Archive for February, 2014

Television, Regions, Rights, and the Internet

February 25th, 2014

I’ve had many conversations with friends about television in the age of the internet. I have a lot of thoughts about the future of television.

One thing that comes up constantly is the frustration around the timed release and geographic boundaries imposed on television. In an age of worldwide communication and media on demand it just doesn’t seem to make sense, and even sensible people like TUANZ CEO Paul Brislen admit to illegally downloading television content.

Even I’ve done it – television is the industry I depend on for my income and yet I’ve participated in online piracy of TV content.

The obvious alternative then is to make it available to everyone, right? Just like iTunes and its competitors have largely done away with music piracy and also revitalised the music industry, couldn’t the same be done with Television. US streaming media company Netflix has come grown so big it accounts for, by some estimates, a third of US internet traffic – so why not just make it worldwide?

Music Can Do It!

Many people argue that because music has managed to do this then TV (and movies) should be able to also.

Sadly it’s not that simple. The music industry is much less complex than television. While there are some different distributors in various geographic regions they are usually owned by parent record labels, or have exclusive arrangements with given labels. Even if that’s not the case, the rights issues for music retail are much less confusing and fragmented than television.

Unfortunately the existing television business model is basically structure in such a way that international online distribution is impossible.

The Business Model

Television is an incredibly complex business model – for a given TV show there is a large assortment of rights packages. The names and specifics vary but they are usually limited by a combination of geographic, platform and time-based limitations.

For US network shows, for example, the domestic sales is only a small part of the revenue model, they also need to factor in the large potential earnings of international sales.

For a company like Netflix (or Apple’s iTunes) to offer content internationally it would have to acquire worldwide rights for their platform – something that’s simply not going to happen.

If we take a hypothetical show like Lost from a few years ago, the show is produced for a US domestic network and then various rights packages are available to international broadcasters. In New Zealand those broadcast rights (specifically free-to-air rights) are purchased by TVNZ to play the show on TV2, they also purchase rights for on-demand catchup screening. The rights package that TVNZ purchase will likely also include some form of exclusivity, so no Pay TV provider or video-on-demand service will be allowed to offer the content into that region until some set time after TVNZ has screened the show.

These specific deals take various forms but they are primary market for TV programmes. Those broadcast rights, especially free-to-air, command the highest fees and, as such, they are protected. No other rights will be sold into a region until the distributor has either secured a primary broadcast sale or is pretty sure they are not going to (ie. all likely broadcasters have passed on the offer).

Why Not All At Once?

So if broadcast is the hold up, why not try to get content on screens worldwide all at once?

Simply because networks around the world have different content, different audience and different schedules.

There are some practical issues too – in some cases episodes aren’t even completed until very close to their transmission date, meaning that there simply isn’t time to get things to international broadcasters in time. When I worked for TVNZ and they were screening Lost within 48-hours of it’s US screening we were receiving unfinished episodes for the promos department.

Another issue is the US television calendar. TV in the US is a weird thing – shows frequently take mid-season breaks of up to six weeks, and sometimes shows will simply be off-air for a week to avoid conflicting with a holiday or major event. These types of breaks usually don’t fit with international broadcasters, so in most cases they won’t start screening a show until they can be sure they’ll be able to screen it without breaks.

So because we can’t get broadcast happening at the same time worldwide we can’t get secondary rights (such as on-demand streaming and episode sales) happening at the same time.

How About Internet First?

Okay so then why not stop treating broadcast rights as the primary sales channel, and look at focussing on online rights? Allow Netflix, Hulu and Apple to get rights to release shows simultaneously into many regions at once, regardless of the broadcast rights in those areas.

Yes – I think ultimately this is the answer.

But not yet. The fact of the matter is that broadcast is where the money is – those rights are the most expensive and therefore they will get top priority. Broadcasters are less likely to want to buy expensive rights to a show if that same show is already available in their market before they can screen it.

How Can It Change?

I think that services like Netflix, and their ability to create their own high-quality content, are the answer in the long run.

If you look at a show like House of Cards I think you can see the future. A show like that can be funded and produced by Netflix, they could immediately offer it globally to their subscribers. They can then go ahead and sell broadcast rights as a secondary option – being directly subscriber funded they are less concerned with the high premiums of broadcast licenses so can accept the lower prices the show will command as a result of being online already.

Of course Netflix can’t do it alone. But luckily it doesn’t have to. Hulu is also commissioning original content, as are others. These companies are already making content without needing to relying on the income streams provided by international broadcast sales, they are therefore not concerned with undermining the value of those sales by making content available online first.

Currently Netflix is, of course, only available in the US and a few other countries (unless you jump through a few hoops) but that’s largely as a consequence of the cost and difficulty of licensing content for new markets. As their in-house library increases it will make is easier for them to enter into new markets without having to make massive upfront investments in rights for those markets.

So What About Movies?

