Are Geographic Restrictions On Content Obsolete?
from the seems-like-it dept
I know that every time we embed a Hulu video here or link to another content site that has geographic restrictions, our comments light up with complaints. There is something just naturally frustrating about some internet company deciding I can’t see a video because of where I happen to be sitting physically. There’s obviously no technological reason for it, and all it serves to do is anger people. But, of course, the reason for it is that the content world’s old way of doing things was to offer up separate licenses in separate geographies — back when that made sense. On the internet it doesn’t make technological sense. The problem, as Michael Geist is noting, is that it still appears to make business sense for companies selling those rights.
Geist is careful to point out that the business model of geographic licensing of content is old but not necessarily obsolete. I’m going to ask the next obvious question: aren’t they obsolete? The only reason that geographic restrictions used to make sense was because you needed to do deals with local gatekeepers to make that content available and to promote it. But when you’re dealing with content on the internet, that’s no longer true. The borderless nature of the internet takes down those barriers. Businesses should be rejoicing that the old baggage and blockades and gatekeepers — and all associated expenses — are no longer necessary. They can now distribute their content worldwide with no additional hassle. That should be celebrated. But, of course, since business models were structured under those old systems where gatekeepers mattered, the content providers are addicted to that structure, and the revenue promises that come with it. However, it seems like only a matter of time until businesses start to recognize the sheer inefficiency of doing things that way, and stop wasting so much time with geographic restrictions on a platform where such restrictions make no sense.
Filed Under: business models, geography, licensing, restrictions
Comments on “Are Geographic Restrictions On Content Obsolete?”
They still make sense today. Monopolies (e.g. those granted by copyright) benefit from price-discrimination.
it makes business sense for a bunch of reasons, mostly dealing with the local market price for goods. a movie in the us might be $10, and might be $20 in japan, and $0.50 in a third world country. it would be incredibly silly for any business to either sell at too high or too low of a price for a given market. setting the price to the lowest all over the world would deny them the high price benefits of some markets, and setting the price to the highest worldwide price would deny them access to lower price markets.
geo is the scheme because it matches with the political systems, tax regimes, and the like. it is just as natural as coca-cola being sold for different prices in different parts of the world. you dont get upset at them for geo-restricting their products (and they do, try to import cheap coke products from another country…)
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Govt granted monopolies don’t make sense. They maybe good for big business and tax collectors but they’re bad for society as a whole.
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where is the discussion about monopolies? this is just individual companies granting rights to individual works under contract. nothing is stopping you or anyone else from doing the same with your own works, or doing it differently for that matter, if you can find people to do business with.
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First of all regional locks exploit govt granted monopolies (copy protection laws). So yes, you did say something about monopolies.
Secondly, broadcasting stations have monopolies on broadcasting spectra. That gives others who don’t have a license to use those broadcasting spectra (but have an inherit right to use them without a license) a government granted disadvantage. Same thing applies to cableco monopolies granted by governments.
Thirdly, even restaurants often refuse to play independent music because they might have to face expensive lawsuits against collection societies under the pretext that someone “might” infringe. For example see
http://www.techdirt.com/articles/20090109/1823043352.shtml
and of course this only harms content creators.
Re: Re: Re:2 Re:
“First of all regional locks exploit govt granted monopolies (copy protection laws).”
Unless you are arguing that anyone should be allowed to circumvent those locks of course.
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also see
http://www.techdirt.com/articles/20100611/0351569781.shtml
http://www.techdirt.com/articles/20091214/0857127338.shtml
among the others (there was a more recent one that I can’t find right now).
Re: Re: Re:3 Re:
http://www.techdirt.com/articles/20100518/2341299481.shtml
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Hey, Mike, since we’re talking of readers complaining… can you make your links descriptive, like any other decent blog does? I really don’t want to click-through to every reference posted… a few words of the title of the post will help so much. Thanks!
