Tuesday, November 29, 2016

Ad free CBC? Why not shift money to creators?

In response to articles discussing an advertisement free CBC, I had the following to say:

When I was asked to elaborate, I realized I need to give context as most people in the content industry do not think the same way as I do as a system administrators with decades of experience in the technology industry.

The layered approach to communications technology

4134   COMMISSIONER DENTON: Mr. McOrmond, interesting brief. I see it is informed by an internet idea of the world.
4135   So in your preferred solution then there would be essentially some kind of bandwidth to the house, whether wired or wireless, it would be part of a municipal infrastructure such as sewage or water, and applications would float on top of that or through it.
4136   Now, what happens to the carrier in that instance?
4137   MR. McORMOND: I am essentially suggesting that we no long would have carriers in that instance. They would be replaced by a utility and a free market.
4138   COMMISSIONER DENTON: Right. So you realize this is formally heretical and they will be onto you for this?

The above is from an intervention I made in front of the CRTC in 2009.  I'm not informed by an Interned idea of the world, but informed by the OSI model upon which most digital communications infrastructure is designed.  This model emerged in the late 1970s and early 1980s, and was already in-place when I was learning about digital networking in the 1980's before I or most people heard of the Internet.

The core idea is quite simple:
Its goal is the interoperability of diverse communication systems with standard protocols. The model partitions a communication system into abstraction layers. The original version of the model defined seven layers.

A layer serves the layer above it and is served by the layer below it. For example, a layer that provides error-free communications across a network provides the path needed by applications above it, while it calls the next lower layer to send and receive packets that comprise the contents of that path. Two instances at the same layer are visualized as connected by a horizontal connection in that layer.

When we are talking about the layers that together offer wired Internet services, I separate the layers tied to geography (layers 1 and 2) from layers above that.  I consider all digital communications (whether it is ISP services providing IPv4 or IPv6 public routing, IPTV, cable or telephone) to be "over the top" of that service.

This is quite different than how the converged phone and BDU industries define it which is that only competitors to their own vertically integrated services are "over the top".  While I am using a neutral definition that is based on the underlying technology, they are using a business definition which privileges existing vertically integrated companies over the interests of a competitive marketplace.

This creates very different language between people from the Information Technology industries and people who are part of the converged telecom/BDU industries.

How does this layering impact the content industries?

When I look at the content industries I also see a number of layers.  Like my separation between physical networking and services that are built "over the top" I separate industries involved with the creation of content from those who are involved in the communication or distribution of that content between creators and audiences.

In the most recent "Canadian Content in a Digital World" consultations the type of content discussed most often was television ("small screen" format video content, contrasted with "big screen" format movies).

When some people think of television they bundle together everything from the first ideas that a scriptwriter has all the way to the wiring (aerial, cable/satellite/IPTV receiver) that plugs into the television.  Most stop there and at least don't consider the television manufacturers to be part of the same industry.

When I think of television I see a series of layers with interoperable interfaces between them.

  • Content generation:  There are a large number of creators involved in the production of scripted (and even unscripted) shows. While there are different layers within, I feel comfortable as an audience member grouping those layers together even if the different layers are critical within the industry.
  • Content distribution:  There are many interoperable and competing methods, with the following being only a few examples:
    • physical media distribution, such as DVDs, through online and physical retailers
    • online content libraries, which includes flat-fee subscription services like Netflix or online retailers like Google Play or Amazon Video (once launched in Canada to compliment their existing physical DVD distribution business)
    • Broadcasting and BDUs, which provide pre-programmed streams of content (Note: I strongly reject claims that online content libraries are more similar to broadcasters than they are physical media retailers)
  • Content access: there are a wide variety of access technologies, and an increasing number of these are networked within the home.  One content access device (receiver) may be a different home networked device than the screens used to view and the speakers used to hear, and we need vendor neutral interoperability between these devices.

In my primary submission to the DigiCanCon consultation I focused on how the government managed (I suggest mismanaged) convergence.  The transition could have been a transition from purpose-built analog networks where what was on top of the network was fixed to one that could be modeled after the OSI networking model with interoperability between services built on top of each other.

I believe the greatest threat to the content industries is ties to specific brands or technologies on other layers of the communications stack.  If, as an example, a screenwriter believed that their future is tied to that of "broadcasting" then they will try to force any type of content distribution -- even disruptive technologies that will likely replace broadcasting for most audiences of scripted programming -- to act as if they were the same "broadcasting".

This policy is of great benefit to the "broadcasting" industry, who would then have less to fear from competitors hobbled by a regulatory environment that is mismatched for these competitors.  It is, however, extremely harmful to the interests of the content industries as well as their audiences.  There are many features of some of these disruptive technologies which would benefit creators that they won't be able to harness if they incorrectly identify suppliers of these technologies as opponents.