The movie industry is a lot more like music in how the rights and distribution model is structured. There are certainly less layers of complexity and the overall worldwide ownership is similarly often centralised.

However independent distribution is a little more common in movies than in music, which can certainly account for some frustrating delays in getting smaller features into some markets.

Ultimately though the movie industry isn’t stuck the way the TV industry is. In fact it’s possible to “buy” and “rent” movies from a few different providers in New Zealand, including iTunes. The timing and availability will still depend somewhat on the local cinema schedule, but it’s getting better.

It’s also increasingly common for features to become available in that way that we’d otherwise never have seen due to their inability previously to secure local distribution.

However we still don’t see much in the way of online streaming (like Netflix) here because… well it’s chicken and egg really. The companies that want to provide those services need content to attract customers, and customers want content before they’ll pay.

Spark – Our Great New Hope!

Telecom, in announcing their upcoming reinvention as Spark also announced their intention to spend $20m establishing a new streaming on-demand TV service called Showme TV. Hopefully with that capital injection and Telecom/Spark’s weight and infrastructure behind it the new service will be able to break through the chicken/egg barrier and secure enough unique content to firmly establish itself as a viable provider.

TVNZ and Labour Activists

February 17th, 2014

TV3 political maverick Patrick Gower has broken the news that a senior TVNZ manager ran aspects of his Labour campaign from within TVNZ.

“TVNZ is being used as a campaign base by Labour Party activists,” Gower’s story begins, although the reality seems a little less dramatic.

Shane Taurima, then head of TVNZ’s Maori and Pacific unit, held a Labour fundraising meeting within TVNZ’s offices (outside business hours it seems) and he and some of his staff sent some emails related to his Labour party activities from their TVNZ email addresses.

This hardly seems to constitute a “campaign base” as Gower claims, but is definitely a misuse of company resources for which TVNZ is no doubt displeased. As a result of these revelations Taurima has resigned from TVNZ (I suspect he’d have been pushed if he hadn’t jumped). I’d guess that the others involved were also disciplined about their misuse of company resources.

And ultimately that seems like it. I’ve no doubt at all that many political candidates have allowed their business and political lives to intersect in improper ways, but those are never an issue because their employers are probably not state-owned broadcasters.

There’s nothing in Gower’s article to suggest that Taurima’s conduct within the scope of his role as head of Maori and Pacific programs at TVNZ was improper, but the implication is certainly made when the story includes a quote from Broadcasting Minister Craig Foss who says, “The public expect fair, balanced and politically neutral reporting from their broadcasters.”

In the end it’s unavoidable that people have political opinions. This is true of broadcasters and journalists as much as it is of anyone else, but we expect them to temper their political opinions when doing their job, and we just have to trust that the do. The fact that Taurima was taking those political opinions to the next level by becoming directly involved in politics doesn’t really change that.

The mistake that was made here, and it’s a big misjudgment by people who should know better, was to allow their political action to intersect with their employment, but the aggrieved party there was TVNZ, a company that has clear rules about what employees can and cannot do while at work and with their company resources.

Some commentators have said that TVNZ was “allowing” Taurima to use the company for his political action, but that’s simply not what’s suggested by what’s been reported. Indeed he as resigned as a result.

Volunteer Writers

February 10th, 2014

An interesting offer from New Zealand’s national air carrier – write for their website in exchange for… nothing.

We’re searching for creative and interesting writers in the areas of Aviation, Travel, Health, Tech, Education, Lifestyle, Music, Film, Fashion, Food and lots more.  We have re-launched and expanded Flying Social to offer even more interesting lifestyle content from around the Air New Zealand global network and from interesting people all around the world.

In return for writing for the Flying Social team you will be featured as one of our contributors with a contributor profile page that has links to your social media channels and your content will be shared across Air New Zealand’s social media channels.

Air New Zealand

Encouraging people to contribute free content for your blog isn’t such a bad thing, but it’s a little difficult to stomach when you’re a very large and high profile airline. Unsurprisingly the offer wasn’t well received online…

Now it’s fair that Air NZ might not have a cash budget to source content for their blog, but there must be a better option?

Here’s some ideas for the team at The Flying Social Network (these are offered for free!)

  • Pay in Airpoints – The Air NZ loyalty scheme is great… Airpoints dollars are worth the same as standard dollars. So much simpler than the insane air miles that many carriers offer. How about 50 Airpoints for each published article?
  • Discounts and upgrades – Why not let your valued contributors travel more often and in comfort? What about some simple discounts, maybe special offers for them? A complimentary lounge pass?
  • Exclusive offers/competitions – Going to offer a special on travel to Singapore soon? Why not open up a chance for one of your proven contributors to win a complimentary weekend there!

These simple offers would cost very little and allow contributors to be rewarded for their work (and it is work!) while also building a stronger sense of community.

UPDATE: Air New Zealand has taken the criticism on board and say they’re reconsidering to come up with appropriate compensation… Good! Fingers crossed.