[opendtv] Re: News: Users Don't Want VOD To Be C.O.D., Want It Free

  • From: "John Willkie" <JohnWillkie@xxxxxxxxxx>
  • To: <opendtv@xxxxxxxxxxxxx>
  • Date: Tue, 17 May 2005 17:29:45 -0700

Fair use rights of PVRs are protected by the Betamax decision?  I find this
to be an outrageuous assertion.  Do you have any case law even approximately
on point?  (I suspect not.)

Let me engage in judicial minimization.  Do you think that a product (make
it legally, and buyers can do what they want) is EXACTLY the same as a
service (where the service provider offers terms of service and can monitor
usage after the initial "sale')?

It could be -- the pending MGM/Grokster case before the Supremes -- that a
service will be made analagous to a product.  But, having ACTUALLY READ all
the decisions that culminated in the Betamax decision, I can find no way
that one can equate the betamax (product) decision with services like

Virtually all the case law I've found is contrary to the possibility.

And, I'm not talking about my feelings or how my ox might be gored, just
thinking about the actual LAW.

John Willkie
----- Original Message ----- 
From: "Craig Birkmaier" <craig@xxxxxxxxx>
To: "OpenDTV Mail List" <opendtv@xxxxxxxxxxxxx>
Sent: Wednesday, May 11, 2005 4:36 AM
Subject: [opendtv] News: Users Don't Want VOD To Be C.O.D., Want It Free

