SOPA V. Soapy: In 2012 Government and Big Business Will Understand How Powerless They Are In The Face Of Human Ingenuity
SOPA. The Stop Online Piracy Act.
The entertainment industry and, I suspect, some folks along the Republican side of the aisle, want the ability to block any website from view that could have possibly, maybe once, but we’re not really sure, hosted copyrighted content illegally. In principle, I get it. The entertainment companies would very much like to stop dumping millions of dollars into projects that have to actually be good in order to recoup their cost. The current state of affairs seems to be; “I create a crappy but mildly entertaining product, people get wind of the fact that it’s probably not going to be very good and therefore not worthy of their hard-earned money and they either download it illegally, or wait for it to arrive on DVD, OnDemand, or Netflix.
The simple solution, of course would be for content producers to stop churning out endless acres of crap. But that’s never going to happen. So we get SOPA; a nuclear option to stop the money from bleeding out.
But is the money bleeding out in enough quantities to warrant a nuclear option?
I really don’t think so.
The vast majority of consumers fall into what I call the baseline user class. They own at least one full computer (desktop/laptop) likely a smartphone and maybe (a very slim percentage so far but growing) a tablet of some sort.Maybe they do a bit of gaming but mostly they surf the internet, watch cat videos on YouTube, get a bit of work done and post embarrassing pictures of themselves and others on Facebook. That is the vast, vast majority of users. I’ve tried to explain to those of my friends that fall into this category how to use tools like Bittorrent to acquire free (or stolen, depending on the laws of the jurisdiction you happen to live in) content, but it mostly falls on incapable ears. Gone are the halcyon days of piracy through simple channels like Napster and Kazaa. Pirating in the modern era is much more efficient but also requires a bit more specialized knowledge and effort, two things that the baselines lack when it comes to entertainment.
When the average user thinks about digital content, it usually comes in convenient but paid for and licensed forms like iTunes, Pandora, Netflix, Hulu, or Amazon. The vast, vast majority of consumers pay for every single piece of digital content they consume. Sure, the way they’ve chosen to consume it means scaled down profits for content producer but, as Republicans and Tea Baggers love to remind everyone, the market determines value, not whatever you think something should be worth.
So why SOPA?
Power, control, censorship and a deep misunderstanding of the technological proficiency of the people who actually understand how the internet in general and piracy in particular work.
Congress believes, by virtue of the authority granted to them by those who’ve elected them, that they have power. The entertainment industry believes, by virtue of its billions of dollars in revenue, that they have power. The supporters of SOPA who aren’t tied to either of those spheres believe, by virtue of their influence over daily life on the internet (see GoDaddy) that they have power.
And they are all correct. But it is not true power, because it is utterly dependent on a combination of our tolerance and apathy, two traits which are mercifully shrinking within the populace at large.
Congress, for example, is filled with people who care not a bit for the desires of those who voted them into power. They care, almost exclusively, about pushing the agenda of their political party. They care about winning. But they can only do so if they are allowed to continue holding office, so they have to walk a tightrope between their own desires and not doing anything that the lowest common denominator of their electorate will find undesirable. Their power is derived from us and they can only exercise control over us to the extent that we allow it. At least in four year blocks.
Large service and content providers like those within the entertainment industry are subject to the same limitations. Yes, their money equates directly to power and influence. But they can only continue to exercise those advantages if we continue to give them money. Which is why the passage of SOPA is so important to them. They are trying to force us to pay for their schlock whether we care to or not and, really, it’s hard not to foresee a scenario where one of the major content providers decides that something hosted on Netflix somehow violates a copyright agreement and uses the broad powers of SOPA to blockade the legitimate services we choose to use in lieu of more expensive options. They want to dictate terms to the market. The reason that they’re being so brazen in their measures this time is, ironically, that the very same limitation that should make them think twice about so joyously biting the hands that feed them (our ability to effect a boycott of their services and thus drain them of all of their resources) is exactly the thing that we won’t exercise. Time and again (with the exception of the recent GoDaddy mass exodus) we’ve shown that when principle clashes with convenience, convenience wins. It is a frustrating flaw of the human condition.
What both governments and corporations fail to understand is that individual mastery of technology within our culture has become such that, within the relatively small percentage of the population that doesn’t fall into the baseline category of users, there exist large pockets of individuals who have the power, from a keyboard, to thwart the concerted efforts of Big Business and Big Government with relative ease, especially when it comes to the field of internet censorship.
