The Cost Of Permission Culture: Or Why Netflix Streaming Library Sucks Compared To Its DVD Library

[KoKo]

from the first-sale-is-important dept--by Parker Higgens


Why can't movie-streaming sites deliver the selection of movies that customers obviously want? This was the question posed by a recent New York Times column, comparing undersupplied services like Netflix with unauthorized platforms like Popcorn Time. The answer, the Times explains, is windowing—the industry practice of selling exclusivity periods to certain markets and platforms, with the result of staggered launches.

But the Times fails to ask a more fundamental question: why do streaming sites have to listen to Hollywood's windowing demands in the first place? After all, while it's clear why the studios like windowing—they can sell the same rights over and over once the promised exclusivity periods expire—it doesn't seem like a very good deal for users. Those users get access to a smaller selection, higher prices, and fewer choices between platforms and services. It should be astonishing that a company that once had to maintain and transport a staggering inventory of fragile plastic discs is able to offer less when its marginal cost dropped to near zero.

The problem is that, unlike earlier movie-rental options, streaming rights fall fundamentally within a permission culture. Netflix is a great illustration of what's gone wrong here. It's gone from having a nearly unrivaled catalog of films available to rent to being the butt of Onion jokes. What happened: It shifted from a system where nobody had a veto power over its operations, to one where it had to get permission and make deals with Hollywood. Sometimes it's difficult to find the concrete costs of living in a permission culture, but the decline of Netflix's selection is an important cautionary tale.

It's especially clear when you look at how Netflix upended the movie rental market in the first place. In one way, it suffered from a major competitive disadvantage: competitors like Blockbuster had locations near people's houses. As long as those stores had the movie you wanted, you could be watching within hours—not days—of deciding on a title.

But Netflix was able to experiment with different price points and subscription models and, crucially, it could try those without first convincing any incumbents. Both Blockbuster and Netflix's DVD-by-mail service relied on the first sale doctrine, meaning they can buy physical copies of movies, and then resell or rent at any price they like. No royalties, no licenses, no contracts—with physical media, once a rental company has bought the copy, the copyright holder is basically out of the picture.

More--INTERESTING READ AT:

http://www.techdirt.com/articles/20140408/16254926844/cost-permission-culture-why-netflix-streaming-library-sucks-compared-to-its-dvd-library.shtml#comments

[apnu]

1. Very interesting indeed. Good questions asked and it explains why piracy is so common.

Simply put.

Human beings want what they want, and they will find ways to get what they want. If someone is a provider of something people want but they put up road blocks to getting that content, people will find a way to get around it. When they turn to Netflix and get crappy selection because rights-holders are being pricks, they will run to the Pirate Bay and get the content they want.

Its lose-lose for everybody.

1) Rights holders lose sales then have to use expensive lawyers and lobby power to change and enforce laws preventing piracy. Double lose for them.

2) Middle men like Netflix get it from both ends, the rights holders jack up their rates and customers flee to use an easier service to get the content they want.

3) And the consumers of the content lose because much of the stuff on those sites are poisoned and they have a high chance of being infected with malware and being swept up in a john doe lawsuit and all that stuff. Plus the quality of the content is very hit or miss.

As I see it, this is the path of most resistance, and the problem spews from the rights-holders. Instead of resisting change from the VHS/DVD/Blu-Ray era to the digital era we now live in, they should have been involved early on and they could have steered the technology in a way that profits them and pleases their clients. We live in an era where their obtuseness of the RIAA and MPAA has directly caused this problem. As far as I'm concerned its all on them. They've trampled on good-old American ingenuity. Companies like Netflix (and others) recognized a new market, spent millions to develop that market, making consumers happy and the rights-holders come in and piss on all that. Well that's the bed they made for themselves, I hope they enjoy laying in it. I have no sympathy for them.

[loudsue]

2. ++++1,000,000 Good post.

[Timez Squarez]

3. I have been contacted for a lawsuit against me for downloading a movie

Some obscure that no-one cares about. I believe it did star Steven Stegal.

Nonetheless, I wrote back and tell them to go ahead in legalese, and it never materialized. So far no notices. And that was 18 months ago.

I continue to torrent movies I select and only from known sources.

ETA: it was from Voltage Films.

ETAA: http://www.huffingtonpost.ca/2013/06/28/teksavvy_n_3517688.html

ETAA: Conclusion - the lawsuit was dropped. http://www.huffingtonpost.ca/2013/11/13/distributel-file-sharing-lawsuit_n_4268464.html

Shades of Righthaven.