NOW how much would you pay?

Skepticaltyronlannister
Boy, do I feel foolish! For two years now, I’ve been paying anywhere from $60-$90 a month to a satellite TV provider, for hundreds of channels I don’t ever watch. I’ve been doing it to pay for the shows that I do watch, and I just had no idea that there was a better way.

Fortunately for me and millions of stupid people like me, M.G. Siegler’s got it all figured out. There are these things called “torrents” that let you download television programming from the internet for free, sometimes even before it’s broadcast in your area! All you have to do is:

  1. Download a BitTorrent client for your system.
  2. Find the torrent file for the show you want to watch.
  3. Tell yourself that you’d be perfectly willing to pay for the show if those damn media companies would only let you.
  4. Download and enjoy.
  5. Don’t put any additional thought into it, apart from rationalizing it on the internet.

Siegler’s devoted a lot of deep thought to this moral quandary:

The problem is that I’m not an HBO subscriber. Believe me, given the quality of their programming, I would love to be. Unfortunately […] You cannot give HBO your money directly. They will not accept it. They are fully in bed with the cable companies and are not going to get out of that bed anytime soon, because of what they get paid to perform their unnatural acts in that bed. A lot of money.
[…]
Because of the aforementioned naughty cuddling deal HBO has with the cable companies, they also cannot (or will not) offer up their content via a legal means, such as iTunes, in a timely manner.

Clearly, it’s HBO’s fault. They’re wallowing in cash from their dark dealings with the cable and satellite monopolies, and they’ll be damned if they’re going to give up any of that profit just for the sake of Doing the Right Thing.

It’s a tough decision, and Siegler is being extremely bold by being the first person on the internet to admit that he’s pirated media.

It brings me no great pleasure to do it, and I’m not technically sure that I’m allowed to say this, but I’m going to because HBO has left me no choice: I’m going to be pirating season 2 of “Game of Thrones.”

I’m going to be forced to scour the shady underbelly of the Web to find the show.

[…]

Again, I’d gladly pay for it. But I have no way to do so, outside of forking over an obscene amount of money on a monthly basis to a cable company, and/or waiting a year. I’m just not willing to do that. My hand is being forced.

And when someone posts a link to the webcomic The Oatmeal that said exactly the same thing as his blog post does, and which was forwarded to the Facebook and Twitter feeds of every single person on the internet a few weeks earlier, Siegler makes it clear why he’s writing: it’s “worth putting it into words again and again and again and again, until something changes.”

It’s clear: there is no other option.

Except, well, being patient and waiting for it to come to iTunes. Like adults without an over-inflated sense of entitlement do. That’s basically the approach that Andy Ihnatko suggested, in his post “Heavy Hangs the Bandwidth That Torrents the Crown”. That was one of the most perfect articles ever written about the topic. At least, it was before Ihnatko felt the need to qualify it with an addendum about how media companies force people into piracy. Apparently the notions of personal responsibility and “two wrongs don’t make a right” are too nuanced for the internet to be able to process.

Oh right, I forgot that there is one other option: paying for it with cable or satellite service and a subscription to HBO, like millions of other people do. But Siegler thinks that’s outrageous:

Why would I pay upwards of $100 a month for something I have no interest in? I just want HBO.
[…]
When I watched the first season of “Game of Thrones” this past week, I watched it through iTunes, where I happily purchased the entire season for $38.99 (in HD).

So as he repeatedly makes clear, Siegler is perfectly happy to pay for his television programming. Well… up to a point, anyway.

Let me see if I can piece together the terms of this transaction: it has to be less than $40 for the entire season. He has to be able to download it to his computer and watch it anywhere. And he shouldn’t have to wait any longer than HBO subscribers in any time zone in the world in order to watch it. If profit-hungry HBO doesn’t agree to those terms, the only recourse for the consumer is to download a torrented version.

Why is HBO being so damn unreasonable?

At The Onion’s AV Club, Todd VanDerWerff posted an article called “Patience and piracy: Why helping yourself hurts good TV.” It’s got more rational thinking and insight than a hundred Oatmeal strips stacked end-to-end. But, because of all those troublesome words and ideas, it didn’t go viral. (And because it didn’t have “Piracy” and “Game of Thrones” in the title, like Siegler’s post, it didn’t do as good a job of link-baiting. “I’m being forced to pirate Game of Thrones against my will!” is a much more internet-friendly title than “A Winter of Piracy is Coming.”)

Here’s where things get a little tricky. And speaking as someone who watches a lot of television, I have special insider knowledge of how media corporations do business that Siegler, a partner in a venture capital firm, couldn’t possibly be privy to. So excuse me for getting technical here, but bear with me: an epic fantasy series consisting of dozens of hours of footage filmed in various locations with several prominent Hollywood film stars is not an inexpensive production.

Whew, sorry to blow your mind with all that jibber-jabber. Let me dumb it down a shade:

We all know how TV works — you watch it for free or download a season pass for around 40 bucks on iTunes or Amazon. But then, this isn’t TV. It’s HBO. And over a decade ago, HBO responded to the decreased demand for their feature-length movie schedule by putting the spotlight on well-produced, innovative, quality original programming, and also Hung. And it’s not just the case that they produce “tentpole” series like Game of Thrones, Boardwalk Empire, and Rome — television series with feature film budgets. They also produce stuff that probably wouldn’t be feasible elsewhere, like Deadwood, Bored to Death, and even True Blood. (Which isn’t an epic production like the others, but still straddles the line between lowbrow enough for broadcast TV but still too raunchy and too niche for broadcast TV).

That model isn’t cheap. And I’m sure that HBO appreciates the thought, Mr. Siegler, but your generous contribution of 40 bucks before Apple’s cut isn’t quite enough to cover it. For that matter, your $15 a la carte subscription to HBO wouldn’t cover it, either. What covers it is that “naughty” relationship HBO has with the cable companies. It’s kind of like that $600 smart phone you bought for $300 plus a cellular contract.

Except there’s even more to it than that. HBO can afford to produce shows like Game of Thrones because HBO has established itself as a company that can produce shows like The Sopranos (and Rome, Deadwood, etc). People will pay for HBO because of the programming that they can only get on HBO. That exclusivity is baked into the value of the company, and therefore into the cost of its programming. They’ve sneakily hidden this fact into their shady deals with unscrupulous cable providers and by making it the tag line of an entire marketing campaign: “Only on HBO.”

If you can spend $2.99 for an HD copy of the latest episode of Game of Thrones at the same time as a cable subscriber who’s paying over $95 a month for his cable and HBO subscription, then there’s no incentive for him to keep subscribing. And then there’s nothing to separate the digital release of Game of Thrones from that of Mad Men and Breaking Bad, even though two of those series are subsidized by advertising and one isn’t. And there’s no incentive for HBO to keep funding weird, original, expensive, commercial-free television series.

None of this is really all that complicated.

But in this case it’s different, because Siegler and others like him really want to watch Game of Thrones and nothing else that HBO offers. Well, a couple of years ago I really wanted to watch True Blood and nothing else that HBO offers. What I did was I torrented an episode, and I felt like an asshole about it. Then I paid $20 a month for an HBO subscription. So please don’t anybody try to present a confession of “I didn’t feel like an asshole about it” as a battle cry of “I’m taking a stand against Big Media!”

Would I prefer to pay $40 or less to get a season pass of just the series I want to watch? Of course I would. But I was cursed with a conscience and the nagging tendency to think about things for more than a half second. And I quickly realized that paying for the stuff I don’t want to watch helps pay for the stuff that I do want to watch. And that the stuff I watch for “free” has been paid for with advertising.

(Incidentally, the next time I read anyone suggesting that digital versions of print media like books, comics, and magazines should of course be cheaper than the print versions, because the cost of printing has been removed, I’m going to devote all my energy to perfecting my slap-someone-over-the-internet technology. Don’t say you weren’t warned).

And am I suggesting that DirecTV and HBO are just barely scraping by with subscription fees and DVD sales? Of course I’m not. Both NewsCorp and Time Warner are doing quite well for themselves, last I checked. But I missed the day of ethics class where they told us that it’s okay to take stuff without paying for it as long as I was taking it from rich people. And unfortunately for me, their financial success doesn’t obviate my personal responsibility.

Personal responsibility is what it all comes down to, because that’s the part we actually have control over. Marco Arment, someone I usually agree with about everything except coffee, wrote a post (with diagrams!) called “Right vs. Pragmatic” in response to the Oatmeal cartoon and Ihantko’s blog post. And for most of that post, he’s right. The response to piracy from “big media” has just been bone-headed. All the litigation and legislation against piracy on behalf of the RIAA has been a failure both financially and in terms of PR, and now the MPAA is making all the exact same mistakes. The DMCA sucks. And it’s stupid to hold onto an outdated business model when there is still plenty of money to be made providing content through more accessible channels like iTunes, Netflix, Hulu, etc.

