Brutal Economics of Cable TV

May 29, 2011 7:34 AM

The success of The Walking Dead, paradoxically, has left the network with an unusual dilemma. Like the executives of Mad Men’s Sterling Cooper Draper Pryce, AMC is facing an existential question: How do I grow my business without sacrificing who I am? The Zombies at AMC’s Doorstep. TL;DR version: How AMC Explains the Brutal Economics of Cable Television
posted by fearfulsymmetry (83 comments total)

Widespread internet distribution: it cannot come soon enough for people actually making good shows.
posted by jaduncan at 7:39 AM on May 29, 2011 [4 favorites]

But how do you monetize that, jaduncan?
posted by cavalier at 7:59 AM on May 29, 2011 [3 favorites]

you wanna make money, or you wanna tell great stories?
posted by quonsar II: smock fishpants and the temple of foon at 8:27 AM on May 29, 2011 [4 favorites]

As a cable network, quonsar, you can't really do the latter if you are unable to do the former.
posted by antifuse at 8:28 AM on May 29, 2011 [1 favorite]

A dollar per user per month? 25 cents a program on iTunes would go down well, I suspect.

Alternatively, adverts. Same, as they say, as it is in town.
posted by jaduncan at 8:29 AM on May 29, 2011

See, that's the thing cavalier, some of us would gladly pay for high-quality, ad free internet access to the items offered on cable TV. We don't have cable, and we probably never will.

We watch 100% of our 'television' one of three ways: Netflix, Hulu, and questionable channels. If it's on netflix, great. That's our default (a service we gladly pay for each month!). If we're lucky enough to be watching a series that Hulu carries, we switch over to that once netflix can't keep up. And if there's something that we're dying to watch (i'm looking at YOU HBO and AMC) and we can't access it one of those two ways? We find it through questionable means.

But we'd gladly fork over a reasonable fee to watch cable TV on our computers instead of actually buying cable. That fee would have to hit some sort of sweet spot (even for a premium channel like HBO or AMC) would have to be way less than access to netflix...because i get a shit-ton of access to entertainment for my 15 bucks a month. But until that happens?

This comic has probably been posted here before, but it sums it up pretty goddamn well.
posted by furnace.heart at 8:32 AM on May 29, 2011 [26 favorites]

It reminds me of Steam, actually. Nobody would purchase games online, until Steam got the balance right and they did in large numbers.

It reminds me of iTunes, actually. Nobody would purchase music online, until iTunes got the balance right and they started to in large numbers.

If there's revenue to be had, and enough broadband penetration, why not just do an end run around the cable company and keep the advertising/product placement revenues? It's not like that's something that doesn't keep the cable companies up at night, after all. Or payment per episode. Cable TV is going to be roadkill at some point, and should be.
posted by jaduncan at 8:33 AM on May 29, 2011 [10 favorites]

Calling The Walking Dead "less brainy dialogue, more eating brains" seems unnecessarily reductive and dismissive. I've only seen a couple of episodes, but I certainly wouldn't characterize it as some kind of ratings-grubbing sellout.
posted by Horace Rumpole at 8:35 AM on May 29, 2011

In the long run, telling great stories may = making money. People will remember Mad Men and Breaking Bad in ten years, in twenty -- there will be a market for these shows in repeats, a market for books about these shows and elaborate multi-disc retrospective DVD/BR/frickin'-neural-implant disc sets.
posted by kittens for breakfast at 8:35 AM on May 29, 2011 [1 favorite]

Oh, and crucial point linking those two retailers: they suck less than piracy does, if you're prepared to pay for legal safety and product convenience. People are, so they make money.

I will admit that if one's business model is based around utterly meh crap to fill time then this works less well than if one's business model is about making great shows that people care about watching. This might be regarded as a feature rather than a bug.
posted by jaduncan at 8:36 AM on May 29, 2011 [3 favorites]

I would not be surprised to see an HBO online only subscription in the near future. I assume it is what the heavy promotion of HBOGO is about.
posted by furiousxgeorge at 8:43 AM on May 29, 2011 [2 favorites]

I would gladly hand over cash money for the right to legally watch True Blood and Game of Thrones online without having to pay for cable. HBO doesn't want my money, though, so I just bittorrent them.
posted by empath at 8:49 AM on May 29, 2011 [11 favorites]

I've only seen a couple of episodes, but I certainly wouldn't characterize it as some kind of ratings-grubbing sellout.

I thought it was a fairly smart, classy show, honestly.
posted by empath at 8:49 AM on May 29, 2011

A dollar per user per month? 25 cents a program on iTunes would go down well, I suspect.

That's a lot of iTunes users to support a program at either cost. The underlying assumption is that the potential audience has the technological savvy and tastes to use iTunes in that way. Some don't have computers powerful enough. Others don't have the bandwidth to make it work out. The way the cable networks work is that those costs are bundled into packages, regardless of whether we watch those channels or not.

Direct funding of shows like that, bypassing both the ad model and the subscription in favor of a direct paid model is an interesting experiment that few would undertake.
posted by ZeusHumms at 8:51 AM on May 29, 2011 [1 favorite]

Give it a couple of years, an AMC will not be America, have movies, or be remotely classic.

I yearn for the days when computers will build our video playlists on cable stations, much as they do on the music-only channels on digital cable, because the content will be slightly more related to the actual name of the channel.