> "Voluntary audience interactions are worth far more than impressions..."
> Josh Bernoff is at it again with new research on the emerging markets
> for cable based VOD services. As I have been predicting, VOD is
> facing an uphill battle against the PVR, which offers viewers the
> ability to cache their favorite programs (legally), with the added
> benefit of being able to skip the commercials.
> But VOD could find a place in American homes with a modified approach
> to the presentation of targeted advertising in place of the ads that
> ran when an advertiser supported program aired originally. As Bernoff
> points out in the following story, advertisers place far greater
> value on interactions initiated by the viewer, than the presumed
> "impressions" upon which today's shot-gun ad supported programming
> models are based.
> The problem is one that i have noted frequently as a major drawback
> to "Free VOD" services...
> You can't give away something if it costs you money. Unlike PVRs,
> which are currently protected by the Fair Use rights established in
> the Betamax decision, cable operators cannot make programming
> available via their VOD systems without permission form the content
> owners. At the moment the content moguls are demanding additional
> payments to offer programs that are available OTA, and in extended
> basic cable tiers, via their VOD systems. The cable companies note
> that with VOD the viewer cannot skip commercials, and that they have
> already paid for the content once via subscriber fees and/or
> re-transmission consent fees; they are generally refusing to pay
> extra to offer these programs on demand. And then there is the
> reality that the cable systems must recoup the investment in the VOD
> infrastructure - using it to deliver free programming does not
> generate any revenues.
> For FVOD to succeed, a new advertising model is needed. In general
> terms the cable system must collect additional revenues from
> advertisers to pay for the delivery infrastructure and the content.
> Then a portion of this revenue must be shared with the content
> owners. The most likely prospect for such a model is to replace the
> shot gun ads with targeted ads that will stimulate the audience
> interactions that advertisers are willing to pay a premium for. This
> might take the form of an "opt in" ad at the beginning of a program
> with in-depth info about a product and the ability to click through
> for more info.
> Regards
> Craig
> Users Don't Want VOD To Be C.O.D., Want It Free
> by David Kaplan, Monday, May 9, 2005 8:00 AM EST
> THE LACK OF FREE CONTENT appears to be suppressing demand for
> video-on-demand (VOD) television services, suggests new research from
> Forrester Research.
>   VOD is now available to nearly 19 million homes--or about 75 percent
> of the U.S. digital cable universe, Forrester's Josh Bernoff notes in
> his report on the various ad models for VOD. While movie buys and
> usage of subscription content such as HBO On-Demand are increasing,
> the model is languishing to some degree, largely because of the
> reluctance of cable operators to pay for quality programming.
>   Comcast, the nation's number one MSO, refuses to pay directly for
> FVOD content. For the most part, other operators feel the same way,
> Bernoff said.
>   "With cable bills at an all-time high and satellite picking off
> price-conscious subscribers, cable is sticking to its story: 'We paid
> for this content on linear channels, and we won't pay extra for
> on-demand rights,'" he said.
> Selling advertising is therefore the obvious solution to this
> problem. As Bernoff notes, for advertisers, ads in on-demand programs
> could win back some of the viewers lost when digital video recorder
> users skip commercials. For networks, these programs could increase
> audiences by capturing viewers who missed programs at their original
> airing time. And if ads encourage the producers of popular programs
> to place them in free on-demand areas, consumers--and cable
> operators--will also get what they want.
>   Still, Bernoff said that despite the best efforts of the advertising
> industry, marketers have yet to get excited about VOD.
>   "[VOD] experiments have brought in less than $15 million in ad
> revenues so far," Bernoff said. "Why? Because there's no viable model
> yet for on-demand advertising."
>   The main hurdle to overcome is measurement, Bernoff said. Once a
> viable system of metrics can be instituted, "advertising on demand"
> will help gain approval from marketers to support VOD.
>   As for the types of models advertisers and cable operators should
> look to, Bernoff cites TiVo's Showcases--which allow viewers to
> opt-in and watch long-form spots from advertisers--and Google, which
> sponsors "pay by the click."
>   "TiVo showcases benefit from links in spots," Bernoff said. "TiVo's
> 3 million subscribers can view its long-form ad showcases--which are
> a lot like Cox's FreeZone videos. But TiVo doesn't sell its showcases
> just hoping that viewers will trip over them. Instead, it drives
> viewers to the long-form ads, using links from its main menu and from
> traditional TV spots. Ads for the movie "The Interpreter," for
> example, contain invisible "triggers" that pop up an icon on TiVo
> screens during an ordinary commercial. Viewers who are interested in
> the movie can jump into the showcase and learn more."
>   So the key idea is that TiVo Showcases are worth far more "when you
> drive traffic to them."
>   As for Google's pay-by-the-click sponsorship model, if you search
> for "Seasonal allergies"--and GlaxoSmithKline is happy to pay a dime,
> or maybe a dollar, to direct you to "ibreathe.com"-- you can learn
> about Flonase, Bernoff noted, by way of example.
>   "Paying by the click has turned search advertising into a
> billion-dollar business that accounts for nearly as much revenue as
> online banner and display ads," he said. "In the same way, we believe
> advertisers will pay far more for each viewer who clicks through to
> its video showcase. Voluntary audience interactions are worth far
> more than impressions."
>   Bernoff advises advertisers to invest in advertising on-demand
> format as soon as Comcast and Time Warner Cable make it available,
> which he expects to happen within the next 18 months.
>   As for viewing habits, for people with digital video recorders, all
> video is video-on-demand, as a new survey from Newton, Mass. Tech
> analyst Lyra Research finds that DVR users watch more VOD programs
> than non-DVR users, and these findings held true for both free and
> paid VOD.
>   While it seems a bit surprising considering the general assumption
> that DVR and VOD technologies are competing for viewers' usage, this
> is not so, said Steve Hoffenberg, Lyra's director of electronic media
> research.
>   "We had anticipated that the DVR users would particularly watch less
> free VOD than the non-DVR users because DVR users can readily
> time-shift and control their TV shows without using VOD," Hoffenberg
> said. "Our findings may be because VOD offered content that was not
> available via broadcast or because the DVR users are more experienced
> than non-DVR users with time-shifting, and more comfortable operating
> menu-driven systems for selecting programs. This will be an important
> topic area to clarify in future DTV View research."
>   Right now, however, VOD and DVR usage is fairly low, Hoffenberg
> noted, adding that the study looked at 350 cable-TV VOD users across
> the country. Also, for VOD, the program offerings are limited, and
> the technology doesn't inspire much consumer enthusiasm, at least
> according to some of the respondents, he said. As one survey
> respondent commented, "VOD is still a work in progress."
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