Author: David Newhoff

David is an author, communications professional, and copyright advocate. After more than 20 years providing creative services and consulting in corporate communications, he shifted his attention to law and policy, beginning with advocacy of copyright and the value of creative professionals to America’s economy, core principles, and culture.

KPMG Report – Movies & TV Widely Available on Legal Services

I’ve lost count at this point how many times and ways I’ve rejected the premise that piracy is a consumer-driven response to claims of scarcity in the market, especially in the United States; but now KPMG has released the results of a study of motion pictures and television programs that rebuts such pro-piracy claims with actual data.  You can read the details of the report for yourself, but suffice to say that if you’re an American, you really have no excuse not to be watching filmed entertainment through one of many available legal channels.  From my point of view, the KPMG report doesn’t reveal a lot that cannot be surmised anecdotally simply by scanning available titles on iTunes, Amazon VOD, Google Play, Netflix, Hulu, and so on.  But the report does verify these casual observations for anyone seeking a more methodological examination.

Naturally, KPMG could not study every possible title and account for every taste, but by looking at a sample of 808 unique films with measurable popularity based on revenue, critical acclaim, and awards, the firm found that 94% of the films studied were available on at least one (and in most cases several) of 34 legal distribution services included in their research.  These services included Subscription Video-On-Demand, ad-supported Video-On-Demand, and Electronic Sell-Through services.  The study did not even include TV-everywhere services or online catch-up services offered by networks for fans who might have missed episodes when broadcast.  Naturally, the report also does not look at original programming for web-based networks like Netflix’s House of Cards, though shockingly enough, these programs as well as network titles made rapidly available on such services are still pirated in remarkably high numbers.

Data aside, I can say personally that I currently use four non-broadcast, web-enabled services these days and still don’t have time to watch everything of interest. And so, I continue to wonder what kind of ultra-leisurely lives are led by those who complain about a lack of access to filmed entertainment.  Simply put, if you need pirate sites to feed your demand for these media, you have WAY too much time on your hands. Certain individuals may claim that specific titles of interest cannot be found through any legal channels, and such complaints often give way to over-reaching claims that piracy is about preserving culture; but year after year, sites like TorrentFreak reveal that the most pirated titles are, not surprisingly, the most popular titles according to the same kind of criteria used by KPMG for its study.  All highfalutin claims aside, if pirate sites had to rely on fans of arcane, art-house cinema, they would all fold.

To put the time thing in perspective, if we only count the titles included in the KPMG study, they translate into roughly 6.5 hours of viewable material per day for a whole year.  I don’t know any adults with full lives, jobs, responsibilities, etc. who have 6.5 hours a day, every day to watch TV shows and movies. The only people who have that kind of free time are children, who really shouldn’t be watching that much of anything, legally or otherwise.  And I suppose adults who possess great wealth might have that kind of time on their hands, but then they can afford all manner of access to media and are far more likely to spend their leisure time sailing or heli-skiing or something more exotic than six-plus hours a day watching TV and movies.  So, claims of scarcity by anyone in the US at least really need to be scorned and then ignored for the adolescent whining that it is.

One aspect of this subject I do find interesting is that despite chronic claims by various pundits and consumers that legacy industries need to “adapt,” the filmed entertainment industry has actually responded very rapidly to changes in viewer habits and desires as consequences of changes in technology.  In fact, industry-wide modifications and even experiments in distribution have been virtually in synch with advancement in the capacity to send and receive high-quality video signals worthy of our high-quality monitors and televisions.  One chart on Page 8 of the KPMG report shows a trend in decreased time between primary and secondary release of motion pictures, and this downward curve over the period studied more or less matches the technological improvements that make services like Netflix and iTunes work in the first place.  When you consider the scope of these industries as well as the number of potential stakeholders in a particular title (e.g. the number of licensees involved), the industry as a whole has actually done a pretty good job of keeping up with the times.  I get that there remain a number of Veruca Salts out there singing “I want it now,” still unsatisfied perhaps with a three-month window between a theatrical release and a low-cost, online rental; but certain demands are  simply unreasonable if we’re to have a market at all.  Of course, while waiting for that one title to become available, the KPMG report shows that even Veruca has legal access to about 585 hours of other things she can watch.