MTV? SyFy? Bah humbug!
posted by blue_beetle at 8:53 AM on May 29, 2011

The underlying assumption is that the potential audience has the technological savvy and tastes to use iTunes in that way. Some don't have computers powerful enough. Others don't have the bandwidth to make it work out.

A had a long argument with a friend back when MP3s and winamp came out where he argued that mp3s would never replace CDs, because he could just drive to the store and get the CD in 10 minutes and it would take him an hour to download it from AOL.

You are talking about technological problems that will be laughable in 5 years.
posted by empath at 9:04 AM on May 29, 2011 [12 favorites]

Telling great stories is not what AMC does. That is what Lion's Gate does. AMC is a network (aka a sales channel) that *shows* those great stories -that's it's business. They buy shows, they aren't a studio. Lion's Gate made 75 million selling to Netflix, not AMC, because Netflix and AMC are competing sales channels, as is iTunes. The first article talks about networks that are also great story tellers (like HBO) and AMC is trying to decide if it wants to be one too. Unless it owns it's own shows, a new internet channel won't help AMC at all. It will be competition actually.

The most depressing thing I read was this: "FX, AMC’s closest equivalent, may be showing Justified, Sons of Anarchy, and other respectable original fare, but it makes its money on reruns of Two and a Half Men."
posted by acheekymonkey at 9:04 AM on May 29, 2011 [6 favorites]

jaduncan, the catch-22 here is marketing. Sure, lots of people would pay a quarter an episode to watch Mad Men or Game of Thrones or True Blood. I know I would. But the only reason lots of people would pay that quarter is because lots of people have hard about them, and the only reason lots of people have heard about them is because they're on cable.

Sure, there are examples of people releasing stuff directly online. But none of them, as of yet, can support a show like Game of Thrones, which it cost HBO $60 million to make. There are a few authors who have gone straight to the internet, but one person can write a book. Joss Whedon has had success with Dr. Horrible, but that's because he established his reputation on network TV to the point that there are millions of people who will pay for whatever he does.

$60 million is a lot of money to risk. Investors--and that's really what we're talking about here--don't tend to like risk, particularly when it is not supported by commensurate possibility of reward. HBO made Game of Thrones because it was pretty sure it could make that a profitable venture, and it had that surety because its subscriber base represents a known and quantifiable source of revenue. iTunes does not. Lada Gaga set a record earlier this year when she moved one million downloads in a week. And that's music. Movies and TV shows don't move nearly as well. But Game of Thrones had more than four million people tune in for the premiere. Betting you can drum up that kind of audience without an established distribution channel is risky. No one's really done it yet. We'll get there at some point, but we're not there yet.
posted by valkyryn at 9:06 AM on May 29, 2011 [5 favorites]

I would gladly hand over cash money for the right to legally watch True Blood and Game of Thrones online without having to pay for cable. HBO doesn't want my money, though, so I just bittorrent them.

What I'd like to know is, when shows like Game of Throne or The Pacific come on premium networks like HBO, shows notable enough to be at least pop cultural events if not cultural events, do subscriptions to HBO and its carriers go up noticiably? That to me seems to be one of the main goals.
posted by ZeusHumms at 9:06 AM on May 29, 2011

I've only seen a couple of episodes, but I certainly wouldn't characterize it as some kind of ratings-grubbing sellout.

I think it's AMC trying to sell out without selling its soul -- it's a good-looking show with a solid cast and an Oscar/Emmy pedigree that's about shooting zombies in the head.

To be fair -- and I'm trying to be, because I like the Walking Dead comics and think the show has some serious potential to work with -- AMC's efforts to emulate the shows that put it on the map haven't led to anything as good, as far as I'm concerned. I stopped following The Killing about four episodes in, and couldn't finish watching the first episode of Rubicon. I know it sounds insane, but is it possible there's a finite number of best shows of all time?
posted by kittens for breakfast at 9:06 AM on May 29, 2011

Direct funding of shows like that, bypassing both the ad model and the subscription in favor of a direct paid model is an interesting experiment that few would undertake.

Oh yeah, sure. That's why I said 'can't come soon enough' rather than 'is here now'. But it will come, I think. Just like Steam bypassed the high street shops.
posted by jaduncan at 9:09 AM on May 29, 2011

"The underlying assumption is that the potential audience has the technological savvy and tastes to use iTunes in that way. Some don't have computers powerful enough. Others don't have the bandwidth to make it work out."

A had a long argument with a friend back when MP3s and winamp came out where he argued that mp3s would never replace CDs, because he could just drive to the store and get the CD in 10 minutes and it would take him an hour to download it from AOL.

You are talking about technological problems that will be laughable in 5 years.

These aren't technological problems - they're problems of user sophistication and economics.
posted by ZeusHumms at 9:12 AM on May 29, 2011 [1 favorite]

Walking Dead is the only thing I'd really watch AMC for... if I had cable. I don't. I get my Walking Dead discs through Netflix.

Mad Men is extraordinarily boring. The only reason I ever tried to watch it (back when we did pay for cable) is because my husband is friends with one of the actors, but then we just found ourselves fast forwarding to their part and then, finally, giving up because watching paint dry is much more entertaining than watching that show.

