Loophole antennas

August 30, 2012 9:37 AM

Suppose I could offer you a choice of two technologies for watching TV online. Behind Door Number One sits a free-to-watch service that uses off-the-shelf technology and that buffers just enough of each show to put the live stream on the Internet. Behind Door Number Two lies a subscription service that requires custom-designed hardware and makes dozens of copies of each show. Which sounds easier to build—and to use? More importantly, which is more likely to be legal? If you went with Door Number One, then you are a sane person, untainted by the depravity of modern copyright law. But you are also wrong. The company behind Door Number One, iCraveTV, was enjoined out of existence a decade ago. The company behind Door Number Two, Aereo, just survived its first round in court and is still going strong. Why Johnny can't stream: How video copyright went insane by MeFi's own James Grimmelmann.
posted by Horace Rumpole (17 comments total)

Isn't door number one essentially what Netflix does, except that Netflix isn't free?
posted by asnider at 9:46 AM on August 30, 2012

Been here, done it.

http://www.metafilter.com/112775/NYC-to-have-broadcast-TV-signals-streamed-to-the-net-Hilarity-by-which-I-mean-lawsuits-ensues
posted by Ardiril at 9:52 AM on August 30, 2012

The Aereo stunt is pretty clever. Timeshifting content to make legal copies. Exploiting the letter of copyright to violate the spirit. I kind of love it.

I've been writing letters to various media companies begging to be allowed to give them money for their content. TNT, HBO, FX. etc. Let me be your customer. I want to pay you for your shows. I want to watch them on my iPad and iPhone and on my TV.

I don't want cable. I don't want to support channels I am in opposition to. I don't want to encourage the creation of content i find of no value.

Just let me give you money for your shows.

I'm starting to go this way with movies as well. Anymore I have the choice between renting one without leaving the house where I can pause it and make reasonably price snacks and not deal with obnoxious assholes who won't shut up, or I can pay $20 to go to the theater. If I could have rented Dark Knight the night it came out I would have. There's a good chance that by the time it does make it to rental I'll no longer care.

I don't torrent. I have Netflix, and HULU, and a slew of apps. I am never lacking something to watch. Companies need to figure out if they want my money and eyes or not. The ones that aren't trying to dictate how and when I consume are the ones I am choosing to support.

The rest are dinosaur food.
posted by cjorgensen at 9:56 AM on August 30, 2012 [6 favorites]

Isn't door number one essentially what Netflix does, except that Netflix isn't free?

I believe Netflix has licensing agreements with the copyright holders of the material they stream (and the increasing licensing fees are slowly killing them). iCraveTV and Aereo were/are trying to take the content that the networks broadcast over the air, without paying the copyright holders for it, and then sell online access to the content to their own subscribers. The reason this is an insane copyright situation is that the copyright holders (the over-the-air networks) could just go ahead and sell their product directly to consumers in a way that people want, but they're wedded to a weird business model that was created out of technological necessity decades ago where they give away their product for free and make money on advertising.

I'm not sure, but I think if all the networks decided to give up on over-the-air broadcasting and became cable channels tomorrow this loophole would disappear.
posted by ghharr at 10:17 AM on August 30, 2012 [1 favorite]

My thought: File system level duplicate detection. And there it is on page 3.
posted by benito.strauss at 10:39 AM on August 30, 2012 [1 favorite]

Those are some... odd services he describes there.

The most ambitious music locker service doesn't even describe itself as one. Instead, ReDigi calls itself "The World's First Pre-Owned Digital Marketplace." (The claim may be a bit overstated; similar ideas include the Digital Content Exchange and this patent application.) Why buy "Rumor Has It" from iTunes for $1.29 when someone else who already did is willing to sell it to you for 79 cents? ReDigi's offline model is the used CD store—which of course is completely legal because of first sale.

