Category: Film

Growth in Legal Platforms for Film & TV Continues

In a recent post, I alluded to a statement by the Copyright Alliance, which emphasizes that Section 1201 of the DMCA supports the development of multiple distribution channels for premium content, giving consumers and producers more choices in the digital market.  This section of the DMCA prohibits circumvention of Technical Protection Measures (TPM) used to ensure that, for instance, if you want a Netflix account, you need to subscribe in order to acquire log in credentials for the service.  This legal framework creates a competitive market for investment in the various types of subscription-based, and ad-driven on-demand models, which is increasingly how consumers choose to view filmed entertainment.

A new report conducted by SNL Kagan for the MPAA demonstrates continued growth in the availability of filmed-entertainment titles across multiple, online platforms.  Since the last report of its kind, conducted in 2013 by KPMG, SNL Kagan’s study indicates steady growth of available works across the four types of online services studied in the previous report, as well as growth in TV Everywhere services, which was not included two years ago.  The service type that showed the most dramatic increase (23%) was in Subscription Video On Demand (SVOD) services, and this increase is largely attributed to new 2015 offerings from HBO, Showtime, and SlingTV.

The headline for consumers is that of the 47 online services reviewed, SNL Kagan found that 98% of the premium films and 94% of the premium TV series studied were available on at least one service and that 95% films and 85% of TV series were available on at least five of the services. The films and TV shows included in the research represented a cross section of commercially-successful and critically-acclaimed titles with the expected result that the more current (i.e. within the last 5-6 years) the title, the more likely one is to find it available, especially with television series.  Even among the category of Emmy winners, which naturally includes many older titles, the study showed an increase of 5% in availability since the KMPG study, suggesting that a steady increase in archival material is being made available as well as newer releases.

Suffice to say, there’s more filmed entertainment available on demand than anyone realistically has time to watch.  So, why does piracy continue to grow—even in North America—in tandem with growth in legal availability of films and TV shows?  Don’t all the net-savvy pundits continue to insist that “piracy is just a reaction to scarcity”? Yet as the so-called scarcity void continues to be filled, piracy continues to increase.

Now, I have no doubt that out of every million users who pirate movies and TV there are a couple hundred seeking obscure, hard-to-find titles; but we can’t pretend this is a significant factor when year after year, the most-pirated titles are always the mainstream hits that are the easiest to access through legal channels.  The bottom line is that if piracy were driven exclusively by fans of the avant-garde, quirky, and hard-to-find titles, it would not be a multi-million-dollar, criminal industry.  I think the only honest thing to say is that piracy probably continues to increase because free is an attractive price that no legitimate business can offer.  Meanwhile, the users of pirate sites are being subsidized by the fans who pay their subscription, rental, and purchase fees.

Despite this growing abundance of stuff to watch, though, it still seems that every unavailable title becomes an excuse to perpetuate the narrative that “Hollywood” is stuck in an outdated business model, clinging to mechanisms like copyright as a form of protectionism. But the growth in availability reflected in this report belies that narrative; and the deals among film producers and platforms like Netflix, Google Play, and Amazon ought to dismiss the premise. But more acutely, what consumers need to understand about the process of making titles available has nothing to do with a failure to innovate and even less to do with technology itself.

Unlike criminal organizations, legitimate owners of film and TV titles—whether they’re independent production companies or major studios—are not free to simply violate contractual arrangements that pre-date these new distribution models.  Sometimes called the “rights thicket”, the collection of licensing arrangements that may be attached to a given title has to be renegotiated for a new distribution platform or new market that was not included in the original deal; and these renegotiations run the gamut from affordable to very expensive, from relatively simple to nearly impossible.