Give me Walking Dead any day.
posted by Malice at 9:14 AM on May 29, 2011 [1 favorite]

And oh, it might turn out that Netflix is that distribution channel. Just a guess.

They are acquiring the critical mass of subscribers - in 3-5 years they could just start handling first run distribution.
posted by jaduncan at 9:15 AM on May 29, 2011

Jaduncan, the article talks about how Netflix will be doing just that with House of Cards.
posted by kittens for breakfast at 9:16 AM on May 29, 2011

two for walking dead.
posted by clavdivs at 9:17 AM on May 29, 2011

Jaduncan, the article talks about how Netflix will be doing just that with House of Cards.

Ooh, fascinating. I missed that. Yeah, it's hard not to see more than that. Aside from anything else, the demographics of the people who use Netflix are great compared to the general industry. The web client could kill on advertising rates with the ability to pick personalised adverts to show.

No wonder Google want Youtube to be doing more modern shows, eh?
posted by jaduncan at 9:20 AM on May 29, 2011

I would not be surprised to see an HBO online only subscription in the near future. I assume it is what the heavy promotion of HBOGO is about.

The cable companies will fight that like hell, just like they've fought ala carte pricing. If networks start saying "You can have the exact same experience of our network over the internet, without a cable TV subscription, for X dollars a month" it's doom for the cable TV business model. I wonder if HBO has any idea how much they ought to be investing in net neutrality lobbying right now, because that might be what gets the providers to drop their caution on the issue.
posted by Horace Rumpole at 9:20 AM on May 29, 2011 [1 favorite]

Oh yeah, sure. That's why I said 'can't come soon enough' rather than 'is here now'. But it will come, I think. Just like Steam bypassed the high street shops.

The pile of dead bodies will be interesting to look at. On the other hand, this is the point where we need to turn our bleary eyes to Time Warner and Comcast, each having a massive investment in both the ad model and subscription model, and wonder if they'll let a direct paid model come to pass without a fight.
posted by ZeusHumms at 9:21 AM on May 29, 2011

I would gladly hand over cash money for the right to legally watch True Blood and Game of Thrones online without having to pay for cable. HBO doesn't want my money, though, so I just bittorrent them.

Don't they sell episodes on iTunes? Would that help?

But I know the feeling, you just want to see the show and you'd gladly pay for it, but the show or network makes you jump through hoops to do it. At that point, a lot of people take the route of least resistance, i.e. bittorrent.

And oh, it might turn out that Netflix is that distribution channel.

I literally do not give a shit about cable since we got Netflix. There's enough content on there to keep my household entertained for years. We just our cable subscription back to the basic channels, while upping our internet bandwidth. It's been great, like how tv should be.
posted by Brandon Blatcher at 9:21 AM on May 29, 2011

furnace.heart nails it. I'll gladly pay for content through non-cable channels. We've had a Netflix account for years, and now have several devices that can stream Netflix. Last month we added a Hulu Plus account after the XBox 360 got an app for it.

Game of Thrones and (soon) True Blood? Not available through those means, so alternative means are necessary.

Netflix and Hulu have made acquiring content legally so much easier than downloading through other methods. The same with Amazon MP3 and iTunes for music.

Make it easy for consumers and they'll purchase it, even if they were pirates before.
posted by formless at 9:23 AM on May 29, 2011 [1 favorite]

And after the House of Cards announcement, Starz announced the next day that it would introduce "a 90-day delay on the availability of new episodes of original series for users of its Starz Play broadband service, which it offers in arrangements with Netflix and telecom giants Verizon and Qwest." Starz also announced a similar delay would happen for first-run movies that it put up on Netflix eventually.

It should be noted that Starz has a relationship with Netflix that allowed Netflix to put up a lot of streaming movies pretty quickly when Starz gets the rights to them. It turned out to be a bargain for Netflix.
posted by ZeusHumms at 9:24 AM on May 29, 2011

Don't they sell episodes on iTunes? Would that help?

I think like 6 months later. I got the first season of True Blood that way, but got the rest via bittorrent as they came out.
posted by empath at 9:25 AM on May 29, 2011

But it will come, I think. Just like Steam bypassed the high street shops.

I really don't think you understand the scale of the kind of undertaking we're talking about. For a TV show to be successful, several million people need to watch it. Ergo, no one is going to produce shows for any medium which cannot guarantee them at least the possibility of that many viewers.

Here's the thing: people don't go to the store to buy TV shows. For most people, most of the time there isn't any transaction involved in watching a TV show. Even if we do pay for it, we don't pay for it right then. It's either free, i.e. ad supported, or we subscribe. Replacing brick-and-mortar stores with an electronic storefront doesn't fundamentally change the way people pay for things, it just makes it more convenient. Switching from ad-supported or subscription-based services to a pay-as-you-go model is a radical change.

Netflix may well be the first internet-based service provider to do this, but they're not there yet. Sure, they've got about 23 million subscribers, which is admittedly a lot, but cable is in almost 60 million homes, and network TV is ubiquitous. But only a tiny fraction of cable subscribers watch any given show. The most popular non-sport show last week? Some godawful made-for-TV movie on Disney with 4.9 million viewers. Or about 8% of cable subscribers. Netflix would need to get almost 22% of its subscriber base to get the same number of people, and that's just not going to happen. Netflix needs to triple its user base before anyone will look at them as a serious competitor to cable channels.
posted by valkyryn at 9:25 AM on May 29, 2011 [2 favorites]

I'd totally pay ten bucks for the next season of The Walking Dead, if I could get it in unprotected 720p or 1080p. (I'd probably pay $15 for 1080p). MKV format would be good, because it seems to work well, and my primary video player likes it, but anything that's not protected would be okay.

