2009 Will Mark the Beginning of the End for Georetardation

Having made a number of blogging related predictions, I move on to the tech scene. While there’s probably a list to come (and its own post) there’s one area I’ve been watching very closely this year, and that’s one of my pet hates, Georetardation.

For those not familiar with the concept (so basically most living in the United States who never suffer it) georetardation is the blocking of content outside a specific geographic area. For example, folks outside of the United State can’t view content on Hulu, well at least not without using a VPN.

The reasons why companies georetard online content is simple: rights are sold outside the United States, and that usually includes online rights. Those agreements don’t allow shows on Hulu (I’d note shows, Hulu continues to georetard content (mostly clips) legally available outside the United States) to be shown in say the United Kingdom or Australia.

The problem with georetardation is that it is driving piracy. Providing content online, free or paid in the United States was meant to be a counter to illegal downloading of content. The figures as to whether this is working or not aren’t clear, but certainly the United States ranks well down lists for downloaded television content now, and the strong numbers coming out of Hulu would suggest that more people are watching content online; perhaps some of those are now doing so instead of downloading content.

My bold prediction for 2009 is that one television network will drop georetardation, maybe not completely, but across large markets, marking the beginning of the end of the system.

It’s a stretch, but only a couple of years ago so was the idea that we’d be able to buy DRM free music.

Why one will drop it

Old media, despite well justified derision as being clueless, is slowly starting to catch on to the idea that the way to combat piracy isn’t to sue everyone, but to instead see rates of piracy as unmet demand. In 2009 they will see that unmet demand as being global, or at least key areas outside the United States. US television networks don’t like their shows being pirated anywhere in the world, and one of them will clue into the fact that it’s time to force the rights holders hands and offer those shows online.

Hulu is already pushing for this, although they’ve been promising international expansion since day one, and yet they really have never done much about it.

My bet is that NBC will be the first to offer their shows online outside the United States, with Fox a close second.

NBC has arguably been the most progressive of the US television networks in offering content online, and clip content outside of the United States. While they’re blocking some content (they’ve started blocking SNL for some reason post election), they do seem to understand that international audiences offer value.

How they’ll do it.

Offering full shows internationally isn’t as easy as decreeing it to be so, and flicking a switch. Television networks have deals with providers in each country, and likely different conditions with each.

NBC will be able to renegotiate deals as they come up for renewal, but likewise they won’t want to risk the money these deals bring in.

So here’s how it will play out.

NBC will negotiate with key rights holders about internet play rights, particularly in those territories where content isn’t being offered online. Example: the UK does have a fair bit of content online (not sure on NBC content specifically) but somewhere like Australia just doesn’t.

The deal will be simple: NBC, through Hulu or directly, offers full shows online. Ads on those shows served to each country will be supplied, if available by the local rights holder. In Australia, that would be the Seven Network, who through joint venture Yahoo7 has a strong local internet presence. As is the case with all Hulu content, that content will be available on local affiliate sites (again, in Australia, Yahoo7). Ad sales may or may not be split depending on the individual agreement, but primacy goes to the local provider so they gain as well.

If local affiliates don’t want to play ball, NBC makes a song and dance about local piracy rates, and finds a clause about IP protection as a threat.

International rights are highly competitive, and the decision of an existing rights holder not wanting to sign on could easily be used by NBC as a bargaining chip in future renewals or open competition for rights.

Delayed Programming

Where the fall of georetardation gets hard is with local time delays in programming. For example, the ABC in Australia is playing the Dr Who Christmas Special January 25…and they claim they’re fast tracking it. Networks worldwide don’t work on the same schedules as the United States, and often sit on programs for months, sometimes years before playing them, and this is going to be a big issue in dropping georetardation.

A compromise could be a premium model, where shows not shown on television locally are available for purchase or rent, on iTunes or elsewhere, before shown locally. Revenue could be split with a majority going to a local affiliate. The advantage there is that everyone wins: people who want to watch shows don’t have to pirate them, and local affiliates can make money by meeting demand for shows already shown in the United States, but aren’t scheduled closely there after.

The alternative could be an ad supported model, although it’s a harder sell. I’d think that we might see a hybrid model that differs from territory to territory.

Domino effect

Like the removal of DRM on music, it only takes one big player to drop georetardation for the rest to eventually follow. The reality, sad reality perhaps is that countries such as Australia are years behind the United States when it comes to legal access to content. In a tight economic environment, US television networks will want to do everything they can to get every last cent from their content (mind you, they always have to some extent) and forcing affiliate hands on internet streaming is a logic step in the progression of online content provision.

If it doesn’t happen in 2009 (I think it might), it will happen in the next 5 years; it has to happen. The world has become a global marketplace, not one artificially defined by borders. Television content shown in the United States is available within an hour of it being shown on BitTorrent networks, and someone in Australia or the United States can watch that content within hours of it being shown in the States. This isn’t some evil conspiracy of pirated content; this is fans wanting to keep up with the latest shows, and these viewer present an opportunity, not a threat. Old media may be in trouble, but television networks aren’t dumb either, well at least not all of the time.