Critics sometimes dismiss this challenge, suggesting that as long as there is financial incentive, producers will find a way to solve the “rights thicket” problem; but that’s easier said as a generalization than it is accomplished on a case-by-case basis.  If an indie film producer has to spend $200,000 in legal fees to make his 30-year-old title available on iTunes, the film is going to have to be rented or purchased quite a lot for that investment to have been worth it.  For some fans of this film, its lack of availability is a justification for pirating the title; but no matter what, this narrative that the producer is simply greedy or too myopic to innovate is a misconception. Meanwhile, even the availability of that more obscure title on the pirate site is also subsidized the by the illegal distribution of the major (otherwise easily available) titles that draw most of the traffic.  And of course, not one second of any of this material would be available without the legal frameworks that make investment in production and distribution possible in the first place.

Two years ago, when KPMG released its report, I pointed out that just the titles in their study amounted to about 6.5 hours of legally available content per day for a year.  Now, it’s about 3-4% more than that. So, when do we get to drop the “scarcity” rhetoric?

Producer De Laurentiis of “Hannibal” Speaks Out Against Piracy

Veteran film and TV producer Martha De Laurentiis was on Capitol Hill yesterday to take part in an event called Meet the Producers, presented by CreativeFuture in conjunction with the Creative Rights Caucus.  Specifically, De Laurentiis has been motivated to speak in opposition to the false belief that piracy doesn’t cause harm to real people.  As the executive producer of the hit TV series Hannibal, she notes in a corresponding OpEd in The Hill that the show was the fifth-most illegally downloaded program and suggests that the level of piracy was just enough to contribute to the cancellation of the series after three seasons.  “With more than 2 million viewers watching our show illegally, it’s hard not to think online pirates were, at the very least, partly responsible for hundreds of crew members losing their jobs and millions of fans — who watched the show legitimately — mourning the loss of a beloved program,” writes De Laurentiis.

To put two million viewers in perspective, a hit like The Daily Show has had roughly one million regular viewers at its peaks. So De Laurentiis is hardly being whimsical when she implies that Hannibal had technically earned enough viewers to sustain itself, but that if too many viewers choose unlicensed platforms, they can kill off production.  Above all, I’m glad to see De Laurentiis focus her attention on the skilled workers who make these shows happen.  The “small screen” is indeed enjoying a golden era, with writing and production values that were historically the exclusive bragging rights of feature films.  But nobody should kid themselves into thinking those production values are cheaper to achieve today because of digital technology.  They’re not. And anyone who says otherwise simply has no idea what the hell he’s talking about.

The number of skilled technicians involved in achieving a specific look, mood, and style—and then maintaining those qualities consistently for the hours of footage that become a TV series—would still surprise most viewers. Their names go by in credits we don’t read, in type that can’t even be read on a tiny screen, if that’s how you view; but there is absolutely no way to produce quality shows without these people. And some of their skills take years to develop under the apprenticeship of master technicians and craftspeople.

Skilled workers don’t get cheaper over time, and neither should we want them to.  We want wages for everyone, no matter where they work, to keep up with the cost of living. To wish otherwise is self-destructive.  And, as I have tried to argue in the past, killing off otherwise viable TV shows through piracy isn’t just about the shows themselves; it’s about the lighting crew guy in your neighborhood who tightens his belt and doesn’t patronize your place of business as a result. It’s how we kill a whole segment of the middle-class economy.  And we have enough problems in that regard as it is.

We know what the middle-man pundits usually say to observations like those of De Laurentiis.  They say, “adapt”.  They say, piracy can’t be stopped, so change the business model to adapt to the market we have.  But there is only on rational response to these voices, and that’s to tell them to shut the hell up.  These people are idiots, and it’s time for more professionals who know what they’re talking about to call these pundits out for their idiocy.  If with my zero years of experience in aircraft manufacturing, I told executives at Boeing that their supply chain management needed retooling, I would sound like an idiot.  That’s what people who’ve never been anywhere near a film or TV production sound like when they say “adapt”.

Martha De Laurentiis is herself a part of film industry royalty, if you will.  The widow of legendary producer Dino De Laurentiis, cynics and piracy-apologists could choose to dismiss her as just a member of the Hollywood elite. But where does that excuse get us exactly?  If there is to be film and television at all, there will be producers and executives and studios and networks of one type or another. And these producers will still need to hire thousands of skilled workers with years of training in lighting, camera work, production design, wardrobe, make-up, post-production, and the management skills to oversee the insanity of coordinating all the many departments into an on-time, on-budget delivery of the show you want to watch.

