“Users want to see more content on Boxee. Content owners want to be paid for what they produce (whether that’s TV Shows, movies, music, or applications). We don’t believe these are conflicting interests.”
Content rights have always been the thing holding back the next generation of content delivery. Here’s to hoping content owners overcome their self-serving biases and price their wares (for now) at a mutually agreeable level, even if it’s not the most profitable. In the long-run, teaching everyone the habit of paying for content online is more valuable than collecting relatively large payments from a few early adopters (and pissing off everyone else in the process).
Here are some random thoughts/questions I’ve been kicking around lately. They’re mostly half-baked. Thoughts welcome.
*HT to Mark M. for the line
When a member of the Supreme Court asks, “What’s the difference between email and a pager?” then maybe it’s time to reevaluate things.
I’m in Park City (Mt. Rushmore tomorrow!) and in need of sleep, but this issue is important to me. The problem with the Supreme Court re: technology is the court moves at a linear snail’s pace. By the time a case reaches SCOTUS, it’s gone through at least 2 other court systems, each of which have their own backlogs. Add in discovery, motions and all the other things that must be done to have a trial and judgment, and you’re usually talking 3 years at the low end. That FCC v. Comcast case that the web was abuzz about a few weeks ago? Filed in 2007. Slowness is the price we pay for a full and fair review process, and that’s usually ok with me. But technology and its social impact changes almost overnight, so we unfortunately end up with a court that’s often deciding the law of the land according to facts established 3 years ago. Three years ago, foursquare, tumblr, twitter, hulu and pretty much every interesting technology startup today didn’t exist or was basically in utero. As a result, neither did checkins, microblogging, tweeting or streaming network television. These companies are changing the dynamics of the world (and IP law) daily. Toss in a severe deference to stare decisis, and it’s obvious that the Supreme Court just isn’t equipped to handle such fast-paced change.
But when it comes to laws, slow isn’t always bad. It’s small-c conservatism that I can usually get behind. The court process tends to prevent reactionary rulings, and that’s a good thing. Still, I don’t think we need to live in a country where the standard for personal jurisdiction in internet cases is based on whether a website is “interactive” or “passive.” That made some sense at the time, though maybe not to people who saw where the world was going. But in the context of the case facts and court procedures, I can understand the ruling. Nonetheless, the nomenclature is clearly of another era, and now absolute useless as precedent or as any sort of guide for a body of power.
I’m not sure how I’d fix this issue, but I have at least one half-baked idea. I’m of the belief that the court system wasn’t set up to handle a lot of the issues it now faces, especially technology issues. It’s like trying to build a highrise on a foundation laid for a barn. My idea: apply the bankruptcy court model to internet cases, that is, create a separate system of federal courts of equity with exclusive jurisdiction over cases where the primary issue is inherently linked to internet technology. These courts would quickly gain expertise in technological trends which would lead to more efficient and predictable rulings, and because they’d have equity powers, they could adapt to changing circumstances without resort to outdated precedent. I’ve been pitching this idea for MedMal for a while now to help decrease award volatility, but I think it would fit even better for internet-dependent cases.
I’m sure I’ll have more thoughts on this in time. This is an issue often ignored in the patent law debates going on among the venture community, but it’s important insofar as the courts are the bodies responsible for interpreting statutes—they decide how laws are understood and enforced. New legislation isn’t enough; we need to address the interpretation mechanism too.
From last night’s interview with Steve Jobs at d8:
Steve: The problem with innovation in the TV industry is the go to market strategy. The TV industry has a subsidized model that gives everyone a set top box for free. So no one wants to buy a box. Ask TiVo, ask Roku, ask us… ask Google in a few months.
7:56PM Steve: So all you can do is ADD a box to the TV. You just end up with a table full of remotes, a cluster of boxes… and that’s what we have today. The only way that’s going to change is if you tear up the set top box, give it a new UI, and get it in front of consumers in a way they’re going to want it. The TV is going to lose in our eyes until there is a better go to market strategy… otherwise you’re just making another TiVo.
I read this to mean the ultimate battle for TV will be fought over spectrum allocation. Because of the way our IP regime lock up streams for broadcasters, they’ve had little incentive to innovate. As a consequence, content and advertising delivery innovation “over the top” has wildly outpaced such innovation within the broadcast stream. Apple clearly sees a massive monetization opportunity in content (and ad) delivery to lean-back devices, but sees the two-box solution as untenable. To win the war for video delivery, they need bandwidth. To get bandwidth, they need to convince the FCC to allocate spectrum away from broadcasters and toward broadband.
In the meantime, Apple (more specifically, Steve Jobs, as Disney’s largest shareholder) appears uniquely positioned to push content providers to offer their shows online in parallel with broadcast—they’ve got the motive, the means and “give” (via their monetization platform). In that sense, their incentives are aligned with Boxee, but it’s gonna be an uphill battle to open up those content streams beyond the iTunes store. If I’m Boxee (or USV, or anyone interested in perpetuating innovation in online content delivery platforms), I’m thinking about putting a lobbyist on retainer to make sure that any play by Apple for online delivery of broadcast streams is either open or license structured (that is, if NBC decides to deliver a live or “effectively live” stream online, they’d be required to allow anyone with an FCC-licensed platform to deliver it—basically, analogize online delivery platforms to the airwaves).
I concede that this idea is only about 10% baked. What I’m thinking about here is the danger of platform-restricted content. The whole point of the internet is to democratize the delivery of information (see: the net neutrality debate). I consider video content “information” in the same sense as text. Therefore, I see anti-competitive danger in restricting its delivery to a specific platform, be it Boxee or the next Apple TV product.
To spur innovation in content delivery platforms, we need to allow some form of open access by those platforms to content providers. Otherwise, we’ll end up with the same innovation problems we’ve seen with the duopoly structure of cable. Does anyone think Time Warner’s interface is optimal? Does anyone doubt they would be pushed to do better if they didn’t have a regulatory monopoly/duopoly on their delivery channel? I recognize that such a grant was required to incentivize the deployment of the network infrastructure in the first place, but if (when?) the delivery of what we now call “broadcast content” moves to broadband (as defined by spectrum allocation), we need to ensure that we don’t copy a regulatory scheme based on recouping buildout costs onto a network without those costs.
I want to see an ecosystem of competition in video content delivery. As video content product becomes more fragmented, the need for innovation in discovery and delivery platforms scales exponentially. For consumers to get the platforms we deserve, we need to ensure that Boxee (or any other startup) has the same ability to access and deliver content as Apple or Google. I’m not saying we shouldn’t allow NBC to develop its own content delivery platform, but as a consumer I prefer that that the delivery platform be decoupled from the production platform, with the latter subject to open access regulation. Forcing delivery platforms to compete on the basis of design (rather than content) is optimal for consumers.
Of course, if I’m NBC/ABC/CBS/Fox, I’m fighting tooth and nail for things to come out the other way…
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