(Sorry for hijacking your discussion, please go on)
Re: Re: Re:5 Re:
Hey, Mike, since we’re talking of readers complaining… can you make your links descriptive, like any other decent blog does? I really don’t want to click-through to every reference posted…
Hmm? We’ve always tried to make the link text descriptive. What about it is not? In fact, we purposely avoid things like link texting “this article” and instead make sure that the link text is descriptive.
Re: Re: Re:6 Links
I believe he means links such as this: http://www.techdirt.com/articles/20100518/2341299481.shtml
That doesn’t tell us anything about what the article is. Obviously it is relatively easy to make “our” links descriptive, but if you make the url of the post more descriptive (beyond just the date and some sort of counter which tells us nothing), then that would be helpful.
Re: Re: Re:7 Links
I agree on this. I share a lot of TD links around between friends. It would be helpful to be able to distinguish between them at a glance.
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“it makes business sense for a bunch of reasons, mostly dealing with the local market price for goods. a movie in the us might be $10, ……
(rant that has NOTHING to do with digital replication and near-zero distribution costs snipped)
it is just as natural as coca-cola being sold for different prices in different parts of the world. you dont get upset at them for geo-restricting their products (and they do, try to import cheap coke products from another country…)”
All of which has NOTHING WHATSOEVER TO DO with the topic at hand. What you are describing is a model that already exists for PHYSICAL goods that a) use physical scarcities and b) have to be moved around from place to place PHYSICALLY.
Welcome to the internet. Please look around, and you will see there are NO restrictions to either geography, distribution, or replication, as long as the information is digital. These DO NOT APPLY and are NOT necessary in ANY way to the moving of information (digital bits, copies, etc) to anywhere in the world.
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Monopolists think that just because monopoly prices can be charged that they should be charged and so the government should go out of its way to grant and enforce monopolies. Forget the social harm monopolies cause, that doesn’t matter, monopolists are only interested in their own welfare.
5 more posts. keep going mike.
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It must be Friday which is why you’re not at least making an effort to say something meaningful.
Geist is careful to point out that the business model of geographic licensing of content is old but not necessarily obsolete…..
RIIIGHT so now hes defending something that inconvenience’s millions
I really hate lawyers….all of em.
Re: Congratulations, Einstein.
Why are you blaming lawyers? Lawyers aren’t running around licensing content under geographic restrictions.
I know! Because you’re one of the dummies that has bought into what rich people tell you, namely that, “Lawyers are what’s wrong with this country.”
I’ve got news for you, Einstein. The rule of law is the only thing that prevents this country from becoming even more of a plutocracy/kleptocracy. You should bring coffee and donuts to the nearest lawyer and thank them for existing to remedy your grievances against government and big business.
In some areas of business they might make sense, but in others they don’t. Take DVDs for example. The region encoding scheme is cited as being “necessary” to “prevent ‘piracy'”, when all they do is make users angry and give them reason to download regionally unavailable films illegally or buy from bootleggers.
The developers of Half-Life, Valve, found that when they did a simultaneous worldwide release of a game, the illegal downloads dropped quite a bit and users praised them for not delaying for some region-based BS. It’s a shame movie companies are too blind to see what customers really want.
As more people learn to self-publish, I think the obvious answer is no.
I just put a CD up for sale on iTunes and it was my choice to choose countries iTunes was allowed to distribute it to.
If I had arrangements with other companies to distribute in other countries, then yes, I could see localized distribution necessary. But I’m not a multi-national company with reciprocal agreements that I need to manage.
Here is how much those things make sense.
Try it on Google or Bing an see what it happens.
heroes season 1 episode 1
Making extra money from a group of poor suckers is never obsolete
If you want to give discounts to poorer nations, you need em.
There’s no two ways about it. You have no choice if you want to charge pennies to the poor countries because they can’t afford the full freight. Or if you want to give the poor countries free content because you like them, the same holds.
I see this all the time...