But in that entire post, there’s one very important point that Arment fails to emphasize: Responsible, grown men should not be throwing their fucking trash on the floor in the first place.

If you want to really make a stand, instead of just talking about it to make yourself feel better, then actually take a stand. Don’t buy TV from HBO if you don’t like the way they do business. Don’t help advertise it, either, by posting big pictures from the series on your blog and using the title in your post title and talking about how the show is so great that you’re willing to steal it. And if you like the show and would like it to be available on iTunes, then buy it on iTunes. If you want the show to be available on iTunes sooner, then buy a show you like that’s already available, and make it clear that there’s a demand for television through that channel that’s greater than what they’re seeing from cable or satellite subscriptions.

HBO execs have about a 0.0000% chance of reading a post on your website. They have a slightly higher chance of seeing your download of the torrent file in the logs of a pirate website years from now when the site gets threatened for shutdown. They’re guaranteed to read the income statements from Apple.

All that said: everyone should check out that Oatmeal comic one last time, and give him the final say. Scroll to the bottom of the page, after the big chunk of ads that help pay for his bandwidth, and read the last three words.

“Please don’t steal.”

Published by

Chuck Jordan

Writer, Programmer, and Designer of Videogames and Videogame Like Entertainment Products

46 thoughts on “NOW how much would you pay?”

  1. Great post!

    Although this shouldn’t have any bearing on the discussion of weather pirating TV shows is wrong, if we think about a generation from now, are people still going to be subscribing to cable TV?

    I think that some of the momentum from the Oatmeal comic stems from the notion that media consumption is changing and it feels oudated and backward for companies to “stick to their old ways”. I’m not claiming that this sense of entitlement is justified (especially since I’m part of a generation that had to wait for summer re-runs to air if I wanted to watch an episode I missed), but it seems like HBO is eventually going to have to adapt its model to accommodate the generation that is used to having everything instantly. It might still need to be a premium subscriber-based model (for the reasons you stated above), but requiring someone to come install a piece of equipment and run wire through your house to watch a TV show is probably going to sound pretty ridiculous in a couple of decades.

  2. I don’t know, Dan. I don’t think you qualified it enough. It basically sounds like you’re saying piracy is completely okay.

    There’s no doubt that HBO’s going to have to find a way to change its model. You can tell they already realize that, considering how hard they’re pushing HBO Go. But you can tell how much they’re still dependent on subscription and cable & satellite subsidies since you’ve still got to have a subscription to use HBO Go. Which means ridiculous situations like putting HBO Go on Xbox Live — you can’t watch HBO on your TV-attached console unless you’ve already got a subscription and a TV-attached cable box. The cable box is obviously going to go away, and it’s just the exclusive deals and sports broadcasts that are keeping it around.

    The biggest problem I’ve got is when people say stuff like “I don’t have to worry about the ‘problems’ of a big company like HBO! Times have changed! They’ve got to keep up or get left behind!” Once a person has decided that he’s entitled to anything he wants, whenever he wants, at a price that he determines, without advertising, and I guess now with an ending that meets his exacting standards, then there’s absolutely nothing that HBO or any of the media companies will ever be able to do to counter that.

    Considering how these guys have figured out how to produce a $60 million TV series and only charge $38.99 a year instead of $100 a month to pay for it, I’ve got to wonder why they’re wasting their time writing on blogs and message boards, instead of in taking their rightful place in charge of media companies.

  3. I’m definitely in agreement with you on this, and I’m kind of glad I’ve never been able to get any kind of bittorrent to really work for me because I would rather not deal with the ultimate guilt I’d have about doing it. (And for the record, the only things I’ve tried to bittorent are things that weren’t available any other way, mainly records that aren’t on CD and are out of print, and a TV show I had to recap but which my TiVo had neglected to record. Not that that makes it “right” or anything.) Trying to justify stealing something because you don’t want to pay the given price and/or disagree with the mode of delivery is just crap. Just admit you’re an impatient person, maybe poor, maybe just cheap, but don’t try to blame some corporation for making you do a baaaaaad thing.

    But the place I kind of run into a wall when discussing the issue is when people say, “Well, then you must also be against making copies of CDs for people, or CD mixes, or recording a show and lending or giving a copy to someone, or maybe even having them come over and watch a show at your place because they don’t pay for that channel?” Because I’m not against that. I don’t see a problem with that. But maybe I should?

    But, if that *isn’t* the same thing as someone downloading something from the Internet, I really have no way of explaining that difference. Maybe you can? (Whether you think it is or not. I just think you might have a better shot at forming an argument about than I have been able to.)

  4. Trying to justify stealing something because you don’t want to pay the given price and/or disagree with the mode of delivery is just crap. Just admit you’re an impatient person, maybe poor, maybe just cheap, but don’t try to blame some corporation for making you do a baaaaaad thing.

    Very well put. The only reason I keep going on about piracy is not to wipe out the scourge of IP infringement once and for all, it’s to tell people to shut the hell up about it already.

    People keep building up these elaborate networks of rationalizations and justifications. You’re not bucking the system, you’re not sending a message to big media, you’re not the vanguard of a new media generation. You’re watching a TV show or playing a video game without paying for it. Get over yourself.

    I get all my money from media companies, but still: let’s be realistic. The complaints from the RIAA and MPAA are ridiculously overblown. And “casual” piracy isn’t going to destroy the industry.

    What can destroy the industry is if people — influential people, who should know better — keep spreading the idea that piracy isn’t just a “misdemeanor,” but that it’s not wrong at all, or in fact that it’s a good thing. Because once you’ve built a culture of entitlement, there’s nothing the media companies can do. You can’t make a financial transaction if one of the parties thinks the other isn’t entitled to make a profit. And eventually, there’ll be no incentive to fund expensive productions, and we’ll get nothing but Real Housewives and Hitler documentaries.

    But the place I kind of run into a wall when discussing the issue is when people say, “Well, then you must also be against making copies of CDs for people, or CD mixes, or recording a show and lending or giving a copy to someone, or maybe even having them come over and watch a show at your place because they don’t pay for that channel?” Because I’m not against that. I don’t see a problem with that. But maybe I should?

    But, if that *isn’t* the same thing as someone downloading something from the Internet, I really have no way of explaining that difference. Maybe you can?

    I’m not much help there, since I don’t think it’s practical to say there are absolutes. “It’s wrong, but just do it in moderation and don’t brag about it” isn’t a super-strong moral or philosophical argument.

    I think everybody should just stop acting as if the internet has ushered us all into a Brave New World of post-physical-media morality, where all the rules have changed and we’re living in domed cities and report to Carousel when we turn 30.

    If it’s something you would’ve done before you knew what Napster was, then keep doing it. If it’s not, then don’t.

    Just as a hypothetical example, say I really wanted to watch True Blood and didn’t have an HBO subscription, but I had a friend who did. I wouldn’t have any problem going to her house to watch it. Or even taking a copy of the show that she recorded. If I wanted to keep watching the series without waiting for it to get released on DVD, then I’d subscribe to HBO.

    As long as you’re not doing some kind of wide-scale distribution of it, what’s the real harm? That’s the only significant thing that’s changed in the age of torrents and the internet — it’s always been easy to give one person a copy of something you’ve bought; now it’s just as easy to give a million people that copy.

  5. Chuck, it’s hard to argue with an impassioned piece of writing without coming across as being either combative or peevish (or maybe both). I saw M.G. Siegler’s post when he first put it up and to be fair I think it should be taken with a grain of salt. Danny Sullivan from searchengineland.com wrote a similar post in his private blog about a different show in the Newscorp stable.

    I agree if you take the absolutely moral stance here Siegler (and all those of us who sympathize with his frustration) has nowhere to go. His point and practically everyone’s who mouths off about piracy (myself included) is that the time of locked verticals and virtual monopolies needs to come to an end, that the models of artificial scarcity built to generate inflated value must change and that customer service in the digital age needs to be about accessibility and quality in order to generate impassioned consumes as opposed to outraged, frustrated critics.

    In your reply above you mentioned “And “casual” piracy isn’t going to destroy the industry.” it is a reasonable point of view to take and, again, it’s shared by millions. Yet when the MPAA takes single mums to court and demands $150,000 for infringement of copyright and damages thereof, I think you will agree that being ‘reasonable’ is an argument which holds no track with them.

    I think Siegler’s post (for which he got as much support as he got heat) did the job of highlighting the issue. In true social media style so did yours as the conversation evolved (initial moralizing slant notwithstanding). We are at a cusp. Social media is creating challenges which eventually all companies (not least those in the entertainment arena) will have to meet. Right now they are in denial and either not reacting or over-reacting. The world however is changing and we are all part of this change.

