Dear Content People, Please Let Me Pay You

Dave Zatz —  January 19, 2012 — 32 Comments

As push back on the overly broad SOPA rages, outspoken investor and reluctant content pirate Fred Wilson once again emphasizes the challenges facing the content industry… and their potential customers.

Making movies is expensive and risky. I totally get that the studios need to make a lot of money on those movies to make their business model work. But denying customers the films they want, on the devices they want to watch them, when they want to watch them is not a great business model. It leads to piracy, as we have discussed here many times, but more importantly it also leads to the loss of a transaction to a competing form of entertainment.

While Fred primarily focuses his discussion on the studio release window (this time), consumer frustration extends to all sorts of global media. And, unfortunately, I doubt we’ll see an expeditious resolution given a still archaic licensing and distribution quagmire that still emphasizes the sale of physical goods.

I do see signs of forward progress, but it’s clearly gonna be a long slog. Like Fred and many of you, I find myself frequently frustrated.  Take for example my recent experience with the BBC’s modern-day Sherlock. After receiving a recommendation, I picked up a Netflix streaming subscription ($7.99) to catch the three episode miniseries. In this scenario Netflix and the BBC, hopefully even the actors, writers, producers, etc all earned a little something. For me as the customer, it was no muss no fuss and I quite enjoyed the show.

So much so that I wanted to catch the second season. But it turns out the only legit option is to fly overseas and watch Sherlock in the UK – via the telly, as they say, or the BBC’s iPlayer catchup service. Of course, this isn’t exactly cost effective and I’d prefer something a bit more practical and modern like an iTunes download. While the BBC is reportedly working on an International iPlayer subscription offering, there’s nothing yet available in the US. And, thus, I find myself subscribed instead to a VPN service with nodes in the UK that enable me to freely stream BBC video as if I were local. So someone’s getting paid. But it’s not the folks responsible for the compelling content. I’d feel better about things if only the gatekeepers would take my money.

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32 responses to Dear Content People, Please Let Me Pay You

  1. Here’s the thing… I’m a gainfully employed adult – with disposable income, yet limited free time. So I’d much rather pay you for your premium content than dick around with morally questionable technical challenges.

  2. And so these VPN services will get a lot more traffic I’d sopa is passed.

  3. “So much so that I wanted to catch the second season. But it turns out the only legit option is to fly overseas and watch Sherlock in the UK – via the telly, as they say, or the BBC’s iPlayer catchup service. Of course, this isn’t exactly cost effective and I’d prefer something a bit more practical and modern like an iTunes download.”

    Why do you hate the airline industry?

    Making airplanes is expensive and risky.

    Or hell, the only transatlantic surface passage is offered by the same company that owns the Costa Concordia. Why do you hate the passenger ship industry? Making ocean liners is expensive and, as we’ve just seen, highly risky.

    If you want to watch season two, just head off and eat fish ‘n’ chips for a week like a normal person would.

    (The better story of the day is Cupertino attempting to force authors to please pay them for wanting to be content people. The last few years, it actually became difficult to tell if Steve-o or Rupert was the more evil one…)

  4. Yup, subscribe to a VPN, stream (or torrent) all you want, and all your local ISP knows is that you spend a lot of time connected to websites in Tuvulu.

  5. Other examples: Warner Brothers doubling the window where DVDs become available to rental houses like Netflix (in one of your links). Also, HBO cutting off DVD sales to Netflix (but they can get from other sources). It really feels like these guys are fighting a rear-guard action.

  6. “Also, HBO cutting off DVD sales to Netflix (but they can get from other sources)”

    That one always made perfect sense to me. Once Netflix went into original programming, they became HBO’s competitor. So why shouldn’t HBO force Netflix to buy its DVD’s at retail price rather than giving them a bulk discount?

    Consumers don’t lose in that one. The only hurt party is Netflix’ margins.

  7. I felt so bad about torrenting/VPNing to see BBC programming that I actually emailed the BBC to see if I could pay a license fee to make up for it. When they sent me a form letter, I actually went on twitter and offered to pay any British citizen’s license fee for a year, but have yet to get a response. I am always shocked when I see people complaining about the BBC license fee, because I would gladly pay it just for the 6 or 7 show I regularly download.

    I am constantly badgering them to bring the iPlayer app to the states, but keep getting stonewalled.

  8. Chucky/Mike,

    Yeah, the BBC is the one safe haven we have in the UK from ads – that’s why Murdoch hates the Beeb. But it’s the best £145.50 I spend each year.

