Is Bit Torrent really a threat for Old Media ?

Whilst on the surface the Bit torrent application using Peer to Peer technology has the capacity to do harm , again I look at the response to this in a productive viewpoint, how can the studios benefit from this obvious market potential …

For software applications, it is only a threat if the license key operates with the software –  this comes back to the software providers own encryption and licensing software system.

For Video, it is obvious, from the numbers of users, it is well proven point that there is a market for TV shows and Movies … this can be shown by the number of Torrent participants in the data stream … why isn’t it an option to pursue, that the content producers offer a legal stream of product, such as the Australian ABC does when product is broadcast within Australia, OK it is downgraded and in Mp4 Video format, but for those who have missed the show, or want to keep it for their amusement, what is the harm ? – it is a domestic only quality. Alternatively I can view the content in high quality using the i-View program replay service … for a limited time ?  Excellent interactive relationship for a transparent relationship with your customer.

For those outside of the studios primary market, which is primarily that of the continental USA, it is impossible to gain access to the content legally –  due to the Networks own licensing restrictions, people outside the studio zone, cannot view the product on-line … so the Bit torrent Software was born and is used as a response to this limitation. I am speaking primarily here of TV programs, the software allows someone to upload a program that was in the Public Domain, as it has been broadcast, so they can viewed in another geographic zone … In Australia none of the Video Streaming services allow access to the content for users in Australia, due to licensing issues, why is this ? Surely if I was subscribing to a US content provider –  streaming content, my own internet id (Geo location) would identify what geographic zone I was in, and thus my licensing region, and thus the content licensee for this zone … in my view the money I pay for access could be quite easily sent to the applicable country license holder for a particular content, by the i/p address as a subscriber … you guys need to start thinking outside of the box, and there is a substantial  increase in income that will flow once you do something so simple, for no appreciable increase in costs, as well as the increase in net due to increases in good will and lack of a confrontation relationship and the lack of a divisive enforcement arm – which lacks any credibility.

Stripping of a DVD to obtain the Video Stream is something that is another kettle of fish all together, as it was a licensed program, for one viewer only (household) –  I can see the harm here, all though it is no way to take as credible the loss of income the studio pundits claim, you cannot view the numbers and directly equate them to lost profits. However I do not agree with the commercial use of the Bit Torrent service where people pirate these streams to produce pirate copies to DVD’s …. however from the research I have undertaken, talking to users past and present, for a single user .. I have been told by many people I have spoken to actually go onto to buy legitimate licensed products, using the downloaded product as a trial if you like.

The content creators themselves have used the Bit Torrent facility, in the recent past and continue to do so. Recently there was the much heralded release of almost the final installment of a major franchise – (one more to go) … a program full topped and tailed (a teaser .. less than 40 minutes long) was released onto the Bit torrent before the theatrical release date … I have written about this as a use by the studios, when it suited them as a “legitimate marketing channel”, they used the Bit torrent facility, that obviously created interest and did make a positive difference at the box office.

However, by creating scarcity, the studios, the content creators / providers have created a secondary market that is so substantial –  what is their response, instead of being constructive and transparent, and working with the internet, to provide a access channel to provide access to this content, they go to these facilitator organisations that further exacerbate the situation, they troll the internet for alleged offenders. I have been so informed that the content providers / studios supposedly farm out their enforcement to self styled cowboys who I have been told send out unsubstantiated claims of infringement … for which they have no way of gaining anything positive from, except that it creates distance between the two parties and a them and us mentality. Nothing will be resolved … hopefully though, we are looking for a solution here … right ?

Surely if the studios, created a way whereby people could legitimately download a copy of the content, a downgraded quality for free or via something like an i-store or similar content provider at a reasonable cost of say $1 per TV episode (bear in mind there is no medium and the user pays for the data downloaded), the problem would essentially evaporate ….. or provide a encryption licensed video feed on something like a i-View format file, to provide the content …. or invest in a new Video file format that could not be hacked with a one user only encryption key.

Further to these claims of loss that is put forward by the license holders and their cowboys, this is substantially a fallacy, as it looks at the numbers of downloads and equates them to sold product at a sell price, this is such manipulation, as those downloads will not transfer to income unless the studio actually puts a 21st century procedure in to capitalise on this … if those that are seeking content could legitimately source product from the studios, free for a lower quality downloaded copy of pay for it at a reasonable price for a quality product then I believe the problem, much of these I am a victim mentality the content providers, particularly the spin the TV studios are pushing, is substantially a beat up and the problem would essentially evaporate.

If we view the actual financial performance of studio licensing, in context of the United States Balance of payments for 2008, 2009 and now in 2010 –  you can see increases in licensing income for overseas content sales which has increased over these years.

Incidentally there is only one major TV network in the USA that gets it … and coincidentally only one in Australia … that is making an attempt to provide access .. unfortunately the worst network is someone who should know better and I thought that they did

I wrote about this and other aspects of the affect of the internet on Old Media models in a white paper as far back as 2008 … with different ways to re-structure their business models even then, it is obvious that no one is yet ready to see a solution here and start thinking outside of the box now or then.

My view of the Internet and Older business models, is a couple of things, (1) The internet user demands a different relationship with content providers & (2) Use the internet to form communities, and build a sustainable interactive relationship – this is its strength (3) Please think outside the box … you cannot win this – make some money by approaching it another way … and what you can do best, that is to produce excellent content .

My advice to the studios, capitalise on the opportunity …. focus on your craft instead of sending all your profits to the lawyers.

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