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?