Maybe Google Means “See No Evil”

Yesterday, Google chairman Eric Schmidt was interviewed on public radio and simulcast on Google Hangouts.  WAMU’s Diane Rhem threw softballs, slow and over the plate at Schmidt, providing a friendly platform for the chairman to evangelize the many ways Google makes the world a better place.  Coincidentally, I happened to be editing the following:

For those who don’t know, ChillingEffects.org is a database and website managed by the Electronic Frontier Foundation and The Berkman Center for Internet & Society.  It is a presumptive watchdog over the presumptive misuse of DMCA takedown notices — the implication being that free expression is “chilled” whenever such an abuse takes place.  In principle, this might seem like a reasonable thing for the EFF to oversee; after all, we don’t want free speech to get chilly, even if there is diminishing hope that speech is necessarily getting anymore valuable in the digital age.  But it turns out that whenever, say, Google receives a DMCA takedown notice for a link to infringing material, every one of these complaints is sent to ChillingEffects so that users are, in principle anyway, able to read the details of the complaint from the notice sender.   So for example, if you were to search the term “Expendables III,” which was weeks ago leaked before its theatrical release, you would find among the search results a notice from Google that reads as follows:

In response to a complaint we received under the US Digital Millennium Copyright Act, we have removed 1 result(s) from this page. If you wish, you may read the DMCA complaint that caused the removal(s) at ChillingEffects.org.

In many cases, the link to the complaint will not provide the user with much information, and it’s a bit of a mystery what most users might do with the information anyway.  After all, if you’re the creator of a file like a YouTube video that is taken down by a rights holder, you can have access to the information needed to rectify the fault, if indeed it was a false claim.  What’s truly obnoxious about this notice, and even the name ChillingEffects itself, is the not-very-subtle implication that DMCA takedowns are by default abusive and generally chill free expression. Ya see what they did there?  And by they, I mean Google, which funds ChillingEffects to no one’s surprise I’m sure.  Now, enter the Hollywood hacked photo scandal and a twist on that story that, as Eriq Gardner recently wrote for The Hollywood Reporter, “might reveal something about Google’s policies toward flagged copyrighted content.”

What Garder is referring to is the fact that former Kate Upton beau, Detroit Tigers pitcher Justin Verlander, delivered via his attorneys takedown notices identifying 461 URLs that were hosting racy photos of him and Upton. Of those URLs, Google removed links to 51%, drawing a distinction, according to Gardner, between nude photos and racy-but-clothed photos, irrespective of the fact that all of the photos in question were indeed stolen and are being published without permission.  Never ones to lose an opportunity to be complete tossers about copyright, Google is supposedly relying on an untested legal theory that the copyright holder of a selfie can only be the button pusher at the time of the taking.  This seems hardly relevant with regard to the matter of just acting like decent human beings; if images are known to be stolen, and the subject(s) of those images request that your for-profit search business remove links to them, you ought to do it on principle alone.  But this is not the mindset of the web industry despite its many self-aggrandizing proclamations as the engineers of social change for good.

Google seems to be concerned with a much higher principle than invading the privacy of a baseball star, a supermodel, or frankly you or me, and that’s the principle of doing whatever the hell it wants without consequences.  I think Gardner is right and that Google would love nothing more than a court case to affirm its position that these photos, though acquired illegally, are not the intellectual property of Mr. Verlander and that he, therefore, has no right to request their removal under DMCA.  This could even prove to be technically accurate; the copyright owner of a photo is the individual who exercises sufficient creative control (not the button pusher), so these images could still be the intellectual property of Miss Upton if indeed they were hacked from her account.  But that doesn’t mean Google isn’t benefitting from traffic driven by a prurient interest in seeing photos that were stolen and believed to be secure by their owners.  And Gardner also raises a valid point about ChillingEffects when he writes, “Google has in effect provided a road map for any voyeur looking for sites that refuse to remove stolen photos.”

All of this falls within the scope of the broad agenda maintained and well-funded by the Internet industry to foster a policy of “anything goes.”  As long as we allow them to gloss over privacy invasions, infringements on intellectual property, and profiting from social harm in the name of free speech, we only end up harming free speech in the long run.

I have different Net Neutrality worries.