Case in point:
This morning I read this article that talks about a browser extension for Firefox called Soapy. Soapy is a tiny little script that can be downloaded and installed by anybody, into Firefox on any computer, by means of simply dragging the script file to your browser window. And its sole purpose is to change the way your browser looks up websites that have been blocked by SOPA and instantly navigate around ISP enabled blocks to allow you access to your content.
Before SOPA has even been passed, someone has found a way to render it moot. And this is just the first blow; this is just one guy, typing away from the comfort of his home office. Others will follow. It will become easier and easier for the baseline user to access tools that free them from the oppression of corporate and government interests, and that is a very good thing.
But why is it so easy?
Because the people who seek to control and censor online content don’t understand that the internet isn’t a thing that they can contain within the laws of the land. It isn’t something that you can control. The internet is more than cables and connections and websites. It is, like Soylent Green, people.
And people, whether en masse or as individuals, will always find a way to remain free.
Even from the clutches of Sony Entertainment and the Tea Party.
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Although Netflix remains committed to offering HBO titles to its rent-by-mail customers — the company can simply acquire the latest releases of Boardwalk Empire and True Blood via other retail outlets — this move underscores a trend we’ve written about before: The content battle taking place between online streaming and TV Everywhere, the initiative from content providers to offer their products directly to subscribers online.
Brad Adgate, senior vice president and director of research at Horizon Media doesn’t think HBO’s decision to refuse discounts on its discs will have much of an impact on Netflix’s subscriber base, in part because “DVDs are kind of on its way out and Netflix has moved its core business to streaming.” He describes the relationship between HBO and Netflix as “frienemies,” noting that “they are competitors but also offer the other a source of revenue.”
According to Adgate, the real challenge is the success of HBO’s streaming app, HBO Go, and the broader impact that might have on Netflix’s new core business.
HBO Go vs. Netflix
HBO’s parent company, Time Warner, has famously refused to license its popular and critically acclaimed content to Netflix (excepting early HBO programming like The Larry Sanders Show that are bound under different home-video agreements). Instead, HBO has pursued its own TV Everywhere initiative with HBO Go.
HBO Go is an app that offers subscribers access to current HBO programming along with a back catalog of original series. This content is available on iOS, Android, Roku and video game consoles. HBO Go is a huge hit, with more than 5 million downloads in 2011. Time Warner Cable and Cablevision, two early TV Everywhere holdouts, have both agreed to start support HBO Go in 2012.
As I’ve argued in the past, the success of HBO Go has shown content owners that they don’t necessarily have to bypass traditional distribution platforms like cable; instead content owners can augment their current cable deals with online/tablet/phone access.
The Content Battle Continues
When it comes to content, Netflix is in a bit of a catch 22. On the one hand, it needs a viable, robust and ever-increasing library of streaming content to keep its customer base. On the other hand, the success of Netflix — and indeed the broader success of Hulu Plus, HBO Go and online subscription in general — has made acquiring content much more expensive.
As Adgate pointed out, Netflix’s deal with Starz expires next month. When the Starz agreement ends, Netflix will lose its streaming access to almost all of its Walt Disney, Pixar and Sony Pictures content. Netflix has tried to spin the loss, pointing out its content deals with AMC Networks and DreamWorks Animation, but as Adgate pointed out, the company is now paying the same amount for a small selection of titles that it used to pay for an entire year’s worth of Starz content.
Adgate thinks Netflix’s next step will be to sell advertising “similar to the way Hulu does and what YouTube is trying to do” and in the process “create a second revenue stream” in addition to subscriber fees. Adgate argues that while many compare Netflix to ad-free pay cable à la HBO, the better comparison is traditional cable networks like FX or ESPN. As Adgate notes, “Consumers already pay $5 a month for ESPN and you get ads with that.”
It’s an interesting proposition. While Netflix might have a hard time integrating advertising into its main catalog of titles, the company is increasingly investing in original programming. Its first original series will debut next month, with future projects — including the continuation of Arrested Development to follow into 2013.
Viewers Still Love Netflix
Of course, even with the content growing pains, viewers still love Netflix. The company reported 2 billion hours of streaming content was consumed at the end of 2011. Analyst Richard Greenfield told Variety that by his estimations, that would make Netflix the 15th most watched network.
The real question is, what impact will new content deals (or a lack of deals) have on these viewership numbers.
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