Dr. Geek: Threats to the Future of Television

Film and television geeks like to watch copious amounts of either film or television.  Their whole geek-cred starts there, and then it may extend into other pursuits, from attending film festivals to find fresh faces of hip directors, to attending pop culture conventions to get the autograph from the TV star of that series no one else has ever heard of.  Their fandom is centered on the ability to watch. So what happens when there are obstacles to watching?

Hulk smash box office records!

We all know movies and television shows cost money to produce.  For every dollar spent on production, there is no guarantee that you’ll bring in Avengers level money, or even Think Like a Man level money.  Producers need to recoup cost of production in order to feel justified in investing in other productions.  No revenue, no investment, no Hollywood or Indie-level professional productions.  That is why the film and television industry, like the music industry before it, has sought to crackdown on the distribution of content via the Internet — particularly online piracy, even attempting to bring in federal government regulation of online video distribution.

But SOPA, PIPA, and the more recent CISPA are not the only examples of threats to the film and television consumption practices that have evolved with the emergence of online and digital technologies.  Recently, Microsoft announced that the Windows 8 OS will feature a Windows Media Player that is not automatically set up to play DVDs/BluRays; users would have to pay an additional licensing fee for such playback capabilities.   And while you might think such a movie would signal more of an industry-wide acceptance for streaming or downloading content, Hulu and Comcast have made  announcements that, if enacted, would constitute challenges to these practices the American public have been constructing for the past twenty years.

At the dawn of TV, in order to consume television programming, there was over-the-air (OTA) broadcasting, a technology utilizing what had previously been constructed for radio transmission.  From over-the-air came cable television, which evolved out of communities wiring their houses to one central radio tower in places that could not easily receive the air-bound transmissions.  As humankind progressed in space, satellite television became another viable technology through which to consume television. At each stage, the distribution of television, and thus how we consume it, has been controlled by corporations.  Even those community developed cable networks became the cable networks that we know (and usually loathe) today.

Television via the Internet has developed in a similar fashion to those early community cable networks.  Only this community has been on  a global scale.  And that has been a tremendous source of conflict.  With the Internet, distribution and consumption technologies have become based on either streaming or downloading.  Streaming can be live or archived.  Downloading can be full-packet or torrents.  The technology is not a problem, although some may like to frame the argument that way.  Corporations utilize these technologies to distribute their copyrighted material, while regular folks may use them to distribute less-than-legal material.  So it is not the technology that is the problem: the source of conflict has been the practices that surround them.

Now, of course, one thing people always point to as the central conflict is online piracy: SOPA and PIPA were ostensibly created to address that concern, which has been an obsession of Hollywood since the days of Napster.  However, piracy is a lessor percentage compared to all online distribution and consumption of programming.  Far more common, and on the increase, is the use of the Internet to watch television and films as a substitute for watching OTA, cable or satellite television, or even buying and renting DVDs.

This substitution is a threat.  For the television industry, it means a loss of revenue from the sale of ads during all those commercial breaks.  For the movie industry, it means the direct loss of revenue from sales of DVDs, to individuals or via agreements to renters like Blockbuster.  While it is not a huge segment of the viewing audience that gets the majority of their programming via the Internet, it is a growing segment of a powerful demographic: young people.

Digital natives: Welcome to your future.

Young people who have developed and been raised with the technologies, the practices, and the communities that constitute online distribution and consumption. Young people, not just in the United States but around the world, who have been able to watch, and share, content from nation-based media producers within this virtual community.  In the past, bootleg or official VHS tapes of foreign programming could take years to land on American soil, and years more to circulate to the level of reaching cultural awareness.  Now, those years can become days and months as files circulate the Web.  That is why corporate-controlled streaming and downloading services have nation-based locks in place: people from non-American countries cannot access copyrighted materials before the corporation has deemed it the right time for such material to be distributed there.

