Jun 22 Podcast #536: Movie and TV Piracy
This is not a typical topic for the HT Guys but recently we received a lot of emails about the fact the HBO series “Game of Thrones” is the most pirated show today. We stated that if the show was available for download at a reasonable price it wouldn’t be pirated as much. A listener wrote us and gave us his take (Pirating American TV Programs) on why show are pirated outside the US.
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Movie and TV Piracy
This is not a typical topic for the HT Guys but recently we received a lot of emails about the fact the HBO series “Game of Thrones” is the most pirated show today. We stated that if the show was available for download at a reasonable price it wouldn’t be pirated as much. A listener wrote us and gave us his take (Pirating American TV Programs) on why show are pirated outside the US.
For today’s episode we wanted to take a deeper look into movie piracy and what if anything can be done to combat it.
Dollars and Cents
When Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) bills were working their ways through Congress arguments stated that not passing these laws would cost the motion picture industry between $200 and $250 billion per year, and a loss of 750,000 American jobs. The question is: how could something cause a loss of jobs that is equal to more than twice the current number of people employed by the movie industry? A $250 billion dollar loss is about $800 for every man, woman and child living in the US. The numbers don’t seem to make sense.
A different study by the GAO (Observations on Efforts to Quantify the Economic Effects of Counterfeit and Pirated Goods) suggests that the loss would be closer to $60 billion and that study may be double or triple counting which would inflate the actual loss.
Why Do People Pirate?
Studios need to understand that the main reason people pirate movies is availability and cost. In the case of our friends outside of the US it's mostly availability. They want the same content as we have here in the states and they don’t want to wait weeks, months, or even years to get it. Then there’s cost. Do the studios really think a Blu-ray version of a 1980’s flop is worth $20? Many don’t think last year's blockbuster is worth $20. The studios understand this so they create a disc with a ton of features that no one wants simply to justify the price. Bottom line, charge what the market is willing to pay not what you think the market should be willing to pay.
What Can Be Done?
Since Piracy is already illegal it is unlikely that more legislation will do anything. Pirates are already breaking the law so why would they decide to start to obey a different law? It may cause the casual person to think twice about downloading something that is illegal, but for the most part it won’t even stop them. Its just too easy to download the next episode of Game of Thrones. Those who would argue differently can just look at ten years of illegal downloads and ten years of aniti-piracy measures that didn’t do a thing. Every roadblock that was put up gets taken down, costing millions legal fees and encryption schemes. Here is what we think would work for everyone:
- Release TV shows and movies worldwide simultaneously - This eliminates people who download just because they can’t wait for the content. This is no longer a technological issue. With digital transmission, movies and TV shows can be sent around the world in hours or even minutes. Yes some distribution agreements will have to be modified but that’s much cheaper than fancy encryption schemes and legal fees.
- Allow an all you can eat plan from Netflix, iTunes, Amazon, or whoever - Reduce the price of streams down to a few pennies per view. Newer content could be reduced to perhaps 10 cents a view. The studios would make it up in dramatic increases in volume. Imagine a TV show that has worldwide distribution available for streaming at 10 cents. if 50 million people watched the episode it could make the studio 5 million dollars. More shows would be created and many shows that would be canceled in the US now become viable on a worldwide basis.
- Reduce the price of disc based content - So you’re not a fan of streaming? You're not alone. Disc based content has higher quality picture and sound. But there is still no reason it needs to cost a more than $5. Offer a basic no frills disc of the movie. The studio can create the disc for far less cost and thus increase the bottom line. If given the option of a high quality disc for $5 and flaky download most will opt for the disc.
- Shorten the time after a movie exits the theater and is available as a download/disc - If a movie is available 15 to 30 days after it stops playing in a theater people will buy it. We know, cinema owners will cry foul. To them we say: lower your prices and create a better experience that would make people want to see the movie in your establishment. We’ll do a feature on how cinema owners can get people out of their home theaters and into the cinema on another show.
- Offer DRM Free Downloads of Movie and TV - It worked for the music industry. There is research (Digital Music Set Free: The Flip Side of DRM) that suggests:
- Consumers enjoy unrestricted, DRM-free, digital products more and thus are willing to pay more for an unrestricted product. The impact of DRM technology on consumers’ willingness to pay has not been taken into account sufficiently in previous research, which simply assumes that DRM protection unambiguously decreases piracy. Instead, the present research demonstrates that this assumption might not hold.
- Understand that no matter what, there is a segment of society that will always pirate - Yes there are people in society that don’t want to pay for anything. It’s not right but it’s a very small group. Frankly you won’t be able to sell them a movie at any price. But don’t punish the vast majority because of those few. Go after them and throw them in jail. But don’t lump people in who would gladly pay you for your content if it were available at a fair price.
Final Thoughts
Digital content is not like, say, a computer or a car. It’s hard for someone in South Africa to steal a laptop or car in Southern California. Anyone with a computer can steal a digital file. But it doesn’t have to be. It comes down to a fair price and availability for digital content. If you make your product available to the masses and at a fair price people will buy it.
Reader Comments (6)
There was a mention during the show about the slow navigation of some of the Directv receivers and I would like to pass on a tip that helped the performance of our HR20-700. In the settings menu go to 'video' then 'display.' Turn the 'native' setting to off. In 'resolutions' enable only the native resolution of your tv. This helped speed up our receiver quite a bit.
'What Can Be Done?' : Excellent ideas you have raised, and I agree with all of them.
Would love to hear the TV networks / Movie companies response to these suggestions.