  6. Wait…

    Chuck, it sounds like your position is basically “let’s all be better people.”

    Really?

    I mean, are you really of the belief that you can improve the Internet by scolding it?

    I am being completely value neutral here, I’m not weighing in on right and wrong. I’m just saying, I don’t think that’s gonna work.

  7. I agree if you take the absolutely moral stance here Siegler (and all those of us who sympathize with his frustration) has nowhere to go. His point and practically everyone’s who mouths off about piracy (myself included) is that the time of locked verticals and virtual monopolies needs to come to an end, that the models of artificial scarcity built to generate inflated value must change and that customer service in the digital age needs to be about accessibility and quality in order to generate impassioned consumes as opposed to outraged, frustrated critics.

    Siegler and all of you who sympathize do have somewhere to go. Buy the TV show, or don’t. The problem is framing the issue as if pirating content is a valid third option.

    And it is not artificial scarcity. That’s one of the two main ideas in this post. There is nothing artificial about the sets, crews, locations, actors, marketing people, their time, or the money to pay for their time. Those are all very finite resources. Game of Thrones is an expensive TV series to produce, not just by TV standards but even by feature film standards. The fact that you can make a near-indefinite number of copies of that content does nothing to change the cost of its production.

    Let me say it again: reducing the cost of distribution does absolutely nothing to reduce the costs of production and marketing. It’s fatuous to suggest that because it’s now easier to get a piece of content, that we’re in some bold new age where it’s unreasonable to expect to be compensated for producing that content.

    And attempting to frame the issue as if it were a bold stance against “vertical monopolies,” as Siegler does, is ridiculously backwards and short-sighted. If consumers continue to insist that because distribution is cheaper, then production costs are irrelevant, and therefore all the revenue from a series goes directly to profiting greedy corporations, then they can rationalize piracy as a valid option. If consumers don’t see any harm in piracy, then the only companies that will be able to afford to keep producing content are the ones that are large enough to write off lost sales. Congratulations, you’ve just guaranteed the permanence of huge media conglomerates and eliminated the economic viability of mid-range studios.

    Yet when the MPAA takes single mums to court and demands $150,000 for infringement of copyright and damages thereof, I think you will agree that being ‘reasonable’ is an argument which holds no track with them.

    I think you’re mistaken; I won’t agree with that. There’s nothing “reasonable” about picking out the most egregious cases of the RIAA and MPAA’s most bone-headed litigation and legislation, and suggesting that there’s nothing else going on. What about the take-down of megaupload, who were distributing tons of content and profiting off of it? I think you will agree that my naming that single example is incontrovertible proof that anyone who downloads an episode of “Game of Thrones” is doing billions of dollars in damage to the entertainment industry.

    I think Siegler’s post (for which he got as much support as he got heat) did the job of highlighting the issue. In true social media style so did yours as the conversation evolved (initial moralizing slant notwithstanding). We are at a cusp. Social media is creating challenges which eventually all companies (not least those in the entertainment arena) will have to meet. Right now they are in denial and either not reacting or over-reacting. The world however is changing and we are all part of this change.

    With all due respect, that’s nonsense.

    The world isn’t changing. The predominant distribution mechanism for entertainment in the West is changing. (And it’s not changing as fast as some people would have you believe, since the number of people getting content via internet sources as opposed to cable or satellite providers is still a small percentage. In fact, the last report I read said that cable and satellite subscriptions were increasing).

    Yes, content providers need to do a much better job of making their media accessible, or they will be left behind. HBO already learned that from the proliferation of DVDs and the success of Netflix; that’s why they switched focus from rebroadcasting feature films to original series production. And now Netflix is having to alter its model based on the proliferation of broadband and the DVD format becoming obsolete. But HBO’s entire business model, since its creation, has been based on 2 things: deals with cable providers, and windows of exclusivity.

    What that doesn’t change: personal responsibility. You’re not allowed to set all the terms of a business transaction and then steal the product if your terms aren’t met. It’s never worked like that, and it never will work like that. BitTorrent is cool and all, but it hasn’t changed the fundamental nature of how economic transactions work.

  8. Well, no, you’re not being value neutral. You’re being defeatist.

    And since enough people have said the statement “people are going to pirate stuff anyway, so it’s the companies’ responsibility to account for that” and repeated so many times that it’s being trotted out as if it were somehow a reasonable and justifiable argument, I think that’s a problem.

    “Let’s be better people” is not a bold claim. And frankly, fuck anybody who says it is.

    Shows like Game of Thrones need millions of people to be economically viable. If the idea spreads among millions of people that asking to be compensated for your work is “greedy,” then there won’t be any incentive to create that work any more. Again, it’s really not complicated.

  9. Wait wait wait a sec, please, before this gets all fuck this and fuck that.

    I think piracy is a bad thing. I think it should be stopped.

    And even more broadly, I think the owner of a creative work has the absolute right to control the pricing and availability of that work.

    I’m assuming we agree on that?

  10. I’m not going to say anything here that you haven’t heard before, but nonetheless it bears repeating. You’re completely right that no one is forced to pirate stuff, and that people who throw up their hands and claim that they have been forced are just refusing to take responsibility for their actions.

    But—and it is a big but—whether they’re being childish or not, the truth is pretty clear. A lot of people who would otherwise pay for TV (on iTunes or elsewhere) when the release dates are pushed back as if it were a DVD release, end up torrenting the show instead. I know this is obvious, but to some extent your piece is obvious too – clearly it’s wrong to do it, but a large group of people are doing it nonetheless. Given that a very large group of people do it, and that many of them would cheerfully pay for the same thing, it does seem … well … a strange business decision that seems (superficially at least) to be hurting them and not meeting the needs of many potential customers.

    Obviously it’s *possible* that—of those people who would otherwise buy the content on iTunes—a proportion are pushed to get cable instead. And it’s possible that those customers are worth more to HBO than those who would have bought but choose to pirate instead. If they’ve got those figures, then yeah, it’s a sensible plan – however aggravating it is for those of us who don’t choose to have cable. My guess though is that they don’t have those figures, and instead there is someone high up in HBO who wants to believe that the cable subscription model isn’t going anywhere, and all these people buying on the day of broadcast are strange freaks who are a tiny (and not growing) minority. I, of course, think they’re wrong.

    A few years ago it was revealed that the United Kingdom was the largest bit torrenting nation in the world. It may no longer still hold that crown, but it’s worth thinking why that might be the case. Britain is far from the largest English speaking nation in the world, but it is one of the largest outside the United States. And the delay between broadcast of shows in the US and broadcast in the UK was sometimes up to eighteen months. And when those shows were on British TV, they were often broadcast at strange times, moving around the schedule and sometimes cut to pieces because British broadcasters assumed that any show with any fantasy elements was for kids (for example).

    For these reasons, and because the internet made conversation about the shows in the US readily visible to a lot of people, there were many people with net connections who decided to torrent shows from the US. And it wasn’t all teenagers. Ten years ago, a fifty-something father of a friend would be torrenting the shows he liked and sending them to her on a CD Rom to her university.

    On the whole, the ‘solution’ to this problem in the UK has been for shows to be broadcast much more rapidly in the UK than in the US. Because—the assumption is, and I suspect with reason—that if people are being asked to wait a week or two, then they’re happy to do it, but they start feeling like they’re being dicked around by someone if they’re expected to wait a year after another group, who then talk about it endlessly online.

    The media landscape genuinely is just changing, and a lot of people out there want to watch TV shows in a different way to how they watched them in the past. Of my friends today, very few of them ever watch live TV any more. They get everything on demand, either paid for directly, as a service from Netflix or ad supported from Hulu. I don’t even have the capacity to watch live TV in my house. I don’t want it. It’s distracting.

    I probably pay at least as much as I would for HBO through iTunes, and I actively want to do so. I want to support these shows. But I don’t want a box pushing advertising in my house all the time, any more than I want to have a chocolate dispenser in my house. I could probably resist, but it’s a lot easier if it’s not there. I want to buy good TV and watch it. I’ll give them money for the privilege. Tell me how much they want or need and if it’s not ridiculous, I’ll do it. Or don’t.

    Some of my friends are dutiful but impatient. They’ll torrent the show now, watch it now, and then buy it in full quality when it comes out on iTunes. I can’t claim that they’re doing the ‘right’ thing, but it still somehow seems pretty honorable to me. I guarantee a hell of a lot of people out there are a lot less scrupulous, and while I won’t try and defend what they do, it does seem like it’s something (for many people) HBO could eradicate by simply being a bit more reasonable.

  11. “Whoa whoa whoa! All I did was take the 2100 words you wrote about the economics of piracy and personal responsibility, and dismiss it as futile ‘scolding.’ There’s no need to be rude!

    I didn’t say fuck this and fuck that. I said fuck the idea that doing the right thing is somehow controversial, nuanced, or naive.