Further, it strikes me that it would be very smart for AMC to offer this, because I can get precisely that product right now for free. Hell, I'd be perfectly willing to help with the bandwidth by torrenting the episodes, if they offered a torrent service.

Bandwidth is getting very cheap, so I suspect AMC could make serious bucks even if they hosted it all themselves; if they went to a torrent model, it'd be that much more profitable.

And, yes, some people would pirate the episodes. But they do that already, so offering a way to pay for nice, unprotected content would be free money. Some percentage of the pirates would convert, and it's not like they'll be creating pirates by providing a product that's already available anyway.

I don't understand why they don't get this.
posted by Malor at 9:26 AM on May 29, 2011 [1 favorite]

I would gladly hand over cash money for the right to legally watch True Blood and Game of Thrones online without having to pay for cable. HBO doesn't want my money, though, so I just bittorrent them.

Don't they sell episodes on iTunes? Would that help?

It appears to depend on on the show. Some shows like The Pacific or Band of Brothers I've never found on iTunes. True Blood is on, but not the current season. Game of Thrones isn't currently on.
posted by ZeusHumms at 9:27 AM on May 29, 2011

For a TV show to be successful, several million people need to watch it.

Says who? It's not like we're talking about an immutable law of physics here. Louis CK has a budget of $250,000 for his show. He could get by for years with a few hundred thousand fans dropping a $1 a show.
posted by empath at 9:28 AM on May 29, 2011

Yeah, the article's premise seems built on an unnecessarily dismissive attitude of The Walking Dead just because it's "about zombies". The movie-quality filmmaking, the long, ponderous pauses, all the other stuff that they talk about being AMC's style - it's all there.

Which is not to say that the general phenomenon of tv channels selling out from their basic premise to do whatever is more successful isn't real; but if AMC sold out by doing the Walking Dead, well, we should all be so lucky as to get the opportunity to sell out at such little cost.

Starz announced the next day that it would introduce "a 90-day delay on the availability of new episodes

Good grief. What year is this? Have corporations still not figured out that the only thing introducing artificial delays and artificial supply bottlenecks accomplishes is to turn regular people into pirates? Consumers aren't dumb, but they are impatient.
posted by mstokes650 at 9:29 AM on May 29, 2011 [2 favorites]

I don't understand why people want to buy stuff directly or for download. I bought Walking Dead actually, but I regret it. I don't need to own content. I just need to watch it when I want. I'd almost rather pay a company to store it on their website for me so I don't have GBs of video files I never watch that clog up my backups. Even The Good, The Bad and The Ugly I can only watch once a year.

Netflix has really changed my habits. The average cost per movie for me is 21 cents (as per FeedFlicks.) Not only have I stopped using my TV but I've stopped buying DVDs and iTunes shows. I love paying for stuff, but don't make owning it the only option.
posted by acheekymonkey at 9:35 AM on May 29, 2011 [2 favorites]

Some time back, after I gave up cable (strangely enough, there were other things I could think of doing with that $80+ a month...), I noticed that the shift to watching shows online did affect my viewing. Specifically, the delay--even a one-day delay--significantly reduced the likelihood that I would bother to tune in. Because I could head over to TWoP and read episode reviews first.* Do I really want to spend my $2.99 to watch the season finale of House? (Answer: no.) So...a delay of 90 days? Strikes me as counter-productive (and counter-intuitive), at least when it comes to some part of the potential viewing population.

*--Spoilers usually don't bug me. Obviously, YMMV.
posted by thomas j wise at 9:35 AM on May 29, 2011

What year is this?

It's a year where corporations with business models with decades of history walk the line between the status quo and appealing to those on the cutting edge by putting TV shows and movies on free or paid streaming services (including On Demand services) and selling and renting them online. They want to keep people from migrating en masse to free alternatives, because there's a tipping point where that destroys the business models and the corporations go bust.

Tied into all this in some countries like the US are conglomerations of content carriers and creators where they have more then the usual numbers of tools (bandwidth caps, cable fees) to keep consumers right where they are.
posted by ZeusHumms at 9:38 AM on May 29, 2011 [1 favorite]

Pleased as it sounded with the pickup, AMC was also a bit too embarrassed to use the term reality. After a brainstorming session of its own, the network went with “docu-stories.”

Oh no.
posted by The Devil Tesla at 9:40 AM on May 29, 2011 [1 favorite]

Also, I wonder how much Netflix can increase their streaming subscription fee before consumers flee.
posted by ZeusHumms at 9:43 AM on May 29, 2011

Because I was interested in the TV series (kinda) I I read about 3 or 4 volumes in the comic book series and was surprised at how bad it was (I kept reading out of morbid curiosity) - poorly-conceived, boring, rambling and silly plotting (lots of things seem to happen because the writer doesn't know what to do next except create some random new crisis) , poorly thought out story-world logic (multiple occasions where the writer has a character awkwardly state something that retrospectively explains away some lapse of logic that happened pages and pages ago), weirdly stilted unnatural dialogue, plus flimsy uninteresting characters.
Still, I think AMC did a good job turning the comic book into a TV show, but it's a shame that it thought it should start with this kind of source material.
posted by Bwithh at 9:45 AM on May 29, 2011 [1 favorite]

They want to keep people from migrating en masse to free alternatives, because there's a tipping point where that destroys the business models and the corporations go bust.

