Cat Fight in the Fox’s Den

Until moments ago (mid-day Jan. 1), when a deal was reached, Fox was threatening to black out its channels, most notably Fox broadcast, from Time Warner Cable (TWC) unless TWC anted up a subscriber fee of reportedly $1 per subscriber per month. Historically, cable networks such as HBO, Showtime, AMC, etc. got those fees, but broadcast networks didn’t. They need them now, with ad revenue shrinking, and customers departing networks in favor of cable channels — a multi-decade trend — and, more recently, video games, Internet TV sites such as Hulu, unauthorized (pirated) content, and user-generated content such as on YouTube.

Broadcast networks have started to get paid — CBS, for instance, reportedly gets up to $0.50. TWC apparently offered Fox only $0.30, but the terms of the deal they reached are undisclosed and most likely higher. Even though Fox ultimately didn’t pull the plug, it took the intervention of Senator John Kerry to keep football and “American Idol” from going dark on TWC. That’s not the sort of attention a media company wants. So why didn’t TWC just ante up the $1 and pass on the cost to consumers?

The answer is that MSO's (cable cos. like TWC) are afraid that if they keep raising cable prices, they'll drive more consumers to satellite or induce them to drop cable and just watch TV on the Internet. That is, instead of buying an Internet+cable bundle from Time Warner Cable, the customer might just drop the cable portion and buy Internet only.

Even worse for TWC: If customers opt for Internet only, some will be peeled away by telephone+Internet or cellular+Internet bundles from ATT or Verizon, causing TWC to lose the customer altogether. It’s called churn, and it’s especially likely because customer perception of cable company greed would dovetail with the belief that telcos offer better customer service anyway. Thus, raising cable prices could cost TWC dearly.

So, the battle between TWC and Fox is just another facet of an n-dimensional war between MSOs, satellite cos., landline telcos, cellular cos., cable networks, broadcast networks (ABC, CBS, CW, Fox, NBC), network affiliates (the local stations that actually broadcast the network signal), video game companies, Internet TV sites, unauthorized (pirated) content, user-generated content—and, of course, the consumer. And that's not even to mention the companies that manufacture the hardware, such as handsets, TV's, cable and satellite receivers, and other set top boxes. They’re always looking to play transmission companies off against each other and capture more of the consumer dollar.

To add to the confusion, there’s cross ownership between some of these companies but not all of them, meaning that ostensible competitors have very different profiles from each other, and also that they must often collaborate. For instance, when the Comcast – NBC Universal deal closes (assuming, of course, that it does), Comcast will control a cable system, a broadcast network, and multiple cable channels, whereas Time Warner Cable is a cable system only (that’s because Time Warner Inc. spun off TWC) and Fox’s parent, News Corp., lacks a cable system. Speaking of News Corp., throw in the fight between newspapers and Internet sites, and it’s clear that the Internet sparked a revolution that’s got everybody up in everyone else’s business. It’s the media equivalent of string theory, except that MBA’s usually have better hair than Einstein did.

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Viacom Can't Get Punitive Damages in YouTube/Google Suit

Viacom's suit against YouTube and Google slowly works its way through the legal system. In a decision rendered last week, but only generally reported yesterday, the Federal District Court in New York hearing the case denied Viacom's motion to amend its complaint to seek punitive damages against the defendants.

The Court's reasoning: the Copyright law doesn't provide for punitive damages. Thus, the decision says nothing about the strength of Viacom's case, or the thorny issue of whether the DMCA safe harbor - the notice and takedown procedures that govern one-off infringements on websites - applies in the case of the massive infringement alleged in this suit.

Punitive damages are damages intended to punish particularly conduct by defendants that's particularly egregious, as Viacom alleges is the case here. If available, they would come in addition to actual damages (the plaintiff's actual losses) or statutory damages, which are an alternative to actual damages where it's difficult to show actual damages (or where none have occurred).

HRH-Tube

In a first for the British monarchy - and perhaps kings and queens everywhere - Queen Elizabeth II has posted her 2007 Christmas Message on YouTube. The religious tone may not be for everyone, but that fact that this tradition-bound establishment now has its own channel on YouTube is quite something.

Now, I don't imagine HRH posted the video herself, but her handlers did. She probably doesn't have email either. QEII@hotmail.com? I doubt it.

Nonetheless, quite a change for a Queen who 10 years ago was tone deaf to public reaction over Princess Diana's death.

"Don't Touch My Body (of Work)!" Vivid Tells PornoTube

Vivid Video, a major adult video producer, is suing PornoTube, a YouTube knockoff, reports the LA Times. The suit alleges that Vivid's copyrighted content is available on PornoTube. Suit is conceptually similar to the Viacom suit against YouTube and Google.

The LA Times story also notes in passing that the widespread availability of free short clips on the Web hurts porn producers (whose content is often long-form) because "consumers of adult fare often get what they are looking for in clips of five minutes or less." Indeed.

Exclusive: The AMPTP YouTube Video the Writers Don’t Want You to See

WGA writers, whose pencils are (mostly) down and PC’s off, have lately occupied themselves walking picket lines and chanting protest slogans. Many have found time for a bit of auteurism, creating a growing number of YouTube videos explaining the writers’ position (reportedly an astonishing 750 videos to date). The videos — by turns impassioned and humorous — have collectively attracted notice.