  12. If they’ve got those figures, then yeah, it’s a sensible plan – however aggravating it is for those of us who don’t choose to have cable. My guess though is that they don’t have those figures, and instead there is someone high up in HBO who wants to believe that the cable subscription model isn’t going anywhere, and all these people buying on the day of broadcast are strange freaks who are a tiny (and not growing) minority. I, of course, think they’re wrong.
    […]
    I probably pay at least as much as I would for HBO through iTunes, and I actively want to do so. I want to support these shows. But I don’t want a box pushing advertising in my house all the time […] I want to buy good TV and watch it. I’ll give them money for the privilege. Tell me how much they want or need and if it’s not ridiculous, I’ll do it. Or don’t.

    But that’s the whole thing. If they took down these so-called “artificial” walls and made the episodes of Game of Thrones available to everyone, the price would indeed be ridiculous. Nobody would buy it.

    People are seeing the price of $40 for the season one set of Game of Thrones on iTunes, and then jumping to the conclusion that of course HBO should be able to sell it for that price at the same time it’s broadcast. To do otherwise is obviously just a case of their being greedy and unreasonable.

    But that completely ignores how much the cost of the series is subsidized. You say that you probably pay at least as much to iTunes as you would for an HBO subscription. But do you only buy HBO programming through iTunes? And do you pay enough to account for Apple’s cut of the transaction?

    A year’s subscription to HBO for me was $240 (12 months at $20/mo). I watched two things on HBO: True Blood and, at least for the first few episodes, Game of Thrones. I wouldn’t pay $120 for a season pass to either of those series. And if you were to completely remove cable & satellite providers from the equation, it’d cost even more. HBO makes money from the cable & satellite providers, it “loses” money by selling its stuff on iTunes.

    Again: there is so much money in broadcasting and licensing rights, there’s just no business model yet for selling stuff a la carte. (At least, no business model that doesn’t have the production companies seeing a dramatic decrease in profits). If any of the people claiming that the delays and exclusivity windows are just “artificial scarcity” have a workable idea of how to produce $60 million TV series and sell them without advertising directly to the consumer for under $5 an episode, I’m sure that the execs at the production companies would love to hear it.

    You mention the high rate of BitTorrent use in the UK. That’s no surprise, since there’s so much cultural overlap between the US and the UK, and so much of the content produced in the US is paid for by selling exclusive broadcasting rights. It goes the other way, too.

    When the Davies Doctor Who series was first broadcast in the US, it ran on public broadcasting, months after the UK broadcast. When it finally came out on DVD, the season one set sold for around $80 USD if I recall correctly.

    After BBC America became a “thing” and picked up the series, it started to be shown in the US around the same time as it aired in the UK, and the individual episodes and season passes on iTunes came down to be more in line with everything else — around $3 an episode or $40 for the whole season.

    You could claim that that was some type of artificial wall, or a case of the BBC not correctly gauging the market. Or you could point out that BBC America is both ad-supported and licensed by cable and satellite providers. I’m thinking that that has a lot more to do with the pricing than anything else.

    People just completely underestimating how much this stuff costs. And they’re using that to rationalize piracy — if you can convince yourself that the other party is being greedy, you can feel better about circumventing them. It’s not negotiating in good faith if, when you’re agreeing on a price with someone else, you say “if the price and timing isn’t to my liking, I will take it and pay nothing.” It’s infuriating to see people act as if that’s a valid or even noble option.

    I’d love to be able to cancel my satellite service and get everything a la carte. However, I don’t have a suggestion on how to do that and still keep it affordable. And considering that Game of Thrones gets around 2-3 million viewers on broadcast, and that Pawn Stars gets around 8 million, I’m afraid of a world in which the only series that survive are the ones popular enough to be profitable on their own.

  13. A year’s subscription to HBO for me was $240 (12 months at $20/mo). I watched two things on HBO: True Blood and, at least for the first few episodes, Game of Thrones. I wouldn’t pay $120 for a season pass to either of those series. And if you were to completely remove cable & satellite providers from the equation, it’d cost even more. HBO makes money from the cable & satellite providers, it “loses” money by selling its stuff on iTunes.

    That is where you are losing me. The cost of HBO is not $20/month. Its $20/month plus the cable contract. In my area that would be $1,320/year to watch two shows (and that ignores supporting infrastructure). And if HBO “loses” money on selling on iTunes (where I purchased the show) – then why does it sell the show there? The reality is that it doesn’t “lose” money selling on iTunes. It may not make enough money from iTunes or DVD sales to finance the production of the show by itself but don’t insult our intelligence and say its losing money in those markets.

  14. I’m taking it that my post seemed very insulting. I apologize, sincerely.

    I’m attempting to find common ground, because I’d love to further converse about the solution you propose. That was the intended substance of my prior post.

    I am reading, from your reply, that the tone outweighed the substance. I do apologize.

  15. That’s why I put “lose” in quotes. HBO receives money from cable & satellite providers for making HBO available on their service. It has to pay money to Apple to make HBO available through their service. Cable/satellite is still a better deal for them than selling stuff directly to the consumer.

  16. Audience, no doubt. But paying audience? Whenever the RIAA or the MPAA tries to directly equate the amount of piracy to lost revenue, the first response is invariably “most of those people downloading the content wouldn’t have paid for it anyway.” And that, by itself, is a valid point. You can’t say that a million downloads of an episode of a TV show equals a million lost sales.

    But I’ve never seen people taking that to its logical conclusion: if most of the people downloading the content over BitTorrent wouldn’t have paid for it anyway, how is it in the content producers’ best interest to cater to those people?

    You can’t run a business off of people claiming they’d be happy to pay for your content (as long as it’s at the price I want and is delivered when I want it and has no commercials). You can only run a business off the people actually paying for it. It’s why the claims of “I’m pirating this to take a stand against Big Media!” are so infuriatingly hollow: you’re not taking a stand, you’re removing yourself from the conversation completely.

    To me, the most unsettling thing about the data in that study isn’t the number of downloads. It’s how disproportionate the numbers are. If media companies went to a pure “pay only for what you want” model like Siegler and others keep suggesting, and if we completely forgot about boring concepts like loss leaders and programming blocks, then only the most popular and most insipid stuff would be profitable enough to get made. I hope everybody likes Katy Perry and The Expendables!

  17. Jesse, this WP theme only lets comments go five layers deep apparently. There’s no need to apologize. I just honestly don’t yet see what point you’re trying to make.

  18. Again, to try and establish common ground, and also to be totally clear: as far as I’m concerned, morally, Siegler is in the wrong. You are in the right.

    As for what I’m trying to say, let me put it this way:

    Suppose someone of influence at HBO were to read both Siegler’s post and yours. I’d suggest that they be very worried about the points raised in Siegler’s, and I would advise them not to feel comforted by the points raised in yours.

  19. “You’re not allowed to set all the terms of a business transaction and then steal the product if your terms aren’t met. It’s never worked like that, and it never will work like that. ”

    All the verbiage you’ve just expended puts the lie to this statement. You _are_ allowed to do it, and it _is_ working exactly like that, right now, this moment. Your outrage isn’t changing the facts:

    1) many people don’t like the terms HBO/cable is offering
    2) they have technical means to seek more favorable terms
    3) they are doing so

    You can moralize all you like, but those are the realities on the ground. HBO et al. can either pick up on the signal being sent to them, change things around, and make money that would be otherwise lost to piracy; or they can stay the course, and lose a rather substantial amount of money they could otherwise get. The math required to perform the calculation is not especially advanced.

    (Or I suppose they could flood the legislative aisles with more cash hoping to get new DMCA-style abominations passed, although the record for legislative solutions in this domain is not good, and the collateral damage would be high.)

  20. I’d like to say one thing about the DMCA sucking; It does, but for a lot of people, it’s their only way to get people to stop stealing their work. My wife, and many of her friends are digital fantasy artists. They will spend weeks on a painting, then put it up for sale on their deviant art site, or what have you.

    Ten minutes later, if that, it’s on a dozen sites. Including one where the “artist” will remove her copyright, put their own on it, then say “don’t steal art”. This happens, pretty much continuously, the rampant theft of their work. They have, unless they have the money for lawyers that none of them really do, really one weapon in the US to at least play whackamole with the thieves: the DMCA.

    Could it be better? Sure. but for a lot of people, it’s the only way they have to at least do SOMETHING about the numbers of people stealing their shit. Without it, they’d really have nothing, because lawyers don’t work for free either.

    Other than that point, I agree with your article 100%, well-done sir. Well-done.