But wait, you may be saying, at a used CD store the previous owner gives up the CD when the new owner gets one. Online, don't they now both have a copy? Great question. ReDigi's answer involves some DRM gymnastics. First, it uploads the track to its servers, giving the seller streaming access. When the owner "sells" the track, ReDigi changes the ownership bits on the file, locking the seller out and giving the buyer exclusive streaming access. (To keep the seller from simply uploading a copy and keeping the original, ReDigi deletes the track from the seller's computer and uses DRM to make sure it's never copied back.) In other words, ReDigi is a streaming music locker with a key that can be transferred from one user to another.

Wait, what?

Couldn't you trivially shatter ReDigi's security model into tiny chunks with anything that virtualizes windows?
posted by quillbreaker at 11:07 AM on August 30, 2012

I have Netflix, and HULU, and a slew of apps. [...] The rest are dinosaur food.

I'm not convinced that many of those new players -- Netflix, Hulu, etc. -- aren't also dinosaur food. Unless they start creating content themselves, they're each just one possible delivery mechanism for somebody else's bits, beholden to the owner of the content, and subject to thinner and thinner margins and cutthroat competition.

Take Netflix, for example. They fattened themselves up and sold themselves to the networks for slaughter, giving up a perfectly good business model doing DVDs-by-mail that could have sustained them for a number of years, probably longer. Especially if they hadn't helped push streaming, which is completely nuts. That's like Ford encouraging everyone to ride bicycles.

Their DVD-by-mail operation is and was state-of-the-art, and everything about it is protected either by patents (the mailers, many of the processing machines) or trade secrets. It's nearly impossible for anyone to compete with them, and the last company to try -- Blockbuster -- failed despite having fairly deep pockets.

They were poised to move into HD in the form of Bluray, and could have ensured the success of that format as the dominant method of distributing HD films for the next few years. But instead, they went totally crazy, and decided to push streaming video instead. And even crazier, they succeeded; their streaming-hardware division became Roku, and now I know more people who have and use Roku boxes on a daily basis than use BluRay players. Hell, I just canceled my cable TV subscription yesterday, because of the Roku boxes. I think they're great.

But they're terrible for Netflix. Because the Roku doesn't just let me view Netflix content (although it could have, if they hadn't felt it necessary to spin it off as a separate division -- another baffling choice on their part); it lets me view Netflix content, Hulu content, Amazon content, and basically anyone else who wants to cobble together an app. It doesn't take much to be a streaming-video provider, certainly not compared to what it takes to do DVDs-by-mail correctly.

So rather than being able to go out and buy discs -- at retail, if necessary due to the studios' intransigence -- and rent them out, Netflix will now have to bid against other video-on-demand services to obtain the rights to distribute content. The shows they have available now could disappear next year, and reappear on Hulu or Amazon, if Hulu or Amazon manage to outbid them. And there's nothing stopping HBO or any of the other networks from creating their own Roku channel in the future, and cutting out the middleman that Netflix et al now represent. (At the moment I think HBO and other premium channels are prohibited from doing this by their contracts with the cable companies, but that could easily change.)

The future that Netflix brought to pass is great ... for the networks. It's terrible for Netflix itself, and I think they are probably doomed. If not to actual bankruptcy, at least to thinner and thinner margins and an endless battle with upstart competitors. I think the future will look back and wonder "what the hell were they thinking?" But it's possible that in sacrificing themselves, they may have found a new funding source that will gradually replace advertising, at least on niche shows.
posted by Kadin2048 at 11:18 AM on August 30, 2012 [7 favorites]

Door #1 sounds like Crunchyroll, except that Crunchyroll isn't free.
posted by Chocolate Pickle at 11:26 AM on August 30, 2012

I think Netflix is definitely doomed. They provided an awesome solution to a dvd-world problem: finding what you want and getting it to your house, but dvd-world is ending and streaming-world is the future and there's not a problem to fix for Netflix in streaming-world.

