While I was at SxSW, I was in a session about Darknets. For those that don't know, Darknets are the concept that with the crack down on peer to peer file sharing, private file sharing systems based on trust between individuals will develop, hidden from view.

The session rapidly disintegrated into a free for all about DRM, file sharing, and personal rants and lost all connection to the idea of Darknets. I’m not sure what was expected by putting the MPAA and BayTSP on the same stage as Freenet and Our Media.

Derek Powazek wrote a piece about the session and in it seemed to fault the MPAA and the RIAA as the root of all problems here. Derek is an aquantance, and a smart guy, but he's wrong. It's just not that simple.

I'm not going to defend or condone the four letter groups, DRM, P2P software writers, file sharers, or media companies. I'm going to try to simply explain exactly how complicated the issue is and point out that there is not one throat to choke in this time of change.

Loyal Cruft Readers know that my day job is with a large beloved/hated media company and that I work in media technology. Any new reader should be aware of it so that they don't google me, find out where exactly I work, say omfgwtfbbq, and then try to point to me as an astroturfer.

My work involves me in the discussions of these issues directly. In the session, Kevin Smokler, made the statement, "I want my content, where I want it, when I want!" The funny thing is that it wasn't the first time I had heard that, in fact, it was the title of a presentation I saw internally called "Giving the customer what they want, when they want, wherever they want it."

So everyone is in agreement on the goal here right? Already you can get your content on TV, on Video-on-demand, at the iTunes store, on your cell phone, recorded on your Tivo, on DVDs and CDs. You can even get shows that play on your Game Boy Advance. You can even download on the internet from various peer-to-peer arrangements.

But people want more RIGHT NOW and they need someone to blame. So who is to blame? Everyone one is.

It's easy to blame the MPAA and the RIAA for all the trouble as our entire media industry and the consumer marketplace go through an extremely disruptive transistion. Unfortunately, it's just not that simple.

When something like a television program or a movie is made, it takes a lot of people. Yes, I know there are some people out there making good things with their camcorders and Final Cut Pro, but if you want Battlestar Galactica, The Sopranos, or the Daily Show, it takes a LOT of people. Each of these people have a say in what happens to what they create and they want to get paid.

This happens in the form of contracts. When someone agrees to work on a television program or film, a contract controls the pay they will receive and how the work will be used. Work that is used one time is paid differently than work that is reused many times.

As an example, we decided to air a large number of soap operas from the past. The original contracts called out that the musicians would be paid for a single use of popular songs. We wanted to play it again, and so 20 years later, we had to find out how much the musician wanted. We were faced with a choice, pay the musician for their work or replace the music so as to not violate the original agreement.

Most people that work in production is represented in a similar fashion. To ‘clear’ the rights to use a television program in let’s say the Apple iTunes store, it must be understood that the contracts with everyone are upheld and no individual’s rights are violated.

That means you need to clear the writers, the directors, the actors, the voice talent, the musicians, and anyone else involved with a contract. Each of those roles is represented by a union. Remember when the Screen Actors Guild went out on strike? It was due to SAG wanting to get paid more for reruns on cable TV.

Everyone wants to get paid. Not many give up their rights and reject money.

That’s just the production end. It gets even more complicated.

Many people bring up the example of ripping a DVD to use it on other players. I have to agree, it seems like a reasonable request to me. For better or worse, many of the requests for security and DRM come from the actors, directors and others that have direct financial stakes in the sale of DVDs. Everyone that profits in the sale of DVDs wants to make sure they don’t get copied or distributed at no charge. In fact, these same people make the DVD companies promise in contracts that they will do everything to prevent DVD copying.

Just like Xerox has to protect their trademark and run ads saying that Xeros is a brand and not a verb, companies that sell DVDs have to take an active stand if they know DVDs are being copied. Right now, distinguishing between for-profit DVD copier and the freely distributed file sharer, is not bound into any contacts. The media companies can’t simply look the other way and say it’s OK to share files but not OK to buy bootleg DVDs on the street. They would get sued by the people that make the movies.

Now consider the multiple ways that content gets to you through the wide choice of paths.

For the content to get to you, you need some sort of distribution method, whether a cable company, Apple, or your cell phone. These distribution companies all pay for the content in some way. It’s not unusual for distribution companies to want some sort exclusivity or non-compete clause built into their agreement. You can easily see how a cable company might not want you to be able to buy an episode of Lost via Apple, they want you to buy it via their Video on Demand system.

With varied methods of distribution comes the terrifying prospect of a ‘most favored nation’ contract where a company is ensured that it will receive the lowest price that any of the media companies customers receive. That poses a huge problem, especially when content is ‘given away’ for free in a way that someone thinks money could be charged for successfully.

Again, everyone wants to get paid. No one wants to miss the opportunity to make money.

Further complicating issues is the fact that each delivery format is basically in competition with others. The people wanting you to pay for an episode on your TV are different than the people that want you to pay for the DVD and again different from the people wanting to sell you a copy for your computer. Telling the people that sell DVDs that you should be able to download the movie for free because you paid to see it in the theater just doesn’t fly. They are separate businesses.

Saying that since you pay for cable TV you should be able to freely download any show that possibly aired on any channels is like saying that since you pay for a land line, you shouldn't pay to make mobile phone calls.

Saying that you should be able to download a movie for free because the studio hasn't put it out on DVD yet is like saying you shouldn't pay for a music CD if the band hasn't come to your town on tour yet.

It just isn’t as simple as the “MPAA and RIAA are evil”.

The entire media industry is organized to extract money from each possible content delivery window and format. From the actors to the production company to the media giants to the distribution companies.

There is no vast conspiracy overseeing the whole industry making people do ‘evil’ things. It’s each part of the chain wanting to be paid and the interlocking contracts that enforce this desire.

IMHO, suing people isn’t the answer. Neither is creative people not being paid for their efforts.

There simply isn’t a good solution right now. It’s a hugely complex problem with many people adding value to a common product that even more people want in a multiple of formats and platforms. Many people are working hard to reinvent the entire media industry and meet the demands of the marketplace. Hyperbole and extreme measure on any side of the discussion don't help, they simply antagonize the situation.

In summary, it costs a lot to make shows like Battlestar Galactica, The Sopranos, and the Daily Show. People want to get paid for their creative efforts and most people are willing to pay for content. Unfortunately, there will never be a perfect system that makes everyone happy. Getting people what they want, when they want it, where they want it is a great goal, but it’s hard to do in a way that someone doesn’t get hurt in the process.

Posted by michael at March 16, 2006 09:59 PM