  21. Chuck,

    As I mentioned at the beginning of my reply I have neither the wish to appear peevish nor combative. You take an absolute point of view and defend it without looking at it objectively or even based on factual evidence. Distribution goes a long way towards recouping production costs and by creating artificial gateways where the distribution of a piece of work can only be obtained through certain channels only does create scarcity. You also mentioned the “billions of dollars in damage” that piracy allegedly causes and here, you do need to employ facts if you are going to assert something like this. The figures regarding sales actually support the opposite. Be that as it may, it is not my intention to make you change your mind if you are set in your assumption. I contributed more in the belief that you were discussing this with an open mind.

  22. @Shane:

    All the verbiage you’ve just expended puts the lie to this statement. You _are_ allowed to do it, and it _is_ working exactly like that, right now, this moment. Your outrage isn’t changing the facts:

    1) many people don’t like the terms HBO/cable is offering
    2) they have technical means to seek more favorable terms
    3) they are doing so

    Please, try to keep up. It’s not a business transaction when you don’t pay. You should probably refrain from using words until you’re positive you know what they mean.

    You can moralize all you like, but those are the realities on the ground. HBO et al. can either pick up on the signal being sent to them, change things around, and make money that would be otherwise lost to piracy; or they can stay the course, and lose a rather substantial amount of money they could otherwise get. The math required to perform the calculation is not especially advanced.

    This is exactly the kind of idiocy I’m talking about.

    Saying that a person should pay for what he uses is not “moralizing.” It’s not a “lecture” either. Even suggesting that they are shows how much the ridiculously over-inflated sense of entitlement has tainted the conversation. You’re not giving me an update on “the realities on the ground.” You’re talking with your head up your ass (which, to be fair, may or may not be on the ground).

    You’re not “sending a signal” to any content producer. You’re strictly a consumer. Not a customer, a consumer. A leech. You’re watching, listening to, and playing stuff without paying for it. Get over yourself.

    Don’t for one second try to frame it as some kind of civil disobedience. You’re not being denied something you have a right to. You have no voice. You’ve guaranteed that you have no voice, by removing yourself from the equation. You’re taking advantage of luxury items that other people pay for — content producers, and those of us who do pay for what we use. We are the ones who get to set the “terms.” You don’t.

    You think you’re sending some message? Bringing about change? Why should HBO or anyone else give a damn what you say? You’ve already proven yourself not to be a valuable customer — you’ll use stuff without paying for it. There’s no money in that. The math there is not particularly advanced.

    People who pay for things are an attractive market to business people. You know what makes markets like iTunes and Amazon attractive to content producers like HBO? People buy things from iTunes. That’s why they’re called “markets.” You know what makes sites like The Pirate Bay and torrent search sites the targets of increasingly draconian legislation? People take things from those sites that other people have paid for. Only an idiot would think the two are in any way comparable.

    I’ve had to listen to the same bullshit dressed up in increasingly self-important rationalizations and justifications for over 20 years now, and my patience for it is below zero. All the people like Siegler claiming they’d be “happy” to pay for it if only the terms were unrealistically bent to their liking. Or the people claiming that torrenting content is like free advertising for the content producers. Or the people claiming that the content producers are only bringing it upon themselves by wearing that dress — I mean, by not agreeing to the hollow demands of people who have no problem taking their work for free. Or that a tremendous sea-change is happening because of digital distribution, and the basic laws of economics no longer apply, and that it’s only “pragmatic” to cater to people who’ve proven time and again that they feel entitled to demand more than they’re willing to pay for.

    All that talk plus $3.99 will get you an episode of Game of Thrones.

    I suggest you stop getting all your information on how the world works from Boing Boing and the comments of torrent sites. Take a fucking class in basic economics. I’m sure there are free ones out there.

  23. See my response below to “Shane” for a more detailed account of what I think about that.

    In addition: what you’re saying starts to fall apart at the first assumption. “Suppose someone of influence at HBO were to read both Siegler’s post and yours.” Any executive basing financial decisions on what he reads on blogs and blog comments would have no business becoming someone of influence at a lemonade stand, much less a billion dollar entertainment producer.

    Businesses look at markets. They sell their goods to the people who buy them. If they didn’t, they would quickly go out of business. See the post above: “HBO execs have about a 0.0000% chance of reading a post on your website. They’re guaranteed to read the income statements from Apple.”

    I would advise any stockholder in Time Warner to be very worried if the company began to make decisions to cater to the people who’ve said “I’d totally spend money if only you’d be willing to upend your entire business model and sell the product at a loss, and until then I’ll be taking it without paying for it.” Stockholders should feel comforted when Time Warner makes decisions after looking at the number of people who will legitimately buy things from iTunes, Amazon, or via Netflix subscriptions and licensing agreements.

    But who does read blogs and blog comments? Individuals. The people who make the decision whether they’re going to actually pay to support the things they want to watch, or whether they’re going to take it without making an actual contribution. And you can “comfort” them by telling them:
    “Hey, it’s all okay.”
    “There’s no real harm in downloading stuff without paying for it.”
    “These businesses have enough money to write off the loss.”
    “Nobody has a moral obligation to a big corporation.”
    “The world has changed, it’s their responsibility to keep up.”
    “Of course I’d be willing to pay for it, but they’re the ones who are being unreasonable.”
    “There’s moralizing and lecturing, and then there’s the real world.”
    “I’m actually sending a message to Big Media.”
    “If they didn’t charge so much in the first place, I wouldn’t download it.”
    “I’m actually doing them a favor, by advertising their content for them.”

    Or you could make individuals worried, by actually having to think for one second about what they’re doing. Where are all these corporations getting this money in the first place? Is it all just pure greed, or are people actually paying for what they watch? Are those people just gullible saps, unaware like I am that the System is Trying to Keep Them Down? How much does a series like Game of Thrones actually cost to make? How much do subscription fees pay for the cost of the operation, as opposed to DVD sales and digital downloads? Why would a company put restrictions on when and where its content is available — is it purely an outdated business model, or is there significant revenue in doing that, revenue that wouldn’t be recouped via direct downloads? Do I actually think that the people at HBO are so stupid as to be completely unaware of torrents? Do I actually believe that a company that profits from the sale of digital media would ignore a new distribution method if there were a valid way to make money from it?

    Once you say “Morally, Siegler is wrong,” why doesn’t the conversation end right there? How else should individuals behave, if not morally? Millions of people individually choosing to behave morally and ethically is how things work. The market will support a pricing system that works, and it won’t indefinitely support one that’s unfair. Buy into that market, or reject the terms and don’t watch it. There is no third option. Anything else is just talk.

    Over the past few years, and especially over the past few months, we’ve been flooded with messages telling us to think about the real cost of our iPads, iPhones, and other devices. Why is everyone so concerned with how much stuff actually costs only when it means pointing an accusing finger at a business? Why aren’t people being encouraged to consider the shows and movies they watch, the music they listen to, the books they read, and the games they play, and think about how much they really cost?

  24. I’d like to say one thing about the DMCA sucking; It does, but for a lot of people, it’s their only way to get people to stop stealing their work.

    I’ll be the first to admit that my knowledge of the DMCA is entirely biased based on what I’ve read about it on the internet (including, yes, Boing Boing). So I’m anything but an authority.

    But my impression of it is that it’s fundamentally flawed because it generates so many “false positives.” That the good it was intended to do — examples like the ones you mention — has long been outweighed by its potential for abuse, especially on behalf of media companies who can afford to hire a staff just to do brain-dead searches on any potential infringement and do a blanket shutdown.

    I’d hope there’d be a way to protect “smaller” artists from having their stuff stolen, without completely obliterating the concept of fair use. (For instance, I didn’t get any kind of rights or permission for the Game of Thrones image at the top of this post, and I honestly don’t know because of the byzantine restrictions of the DMCA whether that qualifies as fair use or not).

  25. David,
    I am discussing this with an open mind. That’s why the comments to this post are open, and I continue to pay for the bandwidth. I’d love to hear a valid counter-argument; I have yet to hear one. I welcome factual evidence, in fact, I’ve requested factual evidence several times.

    Distribution goes a long way towards recouping production costs and by creating artificial gateways where the distribution of a piece of work can only be obtained through certain channels only does create scarcity.

    But again, distribution is not the problem. That’s the only thing that has changed from physical media releases to digital markets. Are you claiming that eliminating the cost of physical media, packaging, and retail space are a significant portion of the production costs of a series like Game of Thrones? I’m not arguing that it’s not a cost at all; I’m claiming that eliminating that cost is not significant enough to change the entire business model.

    If you can find numbers that suggest otherwise, I’d welcome them. I’m skeptical that you’ll find them, for this reason: HBO already distributes its content digitally to millions of customers without having to pay for packaging, physical media, or retail space. The cable and satellite boxes handle that. And as I understand the business relationship, cable & satellite providers actually pay HBO licensing fees to carry their channel, on top of the regular subscription fees. (That could be a mistaken assumption). Assuming that’s true, not only does HBO not have to pay for distribution, they actually get paid for distribution.