I admit to being somewhat confused about net neutrality, but that probably means I’m only slightly less confused than any of my friends who feel confident they understand it.  My instinct is that (once again) the Internet industry is sowing a bit of fear that (once again) the Internet is in grave danger of not working as it should for “the people.”  I say this because the headlines, cartoons, and editorials most often shared by my generally progressive-leaning friends all convey some variation on the theme that without net neutrality, we will wind up with two Internets — a very very fast Internet for big entities with deep pockets, and a very very slow Internet for the rest of us.  On this matter of the extremely bifurcated web alone, I say hogwash if for no other reason than the fact that no entity stands to benefit from “slowing us down” as it were.  Instead, it is more likely that the fear of being disenfranchised is being dangled in front of consumers because Silicon Valley corporations would like us to subsidize their enterprises — that is more than we already do.  Writes the Chairman of NewCompetition Scott Cleland in an editorial on The Daily Calller:

“The rub here is that what big video streamers, like Google-YouTube & Netflix, really want is for the FCC to ban “paid prioritization” — i.e., the prioritizing of Internet traffic that depends on real-time delivery ahead of traffic that does not.

Translation: Silicon Valley covets a proverbial free lunch on Internet consumers’ tab.”

So, regarding the prospect of the “two Internets” rhetoric, suppose we have an entity called Netflix, which is presently the largest consumer of bandwidth worldwide.  And suppose there are other services just like Netflix, all of which expect to grow in terms of volume, in terms of image and sound quality, and in terms of consumer demand.  Now, suppose we have an ISP or some other entity considering the prospect of making stranded investments in the infrastructure required to enable continued delivery to meet increasing demand for more data-intensive content (e.g. 4K video).  The first question is why it would be unreasonable to propose that the Netflixes or the YouTubes or the Hulus of the world pay rates commensurate with their demand on this infrastructure; and the more important question for consumers is why such a proposal would necessarily result in a lack of access to high-speed connections at affordable prices?  In such a scenario, both the Netflix (content distributor) and the ISP (infrastructure investor) will lose their shirts.  It is in nobody’s interests anywhere to disenfranchise consumers from high-speed access to the web; it would be like filling a store full of expensive inventory, locking the doors, and expecting to make sales.

We do see stories from time to time of a more conspiratorial nature, invoking ideological motivations when implying that a not-for-profit or a start-up will be slowed into extinction on the dusty wagon trail of the “slow” Internet while the big, corporate interests and well-funded political organizations race along the sleek superhighway.  But, again, this doesn’t make any sense from a technical or a policy perspective per se.  The mall across the river from my house has a whopping electric bill in contrast to mine because it demands much more from the power plant than my house ever could.  Nevertheless, the lights in my house come on just as instantly as the lights in the mall.  There is no reason why a major user of bandwidth paying more for that use should slow down a relatively small user of bandwidth.  Moreover, we already have a precedent for “uneven” access in place, and it’s actually more fair than in years past.  ISPs in most, if not all, markets offer tiered pricing for access at different speeds, and this makes sense.  If your neighbor wants to play video games online and needs top speed, why should you subsidize his use, if all you want is email and basic website loading?  We can argue whether or not the prices in place are reasonable, but the principle that consumers pay for what they actually need or want or can afford is hardly unfair. And, again as Cleland points out, this is how the technology works:

‘”Virtually every Internet user also understands that different broadband technologies — fiber, coax, copper, satellite, fixed wireless or mobile wireless — all naturally generate a range of broadband speed lanes because of physics.

The technology one chooses to use naturally creates faster and slower Internet lanes.”

Setting aside overlapping concerns about mega-mergers (I honestly believe that’s a separate issue), one of the interesting aspects of this hotly-contested kerfuffle over net neutrality is that it is so typically American with its many ideological contradictions.  One the one hand, we like to believe that “the internet belongs to everyone,” but of course the only way to make that manifest with regard to investment in maintaining and upgrading the system would be to do so exclusively with public funds.  Such an approach would likely rankle conservatives and progressives for different reasons — free-market, anti-socialist arguments on one side, and keeping the government from “controlling the Internet” on the other.  Thus, ironically enough, by insisting that the “internet belongs to the people,” we functionally insist that it belongs to private enterprise and hope that the people’s government can create a regulatory structure to protect our common interest in having a “free and open internet,” whatever that means.  But not too much regulation, mind you, because again, we don’t want the government to have control;  but we also don’t want the corporations in charge either because all they care about is money and ruling the universe.

So, if you think you’ve got net neutrality all sussed, my hat’s off to you; but if you prefer as I do not to have your day ruined trying to track the many players and their various agendas, my instinct is that I wouldn’t worry too much about the “fast lane/slow lane” thing because none of the big stakeholders has anything to gain from this outcome.  I’d be much more concerned about who’s disseminating this over-simple explanation and what it is they’re after.