Follow the Links: Piracy and Big Media

“Everything is deeply intertwingled,” declared Ted Nelson in his 1974 opus “Computer Lib/Dream Machines.” While many of Nelson’s ideas about how a networked hypertext system ought to work (automatic bi-directional links, per-byte ownership, and fragmentary royalties) never came to fruition, every now and then, his statement about intertwingularity rings resoundingly true.

The most recent instance of this for me started with a blog post by David Sleight, a Web designer in Brooklyn, NY. It turned out to be one of a number of responses to a trenchant point about why people use BitTorrent to download unauthorized copies of movies and TV shows. Allow me to reconstruct a path through the hypertext so you can follow along with my thoughts about the role of unauthorized copying and big media companies.

Begin with the Oatmeal — It all started, at least as far as I can tell, with a comic strip from the Oatmeal, written and drawn by Matthew Inman. If you haven’t seen it before, the Oatmeal can be hilariously funny, and is a good example of a comic format that likely wouldn’t have existed before the Internet. In this particular comic, the Oatmeal’s protagonist just finished reading “A Game of Thrones,” the first title in the ongoing “A Song of Ice and Fire” fantasy series by George R. R. Martin.

The strip’s protagonist wants to watch the HBO TV series “Game of Thrones,” spawned from the books, so he looks for it — using a MacBook Pro — first on Netflix. When Netflix reports “DVD and Blu-ray availability date unknown,” a little red devil on his shoulder suggests pirating it. A little blue angel pops up on his other shoulder to present the argument against piracy, so our protagonist tries to do the right thing and watch it through a commercial service, checking on iTunes, then Amazon, then Hulu Plus, none of which have it. The show is available on HBO’s Web site, but only with a full cable subscription, not by itself, and he ends up downloading it from BitTorrent. (The strip was drawn several weeks ago — “Game
of Thrones” is now available on the iTunes Store and from Amazon.)

Point made — the big media companies are losing customers because there’s a basic market disconnect between how video is sold and how people want to consume it, even when there’s agreement about the fact that a commercial transaction should take place.

Andy Ihnatko, Grown-Up Facts, and Time-Shifting — Our inimitable buddy Andy Ihnatko gets this intentional point, but he also takes the opportunity to shine a light on the “simple, grown-up fact” that if you torrent something now because it’s not available for whatever reason (and the TV and movie studios manufacture plenty of reasons), you should still buy it in some form when it does become possible. Otherwise, he notes, “you’re just one of those people who prefer to steal things if they think they can get away with it.”

Seemingly a bit harsh, Andy’s statement raises interesting questions about how we should interact with business models that rely on artificial scarcity based on time. Is it acceptable to torrent “Game of Thrones” two weeks before it comes out on iTunes, Amazon Instant Video, and DVD if you buy it from one of those places as soon as you can? What about a TV show whose first few shows you missed on cable, but which isn’t available via online subscription services? How about the second season of a show that has aired, and will be watchable via your Netflix subscription eventually, but isn’t there yet?

All these questions make me think of the seminal “Betamax case” of 1984 (Sony Corp. of America v. Universal City Studios, Inc.) in which the U.S. Supreme Court ruled that making individual copies of television shows for the purpose of time-shifting deserves a fair use exemption from copyright infringement. Much is made of that case’s effect in relation to devices and services that have both infringing and non-infringing uses, but what may be more interesting is how it clearly defines time-shifting as fair use:

The question is thus whether the Betamax is capable of commercially significant noninfringing uses. … one potential use of the Betamax plainly satisfies this standard, however it is understood: private, noncommercial time-shifting in the home. It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs, and (B) because the District Court’s factual findings reveal that even the unauthorized home time-shifting of respondents’ programs is legitimate fair use.

and

when one considers the nature of a televised copyrighted audiovisual work, and that time-shifting merely enables a viewer to see such a work which he had been invited to witness in its entirety free of charge, the fact that the entire work is reproduced does not have its ordinary effect of militating against a finding of fair use.

The question, then, becomes what “time-shifting” means in a digital world where nearly everything is available at some time and where making a copy is far simpler than programming a VCR. I have no answers here, but it’s an interesting train of thought to follow. Does your cable subscription entitle you to watch — at any time — absolutely everything that ever aired during the time you pay for it? Certainly your Netflix subscription entitles you to watch everything Netflix carries during the time you pay them.