I agree with MjD but as he knows the TV networks here in NZ jealously guard their content license to prevent anyone else in NZ or overseas from using that content. Hence no iTunes TV, Hulu, Netflix down here. Some channels sit on programs for months / years even preventing the DVDs of programs from ever being released. My wife and I like SciFi so rather than wait months / years or ever I download most of them the week they are shown in the US /Canada..
Shows made are already bought and paid for so what price structure does it take to provide content creators with cost plus a reasonable profit?
My disclaimer if anyone from the industry police is listening
I do not pirate movies, I watch copies of movies that my friends have rather like when you used to share records and tapes and you made your own copies.
Pirate stats
There is a great Ted Talks video "Rob Reid: The $8 billion iPod" but for those most pirated statistics if they come from the Torrent freak statistics, then the size of downloads only demonstrate that the problem is not big enough to justify the amount of global effort,rights abuses and public resources expended in prevention, detection and enforcement of DRM/Intellectual property.
In addition, the levels of revenue derived from broadcast advertising, subscriber cable, international syndication and DVD/Blu-ray/digital distribution is surely more than enough to compensate the content creators with cost plus a reasonable profit.
Why not demand Better Corporate management rather than Digital Rights Management
The show is made we know how much it cost to make when is enough profit, enough? Content creators SHOULD BE seeking a better deal from the other links in the supply chain and not making the consumer the patsy. Its like the Stevie Nicks unconscionable contract case has been forgotten.
The current situation employs a similar argument used by pharmaceutical companies to justify maintaining high drug prices. Both media and pharmaceuticals have to have big wins to cover other epic fails or (for drug companies R & D dead-ends). But surely that is what the company's management teams are paid the big dollars for - to pick winners and kill failures BEFORE they blow out. The only conclusion is again the consumer is being made to be the patsy for poor management decisions.
The Daily Show as an example of too pricey for me
As an Australian, I am geo-blocked from watching the Daily Show on the shows website. Even Boris Johnson the mayor of London on a recent episode of the show complains about it!. My alternatives are a subscribe to a cable service, use a proxy server, find a US friend (and a VPN) or Itunes and pay $9.99 AUD for 16 shows of 21 to 30 minutes - this last one is what I do.
The daily show (although it argues isn't a news show for me is an insight into the US) is a current US affairs show and the issues in the episodes expiry date (for relevance) is pretty short and what do I do with the old episodes I have bought as it is not like music that you can play them over and over?
Government Channel models and commissioned content
In the UK, their is a TV licence that people pay and that funds the BBC, in Australia we say Auntie (i.e. the ABC or government channel) costs us 8 cents a day and in the US you have a philanthropic public broadcasting system. Lately all three have taken to outsourcing content production and either by contracting or purchasing in the market their TV schedule is filled. But whether its government or a charity that gets content hasn't the show been paid for so why in re-broadcasting or digital media sales are prices so in line with market prices, shouldn't they be cheaper or God forbid free like they used to be?
Global Release as a solution
I agree a worldwide simultaneous release IS A VERY GOOD IDEA but not as a piracy prevention policy but as you say to dig into a deeper viewing pool and to globally equalize the price to everybody - wouldn't that be true net neutrality? As you say it might also spread the risk and ensure the longevity of a TV series sufficiently so that the storylines could be tied up and the show meet a satisfactory natural death.
Why us?
The digital has made it easier for people to make a business from selling knockoffs but to make the people who buy/download them as end-consumers criminals is really inconsistent with other areas of law (eg: use of recreational drugs vs dealers or even US gun laws that allow everyone to have a gun but only some are criminals), Yet great effort is expended to spy and listen in or to watch what we are watching. I recently had a warning from Google because I made a home video of my children dancing to a song playing in the background !
Yea they charge too much for bluray, but on the other hand some of the suggestions just don't work, you just can't make everything up on volume, that can be a race to the bottom, apple kind of shows how this works, they charge a premium, but it gives them the freedom to innovate and take risks. netbook makers just barely get by and just shovel garbage out by the boatload.
premium services like hbo wouldn't work if they charged less, they would have to reach an audience many fold larger, and then they'd be afraid of taking risks with such a dilluted and less loyal audience, you don't get game of thrones when you go ala carte, you get pg13 everything like at the movie theater.
sure some countries get all the season at once but they have to be behind to do that, and the initial production costs are mostly borne by the us model. if those countries could do a long season show and run it without interruptions and still make a profit i'd be more convinced that it would work
also i'm sure many countries are protectionist. even the canadians supposedly had quotas on their media/radio. the middlemen/regulations and loop holes/negotiations and the rest mean stuff doesn't get shown all around the world all at once without great expense, you can do this for a few blockbuster shows, but everything? no. just look at the daily show and colbert report, you'd think those folks in the uk who claim to be more worldly would have access to such quality political comedy, but they don't, they got some gimped international edition then claimed ratings weren't enough and now its not available at all. you just can't blame the producers, its probably not a friction free market place out there, there are entrenched interests in other countries who would rather keep others out.
also, its questionable whether you could get advertising lined up for a global release, or have it pay enough to be worth while.
In my humble opinion (and yes, I actually mean that) it seems that iTunes has proven people will willingly pay for music rather than pirate it. Much like buying a quick piece of candy at the check out counter, a quick $1.29 for a song we just heard on the radio is easy and painless (until you do it a lot). And how often have I went ahead and purchased the entire "Album."
Same with videos.
In fact, I just recently cut the cable cord, put an antenna in my attic and my family purchases a season's pass for the non-network shows we like. I wish I could just buy them all because now I have them forever in the cloud whereas my DVR'd shows are only there until I delete them or the DVR (TiVo Premier) goes out.
On the UltraViolet topic - oh, how I wish UltraViolet would just let me use iTunes. Very frustrating.
Dwaine