We Don't Need Six Strikes

Last month, audiovisual content rights holders announced the new Copyright Alert System, a.k.a. "Six Strikes" that they and ISPs have put in place to discourage peer-to-peer file sharing of copyrighted files. Good luck! It's 2013, guys -- time to join the new century. Six Strikes is going to be ineffective, and is bad for business. Don't get me wrong: I don't believe that "content wants to be free." But I do believe that content wants to be "freely available."

So the issue should really be about making content accessible, not about piracy. In fairness to the media dinosaurs, the message is starting to seep through. NBC/Universal's Rick Cotton, their chief counsel and head of their anti-piracy unit admitted somewhat grudgingly towards the end of a WSJ interview that content availability was a priority. And yet the IP hawks continue to flog this inane piracy obsession.

A few questions:

1. Hackers always trump blockers. With anti-piracy efforts thoroughly unsuccessful up to now, why are rights holders throwing more resources at this issue? The Six Strikes plan is quite involved, and can only be understood by paying close attention to the video and text explanations provided on the industry's Center for Copyright Information website. I'm sure that every responsible content consumer will hastily beat a path to this website to become informed. In other words: no one is going to care about this until, of course, they get notified that they're infringing. The industry has clearly spent a bundle on thinking this thing through, signing one another up to the plan, and launching it out into the consumersphere, but at the end of the day it has no teeth. As the Electronic Frontier Foundation explains on its FAQ, no two ISPs have the same strategy for alerting and penalizing infringers: some will throttle back your bandwidth, some will require that you take a copyright education "class," but no one is going to shut off your account (and forgo your subscription dollars... duh).

2. Consumption drives more consumption. Why does the industry continue to believe that penalizing customers is a good thing? Getting connected is expensive, bandwidth costs seem to be edging up while bit rates are woefully slow in the U.S. in comparison to Europe and Asia. Are you or any of your friends thrilled with your ISP, and all the great services it provides to make sure you have a great online experience? How about your cable provider? I didn't think so. So on top of all this, your ISP is going to turn you into a criminal for wanting to access content that is for the most part not available legally (but should be!).

3. Limiting access to content forces consumers to pirate (I've quoted the studies before...). Why are rights holders continuing to focus on copyright infringement/piracy instead of making more content available for people to pay for legally? On the Center for Copyright Information website, there is a linked graphic called "How do I find the movies and music I want LEGALLY?" Click on it, and it takes you to a page of Cable and ISP logos that link to the industry partners! What a joke! It's an endless loop! The fact is that consumers who want to play by the rules are being treated like dirt. Content providers are not keeping up with demand, and, at the same time, decrying how their revenues are shrinking in the face of the collapse of the DVD business, and the supposed tide of piracy.

The key to 21st century monetization of content is scale. Instead of trying to preserve old windowed distribution models based on limiting access to content in order to maintain artificial price points, providers need to understand that they can no longer control pricing, because they can no longer control access. So if access is everywhere, and demand is everywhere, why not take a smaller piece of a zillion transactions, vs. insisting on $4.00 for a VOD title or $12 for a DVD or whatever, and then cower in fear at the decreasing demand for what is (to the consumer) overpriced content?

Content is just content. It's a commodity. It's popcorn. This week's new movie opening at the theater has the same value to the consumer as last month's movie or last year's TV series, or the 2010 Superbowl. So let's not try to "protect" it by prioritizing ways of limiting access, or penalizing consumers for wanting to consume. Let's fix our broken business models and provide more innovative pricing, bundling and promotional packaging to create value and "compete with free."

Within ten years, all content will be released day-and-date and a-la-carte -- in other words, a movie will come out on all venues (theaters, TV, online etc) on the same day all over the world, and all content will be available for purchase as a single title, or in the above-anticipated inventive and value-added bundles. The days of cable system "tiers" are numbered...

Make no mistake: this is and will be enormously disruptive for the media industry, and no one is looking forward to the figurative blood that will be spilled here, and the studios that will close or merge, the multiplexes that will close, and the overall contraction that will take place in the industry as we know it today. But this is the reality of our business. We can go the way of the music industry, or wake up and start making changes.