Looking at the numbers.Awhile back, I wrote a pretty in depth article on the subject of BroadCATCHING, which is basically downloading television content to your computer via BitTorrent. At the time I wrote it, the MPAA was focusing on BitTorrent sites that offered movies. Since that was patently illegal, I stayed clear of that kind of activity, but since television is broadcast over the airwaves for free, downloading television shows seemed perfectly legal. Unfortunately, if the MPAA has their way, downloading television programs are no different than downloading movies.
The RIAA versus Napster was the precursor to what the MPAA is going through now. Although Nicolas Negroponte made it perfectly clear in his 1995 book, “Being Digital“, not everyone have been listening. Mr. Negroponte basically said that any product, or service that could be distributed digitally, would be. If the current distribution channel doesn’t provide it, then someone else will. That was the case with Napster. First it was illegal and then Apple figured out a way to make it legitimate with iTunes. Since then, Apple’s little side business has all but taken over their primary business (making computers).

Unfortunately, governing organizations like the RIAA and the MPAA don’t understand market demands and how to adapt. Their only course of action seems to be lawsuits. When Napster was all the rage, the RIAA issued a flurry of lawsuits, citing that they were going after “thieves”. Regardless of where you stood on the issue, hearing about Grandmothers getting sued for supposedly downloading hard core rap music by Ol’ Dirty Bastard made you question the entire process. There was a lot of hype and speculation, but when it was all said and done, the lawsuits didn’t amount to much.

Lawsuit Redux
Since November 2004, the MPAA has been targeting BitTorrent and other peer-to-peer networking sites in an effort to shut them down. Since BitTorrent doesn’t rely on the same p2p closed loop systems like Kazaa and Napster do, the lawyers have had some good success. BitTorrent indexing sites list the torrents on public web servers, so they seem to be easy to target, threaten and shutdown. None of the MPAA’s efforts up to this point have yielded anything in the courts because they’ve all been out of court settlements, or outright shutdowns. It’s simply a matter of money and might overwhelming a lowly opponent.

I don’t have any facts, or figures to back me up on this, but most of the BitTorrent sites I’ve seen appear to be run my small groups of people. Any revenue they receive is usually in the form of donations and/or advertising revenue. They might be breaking even at best, but I don’t think anyone is making a lot of money on this. Take BTEfnet for example, they operate completely free of advertising and simply ask for donations to cover bandwidth. So when the MPAA comes bearing down with lawsuits that could cost millions to try and defend, most sites have no choice but to shut down.

Here’s The Rub
Since nothing is argued in court, there is no final determination on the law. Just because the MPAA says downloading publicly broadcasted content is illegal doesn’t make it so. The law is fluid and subject to interpretation. That’s why there are lawyers. So copyright law is not different that any other law and is worthy of re-interpretation. However, instead of the issue being argued in court where a fair and impartial judge can make a ruling, the thug on the block is just using muscle to scare everyone away.

One could argue the since the content is being broadcast free of charge to anyone with “rabbit ears” then how can you attempt to regulate how that broadcast is received? Does downloading constitute “re-broadcasting”? Personally, I don’t think so. Especially when the site providing the BitTorrent links are doing it all for free. Unfortunately, given the current state of things, this point may never be argued in a court of law because no one has the money to take it that far.

So do I continue to download television programming while the MPAA calls me a “thief”, or do I stick it out for the right to download Stacked?

Looking At The Numbers
Although this next point could easily fall under the argument of “well it’s not THAT bad, I’m going to bring it up anyway. If you take a look at the numbers, targeting Broadcatching just doesn’t add up.

Let’s take a television show like 24. Fox paid good money to have that show broadcast on their network and charged advertisers a pretty penny to be included in the broadcast. Advertisers agreed to pay big bucks because each episode garners 20 million viewers when it’s broadcast. If you look at the numbers on BitTorrent, a single episode of 24 averages around 20,000 downloads. 20 Million versus 20 Thousand? Is this really a big problem?

Maybe they are just nipping it in the bud though right? Maybe they saw what happened with Napster and don’t want to let all the cows out of the barn without doing something. I’m not suggesting that they should just sit idly by, but you have to question the logic behind spending millions of dollars on such a minor demographic of the viewing public. The only group coming out ahead in this game are the law firms that are generating all the billable hours.