    The Beeb is working towards making an international version of the iPlayer (eg starting with an iPad app, in Europe).

    However, they have to step carefully, not least because the Murdoch lobby is ready to pounce if the Beeb becomes self-sustainable and can be seen to not need the licence fees funds from the tax payer.

    WT

  9. Michael Burstin January 20, 2012 at 8:36 am

    Most stupidity about the rental window at Netflix: I am very unlikely to purchase a movie that I have not already seen at least once. If I could get it from Netflix right away and like it enough to own, I’d do so within the initial new release “sale” period. Delay it enough and I might as well wait for it to hit the bargain bin price at Amazon. Not only have they delayed my purchase but they’ve made far less money on that purchase.

  10. Remember the whole Tower Heist/Comcast/Universal kerfuffle? The studios still make too much money off of live broadcasts to piss off the theater owners who clearly see early release as a threat.

    I think they are partially correct: it may take a good chunk out of the live audience for G-rated family movies, but beyond that, going to the movies is a markedly different experience than watching a movie at home, no matter how great a home theater set-up you have.

    Mostly though, I’m baffled that the champions of SOPA didn’t look at the music industry and draw some easy conclusions about the availability of pirated materials and the way to stop that. It was iTunes that put Napster and Limewire and the like out of business – not a bunch of lawsuits and foot-stomping.

    Any why was that? Because paying 99 cents for a close-to-instant download that then smoothly integrated into a music player was a lot easier than spending hours trying to find a working link on Limewire and waiting hours for you queue to come around.

    Consumers like efficiency. Especially if the price is right.

  11. “Most stupidity about the rental window at Netflix: I am very unlikely to purchase a movie that I have not already seen at least once. If I could get it from Netflix right away and like it enough to own, I’d do so within the initial new release “sale” period. Delay it enough and I might as well wait for it to hit the bargain bin price at Amazon.”

    Of course, if the content companies agreed with you about that being the path to maximal profits, they’d just do it. But they don’t agree with you, and I’d tend to think their calculation is correct.

    And, of course, Netflix (and Redbox) are still free to purchase discs and rent them to their customers before the ‘non-rental’ window expires. They just have to buy those discs at full freight retail, rather than getting a discount on price…

  12. “However, (the BBC has) to step carefully, not least because the Murdoch lobby is ready to pounce…”

    I actually think James Murdoch’s frontal assault on the BBC a couple of years back was the what triggered the whole Civilization vs NewsCorp kerfuffle.

    NewsCorp had been doing quite nicely in its slow, steady, and quiet assault on the BBC. The hubris of James in bringing the battle to the foreground is where sand started getting in the gears. Rupert was always smart enough to hedge his bets and not say what he actually thought in public forums. James is more than a bit of a dim bulb.

  13. To quote Gabe Newell of Valve/Steam

    “In general, we think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem. For example, if a pirate offers a product anywhere in the world, 24 x 7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the U.S. release, and can only be purchased at a brick and mortar store, then the pirate’s service is more valuable. Most DRM solutions diminish the value of the product by either directly restricting a customers use or by creating uncertainty.”

    Unfortunately content owners don’t get this,

  14. “Mostly though, I’m baffled that the champions of SOPA didn’t look at the music industry and draw some easy conclusions about the availability of pirated materials and the way to stop that. It was iTunes that put Napster and Limewire and the like out of business – not a bunch of lawsuits and foot-stomping.”

    Actually, it was the law that put Napster and Limewire out of business.

    And more to the point, music industry revenues are still lower than they were before the introduction of the iPod, y’know. I think the movie/teevee industry drew precisely the correct conclusions from watching a decade of Apple drinking the music industry’s milkshake.

    (I’m opposed to SOPA/PIPA and think Chris Dodd is a venal idiot. But I would support significantly less intrusive measures to marginalize piracy. The whole trick is leaving piracy essentially unpunished, while removing any way to make money off of piracy, and simultaneously not putting unreasonable burdens on sites that put up unintentionally infringing material, and not messing with DNS or search engines. There is a reasonable solution out there, but we may not get there for a while.)

  15. @ Mike Zeidler
    You’re “shocked” when someone complains about the BBC license fee? That’s REDICULOUS. You’d be willing to pay because you want to watch the shows it offers. That’s the way it’s suppose to be: if you see value in the product or service, you decide to shell out your money; if not, you don’t. The difference is they don’t get a choice. What if you don’t watch tv at all? Doesn’t matter. Screw you. Pay up. It would be like everybody in America being forced to pay for Netflix, wether they want it or not.

