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| A special report on television. (2 of 2). Apr 29th 2010. Ahoy there! From The Economist print edition The perils of piracy. |
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| GO TO Google's home page and type the name of your favourite TV programme into the search bar, followed by the word "torrent". Press the return key. There it is: a feast of pirated television on file-sharing websites, found for you by the world's most powerful search engine. Napster, a peer-to-peer outfit that brought the recorded-music business to its knees about ten years ago, was not nearly as quick or easy. Television piracy gets less attention than film or music piracy, but it is no less widespread. One of the big obstacles that had stood in its way—the large file sizes required to transmit video—is shrinking as computers get faster and bandwidth costs come down. More and more people are buying televisions that can connect to the internet. There is a danger that piracy will move on from teenagers skulking in bedrooms and into the living room. A furtive activity could become mainstream. If Google searches are any guide, piracy is at its most rampant while shows like "Lost" are airing on television (see chart). The peaks near the beginning of each season suggest that some people use torrent sites to get copies of shows from previous seasons, filling themselves in on the plot before the new one starts. It is likely that every stream of a copied show represents a lost viewer on television. Piracy is a direct threat. Yet television is not about to suffer a catastrophic "Napster moment". When Napster emerged ten years ago, music CDs containing two or three good tracks and a lot of padding were sold in shops for $14.99, and often more outside America. Singles were few and cost almost as much as albums. Compressed digital files such as MP3s were not on offer yet. And music piracy was widely tolerated: even respectable folk had their own sneaky collections of C90 tapes. Dissatisfied customers and a culture of copying created an ideal environment for file-sharing to grow. By contrast, television's unit of output is already the size people want it. They like to watch whole episodes of "Desperate Housewives", not extract the best ten minutes of an episode, as music fans like to extract the best tracks from an album. Much free television can already be watched legally on computers and mobile phones. And TV-watching couch potatoes tend to be lazy. Trawling virus-addled websites in search of programmes seems too much like hard work. TV piracy appeals for two reasons. It can bring shows to foreign audiences faster, and it is free. The first advantage matters for only a very few shows, most of them slick American dramas. The Chinese do not hunger for episodes of "Slovenija Ima Talent" (Slovenia's Got Talent) or "Top Gear Russia". And media firms have reduced this advantage further by releasing TV shows almost simultaneously in different countries. The second advantage is not as big as it appears either. Unlike music and film, nearly all television is free at the margin: once a household has paid its subscription, it costs nothing to watch another show. The real threat posed by piracy is not that it threatens television's current business model but that it makes building a new one more difficult. Aware of the limitations of advertising-supported online video, European media firms are currently testing micropayments for shows. The wide availability of free illegal alternatives may well crimp these efforts. In this sense the pertinent parallel is not with music or films but with newspapers and magazines. These days print piracy is a trivial issue, since most general news articles are given away free. If newspapers and magazines begin charging people to read their output, the pirates are likely to turn up, and quickly. So it may be with television. |
 COPYRIGHT © 2010 DePapaya.com Reproduction in whole or in part, without written permission is prohibited. All rights reserved. |
Saturday, May 1, 2010
Las amenazas de la piratería a la televisión.
Más allá de cómo se transmitirá la televisión.