    They obviously don’t get the same return on investment by selling their DVDs at a retail store. I claim that they don’t even get the same ROI by selling their shows through iTunes, because they have to pay Apple a cut of every sale, even though I’d assume that it’s a higher ROI than having to manufacture CDs.

    If you believe that “artificial scarcity” has a role that I’m failing to understand, please explain.

    You also mentioned the “billions of dollars in damage” that piracy allegedly causes and here, you do need to employ facts if you are going to assert something like this. The figures regarding sales actually support the opposite.

    I did not say that piracy causes “billions of dollars in damage.” In fact, I said the exact opposite. It is in my first reply to Rain in this thread. Follow the link to a TED talk that cleverly and effectively demonstrates just how ridiculous the RIAA and MPAA’s overblown claims of lost revenue are.

    You appear to have misunderstood my paragraph above. You listed a suit of $150,000 against a single mother as if it were incontrovertible proof that media corporations are unreasonable. I said that was absurd. My claim was that I could just as easily point to the take-down of Megaupload, and then say that it was incontrovertible proof that everyone who pirates content is costing the industry billions of dollars in lost revenue. That’s every bit as absurd.

    You can’t pick and choose the most extreme examples of bone-headed litigation (on the part of the industry) or irresponsible excess (on the part of the pirates) and say that the entire system works like that. That leads nowhere good.

    I feel it’s neither peevish nor combative to want facts and to demand people take responsibility for their actions. If you’d like to contribute an objective argument and factual evidence, please do! Saying that “we’re on the cusp of new challenges brought about by the rise of social media” is neither objective nor factual. It’s not a counter-argument to anything I’ve written.

    It’s disingenuous to accuse me of arguing in bad faith if you’re misrepresenting my statements and accusing me of not bringing any facts to the discussion. And it’s really pretty rude to dismiss the claim “people should pay for what they use” as “moralizing.”

  26. Well, I think there’s a false equivocation there: That because SOME entities can abuse the DMCA, that it’s fundamentally flawed, and needs to be trashed. By that logic, all laws must be trashed, along with well, everything.

    When boingboing et al, (and I hardly consider them to be even vaguely objective sources on that. Doctorow’s haterade for copyright is well known. Of course, since he’s famous enough to get paid just to show up, his need to make money off his books is somewhat small. So I also don’t take him seriously when he says “just do everything for free, and nice people will pay even when they don’t have to and we’ll all be well-off.” He’s just a *little* twee and hypocritical there.) start bitching about the DMCA, that’s what they’re doing. Because some people abuse it, therefore, all who use it are abusing it, and anyone using it is a bad person, and therefore their opinions don’t count, because they’re bad people.

    Are there aspects of the DMCA that suck? Absolutely, but I’ve yet to see:

    a) Actual reliable numbers on the “abuse” of the DMCA. Given that the pro-piracy people demand real numbers to “prove” piracy, I think it’s only reasonable to ask for actual numbers on DMCA abuse as a percentage of overall DMCA use. Not everyone is abusing the DMCA, and I’d wager the people who are make up a rather small group.

    b) any proposal to replace it that doesn’t end with “copyright is bullshit find a better business model” or “information wants to be free”.

    Information may want to be free, housing and food are not.

  27. LMAO. I love that attitude.

    “YOU SHOULD LISTEN TO ME”
    “Why?”
    “BECAUSE IF YOU DID, I’D PAY YOU FOR WHAT I’M TAKING”
    “So, let me get this straight. You’re telling me you’re stealing my stuff, and if I don’t do what you want, you’re going to keep on stealing my stuff, and that you’ll only stop stealing my stuff if I do exactly what you say?”
    “YES!”
    “Tell me, does the word “extortion” mean anything to you? Because that’s pretty much what you’re doing. You’re trying to force me into a series of actions that I don’t see as a good idea by threatening me.”
    “I HAVE A RIGHT!”
    “To extortion?”
    “NO! I’M NOT EXTORTING YOU AT ALL”
    “You’re stealing my stuff, right?”
    “NO! I’M COPYING IT”
    “Sigh. *fine*. You’re *copying* my stuff without paying for it, even though it’s not free”
    “RIGHT! BECAUSE YOU WON’T DO WHAT I WANT”
    “Right. Got that. Can you stop yelling?”
    “I’M NOT YELLING, I’M BEING SINCERE”
    “sigh. Okay, so Mr. Sincerity, you’re copying my stuff without paying it, and unless I do exactly as you say, you’ll not only keep on copying my stuff, but you’ll encourage others to do so”
    “RIGHT!”
    “Yep, that’s extortion sonny. Now, why should I do what you say, when it’s clear to me that you’re an extortionist? Why should I listen to you instead of the people who ARE paying me and ARE customers?”
    “BECAUSE I HAVE MONEY TOO”
    “Not as far as I can see. Tell you what, here’s a quarter, go get some candy.”

  28. Please don’t straw-man me. Almost nothing you put in quotes came from me, nor do I agree with it.

    It seems like you’re saying that the people who pirate aren’t relevant, and that the idea of converting their behavior is pointless.

    Do I have that right? That’s an interesting thing to say.

  29. Nonsense. That’s PRECISELY the argument the pro-piracy/pro-siegler side is using. “I’m going to steal your content until you do what I want”.

    What part of that is unclear to you?

    And no, I don’t want to “convert” the behavior of assholes who have all the ethics of a particularly stupid scorpion, and will lash out at the least little inconvenience, because their arguments are provably bullshit.

    Their sole two desires are “make it convenient and make it cheap, then piracy will stop.”

    So in two areas, digital art and music, this has been done. Both are convenient to acquire and use, and both can be had for cheap.

    Yet in both areas, piracy is still rampant. It’s especially bad in the realm of digital art, where this theft is almost institutionalized. So I now have proof that assholes who are willing to steal content won’t stop. You’ll never hit either “convenient” nor “cheap” enough because what they want is delivered to their door for free, with no ads, forever.

    So whenever you push either of those to qualifications, “well, if I could get it on my terms and at a price I’m willing to pay”, what I hear is “I’m lying to you, but I think you’re too stupid to notice.”

    Pull the other one.

  30. If you’re going to tell me my own opinions, I’m afraid I have to agree with David Amerland, above, that there’s not a real conversation happening here.

    Except for the part where you’re disagreeing with something I didn’t say, it seems like you’re agreeing with my summary: you and Chuck believe that the wishes of the pirating masses are not relevant economically.

    Perhaps I came across sarcastically when I said that was an interesting position. I am sincere. I don’t think I’ve encountered that before. Your own anecdote about digital art is compelling. That’s a conversation I’m interested in.

    Belittlements like “What part of that is unclear to you?” make for a conversation I’m not interested in. Chuck has been throwing those around at other people, but not me to date, which I’ve appreciated. Apparently you’ve stepped in for him.

  31. Because you’re still justifying them. You’re still saying “you better consider catering to thieves or otherwise bad things will continue to happen”, yet very few people consider the consequences of catering to idiot thieves like Siegler, who, from what I can tell, can’t even think deeply on his own position.

    For example, they love to pull out the Louis C.K. thing, where he put one of his concerts online for $5, and sold a gob of copies, with no DRM, and so therefore, that’s how it all should be. However, they forget a few things:

    1) Louis was already paid for that concert. Last I checked he doesn’t work for free. It’s not unreasonable to assume he got, at very least, a chunk of the gate.

    2) He was, unless he’s quite foolish/silly, selling items at the show, aka “merch”. Again, he’s making money from that.

    So he puts that concert up online for a low price, and gets a lot of sales. That’s awesome, but to say that what works for what is essentially a one-man show with really low overhead that’s already been paid for and made its money is going to work for something with a FAR higher budget and has to pay a lot of people, regularly, without fail, BEFORE it is seen by person one, is ridiculous. It’s moronic in the extreme and seems to assume that everyone working on every episode of “Game of Thrones” is getting residuals, or can work for free until the residuals roll in.

    It’s idiocy on every level, yet THAT is the thinking you’re telling HBO to seriously consider?

    Do YOU work for free until whatever it is you/your company sells makes money and then you get a cut of the sales? Somehow, I doubt it, most people can’t work under that model.

  32. Right, as I said: you understand exactly what I’m not saying.

    I’m not sure if Chuck is as riddled with inaccurate certainty.

    I don’t think I’ll stick around to find out.

    Bye.

  33. Let’s start with one puzzle. Why are you paying HBO $240 a year to get to see True Blood and a couple of episodes of Game of Thrones. If you think that’s genuinely what it’s ‘worth’ to see those shows, I think that you are—bluntly—wrong. I’m guessing a lot of other people out there are NOT prepared to pay $240 a year to get to see True Blood, and that—frankly—many of those *would* be prepared to pay $40-60 to get to see the Season via iTunes when it’s broadcast. So you need (say) eight of those people to download for every one who buys HBO. That seems *entirely* plausible to me, frankly. Eight people who are prepared to pay $60 to watch True Blood for every one who is prepared to pay $240.