  16. “What if you don’t watch tv at all? Doesn’t matter. Screw you. Pay up.”

    Actually, no. The BBC license fee only applies to households with TV’s that receive live teevee. No TV receiving live teevee in your house, no fee.

    “It would be like everybody in America being forced to pay for Netflix, wether they want it or not.”

    Actually, it would be like a tiny fraction of a penny of your tax dollar going to PBS, whether you watch PBS or not. Which is exactly what happens in the US. There is a valid public interest in having a role for a public sector in a market economy, and the UK does better at hitting the proper balance than the US does by providing better support for the public sector…

  17. Chucky,

    <>

    Yup, with hindsight it looks like a clever tactic getting Murdoch Jnr to publically voice his hatred of the BBC at the MacTaggart Lecture …. http://www.bbc.co.uk/news/entertainment-arts-16472457 ….seems his sis’ also wants to try her hand :-~

    WT

  18. A friend tweeted this the other day: “The reason piracy will never go away? I just torrented an album I already own because it was easier than finding the CD”

    Also, $18/month (£145.50 divided by 12 and converted) is less than the cost of Cinemax these days ($24/month), and I’d trade it for the BBC TV & Radio channels any day.

  19. I also don’t understand why content providers want to region lock their customers. I LOVE BBC shows (esp. Sherlock) and I’m an American living in America. Why do I have to wait for an edited down version on BBC America pr PBS to come out months after it has aired overseas? Or vice versa, why should people in other countries have to wait to see American programming? Talk about lost revenue.

    Let people pay to watch stuff when they want, where they want.

  20. meh, folks will complain that mp3 downloads are not as good a quality as the CD. They will say that share sites are a PITA and risky. They will complain that the companies do not give them a legit way to get the music and who wants to have to buy music a song at a time or rent it but never own it??

    oh wait, this was about movies……… ;)

  21. “seems his sis’ also wants to try her hand”

    I guess they think she’s been kept safe from the radiation by being kept so deep in the bomb shelter for long that it’s OK to roll her out now. But I’d put the odds on them being wrong about that.

    I do wish HBO could mount a big budget drama series of The Murdochs. The story is far more over the top than either Boardwalk Empire or Game of Thrones. And they never run out of storylines.

    In season seven, they could have a Wendi Deng / Matthew Freud duumvirate end up winning the succession battle…

  22. Dave Zatz said “…I find myself subscribed instead to a VPN service…”

    Are you willing to share which VPN service you chose? I have looked into this before but thusfar have been unwilling to give my credit card info to anyone yet due to the lack of a review or at least recommendation from a trusted source.

    Thanks in advance

  23. Actually, it was the law that put Napster and Limewire out of business.

    And more to the point, music industry revenues are still lower than they were before the introduction of the iPod, y’know. I think the movie/teevee industry drew precisely the correct conclusions from watching a decade of Apple drinking the music industry’s milkshake.

    Limewire and Napster had long been eclipsed by iTunes before the courts put them out of their misery. They enabled iTunes by getting people used to the idea of being able to download individual songs from the internet and play them on their computers or mp3 player.

    But iTunes made it easy for all the technophobes to download music. Commenters on this blog often forget just how technologically savvy they are compared to most consumers.

    The music industry’s declining profits are mostly attributable to their refusal to give up on the album model, even when it was clear that most people were buying individual songs.

    It’s not all that dissimilar to the studios and UltraViolet: they’re so intent on selling DVDs they forgot to wonder why someone would want to watch a movie on their iPhone after they’d already spent $15+ to watch it in high-def off a BluRay player on their big screen TV.

  24. “A friend tweeted this the other day: “The reason piracy will never go away? I just torrented an album I already own because it was easier than finding the CD”

    That kinda speaks to what the kind of reasonable anti-piracy policy that I hope we can muddle into would accomplish.

    Piracy should be possible, but it should be more cumbersome than searching your closet for the CD.

    And I think finding a method of de-monetizing piracy that is friendly to internet freedom would end up accomplishing that pretty painlessly. If I were in charge of the MPAA, that’s what I’d be trying to get made into law.

  25. Dave,

    The problem is that selling the program to you directly drives down the fee BBC can change BBC America or PBS. Are you willing to play a high enough price to drive down that lost of value?

    How much are you willing to pay for it? Put a price on it.