Example 1: I know a film maker who was offered $50K for distribution rights in France. He took it. His total download sales for the rest of the world on all channels has been less than $10K. Was he stupid or immoral for selling the rights in France? No, he’s just trying to make as much as he can (even though $60K is not even close to what he spent on the film). Although it makes no technical sense to carve out territories, it can make a hell of a lot of financial sense. And when your personal bank account is involved, it’s very rare that technical logic wins out over financial logic.
Example 2: I was negotiating an on-line distribution agreement with a major media company for great content. They said their pre-existing agreements require them to not only block by geo-IP lookup, but also by credit card. So, someone using Wi-Fi in a New York Borders might not be able to download from my site if they don’t have a US credit card, but they could turn around and buy the DVD off a shelf. Was the media company stupid or immoral for requiring that restriction? No, they had multi-million dollar pre-existing agreements with big international distributors. Those agreements might have had an idiotic clause, but they probably agreed to it because the overriding deal was worth a heck of a lot more to them. And was I stupid, or some kind of “Yankee imperialist” (as some people outside the US accuse me of when they can’t buy from us) for going along with it? I don’t think so; I just wanted to land an important deal, so I had to agree to a stupid clause to ensure that my content partner would not be in violation of their other contracts. I’ve seen lots of contracts in my life. Most of them, even the very good ones, have some stupid things in them.
The Net-Net: Geo-restrictions make no sense in new media (i.e. Internet), but the problem is that old media (broadcast, cable, theatrical, DVD, etc.) still usually pays more. Until you can convince content providers (big and small) that they can make more money by not carving up territories, they are going to carve up territories.
Re: I see this all the time...
“broadcast,”
and that’s another problem with our government. They grant a monopoly on both content and distribution. Everyone has a right to broadcast whatever they want without any licenses whatsoever. If we are going to delegate our authority to the government to manage those rights then the government should act in the public interest and it is not in the public interest to grant a monopoly on both content and distribution channel. It’s unfair for independent artists who would otherwise use broadcasting stations to freely distribute their content that they have to go through someone who has a licensed monopoly.
“cable”
and that’s another problem, that the government grants monopolies on cableco infrastructure and on who can build new infrastructure. If I wanted to start my own cable company and either compete on existing infrastructure or build new infrastructure so that I can let Joe Blow and others start their own cable channels and play independent content on those channels then the government will say I can’t and the supreme court even upholds that due to some alleged natural monopoly nonsense. It’s unacceptable and unfair to independents who want to make their own cable stations and channels and distribute their own content on those channels, that they have to go through those who have a licensed monopoly to do so.
“theatrical”
and that’s another problem, restaurants and venues that want to play independent music and have independent live performances often don’t because they face potentially expensive lawsuits from collection societies demanding licenses under the pretext that someone “might” infringe. There should be huge penalties for these sorts of bogus lawsuits.
“Until you can convince content providers (big and small) that they can make more money by not carving up territories, they are going to carve up territories.”
Yes, government restrictions on competition makes more money than the lack thereof, but it doesn’t mean the government should grant them. The key is to get the government to act in the interests of the public by not granting these monopolies. Granting, lobbying for, and exploiting these monopolies is unethical.
How are independent artists supposed to gain recognition when the legal system systematically shuts them out in favor of content controlled by a hand full of people.
Re: Re: I see this all the time...
The last time I checked, you lived in a democracy. Run for public office and get people to vote you in and then change the laws.
Of course, it’s easier to whine online and pray that the Supreme Court will find cable monopolies unconstitutional.
Re: Re: Re: I see this all the time...
Because everyone who doesn’t run for election should never complain about anything.
Re: I see this all the time...
Good points, but I do have to mention:
“Although it makes no technical sense to carve out territories, it can make a hell of a lot of financial sense.”
Only because the business models used by the industry are based on outdated ideas. As for your friend, I would say that if he’s only made $10K on sales worldwide, he’s done a pathetic job of marketing his film, and perhaps has been depending on distribution methods that don’t allow most of the world to buy digitally. I’d also say you’ve done him a disservice by not mentioning the title of his film, and thus not gain him free international advertising.