Right, except that by 2011 they've had quite a few years to figure out that completely artificial 90-day delays is not the way to do that.
posted by mstokes650 at 9:45 AM on May 29, 2011

A dollar per user per month? 25 cents a program on iTunes would go down well, I suspect.

Another way of looking at this is that, to make the numbers work out, they need to appeal to the lowest common technological barrier. Which to me would mean dead simple, dead cheap broadband, say 10 Mbps at $25/monthly with a generous bandwidth cap, as easy to get as a phone line, plus a simple set top box at $50 or less, available from Walmart. Hook it all up, plug it in, let people choose ala carte.
posted by ZeusHumms at 9:55 AM on May 29, 2011

At least AMC hasn't totally abandoned its original premise like so many other cable channels. That's all we need is one more outlet for ghost hunters, reality shows, true crime reenactments, and wrasslin' (when the revolution comes one of the parties that I want lined up against the wall is the execs for SyFy).
posted by Ber at 10:11 AM on May 29, 2011

At least AMC hasn't totally abandoned its original premise like so many other cable channels.

Planet Green is airing that Discovery Channel show about loggers.
posted by riruro at 11:04 AM on May 29, 2011 [3 favorites]

At least AMC hasn't totally abandoned its original premise like so many other cable channels.

Their original premise, as American Movie Classics, was showing classic movies uncut without commercial breaks. That went away over the decades.
posted by ZeusHumms at 11:17 AM on May 29, 2011 [1 favorite]

What I'd like to know is, when shows like Game of Throne or The Pacific come on premium networks like HBO, shows notable enough to be at least pop cultural events if not cultural events, do subscriptions to HBO and its carriers go up noticiably? That to me seems to be one of the main goals.
posted by ZeusHumms at 12:06 PM on May 29 [+] [!]

Can't say anything about those two, but for The Sopranos HBO subscriptions ebbed and flowed with the each new season.
posted by Gungho at 11:30 AM on May 29, 2011

At least AMC hasn't totally abandoned its original premise like so many other cable channels.

Huh? They abandoned that a long time ago. Used to be, AMC was a place to go to watch, weirdly enough, classic movies. You know, an American channel where you'd watch Movies that were Classics.

The first thing they abandoned was any reasonable pretense that they were showing classics, instead offering mostly a thin gruel of movies that just left the second-run theater or that were otherwise cheap.

Then they started devoting a big chunk of time to stuff that wasn't movies, or wasn't even about movies.

Nowadays, your only hope for reliably watching semi-classic movies is TCM. Unless they've gone down the dark side too in the past few months.
posted by ROU_Xenophobe at 11:55 AM on May 29, 2011 [1 favorite]

What most entertainment companies can't seem to figure out is that digital products have zero marginal cost (as you can produce unlimited copies for virtually nothing). Of course the people who produce the shows/movies/games/music deserve to be compensated for their time and effort, but no matter how much people want to believe in a Just World, people aren't payed based on how hard they work. Any starving artist will tell you that.

There's only one way to compete with piracy: you need to offer a service or a good that people are willing to pay for. Seems obvious, but only a few companies have grasped this. Steam works because it's slightly easier than pirating, it organizes your library of games nicely, and they (eventually) pass the inventory savings onto the consumer. Same with Netflix.

If people aren't willing to pay for your product then that's your problem, not the pirate's, and no amount of moral shaming will unhinge basic economic theory. Give people a reason to buy and they shall buy.
posted by WhitenoisE at 12:17 PM on May 29, 2011 [2 favorites]

What most entertainment companies can't seem to figure out is that digital products have zero marginal cost (as you can produce unlimited copies for virtually nothing). Of course the people who produce the shows/movies/games/music deserve to be compensated for their time and effort, but no matter how much people want to believe in a Just World, people aren't payed based on how hard they work.

You realize you just said, "Of course people deserve to be paid for their work, but nuh-uh." I mean, that's actually the logic behind what you have written. If you were right now to walk into a 7-11 and take anything off the shelf without paying for it, and your defense was, "Of course the manufacturers of these Hostess cupcakes deserve to be paid for them, but nuh-uh," you would go to jail for stealing Hostess cupcakes. That would be embarrassing.
posted by kittens for breakfast at 1:04 PM on May 29, 2011 [1 favorite]

I took WhitenoisE to mean something else. I think WhitenoisE meant that it would be nice if everyone was paid according to how hard they work, but it doesn't work like that. The creators of (insert your favorite cancelled show here) worked smarter and harder than creators for (insert your most hated over-rated popular reality show here) but isn't making any money from all that hard work.
posted by acheekymonkey at 1:25 PM on May 29, 2011

Hostess cupcakes have a non-zero marginal cost. It costs a real amount of money to produce each cupcake, package it, and ship it around the world. There are a finite amount of cupcakes. This is called scarcity.

A movie costs money to produce, but a digital copy can be replicated ad infinitum for nothing apart from the 0.0023 cents it costs to store on a hard drive. This is called information. In the past information was also a scarcity, but it is no longer a viable commodity in the 21st century.