    Is your argument REALLY that people should be paying $240 a year for True Blood? Because that just doesn’t sound in any way plausible. Not one bit.

    Moreover, frankly, the world changes, and people’s business models have to change too. If all the other broadcasters think that they can make money by selling on iTunes the day after broadcast for a certain amount of money, then of COURSE expectations will be set for shows on HBO to be similar. And people will justifiably start asking ‘why am I paying so much for this’ or ‘why can’t I get it at the same time as I get all my other shows’. And one way or another, whether it’s moral or reasonable or not, people are going to start moving to either other shows or they’re going to torrent it. Because it’s easy and it works.

    Is that right? No. Is it basically inevitable? Yes. Does that mean that their existing business model might be under threat? Yes. Is that fair? Bluntly, that’s an irrelevant question.

    And meanwhile, a whole bunch of people actually are moving away from cable completely, because it’s an expensive standing cost each month that they don’t need to pay and they don’t want to pay. They want to own the shows and be able to watch them when they want to. Again, if HBO’s business model doesn’t stand up under those circumstances, and other people’s models do, and if HBO isn’t prepared to find some way to change, then—and surely this is obvious—HBO will fail.

    Again, there’s a difference between what is fair and reasonable and what is going to happen. We’re in a transitional period here. Obviously the possible viewers buying things from iTunes is likely to grow massively over the next ten years. And the desire to be able to buy bespoke, just the things you want, to watch when and how you want, is not going to evaporate. So, I’m afraid, one way or another, HBO are going to have to find some way to adjust to it.

  34. Chuck,

    Thank you for your comment. You are right, I misread your Megaupload comment, the hazard of speed reading on a manic day. The funny thing is that from a moral point of view what you say is right. The case gets remarkably fudged by the fact that we are discussing the entertainment industry which has an unfortunate history of over-spending on the wrong things (from soulless $150 million movies to overblown corporate exec accounts) and the music industry which has made it next to impossible for musicians to become independent even if this makes more sense than signing on a label.

    I have actually written a long post with original research regarding profits and piracy for the entertainment industry here: http://helpmyseo.com/seo-blog/608-sopa-the-reasons-behind-it-and-how-to-fight-it.html – I did not present it earlier because, this is your blog. There is also a piece here: http://helpmyseo.com/seo-blog/643-why-sopa,-pipa-and-acta-are-wrong.html and, as an aside but an interesting one, you may find Cory Doctorow’s argument on copyright in the Guardian also informative: http://www.guardian.co.uk/commentisfree/video/2011/may/30/internet-piracy-cory-doctorow.

    My statement on: “we’re on the cusp of new challenges brought about by the rise of social media” has to be contextualized. It is a disruptive technology (if we can call it that) in the sense that is challenging hitherto siloed verticals (from governments governing people to companies selling goods and services). It creates transparency where none existed before, it has been responsible for one social media marketing disaster after another for major companies which range from PayPal to Blackberry (and subsequent changes in attitude brought in) and the Arab Spring in the Middle East which brought unexpected regime change in countries which were totally resistant to it.

    It is also affecting consumer attitudes and leading to much of the talk we witness here and, incidentally, even this talk is very much a part of it and important in its own right (and I came to your blog from Google Plus). I can give you link after link with evidence on the pressures social media is producing, not least the fact that at the 2012 World Economic Forum in Davos, it was the central subject of discussion at the table, bringing up the question whether Capitalism, as it stands, is “…fit for purpose” in the 21st century, but I suspect you’ll have no difficulty ferreting out some and I do not want to overstay my welcome here.

    My comment on ‘moralizing’ when presented like this is a little off-key. It was not my intention and I apologize. You have been gracious dealing with all the comments here and some of them are pretty combative. They are all an important part of the social media conversation and if we take everyone’s points of view here and your responses I think it is fair to say that your blog post added a lot of value to what might otherwise have been a fairly one-dimensional post from M. G. Siegler and for that, having spent some time going through them today, I am grateful.

  35. I’ve noticed something. People say “Well, if you make things available for easy and cheap, piracy will go away/go down to where it’s not a problem”.

    Okay. Show the numbers. Not some cherry picked thing like this: http://arstechnica.com/tech-policy/news/2011/02/where-have-all-the-music-pirates-gone.ars where they try to take one part of a study that looked at one day’s worth of torrent traffic, (ignoring the rest of the study) and say “Look, this PROVES that music piracy is effectively gone”.

    But actual studies done over time since, say the first iteration of the iTMS that show music piracy in all its glorious forms falling over and being effectively fucking dead. Preferably by a third party who has a history of doing such things well, with source data and methodologies available.

    Because based on what little is out there, no one, on either side can prove shit. At best, this entire “make it easy & cheap and they will pay” is *unproven*. From what I’ve seen, I still think it’s *disproven*. But should someone show me better numbers, I’ll accept them. Or any numbers, really.

    Then explain why that fails to follow out of music. For example, why is digital art so heavily pirated in spite of being YEARS ahead of the curve in terms of distribution and lower cost.

    Also:

    So you need (say) eight of those people to download for every one who buys HBO. That seems *entirely* plausible to me, frankly. Eight people who are prepared to pay $60 to watch True Blood for every one who is prepared to pay $240.

    Is your argument REALLY that people should be paying $240 a year for True Blood? Because that just doesn’t sound in any way plausible. Not one bit.

    It’s EXACTLY as plausible as your completely made up 8:1 number. Also, what are you basing your wholesale replacement of that HBO sub number for $60 on iTunes number on? Do you know for a fact that if all those $240 subs went away, that HBO would still be able to sell seasons at the same price? If so, what’s your source? Remember, those subs are predictable money. You can, literally, bank on it. You can’t bank on one-time sales in the same way. You can make educated guesses about it and be fairly right, but still, not the same thing. It’s why the accounting rules for subs and purchases are so different, and why the only reason you get an $800 cell phone for much, much less is because you’re repaying that cost drop over the course of two years with your subscription.

    Everything is not the same.

    And people will justifiably start asking ‘why am I paying so much for this’ or ‘why can’t I get it at the same time as I get all my other shows’.

    “Why do I pay so much for a BMW when I can get a TaTa, basically the same thing, for $2000″?

    Value and price are not the same thing. I will pay, assuming I can afford it, whatever Led Zeppelin choses to charge for whatever they release, because for me, Led Zeppelin has huge value. Do I care that I can get the fabulous schmuck sisters for a buck and a quarter? No, because I don’t give a crap about them.

    The fact that other things are cheaper doesn’t mean everything must also be cheaper, and again, you still can’t show that the costs of producing a show like GoT will be met by your “give it to me cheap and easy” demands. You can’t even speculate that worth a damn. However, HBO can tell you that right now, that shit is profitable. Show them better numbers, and you may get listened to more.

    Again, there’s a difference between what is fair and reasonable and what is going to happen. We’re in a transitional period here. Obviously the possible viewers buying things from iTunes is likely to grow massively over the next ten years. And the desire to be able to buy bespoke, just the things you want, to watch when and how you want, is not going to evaporate. So, I’m afraid, one way or another, HBO are going to have to find some way to adjust to it.

    Why are you so sure they refuse to, just because they aren’t doing it NOW. HBO is not a small entity, and they may be trying, clumsily and slowly to do what they need to while not firing 90% of the damned company. They may, just may be trying to screw the smallest amount of people possible over the long term.

  36. This doesn’t actually make sense to me either. HBO gets money from the cable companies, because consumers pay for the cable packages. They don’t get all of that money – much of it goes to other places and to administrative costs and—presumably—profit for the companies.

    On iTunes, again, HBO gets money, but again they don’t get all of the money because some of it goes to overheads, administrative costs and profit for Apple.

    Let’s be clear – in neither scenario does HBO ‘pay’ to sell their stuff. In both situations they are paid by consumers with intermediaries taking a cut.

  37. I am familiar with the mechanics of broadcast TV, having worked at the BBC for several years. I’m not by any means trying to argue that HBO shouldn’t take their time, or even that they don’t have a perfect right to do what they’re doing. I’m just saying that while they’re doing this, my suspicion is that they’re hurting themselves.

    Question by question – am I saying that having stuff on iTunes will stop piracy. No, absolutely not. But then, I’m not sure exactly what *will* stop piracy. That’s actually not the question here – the question is how do you maximize revenue to the people who make the programs. That could mean that you just convert 10% of the people pirating stuff into paying customers via value add, convenience or better picture quality. This seems to me to be entirely plausible, and may be sufficient to fund these companies. Since the options at the moment appear to be (1) allow piracy to continue as is or (2) get some percentage of people who are pirating to pay money for the programs, it seems to me undeniable that 2 is the better option.

