Broadcasters and Aereo: sometimes winning means losing

We have a lottery game here in Texas called “All or Nothing.” The point is that if you get ALL the numbers on your ticket, you win, but you also win if there are NONE of the numbers on your ticket. Hence, “all or nothing.”

I think the Supreme Court’s pending decision in the broadcasters versus Aereo case is a similar proposition for the broadcast TV industry, although the other way around. They will lose even if they win.

Historically, when given the opportunity — which this case does — to come down on the side of culture, the high court cannot resist, and culture — whether we like it or not — is moving to a one-to-one model of communications. There are exceptions, certainly, but the use of government resources, like spectrum, to enable old school thinking is up for grabs in the hands of the high court. What most people don’t realize is that one-to-one can mimic one-to-many in certain necessary situations, but one-to-many cannot mimic one-to-one. This is the essence of Jay Rosen’s “Great Horizontal,” and why this case is so fraught with danger for the status quo. You see, it isn’t about my ability to receive; it’s about my ability to send, and that’s why a whole host of laws have to be modified, including the use of the spectrum that’s owned by the people.

TVNewsCheck’s Harry Jessel published a piece last week that examined the question of what happens if the court sides with Aereo. As informative as the essay is, the comments are not only entertaining but also revealing regarding how broadcasters think in terms of defending themselves in the case. Here are six general themes:

  1. Its “unnegotiable” civil defense mission is what will sustain broadcast spectrum. The Telcos even now are working to develop a new system of civil defense warnings and assisting the government in real time and beyond.
  2. The question before the court can’t produce a loss for broadcasters. Since when has the “question before the court” prevented the Supremes from deviating? Sorry, I don’t view this as protection.
  3. Local bandwidth is too small to permit any significant competition to high quality OTA broadcast delivery. This is the same argument used by broadcasters when cable first came on the scene. Quality follows what culture wants.
  4. The most likely outcome would be for Congress to intervene, revising the Copyright Act to bring systems such as Aereo’s within the purview of the transmit clause. The Supreme Court doesn’t need Congress to make law.
  5. There is a finely balanced economic ecosystem going on here in which everyone thrives. But it’s an ecosystem that can be damaged if something disruptive, like a Supreme Court win for Aereo, took place. Nobody cares about our “finely balanced economic ecosystem,” except where it impacts their wallets, and that is a biggie that the court could impact.
  6. If the Supremes give the decision to Aereo, then broadcasters’ spectrum is safe, because Aereo depends on a broadcast signal in order for its antenna farms to work. Well, yes, and that’s a possibility, but Harry’s piece fully explores how that could be a net loss for broadcasters anyway.

If the broadcasters were to win, however, there’s a significant chance, in my view, that the price of winning will be its spectrum, because there is widespread and significant pressure to shift TV stations to cable in the name of spectrum use for the one-to-one world of the Web.

It is the law that gives broadcasters the spectrum. It is the law that says cable companies MUST carry the broadcast signals. It is the law says that broadcasters have a right to compensation for cable carrying their signals. And now broadcasters want the law again to boost their business model. Live by the law, die by the law, for the Supreme Court is the final arbiter of what is or isn’t law, and that’s why this case was such a crap shoot from the beginning.

Broadcasters are already acting as cable companies, and here’s the rub. If broadcast signals become cable channels, then must-carry laws are irrelevant, and retrains fees become renegotiable. Without the weight of law behind the broadcast companies, there’s little doubt in my mind that the networks will by-pass the local money tree in making their programming available via cable. Hence, the losing even if they win.

The problem for the Supremes — and the key reason I think they took this case — is the profound necessity of rewriting what copyright means, absent the immense Congressional lobbying power of the status quo. “Intellectual property” is an oxymoron created by the entertainment industry to give itself the weight of law in conducting its business throughout the world. It works fine in the one-to-many world of mass media, but it makes no sense in the Great Horizontal, and this is the conundrum for the court. Personal use of products must include sharing in a one-to-one universe, and every one of the old industries that thrived in a one-to-many paradigm must face this reality. It will take something like a court ruling to give the people formerly known as the audience (thank you, Jay Rosen) what they deserve.

The supermarket can’t charge me twice for a meal I share with neighbors, yet this is the absurdity of current copyright inside the network. The network is a cultural shift that’s here to stay, and its advancement is the duty of those in positions to make it so, such as our Supreme Court justices. Neither side in this case gives a ripple chip about consumers, the people, and that’s what the court will be forced to consider.

Folks, there’s much more riding here than the question before the court. In attempting to right what they view as a business wrong, broadcasters have opened Pandora’s box, and the chaos unleashed will likely produce a deleterious result for anything “business as usual.”

BONUS LINK, also via TVNewsCheck: Michael Berg’s legal view of the case (although tilted by an admitted bias towards the NAB).

