CES 2011: Wrangling Rights for Cloud-Based Content

LAS VEGAS - As any iTunes or Netflix user can tell you, engineers have largely solved the technical issues behind providing on-demand, cloud-based content. So why isn't every movie, song, video game, book and television show available streaming to computers and phones at this very moment? According to the panelists at the CES 2011 “Content in the Cloud” seminar, the answer is ownership rights.

Even though consumers continue to embrace more and more advanced technologies, media companies and entertainment workers' unions have attempted to slow down progress for fear that new distribution models will cut into their profits. And while they squabble over who should get the biggest slice of the cloud computing pie, otherwise law-abiding consumers turn to piracy, and the porn producers hosting their own conference this week in Las Vegas, the Adult Entertainment Expo, make the real distribution breakthroughs.

"Technology is easy — it's already there. The problem is rights, and the rights are a mess," said Mark Vrieling, CEO of ScreenPlay, a steaming media management company. "The fact that the rights restrict the access to content by the users probably drives the majority of piracy. The rights structures have to move into the 21st century and out of the 19th."

Negotiating over the cloud

In the past, directors, actors, studios, producers, movie theaters and television stations all engaged in complex negotiations over who would gain the rights to show which movie when. The percentage of profit each party received changed as the movie moved from theater to video to TV.

Cloud content, which could potentially provide infinite replays of a movie, song or television show in any venue through any device, makes those decades of carefully crafted legal agreements all but obsolete.

Rather than realizing this new paradigm, content produces have ignored it, concentrating instead on consolidating their control over older technologies like DVD or cable television, said Kurt Smith, vice president of sales for Verizon Digital Media Services.

This focus on older media has led to cloud services such as Netflix getting movies later than any other medium, limitations on what can be shown on sites such as Hulu — and in some cases, entire movies or shows banned from Internet broadcast.

When media companies do attempt to play the cloud game, the variety of options further complicates the rights structure. Right now, users can either pay for each streaming of a video, such as from Video On Demand (VOD), or subscribe to a service that allows for multiple streams, such as Netflix. Complete downloading, such as from the iTunes store, takes the movie off the cloud, preventing users from accessing it anytime, anywhere.

That fragmented delivery scheme means more delays and cloud blackouts for the consumer, since unions, producers and content providers need to negotiate new deals for each distribution method, said Mark Friedlander, the national director of new media for the Screen Actors Guild (SAG). However, Friedlander did note that the unions such as SAG and the production companies are better at cleanly and quickly negotiating digital friendly agreements than they were five years ago.

Adult entertainment to the rescue

Tantalizingly, the adult entertainment company Pink Visual has developed a unified cloud distribution system that could eliminate those multiple negotiations. With Pink Visual's cloud system, users can rent with the option to buy. This best of both worlds offering could unify negotiations over rights by providing VOD, Netflix and Amazon-like distribution schemes in a single service, said Liam Colins, the director of special projects at Pink Visual.

After paying to stream a movie, or viewing it under their subscription service, users can pony up an additional fee to deposit that film into their cloud locker. Users own the movies in their locker, and can then watch any movie in their locker as many times as they want with no additional fee, even if they decide to switch from a monthly subscription to the pay-per-view membership option. However, under this system, users retain the universal cloud access to their media that they lose in the iTunes model.

If mainstream media companies want to retain customers and prevent piracy, they need to give users the experience they want, the panelists agreed. And to do that, it's looking like media companies will need to stop negotiating contracts for movies, video, TV and online. Instead, the panelists said, media companies should consider copying Pink Visual's model and treat everything as the computer files they end up as.

"It's not about 'can', it's about getting paid," Vrieling told TechNewsDaily. "But it's a new world out there. For me, it's all just data."