All Stick, No Carrot
So why does the MPAA seek to disenfranchise it’s viewers and customers and bleed cash instead of doing something about it? Even if you think 20,000 viewers is a minimal market, as the technology progresses, it’s only natural that it will evolve into an easier process. Then it won’t just be those comfortable living on the bleeding edge that will enjoy this method of viewing television will it?

So then, let’s say that this is an emerging market shall we? Right now 20k to 50k customers on average would prefer to download their television content and watch at their leisure. Why not entice those customers with some type of carrot? The MPAA holds that these customers are “thieves” because the downloaded programs come with the ads taken out. Why not offer an alternative?

I would be more than happy to pay for the privilege to download my television, even if it came with advertising. I think most people would if it was an easy to use system and interface. I’d prefer not to have the ads, but if that’s my only “legal” alternative, then so be it. Hell, I’m even agreeing to PAY for the advertising! :O

A few years ago, I used to say the same thing about music. I used to say that if someone would create a legal pay-for-download system that people would flock to it and it would be a huge success. I believe, for the most part, that people are good and decent and would rather be honest if given an alternative. Then along comes iTunes and it becomes a huge success.

A New Distribution Channel
Instead of capitalizing on this opportunity, the MPAA would rather rile against these new customers and lynch them from the tallest tree. Wake up! What we have here is a new distribution channel, not a new form of commercialism terrorism. If you don’t take advantage of this opportunity, others will.

Let’s pretend that I’m developing a television show. Once I have an episode tapped, I know that I can market it through the following channels:

1. Initial Broadcast
The television network pays me a sum of money for the rights to broadcast my program. They can show it in re-runs, re-air it etc., but I know that I’m going to get paid for my work for the right to broadcast it.

2. Later Download
This is new, but why shouldn’t the network offer a paid service that allows customers/viewers to download the program at a later date. The initial broadcast is the big cash cow, so give it it’s due, but after a few days, offer the program as a paid download via something similar to iTunes.

3. Season DVDs
It doesn’t matter how crappy your show is, chances are it’s going to make it to DVD once a season is completed. Even customers who may have downloaded the program will potentially buy the DVD for the behind-the-scenes stuff and all the commentary. 5-years ago no one would have guessed that television on DVD would be big bucks, but walk into any Wal-Mart and you’ll see that it is.

4. Syndication
Depending on the show’s content and the capabilities of the network, the program also gets licensed out into syndication. This is where the long term money is, because reruns live on forever. Yet, this isn’t just for the lower echelon networks like USA and A&E. Syndication includes foreign exports as well. The US generates more content than any other nation in the world and it’s syndicated around the globe.

History Repeating?
As you can see, downloading could be just another distribution channel that could easily interface with those already in place. The good news for the MPAA, or the broadcasters themselves, is that if they took advantage of this opportunity now instead of waiting for someone like Apple to come in and show everyone how it’s done, they would have a lion share of the profits.

Now that iTunes is going so strong, the RIAA is now complaining that they don’t like the pricing structure. Instead of innovating, the RIAA spent their millions in lawsuits that went no where and in the process ticked off a whole generation of customers. Apple saw that the market was there and did something about it and is reaping the rewards. The RIAA is now hat in hand wondering what went wrong.

Unfortunately the MPAA doesn’t have a long track record of being very forward thinking. Remember the VCR?

I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.

— Jack Valenti, Chairman of the MPAA
Testimony to Congress on April 12, 1982

Of course the VCR didn’t ruin the movie industry, or the television industry for that matter. Instead, it expanded the market. Now there are a bevy of movies being made that go straight to video and never make it to the silver screen. They budgeted and marketed as such because they are custom tailored to the video distribution channel. If anything, the advent of the VCR had generated more money for the MPAA than they ever could have imagined and Broadcatching could do the same thing all over again.

Hope For A Brighter Tomorrow
If the MPAA is smart, they would take a page from their own history books and leap on this new opportunity. If they, or those they represent, don’t then someone else will. iTunes did it with music, what’s to say it couldn’t happen with video?

The most recent release of iTunes version 4.8 includes embedded video support. It’s a little unclear at this point what Apple is planning on doing with the new feature, but in my estimation, the sky is the limit. Maybe it will be just for music videos, or other types of music based content, but there’s no reason why they couldn’t begin selling TV if they struck the right deal with the right network.

Plenty of vendors are marketing mobile video players like the Creative Zen and even pa1m0ne is slated to release a new “lifestyle product” called the LifeDrive which will be one of the first PDAs with a 4GB hard drive. Hmmm, I wonder what you would need all that hard drive space for? 😛