SOPA/PIPA isn’t a business problem; it’s a culture problem

I am not an eyeballIn the wake of this week’s remarkable SOPA and PIPA turnaround in Washington, Christopher Dodd, the former U.S. Representative turned U.S. Senator and now chairman of the Motion Picture Association of America, thinks that Hollywood and Silicon Valley need to meet. “Mr. Dodd said he would welcome a summit meeting between Internet companies and content companies, perhaps convened by the White House, that could lead to a compromise,” according to the New York Times.

Prominent New York venture capitalist Fred Wilson essentially accepted the invitation, saying we need a new framework that is based on a shared set of goals and objectives. “The PIPA/SOPA framework was litgation heavy and very invasive,” he wrote. “It was “we are going to do this to you.” It’s not surprising the tech industry didn’t like it one bit.”

As much as I respect Fred Wilson, this is a clever way of positioning “the problem” as one between two industries, entertainment and technology. Okay. That’s fine, but “the problem” is really between the MPAA and RIAA and the people formerly known as their customers. If you think Fred Wilson speaks for the people, you’re mistaken. Fred is one of the genuinely good guys, but his view is quite business-centered. So who speaks for us in these negotiations?

This isn’t a business problem; it’s a cultural problem, and it must be framed as such in order for these businesses to get it right. It is indeed a legal issue, but it tends to get framed in an archaic setting. That’s the real problem here. If you really want to understand the scope of the issue, take the 14 minutes necessary to watch Clay Shirky’s explanation or read his take here.

Shirky notes that the copyright cartel wants to eliminate the sharing of creative works, just as they’ve wanted since creative works first became an “industry.” As a creative person who’s published books and songs and performed those songs as well, I don’t believe the arts are industries, so they shouldn’t be treated as such. The only fiscal beneficiaries of the arts should be the artists and that begins with being seen, read, heard, watched, etc. I oppose the suggestion that the sharing of works costs artists jobs, and I resent it when this is used to justify arguments that prevent people from seeing, reading, hearing, watching, etc. I further reject the suggestion that a self-serving “professional” hierarchy should the sole determinant of what is seen, read, heard, watched, etc. We’ve  gone nuts with deep pockets needing to protect their status, and this has blinded everybody to the revolution that’s taking place around us.

I have a lot of books in my library and continue to obtain both printed and electronic versions. But I’ve given away more than I actually possess, for I believe that artistic works should be consumed. That’s their purpose. The copyright industry tells me, however, that if my friends who “borrowed” those books wanted to read them, they should have bought them for themselves. This is why I’m so vehemently opposed to legislation such as SOPA or PIPA. At core, such thinking is unnatural, for the artist benefits in ways beyond monetary compensation.

Besides, the harm that these companies are experiencing is self-inflicted, because these industries profit by manipulating and gouging the very people their products are intended to entertain. Treating customers as “eyeballs” for profit is not only disrespectful; it is contrary to the very essence of creativity’s gifts. We hear about how artists are   disrespected in our culture, but that disrespect begins with the industry that exploits their gifts for profit alone.

People have had enough, and the disorganized, chaotic demonstration against it last Wednesday evidenced a dissatisfaction far beyond what a simple business negotiation can deliver. Copyright is not property. Period. Let’s get that right, and the rest will fall in place.

 

Righthaven rulings impact everyone

Via Wired:

A federal judge ruled Monday that publishing an entire article without the rights holder’s authorization was a fair use of the work, in yet another blow to newspaper copyright troll Righthaven.

the problem with lawyersThe newspaper industry has generally been quiet about this whole Righthaven nonsense, and it deserves what is happening in the wake of these rulings. I wrote about this a year ago.

Suing is the last thing we want to be doing for only two outcomes are possible. One, fair use provisions are solidified and possibly even expanded, which will weaken the argument that traditional media companies want to use in protecting their “property.” That would not be good for them. Two, fair use takes it on the chin, which would give traditional media companies a sense of power and victory. In this case, others will seize the opportunity presented, and people will go elsewhere, New York Times be damned. That would not be good for media companies either.

Rather than talk some sense into Righthaven’s “client,” it appears we chose to sit back and hope. Instead, this stream of anti-Righthaven court rulings is establishing a very dangerous precedent for copyright future suits, and the industry will rue the day it decided not to get involved.

Chalk another one up for the personal media revolution.

Broadcasters win one, for now

Of all the disruptions facing traditional forms of media today, none is greater than that which is threatening the value-through-scarcity of the broadcasting/cable arrangement. The broadcasters won one in court this week, when a U.S. District Court in New York issued a preliminary injunction against ivi, Inc. The injunction stops the company from streaming copyright-protected broadcast programming online, creating an online form of cable at much lower rates than cable itself ($4.99/mo).