“They said their pre-existing agreements require them to not only block by geo-IP lookup, but also by credit card.”
Again, broken business model. How pathetic is a model that depends on not only blocking foreigners from accessing content, but also travelling US citizens?
“Until you can convince content providers (big and small) that they can make more money by not carving up territories, they are going to carve up territories.”
…and in the meantime provide a great incentive for “piracy”, which they’ll then continue to blame for their problems instead of their broken business models. Therein lies the problem.
Re: Re: I see this all the time...
“As for your friend, I would say that if he’s only made $10K on sales worldwide, he’s done a pathetic job of marketing his film, and perhaps has been depending on distribution methods that don’t allow most of the world to buy digitally. I’d also say you’ve done him a disservice by not mentioning the title of his film, and thus not gain him free international advertising.”
In my experience, on-line sales, on iTunes or anywhere else, still pale in comparison the the money rights holders typically get from traditional channels. I’m not saying that’s always true, but all of the 100 content providers I’ve dealt with who have spoken to me about it have told me the same thing. And these folks aren’t corporate Hollywood execs; they are generally small business owners who pay their mortgages and put food on the table by distributing thousands of films world-wide. If you have a lot of data points to the contrary, please post them. The info would be useful to me and I think others, too.
The “free international advertising” the film maker would get from a blog comment, even on a great site like TechDirt, would be of negligible value. If I posted the film name, along with links to everywhere you could get it, that would just as likely generate zero sales as any. Moreover, I’d be connecting the film to what may be confidential financial information that could disadvantage the film maker in other negotiations. I guess I could chase down the film maker and get permission, but I have better things to do with my time. And there’s nothing special about that film. With perhaps a few exceptions, many film makers will tell you the same thing about on-line vs traditional channels.
Please be aware that I fully agree that geo-restrictions make no sense in a fully-digital world, and few people have ridiculed the practice more than me. But until the financial picture changes, people selling content are going to carve up rights if those deals get them the most money.
I also think it’s important not to confuse the people who make the rules with the folks who have to live by them. If I had the talent to make a film, I’d follow the Nina Paley model (with a few adjustments) to market it; however, if someone came to me with a pile of money for it, I have to imagine that I would be tempted to take it, even if they wanted to carve up the rights.
Re: Re: I see this all the time...
Or maybe he just made a bad film.
Re: Re: I see this all the time...
Or maybe people in Subsaharan Africa don’t have the same money for disposable income?
I love the comments section here. One guy complains that we don’t have enough choices because of government monopolies, and then another guy complains when your friend exercises the choices that he does have. Welcome to democracy, kids. Fascism is still fascism even when you think you know better than everyone else.
Subject
Geo-location blocking just promotes piracy.
If I want to watch a good tv show I have to wait weeks for it to air here in Canada. So rather than wait I just get the episodes on torrents…completely commercial-free.
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Totally agree here! I have to do the same here in Australia. Just stoopid 🙁
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on the up side, last i checked (at least a while ago), DVD players in Australia and New Zealand ignore region encoding. or at least are/were supposed to.
(some of them will play whatever our one is and whatever the first other type you stick in is and nothing else, and computer drives are an entirely different kettle of fish, so to speak, but still. amusingly, I’ve heard
as for TV shows, forget weeks, in NZ it’s sometimes ‘days’ for super popular crap (most reality shows)… months, years, or never for almost everything else. unless you have satellite TV anyway.
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On this subject, geo-location is my number 1 defense for piracy. Since they speak of the moral argument of piracy, I often reply that if they wanted to sell to me (or even better show their show in tv) I probably wouldn’t recommend piracy at all. Since there is no other way for people here to get the content, I see no moral argument and no lost sale from anyone doing piracy here.
YES, they are obselete
Geographical restrictions stopped making any sense in around 1997 when the internet took off in the mainstream, and TV standards merged so that most new PAL TVs had NTSC capability. Unfortunately, the fact that the studios managed to force DVD region coding into the standard and that provided a reason to extend the broken business model into the 21st century.