Within the borders of the United States, there are many ways for TV and film fans to watch their favorite things without using traditional television or home recorders.  Online services that aggregate from a number of providers include the granddaddy of them all, Netflix, along with iTunes, Hulu, Vudu, and Amazon.  And you have a number of media producers who have created services specific to their productions, such as HBO Go, The Daily Show, and TNT.tv.  If you want something from them, you have to pay for it, whether a subscription specific to their service, a subscription based on some membership to a cable or satellite provider, or a pay-as-you-go on-demand feature.

When Hulu first emerged in 2007, it was heralded as a possible future of online television distribution: over-the-top distribution that didn’t require an Internet service provider to deliver content.  Imagine getting all of your favorite History Channel programming without needing a subscription to Time-Warner.  A partnership from two of the largest producers, NewsCorp and NBC-Universal, Hulu primarily features libraries from both companies’ television networks and movie studies.  As it has gone along, arrangements have been made with other companies, resulting in collections from the BBC and the Criterion Collection (which they stole from Netflix).  You pay a monthly subscription so you can get access to all of these streaming libraries, as well as new episodes from current shows less than a day after they were broadcast.

It is that last feature that is under assault.  Hulu, now under partial control of cable company Comcast, is considering a change to their business model.  In order to get access to the new episodes, Hulu subscribers would have to show that they also have a subscription to a cable network, thereby showing that they are already paying for the new episodes that they would be watching via Hulu.  This is occurring at the same time Comcast looks to launch Streampix as part of their Xfinity offerings, which would contain content that should be on Hulu but is mysteriously not.

These are the moves of cable companies looking to maintain some control over the distribution and consumption of paid content, extending the model they developed in the late ’70s and early ’80s that remade television broadcasting.  It is that model of paying an aggregated fee for a lot of product you will probably never watch just to have access to that which you most want.  But, really, that’s what Netflix and Hulu streaming are all about: paying to access the library, not specific shows.  So why not require subscribers to be able to authenticate that they are also cable subscribers?

Well, the obvious reason is that you are being double charged for access to the same content.  Why should I pay both for my Comcast Xfinity subscription as well as a Hulu or Streampix subscription just to watch The Office?  Why not just give all cable subscribers, even those paying the least, a good DVR to record new episodes, and access to an on-demand library of relatively old shows and movies (perhaps a year old?).

But even more than that, there is the challenge to what is the true possibility of the Internet: the ability to get away from the cable model and go into a simple pay-as-you-go model.  A micropayment model, where instead of paying a subscription for an aggregation of content, you just pay for the content you want as you want it.  A model similar to those found on Vudu, Amazon, and iTunes.  Only the model would be geared to charging pennies on the dollar instead of the rather high costs of $1.99 or $2.99 that can be charged for one 30 minute episode of The Office.  For companies, they may feel the need for such high costs because of the need to recoup costs from the sales, or rentals, of content licensed to Amazon, iTunes and Vudu. However, why not provide the content on their own websites?  Some producers currently do provide such content for free with commercials, but there is a market for commercial-free content paid for on a micropayment model, similar to the models that were discussed to save newspapers.

This model could work for television networks, on-the-air or cable, as well as movie studios.  Producers that currently require cable subscription to access content via their websites, such as HBO and TNT, could begin instituting such models to expand their consumer-base to non-subscribers.  Imagine how many people would be willing to pay pennies or dimes to watch each new episode of Game of Thrones as it went live online.  As it catches on there, it could then spread to other websites.

Why won’t it happen?  Because to a great extent, those producers are owned by the same cable companies that are advocating business models based on their tradition of having people subscribe to the aggregation.  And they do not care how much that is against the nature of the Internet, with its ability to give you highly specific and personalized content.  They will bend the Internet to their will rather than learn to capitalize on its strengths.  And that is the threat that we face: more of the same, reliance on tradition, and aversion to innovation that could create better relationships between consumers and producers and fulfill the potential of the Internet.

Is there any wonder, then, why online piracy and peer-to-peer filesharing exists?  Someone has to do the innovation.