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| A special report on television. (1 of 2) Apr 29th 2010. Beyond the box. From The Economist print edition. |
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| Hulu's stylish threat to TV. |
| UNUSUALLY for a microchip-maker, Intel employs a team of anthropologists. The researchers travel from country to country, interviewing people and spending time in their homes to find out how they use technology. The ethnographers also quiz floor managers in electronics stores about what their customers want. These days many of the salesmen tend to say the same thing. People want a cable that will allow them to connect their computers to their television sets. Just a few years ago the notion of using a computer to deliver television seemed far-fetched. There simply was not much video online—not much that was legal and non-pornographic, at any rate. That has changed. Each month the British request some 120m television and radio programmes from iPlayer, a website run by the BBC. Hulu, a website that offers shows from three of America's four big broadcasters, streamed more than 1 billion videos in December 2009. YouTube, the biggest video-streaming website of all (and the oldest of the bunch, at the grand age of five), continues to expand. At present online video draws fewer eyeballs than television, and for much shorter periods. The average YouTube user spends 15 minutes a day on the website, compared with the five hours that the average television viewer spends in front of the box. But the rapid growth of video-streaming websites, particularly in America, is worrying TV executives. As people acquire televisions, games consoles and set-top boxes that connect to the internet, will they come to see online video as a replacement for the regular stuff? "There is a small segment of the population for whom it is already a replacement," says Chase Carey, the president of News Corporation. Most video-streaming websites are supported by advertising. Anyone who wants to watch a video has to sit through a short "pre-roll" ad as well as a few short breaks in the course of a programme. These breaks are often accompanied by a countdown clock to reassure itchy viewers that they will not go on for ever. Advertising rates are high: reaching a viewer on a video website can be more expensive than on television. Yet this is achieved in part by restricting supply. A viewer who watches an hour-long drama on Hulu will be subjected to only a quarter of the number of advertisements that a viewer of the same show on TV has to sit through. The returns from online video are thus poor even before the websites take their cut. And there are other knock-on effects. Because so many programmes are available at the click of a mouse, people may be less likely to buy boxed sets of their favourite shows. Spending on DVDs in America fell from $20 billion in 2006 to $16 billion in 2009. That was partly because of the recession and the spread of kiosks that rent out DVDs cheaply, but Mr Bewkes of Time Warner says there has been a particularly steep decline in DVD sales of TV shows available free online. The biggest worry about online video is a broader one. The television industry is a complex and delicate edifice made up of many interlinked businesses. Online video threatens its stability—and, by extension, the fortunes of media companies. One of the myths about the large media companies based in America is that they are diversified conglomerates. True, they do a lot of things. As well as making TV shows and films, News Corporation produces books and newspapers. Time Warner also makes magazines. Disney runs theme parks and licenses its characters to toothbrush-makers. Yet all these companies tend to derive the largest share of their revenues, and more than half their profits, from television. The conglomerates' TV businesses are themselves rather concentrated. Most of their revenues come from America. Their pay-TV channels are worth much more than their broadcast networks. And most of those pay-TV revenues come not from advertising but from the affiliate fees paid by cable and satellite firms for the privilege of carrying their programmes. A fifth of Disney's entire turnover in the financial year 2008-09 came from this single source. In short, media companies depend on people's willingness to stump up for multi-channel television each month. So far they have not been disappointed. But in America, the world's biggest pay-television market by far, all is not well. Viewers' monthly bills for television have gone up by more than the rate of inflation in the past few years, pushed up by media firms' demands for higher affiliate fees. Now broadcast TV stations are also demanding "retransmission fees". Cable and satellite companies make little money on video as it is and do not want to see their margins eroded further, so disputes are becoming more frequent. Cablevision subscribers missed the first few minutes of the Oscars ceremony this year as the distributor fought with ABC over payment. The routes out of this morass are unappealing. Cable and satellite distributors could drop the least popular channels. They could increase subscription fees. They will probably do both, which means people will be asked to pay more for less. "If the incumbents aren't careful they are going to price their customers out of the market," says Craig Moffett of Bernstein Research. And thanks to the video-streaming websites, viewers are no longer faced with a stark choice between a handful of live broadcast channels and a pay-TV service with hundreds of channels. A home with a broadband connection can get hold of broadcast TV shows both live and archived (the latter playing online with delightfully few advertisements), as well as a few programmes from pay-TV networks. These shows are arranged on websites that are attractive and easy to navigate. Best of all, this option is free. |
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| Here's to a new business model. |