But, like the dog that didn’t bark, the real mystery is why the producers haven’t produced. The Alliance of Motion Picture and Television Producers (AMPTP) has created no YouTube videos of its own, opting instead for the old-media alternative of occasional paid advertising in the NY Times, LA Times and trades, and an op ed piece in the LA Times. I wish I could offer you a link to the AMPTP’s new YouTube video — like my headline promises — but I can’t, because there isn’t one (that link will just give you a blank screen). The companies’ strategy has been more NoTube than YouTube.

But why? With all their resources, why haven’t the AMPTP companies produced and distributed video content of their own? It’s not for lack of writers; the companies could use non-WGA writers if they wished, since new media is not a covered area, and in-house promotional activity presumably isn’t either (and, in any case, the WGA agreement expired October 31 and is no longer in effect). Nor is it because the companies don’t have a case to make; they do, although I disagree with much of it.

And, the companies’ audio-visual silence does not represent a failure to understand the importance of public opinion — otherwise, why buy the ads and write the op-ed piece? Nor can the absence of company content be explained by pointing to the success of the AMPTP’s traditional PR methods, because there’s nothing to point to. On the contrary, the companies are losing the PR battle, and badly; for instance, over two-thirds of respondents to a Variety survey said that the writers were representing themselves more clearly, forcefully, honestly and forthrightly than the companies. In addition, half the respondents see the AMPTP in a more negative light as a result of the strike.

The only remaining explanation is that the studios and networks — the country’s largest media companies — just don’t understand new media, or they have carelessly allowed their representative, the AMPTP, to function without comprehending the importance of new media. Online, and on cellphone and iPod screens, is increasingly where the eyeballs are, not to mention the hearts and minds (thankfully, that’s as anatomical as we need to get). Newspapers, and television, also matter, a lot; but ignoring a fast-growing, young-skewing medium makes companies seem stodgy at best, and ever more the villain — or, “the man,” if you prefer — at worst.

Does it matter? Yes. A business that loses the love of its customers might soon find itself more busy suing them than selling to them. The studios seem to have inadequately taken note of the lessons the music industry offers, so here’s one that bears repeating: piracy is hard enough to combat, but even more so if there’s no love lost between consumer and company.

In addition, a company that can’t figure out how to use new media on its own behalf will have an even harder time understanding how and why its customers use new media. Not for nothing have Silicon Valley companies successfully portrayed Hollywood as an industry that doesn’t get it. The AMPTP’s inaction only reinforces that conclusion. It’s time for the execs — or the AMPTP — to grab their camcorders and start making some video.

This article originally appeared in The Huffington Post on November 27, 2007 at http://www.huffingtonpost.com/jonathan-handel/exclusive-the-amptp-yout_b_74237.html?refresh_comments=1.

L'YouTube Ces Moi (in Thailand)

The Hollywood Reporter reports that the Thai government has lifted the five-month old ban on YouTube. Prohibition resulted from YouTube's refusal to take down content that disparaged the king, an offense in Thailand. YouTube ultimately caved - another reminder that free speech means something different overseas, even though the case isn't as troubling as the Yahoo-China dispute (see my earlier post).

Viacom, YouTube, and a NC Local Politician ...

... those are the ingredients in a bizarre copyright dispute that reads like a law school exam question.

Apparently, the politician prepared a humorous campaign video, and uploaded it to YouTube. VH1 then apparently downloaded the video from YouTube without permission and (re)broadcast it on the VH1 Web Junk 2.0 program, with the program's host appearing in the foreground adding commentary.

The candidate, pleased with the exposure, made a copy of the Web Junk clip, and uploaded that to YouTube. And, in response Viacom ordered YouTube to take down the video!

Now, remember, Viacom is already suing YouTube/Google for massive copyright violation related to all the uploading of clips from Comedy Central, VH1 and other Viacom properties.

So - no surprise - YouTube took down the clip - and even warned the politician that he'd lose his YouTube account if he continued to violate copyrights!

Was the politician was in fact infringing Viacom's copyright? It seems ridiculous, but there's an argument that he was. After all, Viacom owns the copyright in the Web Junk program, the host's commentary, etc.

What's more, Viacom's use was transformative - they added commentary - whereas the politician's wasn't. He just posted the clip unaltered. That makes a difference in copyright law; advantage Viacom.

But come on - this sure looks like fair use to me. Speech about government and politics is one of the most highly protected areas of the first amendment. By posting the clip, the politician was engaged in politicking - advancing his career. And, don't forget, most of the clip was his content anyway.

But if you want to finish this little law school exam, there's more: in the clip, the politician at one point shows a Star Wars-type Death Star destroying a little red school house. (The pol is a local school board member.) So, were Lucasfilm's copyright and trademark rights violated? Let's not even go there. Back in the Reagan days, there were plans for a missile defense system that everyone called Star Wars. Lucas sued over that, but lost.

And who shot the video anyway? If it wasn't the pol, he may not even own all rights to his own video - the production company might, depending on the terms of the agreement between them, or if there even was an agreement. Even if the production co. and the politician have a proper written agreement, the videographer might own the rights, if he/she was a freelancer and had not signed a written agreement with the production company.

Lawyers call this "chain of title" - the links in the chain of ownership from one person or entity to another. Non-lawyers may call it a nightmare, but for lawyers, well, it's just plain fun. Read more.