virtualeconomics

A case for a hypothecated poll tax?

Over at the Telegraph Shane Richmond comments on private-sector media workers' antipathy to the BBC's funding structure that "there can't be many other industries in which you're legally obliged to fund a major competitor to the tune of £135.50 per year."

And the more I think about it the politically odder the funding structure for that unique British institution (that Mencius insightfully calls the Department of Journalism) appears. It's a hypothecated poll tax. That is, a flat fee levied per head of population by the government to meet a specific spending objective.

Which to say the least is something of a political anomaly, since anyone who paid even the scantest attention to the political climate of the early 1980s would presumably concur that the current government would run a long, long way from the implication that it operated a poll tax, and our current administration has consistently opposed hypothecated taxation for all sorts of other purposes on grounds that, according to our last PM, "a hypothecated tax is still a tax that comes out of general taxation". Every schoolboy knows that poll taxes are regressive and end with rioting in the streets. Even our last PM knew that the money collected into the public purse is all the same money, however you describe it, cut it or spin it. And yet.   

(Yes, technically the license fee isn't quite the same as a tax because in theory you can opt out by not owning a television, a strategy I pursued for about five years back in the early 90s. Still, acquaintances who live without a television to this day report that the license detection people react with often aggressive incredulity to the claim that there's no TV in the house, and from my limited experience the choice to go TV-free is sufficiently concentrated in the upper demographics as to merely exacerbate the regressive impact of the levy.)

Humanity's cultural back-catalogue

Marc Andreessen writes today about the potential disruption to Hollywood coming from the ongoing writers' strike, reprising his message that the strike is suicidal from the point of view of both the studios and the writers and pointing out that a new model of VC-funded media (film) creation is the likely end-point for this particular round of the digital media revolution.

I draw a different message from the strike, and it's not to do with how new content can get made when the writers and the studios won't talk to one another.

The world already contains more TV programming, more films, more music, more books and more computer games than I could ever consume enjoy in a lifetime. Unless you expect to live forever (an expectation that, for people in the developed world under sixty in reasonable health, I'd put at about 50/50, but that's another issue for another day) you don't need one hour of new TV programming to entertain you, unless you include the news (which is still being produced by all sorts of people on a 24-hour rolling basis) and news satire (pretty much ditto). The challenge thrown up by the premature closing down of Lost, 24 etc et al really isn't "how then will we fund the creation of the next Lost?" It's "how then will people find all the TV shows / books / music / films already out there that they don't know about yet but would keep them entertained for the rest of their lives?"

The world already contains answers to those questions, some brilliant (TIOTI) some bad (Amazon recommendations) some easily improvable but perfectly adequate to purpose (Pandora, Last.fm). For these technologies to really come into their own as engines for discovering and distributing the vast wealth of humanity's cultural back-catalogue all that really needs to happen is for the studios and other rights-owners to die and the catalogue to open up to unfettered sharing.

So here's to a drawn-out, suicidal struggle between studios and writers. Let's hope they can keep it up well beyond the current prediction of June 2008.

"It is happening again"

I'm rewatching Twin Peaks at the moment, having discovered that although the second season still hasn't been released on DVD in the UK the Dutch edition contains an option to watch the whole thing in the original English. So. Last night I watched the second episode of season one, and relived that moment at the end of the episode when Cooper visits the Black Lodge and audiences around the world (my 14-year-old self included) realised that David Lynch was changing television forever.

About 22 hours of the best damned television ever made to go.   

Unreality TV

Just one thing to say about the non-story that is Big Brother's second racism row this year - in what sense can Endemol carry on calling it "reality" TV if they not only censor it but throw people off the show for the things they seem naturally to say? It's a funny sort of reality that goes through an editorial process.

(I'm kind of surprised though that I can't find anything on YouTube that mashes up the Avenue Q song "Everyone's a Little Bit Racist" - pictured - with the relevant scenes from the two Big Brother episodes.)

"ITV will keep control online"

You'll have seen by now that the UK's largest independent TV broadcaster, ITV, plans to learn from the mistakes of the music industry and keep control of its content as that content moves online. This is just a brief note to point out that the music industry's mistake was not to hand copyright over to iTunes but to persist in the fantasy that content creation was the core source of its value.

(Think about it this way - if content creation the source of value why did the money in the pre-digital music industry so often end up in the hands of the companies that marketed the music, not in the hands of the guys who wrote and played it? Why indeed are newspaper owners so rich and journalists not? Why has Google - that finds and validates content - scaled online while the New York Times - that produces it - has not?)