According to the Associated Press, the court rejected ivi’s reasoning that it is “entitled to the same rights to distribute broadcast programming that federal copyright law automatically grants cable TV operators.” The court found that ivi does not qualify as a cable system.

ivi website

The company is being sued by a host of entities, including local broadcasters in Seattle and New York. ivi said it will shut down its broadcast offerings while it appeals. In a press release following the decision, ivi CEO Todd Weaver sounded a lot like protestors in the Middle East.

This fight is for the people and their right to choice and control over their own entertainment — and it will continue. The oppressive big media networks must open their doors to innovators or they will inevitably fall. People want responsible choice, not the one-size-fits-all television offerings imposed by powerful media interests.”

ivi argues that this is an issue for the FCC and not the courts under copyright, an argument they have little chance of winning. The content within the signals that ivi retransmits belongs to its creators, not the public. I do think, however, that ivi is right in stating that sooner or later, program creators are going to have to realize that the old model of forced scarcity — and for which they can charge an arm and a leg — can’t last forever. Personal broadcasting — including content marketing by the people formerly known as the advertisers — is on the rise, and if Hollywood (and the National Association of Broadcasters) isn’t careful, it’ll find itself on the wrong end of the public’s attention curve.

Consider that the rapid growth of what Borrell Associates calls “non-ad spending” among advertisers includes their own programming, and that these people would be very happy with any distribution model. They are, after all, the folks with the money that support all this programming in the first place. Here’s what Gordon Borrell told me on the subject:

The onset of digital media has accelerated the trend whereby businesses are spending more on non-traditional forms of advertising. Traditional advertising as we know it has gone flat, while “non-advertising” forms of marketing have increased — like spending money on their own websites, paying for product placement in programs, giving away products and services for free via the Groupon program, paying to have their websites optimized for search engines, etc. The table below shows that businesses spend twice as much on “non-advertising” marketing than they do on traditional advertising. To look at it a different way, you might say that advertisers, like consumers, now have control of the media.

non ad spending 2011, courtesy Borrell Associates

Consider also that all of the forecast models for the future show a dramatic increase in online video usage. Search and unbundled distribution options will rule the roost, not some programmer’s view of what to watch when and where. Google TV and everything like it will have their day. The broadcasting industry must be on the forefront of this and not be fighting every attempt to develop the marketplace. As we learned with music, the people will have their way. Does the NAB have the courage and smarts to lead the way, or will we simply try to stop it in the name of short term results?

ivi’s approach on all this has been bold and in-your-face and, as such, could be seen as almost laughably naïve. “They’ll never get away with it,” is a logical response. The noise they make along the way, however, will resonate with everyday people, and that’s a problem no matter what the courts decide.

Columbus media group trips over itself

The Dispatch Broadcast Group, a division of Dispatch Printing, which operates, among other things, the Columbus Dispatch, apparently had their attorneys tell YouTube to pull the video of Ted Williams, the homeless announcer. This happened this afternoon, after 12 million people had viewed the video (when I first saw it Tuesday, I was viewer #32,681). This is among the dumbest moves I’ve ever heard of by a legacy media company. Oh, they have the right to do it, but it’s just so foolish, because it assumes that people will come to their site to watch the video. They won’t. Not under any circumstances. Besides, if they did, they would be out of town viewers, nothing local advertisers would care about. Moreover, even if they did, the bandwidth would choke them.

what you see when you click on the link

The audience of YouTube is varied and loyal. Much better to have a YouTube channel and put your videos there – yes, for free (that’ll change) – than to play this idiotic game with people. It breaks every link that’s been passed around and pisses everybody off. Nice.

Viacom rolls the dice on every media company

The decision by Viacom to continue its pursuit of a lawsuit against Google and YouTube is the last, dying gasp of the old guard. Viacom can’t win, and that means the old guard can’t win, which has ramifications far beyond Viacom. The risk you take when you vow to pursue your position to the end is that you will, in fact, reach the end — your end.

A much better strategy would be to work with Google to craft something that’s workable for everybody. That would require compromise, and rather than do that, Viacom is putting the golden goose on the chopping block. By choosing to push its view that YouTube violated its copyrights, Viacom risks those copyrights in ways it can’t even imagine today. I say that, because Viacom cannot win this war. Even if they did get a favorable decision — they won’t — it wouldn’t stop the fundamental disruption to media. It would, in fact, accelerate it, because people are simply fed up with being milked and squeezed at every turn in the road by the copyright-as-property industry. History is filled with incidences of laws wearing out their welcome on cultures, and the downstream revolt after a favorable Viacom decision would make the current one seem like child’s play.

Maybe Viacom actually wants a Supreme Court ruling, but from where I sit, the only people who gain by this are the lawyers.