A store owner who sells me a cupcake is providing me with a service in convenience because baking is time consuming and/or I wouldn't be able to make a better pastry if I tried. A store owner who sells me a digital copy of a film is providing a service that is less convenient than downloading, more expensive, and of exactly the same quality.

I am not defending piracy on an ethical level. I am saying that hoping people will part with their money because "it's the right thing to do" is not a very good business model.
posted by WhitenoisE at 2:04 PM on May 29, 2011 [4 favorites]

Says who? It's not like we're talking about an immutable law of physics here. Louis CK has a budget of $250,000 for his show. He could get by for years with a few hundred thousand fans dropping a $1 a show.

Now make Mad Men or A Game of Thrones work on that model. Louis CK can make his show for $250,000 (for a season) because its mostly one guy in a dumpy apartment being filmed by like a handheld camera.

I love the fine examples in this thread of the "I want free shit!" justifications for Bittorrenting HBO shows. You don't want to pay for cable, so you take the shows for free. Or, hey, don't want cable? Wait 6 months and get the shows on DVD. But you don't want to wait 6 months either, so you take it for free.

Come on, enough with the justifications. You want free shit, and you want it now.
posted by Justinian at 2:26 PM on May 29, 2011 [2 favorites]

Well, it's not so much that "I want free shit" - I have a house full of content that I've paid for - it's that there's nothing attractive about the Cable TV model.

I don't WANT to pay for channels I'd never watch, not in a million years: I don't watch sports channels, I'm downright offended by the idea of paying for advertising channels - if cable would let me choose my programming a la carte, I'd do that. Happily.
posted by AsYouKnow Bob at 2:33 PM on May 29, 2011 [1 favorite]

It's even worse for us in Europe - in the UK, I can currently watch episode 6 of the second series of Justified, legally.Or, I could have watched the series finale in HD, the day after it aired several weeks ago in the US and keep up in real-time to avoid spoilers from various sources. Case in point - iTunes over here just got the last episode of The Walking Dead this month...

For me it's about the time it takes to get shows over here. Yeah, patience is a virtue and I should just wait, but it also means I have to avoid all news coverage and overseas discussions about relevant TV shows.

I would gladly pay double or triple what I am paying for my lovefilm account (netflix equivalent here in the UK) to have access to what I know I could have access to for free via torrents.

Justinian, I don't disagree with you (which is why I don't torrent things) but it's frustrating seeing all these conversations about something like Game of Thrones knowing that the earliest I will see it is sometime in 2012 when they release a region 2 DVD box set.
posted by slimepuppy at 2:34 PM on May 29, 2011

See Justinian, there is no need for justifications because that's the way the world works and has always worked. If there is no tangible incentive to do the right thing people will take the path of least resistance. This is not hard to figure out, and you can wag your finger all you want but the last decade has shown that most people just don't give a shit.
posted by WhitenoisE at 2:39 PM on May 29, 2011 [1 favorite]

I mean, look at the list of Top Cable Programs linked to above: I'd put my own eyes out before I'd voluntarily watch any of that. And they expect me to pay for the privilege? ($80-, $100 a month to get fine programming like "Sharpay's Fabulous Adventure" ?!?)

I'd be more likely to pay more so that stuff WASN'T coming into my house. NOT paying for TV seems to be a stable compromise for me.
posted by AsYouKnow Bob at 2:40 PM on May 29, 2011

A movie costs money to produce, but a digital copy can be replicated ad infinitum for nothing apart

Yes, well, let me stop you at "A movie costs money to produce." Then let's not talk anymore.
posted by kittens for breakfast at 2:50 PM on May 29, 2011

I'd like to continue the discussion because I find the topic pertinent and interesting, but of course you're free to leave anytime you like.
posted by WhitenoisE at 2:53 PM on May 29, 2011

Well, if you insist. How in the world do you not see a connection between what it costs to make a movie or a TV show and whether or not anyone is paying for it -- whether that payment come in the form of advertising money, subscription service, or combination thereof? It is literally true that a digital copy of a movie or TV show costs nothing to manufacture, but obviously that digital copy is only the end result of a process that does require money to happen, and without money does not happen. Do you genuinely not see that these things cannot be created if nobody is paying for them?
posted by kittens for breakfast at 3:13 PM on May 29, 2011

I don't WANT to pay for channels I'd never watch, not in a million years: I don't watch sports channels

So don't pay. And wait for the HBO shows to come out on DVD which you can then rent for a pittance. But apparently waiting 6 months is also a non-starter.
posted by Justinian at 3:28 PM on May 29, 2011

I understand that fully. If a developer does not receive financial support, they will not develop. That has nothing to do with the business of selling products that already exist and are widely available. Long term industry stability is a distant and secondary concern to most consumers.

If I had it my way everybody on earth would be a conscientious citizen and contemplate the far reaching consequences of their actions. But I'm not the arbiter of moral fortitude and neither is MGM. It is not pragmatic to build a business around the way one thinks the world should be, strategy must be based on how the world actually works.
posted by WhitenoisE at 3:30 PM on May 29, 2011 [4 favorites]

I agree with that completely. But that doesn't absolve individual actors of the moral responsibility for their actions. It also isn't pragmatic for me to sell my car by leaving the keys in the ignition while hanging a sign on it saying you can drive it away as long as you paypal me $5000 later. But somebody stealing my car is still a thief.
posted by Justinian at 3:51 PM on May 29, 2011

It is not pragmatic to build a business around the way one thinks the world should be, strategy must be based on how the world actually works.

