Rob Pegoraro’s Right. He Doesn’t Get It.

Since the day job launched a blog on telecom issues, I have confined my rants about such topics to that forum. This is a “gray area” kind of post. It’s not really policy related, but it touches on the Internet and video. I’m writing it here because it is not, in any way, the view of my employer.

At issue is a column by the Washington Post’s Rob Pegoraro about the recently announced TV Everywhere plan cable companies are pursuing. In his column Rob writes:

Yes, you read that right: To watch this new batch of TV shows online, you’d have to sign up for a traditional pay-TV plan.

The TV Everywhere idea has been a dream of some media people for the last few years; see, for instance, Mark Cuban’s defense of the idea. But I don’t get it. At all.

Well, my immediate thought is, “You’re right. You don’t get it.” But after that, words fail me.

First, Rob, this isn’t “a new batch of TV shows”. This is the content you’re already paying for, but you’re now allowed to view it online. In order to view Pay-TV online, you need to pay for Pay-TV. That’s sort of the whole point.

Pegoraro suggests that this is like requiring people to pay for a subscription to the Washington Post in order to take a college prep test course. Ummm… No. That’s not at all the same thing. TV everywhere is, however, the equivalent of saying, “If you want to eat your McDonald’s Happy Meal in the park, you still have to pay for the McDonald’s happy meal.”

Next, Pegoraro asserts that incredibly complicated things like “authentication” are way to difficult to comprehend or apply:

Set aside such operational issues as authentication (how do you verify that one person’s a Comcast/DirecTV/Fios/etc. customer and another is not?)…

Ummm… How do you know if someone is a Gmail user or not? Well, Rob, they’re called “accounts”. When you subscribe, they create one. They come with something called an “account number” or a “user name” and a “password”. When you want to access your service online, you type (that big flat thing in front of your monitor is called a keyboard) those pieces of information into a form, click “submit” and voila! You are authenticated.

Pegoraro, again:

If somebody wants to watch video online, let ’em: Charge them a fee, make money off their attention through advertising–better yet, give people a choice between watching ads or paying for an ad-free experience. But don’t force them to sign up for an unrelated, non-Internet service.

Sure, because the “ad-supported” model is working so well for broadcasters and newspapers. Even YouTube (ad supported video) is projected to lose between $175 million and $470 million this year. Even TV advertising is a failing venture because people are skipping the commercials. Hollywood has begun writing the commercials directly into the script to stave off that practice. NBC recently announced that Jay Leno’s show in the fall will be “DVR-proof” to force advertising on the public.

Do such actions seem like the tactics of a business model that works?

So let’s take a business model that works (a hybrid ad/subscriber model) and force it to pursue a failing business model because you want content for free – content that may cost millions per episode to produce.

As for the comment that you are forcing someone “to sign up for an unrelated, non-Internet service”, that’s still ridiculous no matter how many times you repeat it. This isn’t a non-Internet service. It’s the same service you already subscribe to, you just have more ways to consume it now. However, if you want to consume it, you have to subscribe.

Finally, Pegoraro suggests that media companies should simply give up and make all their media available for free:

Repeat after me: Trying to introduce an artificial scarcity of easily-duplicated content on the Internet does not work. If you set up boundaries that make no sense to your customers, you will simply cede the field to bootleg redistribution of your work. Fighting this principle is like trying to push water uphill–with a broom.

Well, actually, Rob. Most cable content isn’t available online for free – even through bootleg. Some of the most popular shows on cable are HGTV’s design programs. I challenege you to go find a readily available bootleg source of them. Go ahead, I’ll wait…

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Back yet? What about ESPN sporting events? They’re all available for free elsewhere, right? No? What about NFL games? Surely the satellite guys give those away for free and you don’t need to subscribe to get the Sunday ticket, right? No? Hmmm… Well what about HBO’s programming. You can get Entourage episodes for free all over the net, right? Really? Only the old ones that have been released for sale well after the air date?

How can that be? How can people control such things? How can they possibly defeat the bootleg distribution of their work? Because they don’t make them available online for free? Perhaps.

The fact is, despite Rob’s characterization of Pay-TV as “easily-duplicated content”, it’s simply not true. Look at YouTube. The most popular video sharing site will disable the soundtrack to your video if the audio patterns in the file match copyrighted content. Sure. You could cruise BitTorrents looking for content. And many do. Those sites are constantly defending against their copyright violations and go out of business regardless of the legitimacy they claim (AllOfMP3.com, anyone?).

You can also find websites that show grainy, handicam captured versions of first-run films – often before they appear in theaters. But the quality sucks. Under Pegoraro’s theory, movie theaters should simply give up the fight and make all movies (regardless of the cost to produce and market them) open to the public at no cost on day one. Better yet, just close all the theaters and let people download the movies for free? Heck, the studio could easily make up those $30 million salaries and production budgets by displaying an ad for mortgage caluclators right along side the film, right?

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