If ITV plans to become a major online destination for TV content it has probably already missed the boat. If it wants to keep its content off third-party electronic programme guides, search engines, aggregators and filtering tools  it's not clear how anyone will find that content (this is the  elementary Sam Zell/Google strategic error). This is just another page in the story of pre-digital content businesses trying to replicate those businesses in the digital world and misunderstanding which aspect of their pre-digital business created value, and indeed still exists in the new world.

Update: ...and in comments Ben Metcalfe (whose blog, here, I just subbed: you might want to do the same) points out that ITV in any case "doesn't own many/any of the programs it broadcasts and so strictly speaking it's not their content to decide what happens with it online". A very good point and one I'd entirely overlooked - ITV isn't going to be the driver here given its contribution to the party has always been a gateway (license and equipment to broadcast) which digital entirely obviates. Look at what's happening to music labels - the bands are beginning to just cut them out of the loop.

No-one bearing a key cost of doing digital video business

Two recent video-sharing debacles indicate that the DMCA is failing to locate the cost of accurately identifying copyright breaches with either video sharing sites or copyright holders themselves.

Last week a 15-year-old Australian boy sent a fake take-down notice to YouTube as a prank (Mashable) and the site promptly complied. Commentators and the Australian Broadcasting Commission, who owned the copyright in question and was apparently perfectly happy to see it distributed online, were rightly concerned as YouTube's apparent willingness to accept almost any take-down notice without assessing its provenance. A couple of months earlier, Viacom spammed YouTube with 100,000 take-down requests (BoingBoing); YouTube complied; and now the Electronic Frontier Foundation is organising a class action to protest at the removal of legitimate "user-generated" clips.

The implications of this stand-off for the online public are not good. There are obvious freedom of speech implications when Viacom or a teenage prankster can have legitimate content removed from the web's premier video content channel, accompanied by threats of account deletion for the creators, but there are also issues of who should bear the considerable burden of protecting rights-holders from copyright violation - and by implication bear the burden of protecting legitimate content creators from falling victim to malicious or incidental take-down notices that no-one is taking the trouble to validate.

Only some things move online

Q: When MySpace (New York Post) and YouTube (uTube) both create channels specifically to host political campaigns, what does it tell us about the move of media attention online?

A: That as what used to be very expensive becomes free, there's no reason to imagine revenues will flow from offline to digital.

Viacom vs YouTube: the limits of the visible

By now, Every Schoolboy Knows that Viacom suing YouTube is a strategically irrelevant ploy to stall the inevitable evolution of the market. All the best people have pointed out that Viacom's best case is for a $1 billion court case to distract and inconvenience Google while they go about the business of remaking Viacom's market. The worst case leaves both parties in court for so many years that by the time they come out the market has shifted to in Google's favour and left Viacom in an even worse negotiating position.

So much, we say, for Viacom.

This is already the conventional wisdom. Today I'd like to consider the counter-view, perhaps purely by way of a gedankenexperiment. Here's the question - what would we have to believe to make Viacom's move a strategically valid one?

At the moment, rights-owners find themselves painted into a technological and cultural corner. The very technology that originally made them rich - mass media, and the possibility of bringing mere concert-hall performers to a global audience via mass replication and distribution, has been taken out of their hands by their former audiences. A scarcity of printing presses, of airwaves, of record factories has become bandwidth so cheap and plentiful it isn't metered. Rights-owners, especially for music but increasingly for film and for TV, are now little more than an atavistic kink in the digital value chain as the real power shifts to MySpace and YouTube and BitTorrent. If it wasn't for the fact that the old game of cinemas and broadcast TV has still to be played out, the new digital game would already have finished them.

What could we possibly believe, therefore, to make Viacom suing Google a good idea?

Perhaps that the current state of mass entertainment technology - effortlessly replicable and shareable film and TV and music - isn't actually history's final word on the matter and that new technologies and cultures will emerge. 

Film, in its current incarnation, can't be defended except by temporary litigious maneuvers.  Even theatre is heading towards replicable commodity - Avenue Q is on YouTube as much as it is on broadway. But dramatic productions like Punchdrunk's Faust are not and could not be digitally copied. Live music performances have a value that cannot simply be pressed onto a disc (LongTail). The only original artform of the C20th, video gaming, has already found a model that transcends piracy with MMOPGs making the point of the experience collective and the commercial model a levy to play together rather than a fee to own. Blizzard, NCSoft, SOE are essentially insulated from Viacom's travails.