The Innovator's Dilemma

Much of the dynamic we can see between the content industry, broadcast industry, and Canadian audiences can be explained by Clayton Christensen's 1997 textbook The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail.

Over-simplifying: companies who were successful in one market have a hard time providing services based on disruptive innovation that is likely to replace the older market.

This can be seen with broadcasters, and those that see themselves as dependent on broadcasters, claiming that Netflix and other "foreign" companies are extracting money out of Canada.  Not discussed in this attempt to waive the Canadian flag is the fact that there are no domestic competitors because the incumbent content distributors are themselves "broadcasters" who see this disruptive innovation (online content libraries) as a threat. They have been unwilling to offer that service, and have done everything they can to block competitors.  The closest that will remain at the end of the month is CraveTV which isn't competitive with first-run content libraries like Netflix, most likely because it is owned by a parent company that doesn't want to disrupt its existing broadcasting and BDU services.

My own experience trying to watch Supergirl in Canada is an example of what happens.  As the "broadcast" industry was tied to specific geographic regions, much of the content licensing models have been as well.  Canada is carved out and one entity, in this case (and all too often) a broadcaster (Showcase, owned by Corus Entertainment), is granted an exclusive license for the region of Canada.  That broadcaster then doesn't want online content libraries to compete with broadcasting so doesn't advertise (or sometimes allow to be offered) legal alternatives to broadcasting, nor provide services to paying customers who have opted for existing legal alternatives.

I was essentially forced by Showcase to resort to using a VPN service to bypass region restrictions and watch Supergirl from a US source.  While I paid money to Showcase for a season pass, Showcase hasn't been willing to update the content library offered through Google Play with new episodes.

I had the same problem with other shows including Game of Thrones and BBC Class which Bell apparently would prefer I infringe copyright than find out about legal alternatives to broadcasting.

Personally, I "cut the chord" (unsubscribed from cable service) years ago, and don't want to go back any more than I want to give up indoor plumbing or other modern conveniences.

An Ad free CBC?

CBC is a large corporation that receives a large amount of public money for all the layers that exist within it.   I believe taxpayers should be looking more closely at each layer and ensure that it is taxpayers and the politicians that represent us that more closely direct the specifics we want we are willing to pay for:

  • Canadian content creation:  I want to see more of this.  This means not only am I willing to have my tax money going towards content creation, but that I want the results to be available to me.  I don't use the services of broadcasting (OTA or via a BDU), so content that is only made available via broadcasting isn't made available to me.  As I wrote in my submission, public funding should be conditioned on wide public access.  This means being neutral on the wide variety of content distribution mechanisms and services.
  • Domestic and foreign radio broadcasting:  This is the cheaper of the two types of broadcasting, both for transmission and reception.  This is an important way for Canadians domestically (especially in rural and remote areas), as well as abroad to get news from Canada.  Terrestrial audio radio is accessible in locations which can't be served by the Internet.
  • Television broadcasting: I only believe in subsidizing television broadcasting in rural and remote areas not able to be adequately served by commercial broadcasters.

A proposal to add $318million more to CBC's budget to remove advertising from broadcasting doesn't sound appealing to me.  If we were talking about $318million more for Canadian content creation that would be accessible to me as an audience (public money conditioned on being neutral as far as content distribution systems) then I would be in favor.

Even if we were talking about transferring budgets away from television broadcasting to subsidize emerging content distribution as a policy tool to reduce copyright infringement, I would be in favor.

I don't see anything of value to me of making broadcast television ad-free.  It might make that broadcaster more competitive with online services that are paid for by subscribers rather than advertisers, but I think that is a very inappropriate abuse of public funding.  The last thing I want is my tax money funding a broadcaster which would think of online content libraries as a "competitor" (or some extremists claim "industrial dumper") and be denying me access to content which I partially funded.

A more future-facing proposal


I believe we should be creating structural separation between the major layers in the CBC.  Specifically, content creation would be structurally separated from any type of content distribution.

As part of that structural separation some of the money currently paid to the content distribution layer (the broadcaster) should be shifted to content creation.  I do not believe it is advertising that conflict with CBC's public interest mandate, but the conflict of interest that arises whenever content creation and content distribution are thought of as a bundle.

In markets where the broadcasting arm is seen as being in competition with commercial broadcasters, we really need to finally ask ourselves if a publicly funded content distribution service should be in that market at all.

And yes, it wouldn't make sense to call the Canadian Content Creation Corporation (CCCC?) the CBC any longer...
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