broken” as a workaround, something else will be found. In fact there’s a move afoot to update the bittorrent protocol to a new form that resists seeders being identified.

It’s a pointless exercise. Whatever horse there was has long bolted the stable and the only reasonable response from an intelligent business person is to find new business models. Andy Kessler, writing at Forbes.com, discusses The Inevitability of Internet Pirates: 

Hand out as many guilty verdicts as you like, but folks on the Internet will copy away–because, really, who can stop them? Google won’t do it, Internet providers like Comcast ( CMCSA -news - people ) and AT&T ( T - news - people ), who can block a lot of this stuff, can’t do it without Network Neutrality proponents squawking, “Interference!”

Even authoritarian regimes fail. (The Great Firewall of China is quite leaky.) Plus, it is so easy to create a Web service to download copyrighted material that, like that arcade game Whac-A-Mole, if you take one culprit down with your mallet another five pop up in the next few nanoseconds. Sad but true, there is not much anyone can do.

Blocking sites does not work because it’s relatively trivial to find a proxy server to log into the “blocked site”. DRM has been an abject failure inconveniencing those who actually paid for the product without doing anything to reduce “piracy”. 

Piracy is such a daft word for infringement – a civil or business problem, not a criminal one. With theft of property, the original owner is deprived of ownership because the thief has taken it. Not so with a digital copy where millions can be produced without anyone being deprived of anything (other than potential, not actual, income). The copyright industry likes to use the word “theft” or “stealing” but it’s disingenuous at best and an outright lie in all likelihood. (As are the outrageous guesses at “losses” that make the ridiculous assumption that every download is a lost sale at a premium price, none of which is supportable by fact.)

Not only is it inevitable, but it’s not in the best interests of the content industry. As I’ve noted before, those who do pirate music are also the music industry’s best customers. Apparently the pirating is a way of testing new music that otherwise would never have been heard, appreciated and ultimately purchased. 

Not only that but a new Harvard study shows clearly that it’s in societies best interests to have weak copyright. Remembering that the writers of the Constitution of the USA reluctantly granted “limited” exclusive copyright in return for encouraging creative work.

Copyright law was never meant to protect the music business in the first place—instead, it’s intended to foster creative production in the arts. It seems that goal is fostered by weak copyright and file sharing. 

The idiot copyright industry keeps saying that nothing would be created without ever stronger, and longer, copyright. This is another lie that bears no relationship with any fact or research, but that doesn’t stop the IRAA and MPAA making the claim. (Heck, they simply change their story to suit whatever action they’re currently taking to prop up outdated business models – every action that is, except updating their business models.)

The Harvard Study, analyzed by Michael Geist (the original is a pdf and harder to link to or quote) has found that file sharing has significantly increased cultural production. 

The paper takes on several longstanding myths about the economic effects of file sharing, noting that many downloaded songs do not represent a lost sale, some mashups may increase the market for the original work, and the entertainment industry can still steer consumer attention to particular artists (which results in more sales and downloads).

And this:

The authors’ point out that file sharing may not result in reduced incentives to create if the willingness to pay for “complements” increases.  They point to rising income from performances or author speaking tours as obvious examples of income that may be enhanced through file sharing. In particular, they focus on a study that concluded that demands for concerts increased due to file sharing and that concert prices have steadily risen during the file sharing era.  Moreover, the authors’ canvass the literature on the effects of file sharing on music sales, confirming that the “results are decidedly mixed.” 

It’s time the MPAA, RIAA and their international associates, who do NOT really represent artists, simply realized they were flogging a dead horse and the only chance they have for a future is to adapt. Ever more draconian laws that turn almost every citizen into a civil offender (or worse a criminal) is not only stupid, it’s not in the best interests of those who create the content. Something many musicians have realized already.

Any chance of at least one politician understanding the argument? I didn’t think so.