Right versus Pragmatic — Marco Arment of Instapaper fame was the next to weigh in, responding to Andy’s “simple, grown-up fact.” Wending his way through an amusing analogy of poor restroom design that resulted in lots of paper towels being thrown on the floor near the door, rather than in the trash can on the other side of the room, Marco acknowledges that Andy is correct, that the “right” thing is either to wait for video content you want to watch to be made available to you or to pay for it as soon as it becomes possible.

But Marco, ever the pragmatist, doesn’t feel that pointing out what’s “right” will solve the problem of people downloading unauthorized copies of TV shows and movies. And although he doesn’t say exactly this, the reason it won’t is that it hasn’t already. Society as a whole isn’t going to become more attuned to business models based on artificial scarcity when the tools for making that artificial scarcity disappear are so readily available.

The only solution, Marco feels, is to address the demand so people can get what they want, when they want it, for a fair price, legally. That’s largely what has happened in the music world, thanks to the iTunes Store initially, and now with alternatives from the likes of Pandora and Spotify. Music is still copied, but there’s no Napster-like service that’s as well or better known than the legal outlets.

Is Advertising Like a Network Outage? — As long as we’re talking about business models, what about advertising? Web designer Jeremy Keith makes a quick point that advertising is another one of those models that worked in the past because people didn’t have a choice — you had to watch the ads in a TV show because there was no way to skip or otherwise avoid them. On the Internet now, it’s possible to consider advertising like a network outage, and just route around it via BitTorrent.

As someone who grew up with over-the-air television, I was always confused by why cable television shows had ads — after all, weren’t you paying for the cable service? That confusion has returned now that we can pay to watch TV shows on iTunes, Netflix, and Amazon Instant Video, all without ads. Cable is much more expensive than Netflix, and yet I have to pay both for the service and with my time watching the ads. Certainly, Netflix lacks current shows, sports, and news, but I didn’t watch much of those when I had cable anyway, so I prefer to pay far less for Netflix and avoid ads.

Everyone reading this undoubtedly understands the commercial tradeoffs with advertising, but Patrick Rhone has a wonderful anecdote that illustrates just how artificial and forced advertising feels in this age of Internet video. His family is much like ours, in that everything we watch, we watch online from Netflix or another streaming service. But he has a four-year-old daughter, and he tells the story of just how confused she became when she first encountered ads during a movie playing on cable TV during a trip, and then again in a hotel when faced with a commercial advertising a movie available only in theaters. The solution? The Netflix app on an iPad, streaming over
the hotel’s free Wi-Fi.

In short, the world is changing, and those who are growing up in it now have different expectations about how things work. This is nothing new — back in 1995, the economist Brad De Long wrote a delightful article for us about taking his five-year-old and two-year-old to the University of California Museum of Paleontology and discovering that the museum’s online presence was better than its physical presence (see “Ontological Breakdown, or, Pretending to be a Help System,” 21 August 1995). (That may or may not still be true; it’s a research museum and not
generally open to the public.)

I wonder just how differently Brad’s son, who is now 22, views the world after having grown up with an increasingly fuzzy barrier between the real and the virtual. The next major shift — one where consumer behavior is being stymied by business models built on an ever more tenuous artificial scarcity — is well under way. Big media companies will have to adjust to this new reality if they want Patrick Rhone’s daughter as a customer by the time she’s 22. Or else she’ll just find a different route to that reality.

Back at Big Media — And that’s what leads back to the very first post that sent me down this path, David Sleight’s comments about how those who download unauthorized movies and TV shows are essentially customers in waiting, people who have expressed their desire for the content in question.

Basing his comments on time spent inside big media companies, he suggests that media companies stop trying to shoehorn everything into existing internal systems, give up on segregating customers into “silos” based on devices and forms of access, refrain from trumpeting piracy numbers based on specious assumptions, and construct revenue models based more on content rather than advertising. Luckily, he says that many media executives individually acknowledge these points, so with some luck, we’ll see more corporate movement in this direction.

Then we can get down to rotting our brains with television, rather than reading interesting arguments and honing our rhetorical skills on the Internet. Hey, wait a minute!