Now, it’s a crutch that makes life very difficult for those outside of North America. DVDs are still region coded, and while many DVD players ignore the codes, most major brands (such as Sony) and DVD capable devices such as games consoles still enforce them. Digital stores are region blocked, making for ridiculous situations where I can, for example, buy any CD or DVD I wish through Amazon but I’m blocked from buying an MP3 of the same album I buy on CD through the same store. I have a British XBox 360, but because I’m currently located in Spain I’m told I can’t buy certain games and the last.fm channel that’s part of my Gold subscription won’t load.
These facts, along with the windowing of releases that sometimes makes it months or years before a territory gets an official release, is a massive incentive for piracy. There’s only so many times you can click on links to sites only to be told you’re not allowed to buy a product before you give up on legal channels and start downloading by default.
There’s no technical reason why a Hulu or Amazon can’t offer its products worldwide. As ever, it’s a business model issue that wouldn’t exist if the industry had spent the last 15 years adapting rather than suing.
The main thing that pisses me off about geographic restrictions is not that region based deals are done, it’s that the deals are NOT DONE, and people who live in coutries that are not the major markets are just shit-outta-luck because it’s just not worth their time to actually cut through all the licencing red tape to make it happen.
I even live in a 1st world country (Australia) and we STILL are not deemed important enough to bother making licencing arrangements.
I used to use Pandora before it went geo-restricted. When it did get restricted they put up a message about how they were working hard to do deaals to make it available again. Now 5 years later (roughly) no such deals have been done and they don’t even bother to say they are trying anymore.
So far, geo-restrictions means if you are not a major market then you don’t exist.
audible.com
Audible.com refuses to sell me well over half the audiobooks I try to download due to geographic rights issues. When I contact them about this, I get a stock answer that audible.com does not own the download rights for Japan, though if I had a U.S.- or Canadian-issued credit card there would be no problem.
When I contact publishers to find out who does own the rights, they tell me that it is likely no one owns the Japan download rights. They then imply that arrangements they have with actual dead-tree edition distributors in Japan prevents them from selling these rights. But they are not really sure and perhaps I might just want to buy a hardcover edition of their book from one of these distributors.
Um, no, I tell them, I’m not interested in that. But next time their contract is up for renewal could they please exempt downloadable audiobooks from the noncompete clauses that they apparently have with distributors? If you’re a distributor, is that really a dealbreaker?
It's a transitional thing.
Jim’s arguments (#19) are valid, especially as a content creator, but i expect that (as John #27 points out) these things will change over the next few years as contracts are re-negotiated.
For a digital product they don’t make any sense, it’s just going to take a bit of time for the financial world to catch up with the real one. The legal world will probably take another 50 years…
Re: It's a transitional thing.
actually, it still makes sense of digital product. user is in one country, the price is x (plus whatever taxes have to be collected) and for another the price is y (plus taxes).
it also touches another issue, which is governments who collect taxes on the sale of current media will want to collect taxes on anything imported into the country. it is almost impossible to keep up with allof the taxes, regulations and stuff, which is why it is often easier to license to a local company who handles the processing, collects the taxes, and deals with the government if they get it wrong.
if you think the governments of the world are going to let digital media wander around untaxed, you need to put down the crack pipe. they will be all over it like stink on poop.
Re: Re: It's a transitional thing.
“if you think the governments of the world are going to let digital media wander around untaxed, you need to put down the crack pipe.”
If you think that governments can control people’s behavior, you need to put down the crack pipe. BTW, how is that war on drugs going for you? Most of it is … untaxed yet the war on drugs is a complete failure.
Re: Re: Re: It's a transitional thing.
one of the great things… if you are willing to break the law, does it matter? a discussion of business should be about legal business, not illegal.
perhaps the columbians can start running file sharing instead of shipping cocaine? moron.
Re: Re: Re:2 It's a transitional thing.