And so the thought experiment becomes...what is the technological and cultural future of mass entertainment? Is film where we end the game, or is there something next? Science fiction provides us with plenty of possible answers. William Gibson's Neuromancer trilogy and short story The Winter Market imagine entertainment technologies that feed sensations directly into the brain rather than coming at one remove through a screen into the eyes.  Tad Williams' Otherland imagines a next generation, completely immersive synergy between gaming and film. Star Trek's holodeck is perhaps a better known vision of a future direction for mass entertainment.

Science fiction? Really? Yes, really, because I'm not asking you to believe that holodecks will be installed in every Odeon in time for the Viacom/YouTube fight to be resolved. Don't concentrate on the specifics. I'm asking you to consider the possibility that film, TV and music in their current incarnations are not the endpoint of mass entertainment and that something else - we don't know what yet - comes next. That we can't quite yet draw a line under the history of entertainment technology.

(If you want a steer on what comes next, incidentally, keen an eye on the porn industry. Almost every media/entertainment innovation starts out as porn. When the US congress starts thinking about passing laws to stop people having sex with robots, you'll know a new entertainment industry has been born.)

How does any of this help Viacom? I've already pointed out that their current travails are a function of the effortlessly replicable nature of their product. The production and distribution markets for TV, film and music have been utterly  transformed by digital. But...the gaming industry is already finding solutions such as MMOGs that move the power back to the centre. The technology and culture of entertainment advances every day. To believe that Viacom should hang in there, you just have to believe that future mass entertainment technologies might not be as easily copied and shared as those currently in fashion. That's not such a big mental leap. And if that's true, there's still a place at the table for a company with expertise in exploiting the global rights to mass entertainment output.

Sure, it's a pretty slender chance to hang a company on. But have you got a better idea?

Update: Now&Next turns out to have a speculative timeline of future innovations (pdf) which predicts "Dream Machines" in about ten years and "Virtual Reality Windows" in about twenty-five. That's just the sort of expensive, unreplicable, hardware-based entertainment platform I'm thinking about. (HT: Adverlab)

Is the BBC / YouTube deal about the license fee?

The BBC's deal with YouTube has one possibly interesting side-effect. Back in 2006 the TV licensing authority responded to claims that people watching TV over the Internet didn't need a TV license by pointing to regulation nine of the Communications (Television Licensing) Regulations 2004 which apparently (ZDNet) "covers any apparatus used for the purpose of receiving — by wireless telegraphy or otherwise — any TV programme service".

I understand you can't avoid the license fee by simply claiming never to watch BBC programming on your TV - if a UK TV can pick up TV programming you need the license. Is the BBC therefore simply future-proofing the license fee by making its programming available on the most popular online video-content platform that anyone with an Internet-ready PC can easily access? It looks more than a little like the precursor to a claim that anyone with an Internet-ready PC must pay the license fee because they could use YouTube to watch the BBC, neatly pre-empting the mass abandonment of television sets by a growing segment of the population comfortable taking all of their programming online.

How the Internet has lengthened our attention span

Tim O'Reilly talks today about the web training our minds to prefer snippets or "short form" culture (HT: Nick Carr). "The web," he says, "has put a premium on short-form content, both because it's easier to read in the ADD style that today's interrupt-driven technology is driving us towards, and because it's easier to build collaboratively." YouTube favours the short form, Google favours the short form.

Not so. Or at least, I think, only partly so.

As little as five years ago, everything (I saw) on TV was based around the formula that you could dip in and out from one episode to the next without the need to follow an overall story arc. From Friends to the Simpsons to even serious stuff like the West Wing, programme makers understood that we needed to be able to drop in and out of the show, missing week after week, because no-one is consistently in their house at the same time every week just to watch a TV show - or at least no-one advertisers want to talk to. Everything was episodic, and if there was ever a plotline that spanned two whole episodes it warranted a lengthy explanation at the start of the second show.

Broadband, and broadband's killer ap BitTorrent, has changed all that. TiVo, Teleport TV and Sky+ have changed all that. Hell, DVDs changed it a bit. Look at Lost - all arc. Look at The Wire which to all intents and purposes is four 13-hour-long films. Shows that would make no sense dipped in and out of are suddenly possible because the delivery mechanism is there to ensure people can watch a whole season in order. BitTorrent has done for epic television what Dances with Wolves did for epic films - in this instance a tech-driven, rather than culture-driven, return to a richer, longer form.

Update: having made its way on to Digg, this story now has more comments there than here so you may wish to follow the conversation at Digg here. Although most of them are jokes about attention span, so you might not...