  26. Curious, I’ve only been using it a few days so I wouldn’t consider this an endorsement but VyprVPN has been suitable for two 90 minute episodes of Sherlock thus far. I’m paying via PayPal for whatever that’s worth.

    Rich, yep – they’re many pain point permutations. But the BBC has less of an issue (and less leverage) than say HBO with the MSOs. And why we’ll see a purely over-the-top US solution out of them much sooner than anything out of HBO. As far as what I’m willing to pay, I don’t know. Depends on the content and the terms. On many occasions I’ve bought $2-$3 television show episodes from iTunes and Amazon and rent digital movies for twice that. I’m also often subscribed to Hulu Plus and Netflix. Not to mention I pay Verizon nearly $200/month for “cable” television, Internet, and phone. Then there’s XM and Slacker, too. Of course what I’m willing to pay may not be what enough others are willing to pay for someone like HBO to risk alienating their pay TV business partners and jeopardize those large lucrative deals (which my pal Jeremy Toeman touched on).

  27. Its complicated…

    If BBCA was what you’d want it to be–all the same shows, not edited for american ‘hours’ that are 42 minutes etc, then there wouldn’t be an issue. But given that many of the shows never come over here, they edit the hell out of them (I’m mostly aware of this on Top Gear, but presume it applies to all the shows) to insert commercials, they delay the shows by up to a year etc…

    As far as VPN access, I’ve used StongVPN in the past. Worked fine. Be aware of their privacy policies though–they’ve made it clear they’re not interested in being used for illegal actions and will happily cooperate with media companies filing lawsuits. So while VPN access to iPlayer may be a bit of a grey area and something you might consider doing with them, I certainly wouldn’t torrent using their services. If that’s your thing find somebody else.

    How much would I be willing to pay? When Top Gear is on, meaning 4 months a year?, I’d probably pay $20/month. The rest of the time? Maybe $8 or $10?

  28. As a follow-on to Glenn’s comment, it’s not my intention to endorse or train folks how to bypass so-called regional restrictions. Further, I don’t advocate the use of file sharing networks like Bittorrent as one not only downloads content for themselves but ends up distributing it others as well. The purpose of this post is to express my dissatisfaction with the current system and reiterate that change comes slow.

    Back to how much I’d pay for BBC content, Amazon offers each 90 minute “episode” of the first Sherlock season for $6.99 digitally and in HD. That seems a bit high considering I watched all three episodes via Netflix for effectively $7.99 and it also runs higher than most movie rentals (with higher production values, some longer in length). I’d say $3 – $4 per episode would have been reasonable. In terms of subscription pricing, I’d have to see what else is available – and the current UK BBC iPlayer doesn’t really offer a catalog like Hulu Plus of entire seasons both past and present, but runs content aired within the last few weeks – that’s somewhat less compelling.

  29. “One of our regular readers will be thrilled… as I’m finally getting around to some real Plex experimentation (since it’s a snow day).”

    I wonder which reader that’ll be?

    (FIOS -> KMTTG -> Plex = Legal wonderfulness.)

  30. We’re working on unloading our home and mostly residing in short term corporate housing at the moment. Which means I’ve gone from FiOS nirvana to something less compelling and largely out of my control (both in terms of Internet speed and television offerings) – hence some of these challenges. The new place comes with a few channels of HBO, but no Showtime so I’m also jonesing for OTT Californication and wondering how to proceed while retaining a clear conscience.

  31. “The new place comes with a few channels of HBO”

    CCI byte set in a friendly manner? If not, you’ll have to decrypt and transcode some of your discs if you want to write up Plex.

    Gotta get some content in there.

    “I’m also jonesing for OTT Californication and wondering how to proceed while retaining a clear conscience.”

    Amazon has seasons 1 through 4 in HD. You have a TiVo.

    (A la carte is expensive because a la carte must be expensive, which everyone who longs for an a la carte world never seems to quite recognize. Price is why I love harvesting the multicast and locally caching. And, of course, Plex is the rug that ties the whole room together.)

  32. I am willing to pay Amazon or iTunes for any show I cannot get via HD antenna. Problem is, some programming I want to watch is not available on either. Examples: TrueBlood, Boardwalk Empire, Weeds
    Showtime and HBO won’t put these shows on either service and don’t offer the shows until almost a year later, on DVD/Blu-Ray and at very HIGH prices ($60-80 a season).
    I’m not waiting. Don’t want the show spoiled by information leak. I wanna watch the day after it first airs and I am willing to pay, but I can’t.
    Hello VPN!

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