The industry has begun responding to this by making series' avaialble for purchase almost in sync with their first broadcast. I don't know how well it's working; I've been buying series on iTunes, though I don't like the 30% or so that's probably going to Apple, I like the idea that 70% or something like it is going into AMC's coffers in direct compensation for episodes of Mad Men, as opposed to something like a billionth of a percent of a cable bill, the rest of which is paying for things I'd like to kill with fire, like Fox News.

You can buy music directly and immediately on publication from artists' websites much of the time, the rest you can get from Amazon or iTunes or whatever. You don't have the choice of either subscribing to a nasty sub-duopoly with contemptible business practices and know your payment isn't really giving shit to the artist, or on the other hand wait six months to go buy or rent a disk. You can buy it from the publisher just as soon as it exists for public consumption. Movies are moving in this direction too. I'll be very happy when the same is true for television series.
posted by George_Spiggott at 3:51 PM on May 29, 2011

It is not pragmatic to build a business around the way one thinks the world should be, strategy must be based on how the world actually works.

Which is why studios, both film and television, are slow to move to digital distribution models. The current model actually works. Not as well as it used to, but it works as far as they're concerned, i.e. they get paid.

Movies and TV shows cost an immense amount to produce, and the fact that digital technology makes distributing them cheaper than it used to be does not do much to lower the actual cost of production. You seem to believe that because there is no marginal cost* for digital copies that they should be free. That isn't how the world actually works, and it's silly to demand that others change their business models to accommodate your beliefs.

*This is incorrect, actually. It does cost something to make a digital copy, as bandwidth and media are not free. Granted, it's a very small cost, but Netflix doesn't spend several million a year on bandwidth out of the goodness of their hearts.
posted by valkyryn at 4:04 PM on May 29, 2011

Says who? It's not like we're talking about an immutable law of physics here. Louis CK has a budget of $250,000 for his show. He could get by for years with a few hundred thousand fans dropping a $1 a show.

justinian is right. Louie is directed, produced, written, edited, and primarily acted by one guy. Here's the full crew. It isn't very big. Game of Thrones, on the other hand, has more actors than Louie's entire production staff, actors included. None of those people are volunteering.

Big shows cost big money.
posted by valkyryn at 4:14 PM on May 29, 2011

Yes, the current model still works to some extent, but it's clearly dying and probably will not work in a few short years.

You seem to believe that because there is no marginal cost* for digital copies that they should be free.

No, I don't think they should be available for free, but they are available for free. I don't think cars should be free either, but if tomorrow people could easily, quickly, and cheaply make an exact replica of your car with very little chance of getting in trouble, most people would do it instead of worrying about Ford's 2013 line-up or the job security of the auto workers.
posted by WhitenoisE at 4:34 PM on May 29, 2011 [4 favorites]

If I had it my way everybody on earth would be a conscientious citizen and contemplate the far reaching consequences of their actions. But I'm not the arbiter of moral fortitude and neither is MGM.

Well, I mean, if you're arguing that piracy is happening because people are assholes and nothing can make them otherwise, I'm not sure I agree with that, but okay. If we agree that these people are being assholes, I don't have anything left to argue.

If the argument is just that what the networks are presenting is sub-optimal, that's a different story, as far as I'm concerned. I mean, there's no real question to my mind that the Napster of 2000 was superior in every way to the iTunes of 2011, as a music service -- the content was much broader, the software was much less bloated-er, and you didn't have to think about how much of your money was going to Apple. It was better. That it was free was almost beside the point. But once there came a viable alternative that was legal, even if it were inferior, that was the ballgame.

In cases where the content you want just isn't made available at all, I think piracy is a lot more benign. I don't mean, "Oh, I wish I could just download Fast Five, the theater is two miles away and I hate all those fucking kids"...well, sorry, man. You know, I wish I could watch "Breaking Bad" with Krysten Ritter sitting in my lap. Hell, I wish I could watch season 3 on DVD, which I feel like I should be able to do since it ended like a year ago. But AMC has decided that I can either buy it from iTunes or Amazon Video, clogging my precious hard drive with data, or I can suck it up and wait till they eventually release a disc set, and that does blow but it's not as though it is unavailable to me. It's just not available the way I would like it to be. Well, cry me a fucking river. But like, if you want to watch something and it is not available to you in any authorized form, at any price, I don't know.
posted by kittens for breakfast at 4:44 PM on May 29, 2011

I see a lot of talking but I don't see any Mad Men/ Zombie Horror crossover.
posted by The Whelk at 4:52 PM on May 29, 2011 [5 favorites]

I cried a river. Then a pirate ship went upstream and plundered True Blood season 3 and some porn.
posted by The Hamms Bear at 4:56 PM on May 29, 2011

What really bugs me about the 'it's stealing!' crowd is that they ignore so much to make that argument. If you steal a cupcake, then the store doesn't have a cupcake to sell anymore; they've taken a real loss. But if one person could walk into a store, one time, point a little machine at a cupcake, and then make copies that are perfect in every way without depriving the store of anything, that's not stealing in any kind of classical sense. Calling it stealing just muddies up the reality of what just happened.

