Saturday, 3 March 2012

Can You Really Own Anything Online?

A recent post by David "Doc" Searls brought to light the effects of the slow creep in legislation on technology towards increased surveillance of ordinary people in case a crime is committed and the IP rights holders' demand for our governments to set up special agencies to fight their battles for them. It seems that in the new digital environment, we're not going to own what we pay for, but rent it.

Hollywood moves towards streaming video

A report in the LA Times from September last year declares

Hollywood's solution is to put movies in the "cloud," creating virtual copies that people can access, after purchase, from any Internet-connected device. An initiative called UltraViolet will launch this year, when Blu-ray discs for films like "Green Lantern" and "The Smurfs" will come with free cloud copies. By next year, most online and DVD purchases will connect to UltraViolet's "virtual locker," and Apple's iTunes is expected to have a similar offering.

This initiative includes an attempt to force consumers to purchase content as dictated by the studios, not the market.

At the same time, some studios that make Netflix and kiosk rental company Redbox wait until 28 days after a DVD goes on sale before they can offer it for rent want to lengthen that delay. They believe such a move will encourage consumers to pay more to buy or rent a movie digitally.

By next year, consumers may have to wait two months or longer... Those who want to stream films online for a flat monthly fee from Netflix, Amazon or Blockbuster will in many cases wait years until those titles have completed their runs on cable networks like HBO.

This approach is causing them a lot of headaches because they're tangled up in copyright and patents legislation, not to mention competition from companies offering similar services.

DECE is trying to assemble a cloud-based rights management system whereby purchasers of studio DVD, Blu-ray and electronic sell-through (EST) movie and TV show titles can access their video content on a range of electronic devices and share them with family members. As it stands right now, four studios—Warner Bros. (NYSE: TWX), Paramount (NYSE: VIA), Sony (NYSE: SNE) and Universal—are packaging their physical discs with instructions on how to authenticate digital copies in the UltraViolet cloud.

The trouble is that DRM and their disunified approach has resulted in a clunky system that, although it is legal lacks the one-size-fits-all convenience provided by the pirate torrent and streaming services — and they know it. It's their desperate attempts to continue to charge for content AFTER the consumer has paid for it that's causing all their troubles. And that's not all.

Internet throttling to combat legal & illegal streaming

Some of the internet service providers, both cable and wireless, have introduced tiered data plans to regulate data consumption and charge people more for going over a 5GB cap. Verizon, AT&T, Time Warner Cable, Sprint, and Virgin are all at it. Why 5GB? Because it would limit your internet usage to browsing websites unless you are willing to pay more for the privilege. As one commenter put it on CNet,

All this low Cap B.S. does is screw the user. Forcing them to use PPV and OnDemand services. This is how they try and kill you from using Hulu and Netflix and other streaming services. When you have such limited Bandwidth, you have to limit what you use it on.

Tech blog Techdirt goes further by saying,

The problem with a tiered or throttled data plan is that it actually makes the mobile data service less valuable. Not only does it cost more for the same usage, it adds mental transaction costs as users have to keep track of their usage. That's only going to make people value alternatives much more. The carriers can get away with that if there are no alternatives (as is the case some of the time), but as more alternatives hit the market, expect people to shift their usage to networks they can actually use without fear.

What Michael Masnick said. The thing is, in an age when internet service providers are consolidating, data throttling is going to become more of an issue as some companies gain a monopoly over rural areas. Effectively, they're running a tollbooth system that people will try to find ways around, which may include mesh networking outside of an internet service provider's control. Would anybody be surprised if mesh networking suddenly became popular enough to lower the profit margins of the big internet service providers and they pushed to make it illegal?

The system they have at the moment is currently running into the same problems we had at the beginning of the browser wars of the 1990s: a lack of interoperability and refusal to establish standards in the name of competition. Tech Crunch puts it like this:

The marketing myopia of the railroad industry is well documented in the world of business yet industry after industry makes the same mistake. Railroad companies thought they were in the “railroad” business, rather than the “transportation” business. As a consequence, they missed out on countless opportunities to pursue growth in the auto industry... pharma is still mainly focused on milking the cash cows just as DEC, Data General, Wang were in the 80′s.

They're talking about the pharmaceutical companies, but they could easily be talking about Big Content.

Where the pirates get it right

The pirate streaming and torrent providers actually don't make that much money, but they do cater to market demand:

Simply, online ad-based models benefit materially from the volume, demand, automation, arbitrage, and social sharing of online piracy... So why some big ad-based businesses really oppose PIPA/SOPA has less to do with “censorship,” and more to do with covering up and preserving potentially billions of dollars in illegitimate piracy and counterfeiting driven ad revenue and profits, and the inflated market capitalization that these ill-gotten growth rates generate.

Well if it's that flippin' lucrative, why doesn't the MPAA et al collude with Google/YouTube at streaming their own content and raking in the cash in an ad revenue sharing deal? They could encourage mass sharing and take a cut of the sharers' ad revenue. It makes absolutely no sense at all for anyone to walk away from the huge profits to be made from online ad-based models — if there are in fact huge profits to be made from them.

Even much-maligned Armovore told me that their clients offered a service that is "not as fast as torrents." If there is such a massive profit to be made from torrents, why not provide them?

A) Because they want to meter our use of their content and charge us for each use, or

B) they are flat out lying about the money to be made from an online ad-based model.

What now?

Just my opinion, but I've got a few suggestions for the MPAA, et al:

  1. Let the market, not the providers, dictate how, when, and where content is consumed

  2. If online ad-based models are as successful as you say they are, use them yourselves or shut the Hell up and stop whingeing about the pirates

  3. Remember that people do like to have physical copies

  4. Stop metering your services

  5. Provide a platform for artists to display their work the way they want to

  6. Support initiatives to reform copyright and patent laws; it's in your own best interests to do so

  7. Stop trying to get our governments to fight your battles for you

  8. When you do use ads, make them more subtle and less intrusive

  9. Get rid of DRM. Now.

  10. Try it on a few popular products and if it works, expand it.

That's it for now, I'll let you know if I come up with any more.

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