I’ve been on a fair number of shoots. And whenever these have been location shoots, I’ve noticed a consistent habit among passers by.  Film crews attract a crowd, but people rarely stop for long because they quickly realize there’s nothing to look at most of the time. It’s a bunch of people doing what seem like uninteresting tasks; maybe a guy is carrying some cable while another adjusts a light by an inch and half; a handful of people are discussing the next setup or a change in the schedule; a few guys wait on the backs of open trucks while some grab coffee.  If it’s really exciting, the 1st AC is marking focal points on the lens while the DP looks through a filter at the clouds passing overhead. If onlookers were able to watch a montage intercutting among each individual or group doing their jobs, it would seem fast-paced, which is how it feels as a member of the team.  But the wide shot from the outsider’s view is usually slow and static. It’s like watching a construction crew. It’s just a bunch of people working hard, doing things that not everyone knows how to do. And it’s the only way this stuff winds up on the screen.

MPAA Forges Voluntary Anti-Piracy Agreement with Donuts

We’re about to start seeing a lot more diversity in web names.  With its slogan “welcome to the not com revolution”, the Bellevue, Washington based Donuts is the largest provider of new domain name registrations with uniqe extensions that offer site owners more options to express their identities via their URLs.  For instance, the company has over 67,000 registrants with the extension .GURU; and as described on their website, Super Bowl 50 was a “coming out party” of sorts when viewers were directed to visit GodsofEgypt.MOVIE to learn more about the release of this major motion picture.

This morning, Donuts has also placed itself at the forefront of OSPs taking voluntary measures to mitigate large-scale online piracy.  In a joint announcement with MPAA, the two organizations have forged a voluntary agreement, which outlines specific conditions under which the MPAA will be treated as a “Trusted Notifier” when reporting sites registered with Donuts that are engaged in large-scale piracy.  Conditions of the agreement place the burden on the Motion Picture Association to provide clear evidence of large-scale piracy of the works it is ahtorized to represent; and it must make a good faith effort to make direct contact with the site registrant prior to notifying Donuts.  Once presented with a referral, Donuts maintains the right to act at its own discretion in determining whether or not the site registrant is “clearly devoted to clear and pervasive copyright infringement” in violation of their Acceptable Use and Anti-Abuse Policy, in which case it may put the domain on hold or suspend it.

Both copyright interests and digital rights activists should applaud this voluntary measure, which could serve as a model for other rights holding entities to adopt similar agreements with major OSPs.  In principle, these private-sector agreements provide tangible options for mitigation of large-scale piracy, but their voluntary nature and structure should mute the usual hew and cry of “slippery slope to censorship” that tends to come with legislative proposals. Absent the opportunity to invoke the boogeyman of “government”, it would seem that any complainants about voluntary measures of this nature will have their rationales reduced to just admitting that they like piracy. At least that would restore some refreshing honesty to the discussion.

Ultimately, this type of voluntary measure is a positive step forward for consumers. The Web has grown fast, and the major designers of our experiences and engagement with digital life have, in a a matter of years, attained the kind of market dominance that historically takes decades.  And that’s fine.  But while scaling rapidly in a free-for-all, Wild West environment is exciting, makes happy shareholders, and yields all manner of free apps and platforms for consumers, we are also lately beginning to recognize significant weaknesses that come with adopting a purely laissez-fair approach to the digital market.

When search results lead users to a nest of clickbait and malware; when advertisers lose value in the digital ecosystem; when seeking information becomes algorithmic manipulation; and when digital predators can exploit the environment to do anything from wasting your time to invading your privacy to taking your money, then the Web fails to be what we need it to be.  OSPs, major businesses, consumers, and start-up entrepreneurs all have a stake in a sustainable digital market; and voluntary measures are an expression of that mutual interest.