Further, if you could transmit cupcakes for free over the Internet, then the store would need to adapt its business model. They could still sell cupcakes, but they couldn't charge that much for them; they could price in some convenience, but if they try to price their product too high, they won't sell cupcakes anymore. Each individual cupcakes doesn't actually cost the store any more to make than anyone else, and trying to price them like they do is foolish.

And all the moralization in the world does not change this. The cupcake providers of the world are in the unenviable position of competing with tens of millions of tiny cupcake factories. Their business model is oriented around cupcakes being expensive to make, but they no longer are. They're expensive to DESIGN, but once one has been designed, they cost nothing to make at all. And trying to use the government's monopoly on weapons to try to say that this isn't true is very much like fighting the War on Drugs; we just end up opposed to physical reality, and the harder we fight, the more society as a whole loses.

We need to adapt society to reality. It doesn't work the other way around.

As Bruce Schneier says, trying to make bits not copiable is like trying to make water not wet. Building a business model around the government using its police, courts, and jails to say that water is not wet is a recipe for social misery.
posted by Malor at 5:07 PM on May 29, 2011 [4 favorites]

Further, if you could transmit cupcakes for free over the Internet, then the store would need to adapt its business model. They could still sell cupcakes, but they couldn't charge that much for them; they could price in some convenience, but if they try to price their product too high, they won't sell cupcakes anymore. Each individual cupcakes doesn't actually cost the store any more to make than anyone else, and trying to price them like they do is foolish.

If cupcakes no longer have any value, you end up with:

(a) Cupcakes that are made out of the cheapest ingredients possible (e.g., sawdust)
(b) No cupcakes
posted by kittens for breakfast at 5:14 PM on May 29, 2011

It seems like the one-word answer to a lot of the hand-wringing is Netflix. As long as cable companies refuse to offer a la carte services, there is a huge potential market for services like Netflix that will. It's mainly the technology and consumer awareness that are holding things back. It's like when the dotcom bubble burst and people said it was proof that no one could make a profit on the Internet.
posted by Pants McCracky at 5:17 PM on May 29, 2011

We need to adapt society to reality.

Is anyone arguing otherwise? As far as I can tell there are two basic positions in this thread.

1) Media companies need to adapt to reality and if they don't it is their own fault when all their stuff gets pirated and there isn't anything wrong with that. Or:
2) Media companies need to adapt to reality and, while they're idiots if they don't, the moral responsibility for pirating media is still borne by the people doing the pirating.

Nowhere in there is anyone arguing that companies and artists don't have to adapt to changing technology.

I'm saying that just because HBO and AMC et al need to adapt to the changing times doesn't mean people who pirate all their shows aren't assholes. Both "many companies are dinosaurs" and "lots of people are assholes" can be true at the same time.
posted by Justinian at 5:31 PM on May 29, 2011 [2 favorites]

AsYouKnow Bob writes "I mean, look at the list of Top Cable Programs linked to above: I'd put my own eyes out before I'd voluntarily watch any of that."

You are missing out, Sponge Bob is some good stuff.
posted by Mitheral at 5:47 PM on May 29, 2011

Justinian, I don't believe anyone is arguing that there isn't anything wrong with piracy. I see the two basic stances as

1)Media companies should adapt and if they don't their stuff will be pirated. The moral responsibility is still bourne by the pirates, but moral currency won't help artists feed their families.

2) But piracy is BAD and you shouldn't do it!
posted by WhitenoisE at 5:51 PM on May 29, 2011

Yes, piracy is BAD and we shouldn't do it. But we are not going to convince people not to pirate by calling them assholes, we will convince people not to pirate by rewarding those who don't. Currently it is the opposite: we are not rewarding paying customers, we are penalizing them with DRM and bloat and making piracy even more attractive.

Calling pirates assholes over and over again is just beating your head against the wall. It's not going to change anything so that's why I don't understand how it's a valid argument even if it's true.
posted by WhitenoisE at 6:04 PM on May 29, 2011

1) Media companies need to adapt to reality and if they don't it is their own fault when all their stuff gets pirated and there isn't anything wrong with that. Or:
2) Media companies need to adapt to reality and, while they're idiots if they don't, the moral responsibility for pirating media is still borne by the people doing the pirating.

I think that the thing people are objecting to is the feeling that 2 comes with the silent 'and you advocates for 1 are a bad person for saying that piracy will happen and they they should adopt that'. I don't tend to pirate media (I'd rather pay a sane fee, or just use BBC iPlayer), but I can see that the companies that don't adapt will get steamrollered and if they make artistically high quality stuff that's a shame because I'd prefer a world where they do well. It's more nuanced.
posted by jaduncan at 7:15 PM on May 29, 2011

Anyway, as interesting as these subjects that we've certainly never covered here before must be to the people who love to say the same things about them over and over again, is anyone still interested in addressing the actual subject of the FPP? It's a good article, I think, and whether AMC stays AMC may carry some importance wrt whether television stays in the "golden age" that critics of the last few years have been talking up.
posted by kittens for breakfast at 6:51 AM on May 30, 2011

is anyone still interested in addressing the actual subject of the FPP?

I don't know, are you?
posted by Justinian at 12:01 PM on May 30, 2011