    As to the eight to one number, I was actually trying to be positive here. I was working on the principle that a (say) $60 season pass, of which 2/3rds goes to the creator, results in a forty dollar income for the company. Six fours are two hundred and forty, which would be roughly the same income as from one subscription. So, eight people paying ad hoc would provide more value than one person subscription, and that’s if they only buy one season a year.

    So then the question is purely whether or not you could get eight people signing up for every person who stopped paying the subscription. Now, my guess is that you would, because those people who don’t want a subscription would be prepared to pay, but honestly, it doesn’t entirely matter either way. One way or another the number of people subscribing to cable is dropping. Apparently—according to one set of figures I looked at—by four-five percent in 2011 alone.

    That trend just *exists* and companies just have to deal with it. If you can’t get all your money via the cable route, then you have to look elsewhere, and it seems pretty clear that people with broadband are streaming TV twice as much as people without it and watching half as much TV. So, as people get broadband more they’re choosing not to get cable TV. So if you want to make money you have to get in front of them where they’re watching it.

    Again, if the option is making less money per unit on iTunes sales vs. making no money at all, then it’s pretty clear which is the one that’s most likely to keep businesses going…

  38. Jesse, I think it’s pretty disingenuous to complain about straw men when you seem to have little problem engaging in little apart from ad hominems. Instead of engaging my post, you dismissed it as “scolding.” Instead of responding to my comment, you accused me of putting words into your mouth. And instead of addressing any of the points asked in my or John Welch’s response, you’ve said basically “you don’t have to be rude!” and dropped the mike and stormed off stage.

    This comment board just isn’t set up for My Dinner With Andre style conversations, for better or worse. You pretty much have to make your point in the space available. What you’re calling straw men, I’m calling genuine attempts to glean what your argument is, so that we can respond to it.

    So once again: you appear to be saying that the “pirating masses” are a potential untapped market. And you have said that a post like Siegler’s gets closer to putting the pirate’s money in the hands of HBO, while a post like mine sends a message for HBO to stay the course.

    You ignored my point that HBO execs aren’t reading my post, or even Siegler’s. There is a higher likelihood — still tiny based on the traffic of this blog, but higher — that the people pirating content are reading this blog. As evidence, I present the fact that people are jumping in to defend piracy.

    So how do you “convert” this potential market into paying for what they consume? Do you paint a picture of HBO as this money-hungry faceless corporation engaged in shady deals with cable/satellite providers, so engorged on profits and so out of touch with modern technology that they’ve created a situation where the only recourse is to steal from them?

    Or do you remind people that the stuff they watch has a real cost? And remind people that there whenever they pirate something, there are other people out there paying that cost for them? Please, explain to me how one helps bring these markets together and the other doesn’t.

    Say I were an HBO exec, and I could choose to cater to two markets: one that has shown they’re willing to pay me to watch well-produced programming; and another that has said they will pay me if my price is unreasonably low, and otherwise they have no problem stealing from me. Which one of those am I going to be eager to do business with?

    If people really want to send a message to HBO:
    http://www.hbo.com/#/about/contact-us.html

    Anything other than that is empty talk. If a person can’t make his argument, or enter into a business transaction, without threatening to steal from the other party, then what does the other party possibly have to gain by doing business with them?

  39. Busted! This comment proves that you haven’t been reading my blog, only the posts that get linked by Gruber or Ian Betteridge!

    Really, though, I’ve complained about the “information wants to be free” mentality multiple times on here, at length (as is my way). And complained that Doctorow’s approach is naive at best; it points to individual successes without taking into account how much of a built-in audience that people like Doctorow (and Wil Wheaton, and Louis CK, and so on) already have.

    My complaints of abuse of the DMCA are purely anecdotal. 99.9% of them are following a link to a video that has been taken down because of rights violations, when it’s clear from context that the video should’ve qualified as fair use. When so few parties (Universal, Sony, etc) control so much of the available content, it only takes a few of them to affect wide swaths of the internet.

    I’d like to hear a better proposal as well. Fortunately, I’m confident that it’s not as black-or-white, completely pro-DMCA or completely anti-copyright as it’s made out to be.

  40. Let’s be clear – in neither scenario does HBO ‘pay’ to sell their stuff. In both situations they are paid by consumers with intermediaries taking a cut.

    It’s long been my understanding the cable and satellite providers do pay the channels that they broadcast, in the form of licensing agreements. The channels add value to their service, so DirecTV pays the providers to be able to broadcast them.

    With the iTunes store, Apple just takes a cut from HBO for the “privilege” of making HBO programming available. But with DirecTV and Comcast, I believe the situation is reversed: the satellite providers pay them.

    Are you saying that that’s not the case? A quick check on Google hasn’t turned up any verification on how cable & satellite deals work, but for years that’s how I’ve understood it to work. It’s what Siegler calls HBO being “in bed with the cable and satellite providers, performing unnatural acts,” and what I call “spreading the cost around so that people aren’t paying $80 just to watch one series.”

    I am oversimplifying it, of course. I’ve been presenting it as if I pay DirecTV around $70 for a programming package plus $20 for HBO, and then DirecTV pays that entire $20 to HBO plus a percentage of the $70. I’m skeptical it actually works out that simply since there’s so much money involved, but my point remains that HBO has a much better deal with DirecTV and Comcast than they do with, for example, Apple. And that it’s exactly that arrangement that means HBO programming doesn’t come to Apple until around a year after broadcast.

    If you’re saying that I’ve got it wrong, that cable & satellite providers work exactly like other retailers, I’d genuinely be interested in hearing it. Obviously, that would make a much stronger argument in favor of a la carte sales via iTunes and the like.

  41. Tom (and John):
    I started a reply to this, but it got way too long for this clunky commenting system, so I’ve turned it into a separate post. I hope you’ll appreciate that it’s not an attempt to dominate or derail the conversation, but an attempt to come up with some actual numbers — even if they’re numbers completely pulled out of my ass. And it’s more interesting than repeating the same thing over and over again, which is “people shouldn’t be stealing things.”

  42. Chuck,

    I appreciate your speaking up.

    If I may put a fine point on it: an ad hominem is an argument that criticizes the messenger and not the message. “Scolding” was a criticism of the message. Also, to claim to be misunderstood is not an ad hominem. And there is no way that failing to respond to something can be an ad hominem.

    I also think I’ve respond to almost everything you’ve said. I’ve responded in two ways: I told you that I wasn’t making the points you were refuting, and I asked you questions to make sure I was understanding what you were saying.

    Let me illustrate. These statements:

    “It seems like you’re saying that the people who pirate aren’t relevant, and that the idea of converting their behavior is pointless. Do I have that right? That’s an interesting thing to say.”

    Are not the equivalent of this statement:

    “HBO should be spending time trying to convert pirates into customers.”

    In fact, even this statement:

    “HBO should be concerned about the sentiments expressed by pirates”

    Is not the equivalent of the previous statement, which was:

    “HBO should be spending time trying to convert pirates into customers.”

    In fact, if you want to get technical, asking you if you think the idea of converting pirate behavior is pointless is pretty near the opposite of saying the idea of converting pirate behavior is purposeful. It’s a question, not a statement, and it invites elaboration on the opposite point of view.

    So yes, I see no reason to respond to this:

    “So whenever you push either of those to qualifications, “well, if I could get it on my terms and at a price I’m willing to pay”, what I hear is “I’m lying to you, but I think you’re too stupid to notice.””

    Or this:

    “That’s awesome, but to say that what works for what is essentially a one-man show with really low overhead that’s already been paid for and made its money is going to work for something with a FAR higher budget and has to pay a lot of people, regularly, without fail, BEFORE it is seen by person one, is ridiculous… It’s idiocy on every level, yet THAT is the thinking you’re telling HBO to seriously consider?”

    Or this:

    “So once again: you appear to be saying that the “pirating masses” are a potential untapped market. ”

    Because I’m not saying that. What I am in fact doing is trying to understand your argument better.

  43. Jesse, I still have absolutely no idea what you’re trying to say. I have asked several direct questions inviting answers. Instead of offering answers, you’ve repeatedly taken offense at how the question was worded.

    When I ask “Did you mean to say this?” the correct answer is not “No.” The correct answer is “No, I meant to say this.”

    If you’re trying to understand the argument better, I invite you to re-read the post or any of the comments I’ve made in response. If you have a question, ask the question. Otherwise, I think it was a mistake to try to re-engage you in the first place.

  44. Perhaps so.

    I think the thing you said about my dinner with andre might be the most to the point. The order of the day here seems to be big long posts, and trying to take one idea at a time goes against the grain.

    At any rate, I thank you for the effort to clarify.

    All my best.

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