How Open Will Change Television
Posted on 17 October 2010
The licensing dispute between Fox and Cablevision which kept the Giants game from coursing across the Cablevision network at kickoff today shows us yet again why closed licensing models based upon licensing aggregation simply are not in the best interest of consumers. As I highlighted in a previous post, I’m not a fan of having my cable company providing content contingent upon my letting them negotiate on my behalf without my input. By restricting my choices, by forcing itself as an unwanted middleman, it holds me hostage as a bargaining chip.
It’s not uncommon within traditional media, and it’s being forced upon new forms of media consumption and distribution. Proprietary methods of licensing, securing, and distributing content seek to retain control, while purporting to solve the problem of enabling fair compensation for copyright holders.
Large media companies are in the business of exploiting economies of scale to monetize content. Aggregating customer demand and simplifying its own job of authorizing access to content by providing as uniform a product as possible, cable companies both remove the market choice for content, subsidizing what it provides at its own discretion, and with limited provider choice in most markets, provides service that’s "good enough".
I remain convinced that what will ultimately destroy large media companies will be the disintermediation of forced relicensing schemes by the establishment of an open content authorization standard, and service providers which compete on the basis of the quality of their service instead of the exclusivity of their agreements. An open content authorization standard, complete with near-real-time analytics, support for cryptographically-secure delegation of authorization (to allow for voluntary relicensing schemes), and an ecosystem of disinterested authorization providers can enable a new transparency in the media supply chain.
If Greenpeace can force Timberland into transparency about the sources of its leather purchased from Brazilian suppliers, why is the relative exploitation of both producers and consumers of copyrighted materials free of such transparency when it’s so incredibly simple to track the provenance of digital assets? Should I be able to filter the content I’ll pay for based upon the business practices of the company providing it?
This past week, I listened to Tim Armstrong, CEO of AOL, giving a keynote speech about the future of his company. Two things stuck with me from what he spoke about — one being my introduction to the AOL property Seed, the other being his description of what was needed to create "offramps from the internet", programming. Seed is a site for writers and photographers to create freelance content from which AOL can draw, while compensating contributors. His reference to programming was to evoke the notion of television or radio programming, what most new media types refer to as content curation.
AOL’s building its businesses and brands around content curation, it’s doing so by sourcing its inputs directly from independent contractors, placing thousands or millions of tiny bets in a marketplace that can’t be controlled by its competitors.
An open, transparent authorization system could still be used to allow exclusive licensing access to a single customer, should the copyright licensor choose, but an open platform provides the opportunity for new revenue models based upon ubiquitous access, low transaction costs (at high volume), and simplifying consumption. Authorization policies can allow new methods of consumption, entitlement to value-added content, and clarity on policies for derived works. One can easily imagine a "cover" of a popular song inheriting obligations from the original, but allowing a new performance by an amazing coffeehouse talent to distribute her performance in ways that still ensure that the songwriter’s licensing restrictions (say, a royalty of tenth of a cent per play) are respected. Content curators, such as those doing the "programming" would have an incentive to add value. Content distributors would have an incentive to compete on the value offered by their distribution service, and not on their ability to negotiate licensing deals.
People can run from the comfort of Comcast/Cablevision/Time Warner/Verizon/DirectTV/Dish to the comfort of iTunes, but they’re simply exchanging one master for another. Eventually, even Netflix will face its day of reckoning — its model still relies upon large-scale aggregate content deals it makes on behalf of its customers.
Eventually, open WILL win. Market forces will eventually dictate it. Want to get ahead of the curve and help make it happen?