“one of the great things… if you are willing to break the law, does it matter?”
Wait, what great thing are you talking about?
“a discussion of business should be about legal business, not illegal.”
Why is this so? and much of the discussion is about the relationship between law and business, moron.
“perhaps the columbians can start running file sharing instead of shipping cocaine? moron.”
What?
Re: Re: It's a transitional thing.
“actually, it still makes sense of digital product.”
No one is arguing that government granted competitive restrictions are bad for the monopolists/oligopolist who benefit from them. The argument is that they are bad for society. Everyone who argues otherwise seems to miss the point being made.
Busines Models
The geographic restrictions are still necessary, since the internet is rarely the primary distribution medium. Most concept is still licensed for TV on a country-by-country basis. TV viewing still generates the most revenue and therefor is what supports the business model that allows the content to be created. Until internet viewing creates revenue that changes the model, geographic restrictions will not be obsolete.
http://www.SethDMC.com / http://www.twitter.com/SethDMC
Re: Busines Models
“The geographic restrictions are still necessary, since the internet is rarely the primary distribution medium.”
You are confusing necessary with desirable. Monopoly laws maybe desirable to monopolists but that doesn’t make them necessary.
“TV viewing still generates the most revenue”
Yeah, so?
“is what supports the business model that allows the content to be created.”
Doesn’t mean monopolies and geographical restrictions are a required business model. Content can get created, and has been created, without these restrictions. Even Hollywood was built on piracy. Much of the original creativity of the U.S. originated from the fact that copy protection laws were much less restrictive in the past (the founding fathers were very skeptical of them) and copying each others work and improving on it was more rampant than it is now.
Geographic licensing
From a purely academic, dream-world point of view, they are obsolete, clearly – enough said.
From a real-world point of view, some things do well in California, some things do well on the East Coast, some things do well in the deep South, etc., BUT THEY AREN’T necessarily the same things!
So, if you are charged with maximizing profits, it makes sense. Desirable? Of course not! However, we are in the real world.
This maybe off topic but one idea I had to help solve the broadcasting spectra monopoly problem is why doesn’t a group of citizens start an organization and ask for donations and upon receiving enough donations they can buy out broadcasting spectra and then release it under a CC like license that allows anyone to freely use it however they see fit. Then we can start building technologies around it and wifi devices that can send signals for miles perhaps and others can also use it to perhaps broadcast news and opinion and whatnot. If a couple hundred citizens each chipped in $25 I imagine we can buy broadcasting spectra and release it under some free license.
Re: Radio licenses
The main problem is equipment requirements (transmission watts limits is one of them) and multiple signal “overlapping” in the same frequency.
If some sort of central organization was started with local offices all over and proper radio equipment, then we could make that happen. That way we could also make sure that the same frequency is not used by several broadcasters in the same area.
I can imagine that a lot of people would want to link that with internet radio streams, so people who would want to broadcast things would set up audio streaming software (that’s actually really easy!) and let the “radio offices” of choice “replay”/”forward” it to actual radio waves (broadcast).
Geographic restrictions haven’t made sense for the past 15 years or so, ever since DVDs came out with those stupidly unnecessary region codes. They make even less sense on the internet and are absolutely obsolete.
The problem, and the reason for their persistence among the entertainment industry, is a combination of price discrimination, localised royalty collection agencies for each country, and continuing to work along side old network distribution deals, particularly with local TV networks where networks demand monopolised internet streaming alongside their TV monopolies. But such restrictions don’t make sense anyway, even for TV programs; particularly live broadcasts, on the internet.
Take, for example, the world cup, or even the olympics, where streaming was done by some broadcasters, with regional restrictions limited to their own respective countries. The major problem with this is that if, for example, someone happens to be in a foreign country, where the local broadcast is in a language they don’t understand, there is no ability to legally obtain a stream from your home country, in your own language. (I ended up bypassing these restrictions with a VPN to get the olympic streams from Australia; didn’t bother for the world cup, cause we lost fairly early on)