| Why pay? How much video can viewers get hold of? Bain & Company, a consulting firm, studied the American TV schedules from the first few months of 2009 and found that just under half of the most popular shows were available free online within a week of being aired. Another 10% could be bought from services like iTunes, Apple's media store. No doubt all the others could be obtained from websites like The Pirate Bay, which facilitate the exchange of copyrighted content. The experience of other countries suggests that viewers will plump for something in between basic broadcast television and pay-TV. In Britain 17m households receive Freeview, which offers about 50 channels without charge. In Italy the number of households receiving free digital terrestrial television rose from 4.5m in 2007 to 11.6m in 2009, according to SNL Kagan, a research firm. Italians can use pre-paid cards to buy additional access to sport and films if they like. In both countries the rise of satellite TV has probably slowed as a result, although it has not stopped. Here's to a new business model! It is one thing to retard the growth of pay-TV, quite another to reverse it. In America, where nine out of every ten households already pay for television, that would require people to drop a service to which they have become accustomed. Still, some of them are tempted. In 2008 Dan Frommer, who writes for the Business Insider website, announced he was cancelling his cable TV service and becoming a "Hulu household". Television ventured beyond the box in search of viewers, which it found, and revenues, which it did not. Indeed, its pockets have been picked along the way. But TV executives know how to turn a plot. With much greater alacrity than people in other parts of the media industry, they have recognised the danger they are in and begun to construct a better online business model. They now think carefully about when and where they put their shows online. They usually leave a decent pause, generally between a few hours and a day, between a show airing and appearing on the internet. Viewers who really want to see a programme must watch it on television. After about a month many shows disappear from video-streaming websites altogether to protect DVD sales. Earlier this year Viacom pulled some of its comedy shows from Hulu and put them on its own websites, which carry more advertising. And there is talk about turning Hulu into a "freemium" service, with some shows accessible only to subscribers. Experiments with charging are already in progress in Europe. RTL, a German free-to-air broadcaster owned by Bertelsmann, allows people to catch up free on many recent shows but charges them to view older episodes. It also lets people pay to see online episodes of "Gute Zeiten, Schlechte Zeiten", a popular prime-time soap opera, several days before they air on television. It turns out that some people cannot wait to find out which handsome Berliner will end up kissing which other handsome Berliner. About two-thirds of those who pay for shows order advance episodes. Canal Plus, a French pay-TV outfit controlled by Vivendi, has responded to the growth of online video and the advance of a telecoms competitor by offering lower prices. It launched two budget services, CanalSat Initial and Canal Plus Week-End. Firms like Canal Plus know that few people drop pay-TV once they have it—and they can always be "upsold" to more expensive packages. Gamekeepers turned poachers Perhaps the most important change is that cable and satellite distributors are developing their own online video services. Britain's BSkyB is a pioneer. In 2006—the year after YouTube appeared—it launched a video download service, "Sky by Broadband". Now rebranded as Sky Player, it streams 30 pay-TV channels to those who subscribe to the satellite service. Sky Player is also available, for a fee, for streaming via games consoles to those who do not have satellite dishes. That has brought quite a few customers to the service. In America a more ambitious project, known as "TV Everywhere", is under way. Pushed by Mr Bewkes, this would make pay-TV channels like HBO available online to all who can prove that they subscribe to them on television. TV Everywhere is a bold scheme—more of an aspiration, really—that demands co-operation from many media firms, television distributors and internet-service providers, all of whom have their own ideas about how to build an online video portal. But at least it has a sound business plan. When the first TV Everywhere system launched, in December 2009, a few pay-TV networks caused surprise by running the same number of advertisements as they do on television. That was an abrupt change from the be-gentle-to-the-customer ethos that guided the early move online. It was also perfectly sensible. Although habitués of video-streaming websites scream whenever they see ad numbers increase, the average viewer seems to put up with it. Quincy Smith, who advises CBS, says the network has experimented with running 14 to 17 online advertisements in the course of a half-hour comedy show—quite close to the 19 ads a viewer would expect to see on television. More people watched the online shows to the end than the television ones. A big reason why online video is so popular is that it is so pleasant to use. Hulu's website is beautifully designed; YouTube has a useful recommendation engine. By comparison, the video-on-demand services offered by most cable and satellite companies are primitive. Many households have old set-top boxes, limiting efforts to build a better system. Even so, the user experience could be improved. For example, more advanced remote controls might be used to search for shows. Traditional TV will never be as innovative as the internet, but it can close the gap. Those who expected television to wither when it encountered the internet greatly underestimated its ability to adapt. Some have even conceded the fight. Earlier this year Mr Frommer, who had given up pay-TV and become a "Hulu household", took out a subscription to cable television. The decision was not his alone, he explained: his girlfriend wanted to watch fashion shows. The desire to please others is one big reason why television has proved so resilient. |
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| COPYRIGHT © 2010 DePapaya.com Reproduction in whole or in part, without written permission is prohibited. All rights reserved. |
Monday, April 26, 2010
Aquello que micro-emoresas tecnológicas le pueden enseñar a las grandes.
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