If you're a reasonably plugged-in media viewer right now you might stream content created by Warner or Universal. It gets to your house over your cable company's infrastructure and it gets to your TV through your computer/PS3/AppleTV/Roku/iPad. You might be using the Netflix service, but it's just an interface. There's nothing to keep the content creator, cable company, or device manufacturer (who are all selling things they actually make) from deciding to drink Netflix's milkshake and cut out the middle man with their own interface. You're seeing it already with iTunes video, cable OnDemand, etc.

I guess it's possible that they'll succeed at becoming a content creator but if I were a shareholder I would definitely be questioning why they would expect to be successful switching to an entire different industry (unfortunately, as an Arrested Development fan).
posted by ghharr at 11:36 AM on August 30, 2012

Unless they start creating content themselves....

I'm not that far into either, but I've been enjoying the hell out of:

The Booth at the End (Hulu)
and The Unknown (Crackle)

The reason I think some of these services are also dinosaur food is my TV looks like a Borg having sex with an octopus. Seriously, at some point I will probably think if it's not built into the TV and available over the internet it's dead to me. Speaking of...is CBS still on the air?
posted by cjorgensen at 11:38 AM on August 30, 2012

[Netflix's] streaming-hardware division became Roku

Is that true? Roku were making SoundBridges etc long before Netflix streaming.
posted by We had a deal, Kyle at 11:45 AM on August 30, 2012

Is that true? Roku were making SoundBridges etc long before Netflix streaming.

I can't find a good article that summarizes exactly how things went down, but my understanding is something like this:

- Netflix began developing an STB internally, as a sort of skunkworks project. There were various announcements of hardware partners who were going to manufacture it.

- Netflix decided, for reasons I don't really understand, that they didn't want to be in the STB business. (Whether this happened before or after the next point, I'm not sure.) IIRC the stated reason was because they wanted to not be wed to a particular hardware platform, and perhaps at the time they thought it would sour relationships with game console manufacturers, which probably seemed like a huge market.

- Anthony Wood, founder of ReplayTV and Roku, got brought into Netflix as "VP of Internet TV" in early 2007.

- Supposedly (and this is the point I can't find a good cite on), Netflix transferred the nascent hardware team over to Roku, along with whatever they had developed in-house up to that point.

- Roku released the Netflix Player in early 2008. At the time of its release, I think Netflix was basically the only channel for it.

If that's really how things happened -- and it seems plausible when you break it up into individual decisions, and consider the time in which each decision would have been made -- it's yet another example of Netflix giving away a golden opportunity. It wouldn't surprise me if Roku persists long after Netflix is gone or at least greatly reduced.
posted by Kadin2048 at 12:27 PM on August 30, 2012 [1 favorite]

Door number one lives (just not in hi-def or legal compliance).
posted by squalor at 2:32 PM on August 30, 2012

As bad as it is, outside the USA and Europe, it's worse. Crazy copyright and even less legal content.
posted by blue_beetle at 3:24 PM on August 30, 2012

The future that Netflix brought to pass is great ... for the networks.

Isn't it also possible for it to be great for us too, when/if every company finally has everything from their archives available for us to buy whenever we want, even if we have to go to their stores to buy it?
posted by dng at 4:05 PM on August 30, 2012

That final bit about avoiding fair use was interesting.
Could make for a nice little counterfactual.
posted by doctornemo at 11:55 AM on August 31, 2012

Kadin2048 writes "They were poised to move into HD in the form of Bluray, and could have ensured the success of that format as the dominant method of distributing HD films for the next few years. But instead, they went totally crazy, and decided to push streaming video instead. And even crazier, they succeeded; their streaming-hardware division became Roku, and now I know more people who have and use Roku boxes on a daily basis than use BluRay players. Hell, I just canceled my cable TV subscription yesterday, because of the Roku boxes. I think they're great."

Netflix DVD by mail business was dying even if they didn't know it yet. It is doomed to be a special niche player eclipsed by streaming/download. Probably now one will be able to make serious money with streaming; the IP owners have repeatedly proven to be too greedy. Especially since they seem incapable of pursuing the long tail.
posted by Mitheral at 12:06 PM on August 31, 2012