Cable Is Killing The Motion Picture Business

Last week, the news was filled with news that companies like AT&T and Time Warner are looking to cap (or cap and charge) customer use of the Internet. This week, the Los Angeles Times is talking about Hollywood studios and their online plans for success. Note: if the first thing happens, the second thing won’t.

As part of our failed cable experiment, we were lucky enough to receive a single bill for service. While we didn’t get credit for the lousy service or a little cash back for dealing with the incessant dinner-time marketing calls, we did get to see that we, the customer, were being billed back for the “franchise fee” the cable company pays the City of Pasadena.

How cool is that? We don’t have a choice when it comes to cable service (meaning only one cable company serves this jurisdiction; DirecTV, we’re comin’ home to you soon!), and we get to pay extra on our bill for that dubious privilege? Talk about your racket. Even the oil companies aren’t that brazen about passing taxes back to the customer.

So anyway these for-profit companies — the cable company, the phone company — are fighting things like municipal wireless and municipal broadband because, well, they know the the truth: customers hate these businesses so much that city- or county-run Internet utilities will be welcomed with open arms.

As well they should be. In order for the entertainment industry to succeed in the future, the customer must be wired and wired with lots of bandwidth. Investing in this kind of infrastructure is expensive, and major corporations are loathe to cut into shareholder profits. While Verizon is building a fiber optic network, it’s slow-going.

And I’m a bit disturbed by the fact that corporations are controlling access to what is clearly a basic service. Just as the phone company is not allowed to censor or monitor what I say and what I hear when I talk on the telephone, my Internet provider should not be allowed to censor or monitor what I send and receive. I pay for the service and I am responsible for how I use the service.

But let’s get back to my point: how Americans use the Internet is changing almost hourly. Obviously, since we dumped Charter’s cable service, we’ve been watching a lot of programming online. This means, our cable modem has been serving up a good amount of programming. But even if we were still cable-television customers, we’d be using a lot of Internet.

The motion picture companies want to provide in-home services to customers, especially since the great white hope of Blu Ray was premised on faulty logic: customers don’t want to replace their video libraries every time the technology changes. Providing a mix of streaming, rental, download-to-own, physical product, etc options to customers will grow the industry. I’m not going to buy The Bob Newhart Show as a DVD boxed set — owning this for decades simply isn’t what I want — but I’m really enjoying watching the episodes on Hulu. I don’t even mind the commercials.

I would even happily pay $1.99 to watch the final episode of Battlestar Galactica, given that I have no other option for watching it in a timely manner (yeah, NBC, thanks for holding back the episodes from Hulu for over a week — for what reason, I ask you, for what reason?), but, woe is me, the only option is Amazon’s Unboxed service, and we all know that’s a Windows-only option. So I’m going to wait — though honestly, if I’ve said it once, I’ve said it a dozen times, the way to encourage customers to engage in piracy is to be stupid about providing basic service, like timely programming (NBC, I’m talking to you!) — but I’m still going to have to watch the program via broadband.

If the motion picture industry, in particular, is serious about growing the audience (and I think, despite their rather consumer-unfriendly approaches, they are serious), then they need to put some muscle on the service providers to ensure that consumers get decent bandwidth at reasonable prices. Metering bandwidth in a non-competitive market — sometimes cable’s the only game in town — is actually antithetical to the goals of the Internet.

If the current service is so limited that usage must be metered or capped in order to grow the service (and Time Warner indicates this is how they’ll get more customers and invest in infrastructure), then it’s time to invest in infrastructure. I’m guessing that’s what we, the customers, have been paying these companies to do all along. Where did that money go?

I am bemused by the Time Warner assertion that these higher fees are necessary in order for the company to build the necessary bandwidth to meet consumer demand. Does this mean the costs will decrease when the network is built out? Of course not. There is something particularly unsavory about holding a local monopoly, offering the crummiest possible service, and then, when you need to, oh, invest in your own business, expecting the customer to foot the bill so that your shareholders don’t suffer.

At least give the consumer some options — get ride of the cable monopoly (and since the consumer has paid to build it, don’t fall for the whining about infrastructure investment). Let other players, including municipalities, build out networks that compete (isn’t that what the free market system is all about?). Oh, and Hollywood studios?, you need to play your part. You have the clout to push back against these moves by service providers — and it’s in your best interest to do so.

2 Responses to “Cable Is Killing The Motion Picture Business”

  1. Jim says:

    So two things:

    1) I think that Kassia wrote this as a veiled plea/reminder to those of us with cable and/or Windows NOT to spoil the last two episodes of Battlestar Galactica.

    2) As long as we’re talking about what drives people to piracy, here is another example: taking U.S. first-run episodes of British shows and chopping them up just to get more commercial breaks.

    This practice — shame on you, Sci-Fi and BBC America — has driven U.S. Dr. Who fans into some pretty obscure places on the internet.

    It’s so stupid, because we’d gladly watch them — commercials and all — if we knew that we were going to get the full episodes.

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