Imagine it's the year 1997. Aliens from the planet GNU have gone back in time and provided us with bittorrent, and technology making dial-up modems a million times faster (but they still drop their connection if your mom picks up the phone). You just torrented and watched the latest Seinfeld episode, "The Muffin Tops", and have forever changed your muffin-eating habits.

While watching, you saw ads for Apple's "Think Different" campaign, McDonald's Arch Deluxe, and that "Da Da Da" Volkswagen commercial (which is now stuck in your head). You go out and buy the car, buy a Mac, and buy a Big Mac because the Arch Deluxe tastes like crap.

In 2007 you watch The Muffin Tops again. The old ads from 1997 are still embedded in the file. Apple's ad seems weird since the logo is all rainbows. You drive to McDonald's to get an Arche Deluxe because now you're an adult and it'll taste good, but they don't have it anymore, so you cry and drive home to sign a petition website to bring it back. Nobody ever reads it. Along the way your Volkswagen breaks down and you remember how that terribly sounding ad tricked you into buying such an unreliable piece of junk. You get a lift from the aliens, but they charge you one anal probe for the ride. Now you hate Apple, hate McDonalds, hate Volkswagen, and hate that the aliens didn't have the common decency to at least warm up their metal tools before use. Ouch.

Now imagine the benefits of a torrent option where they have the option of updating the ads every 6-12 months; and releasing fresh torrents (or even better they use your IP Geo info when you fetch the torrent and have region-specific torrent offerings with different ads in them.)

Maybe if its a legit source, you're more likely to download it when you need it from the trusted source, instead of hoarding the file for 10 years, swapping it with friends through other means, etc.

Bonus for increased likelihood that you're swarming with people closer to you instead of slower connections on the other side of the globe

Considering that there is DRM software, and that it's largely accepted for at least some content (PC games), it's a wonder that there's no digital format where a DRM software plays the content you downloaded after playing some relevant ads to you. (Kind of like crunchyroll, or youtube, but with bittorrent distribution like vuze).

Saying that, if vuze or bittorrent.com implemented that scheme, would there be enough of of an indie films community that would supply the first round of content to such an app? And - would people prefer this to youtube or crunchyroll if they can get the same content without installing a bittorrent program?

As for the DRM software thing - that does solve that problem, but to me it is a deal killer. Yes, I would probably download TV from the "official" torrent with ads if it's just a movie, but if it's some DRM-laden mess that has to be played through their proprietary player, no way. Also, there would seem to be very little chance of getting a Linux version of the DRM software which would be a practical deal-killer for me even if I got past the conceptual issue.

The differencing task would be the perfect app for the new unlimited inbound bandwidth at linode. :)

Sure, there are a few global brands that might buy in anyway, but the advertising would be less targeted and there would be less competition for the same slots, so rates would be significantly lower while costs would stay the same (or even be higher.)

All this is ignoring the myriad existing deals that the networks have with peers in other contries offering exclusive region-wide access to certain content. Working around this would be possible, but would result in numerous IP blocks anyway.

Be creative.

You're still exposed to the Apple brand, and are reminded that they've been (hypothetically) awesome since 1997 and beyond. You're still exposed to McDonald's and might head out for a Big Mac (I suspect that'll stay on forever).

Maybe Volkswagens will get better in ten year's time ;-)

Ads are also really crafted at society at that given time. I heard a quote from a history professor who said he could teach American history using only Coca-Cola ads.

Anyone watching it 10 years down the line is just icing on the cake for you, but that's not what you'd pay for in such a model.

Provide fast(ish) servers, so the new torrents will download faster.

Remove all links to the old torrents.

I think that the best solution is to have a container that automatically inserts ads at the appropriate times. In this case though, the task will be making sure someone doesn't just remove the ads from the container. This is a similar problem with DVRs, but since this would all be automated, there is a greater risk.

However, I would prefer to patronize a tracker that required subscription fees and didn't display ads. I have thought about launching a startup that would provide media companies with the platform to do this. There are a lot of interesting possibilities for both producers and consumers there.

At the same time, advertisement is so deeply ingrained in the operation of TV companies that I am not really sure they'd ever be comfortable moving to a model of distributing TV that didn't rely upon an advertisement as a revenue stream.

As jerf mentioned, these companies love streaming because it gives the same kind of control they get from "streaming" the broadcast to your television; all the content is retained server-side and the user doesn't get their own copy without special initiative (DVR/VCR). They are still able to consolidate control of distribution under the streaming model (or the iTunes model, where they ask Apple to remove the file and it's apparently gone forever) and I find it unlikely that they'll be willing to give that up.

This is primarily hypothetical as I consciously avoid almost all TV and movies.

The cable company I'm sure would argue that your subscription fees pay only broadcast and signal transport costs and that the individual channels run advertisements to pay for their operation and production.

Content middlemen: you've lost. The 21st century has no place for you. Distribution is now dirt cheap and dirt simple. You can't add any value because you don't solve any hard problems. All you've done for the last 10 years is make content harder to pay for.

Content creators: make content, add it to your website, charge $2 (or whatever) for a DRM-free download, and enjoy money forever. People will pay you for making things if you let them. No, you won't get a billion-dollar lump sum just for coming up with an idea. Sorry, those days are over too.

(Also, I'm not willing to share my 'net connection with big companies. You have money, buy your own bandwidth.)

Case in point (and I know these numbers are a little faulty, but...):

The Simpsons in October 2010 charged $253,170 for a 30 second spot[1]. Meanwhile, during the previous season, they had an average viewership of 7.2 million per episode[2]. This works out to about $0.035 per spot per viewer.

[1] http://adage.com/article/ad-age-graphics/american-idol-spots...

[2] http://en.wikipedia.org/wiki/The_Simpsons#Criticism_of_decli...

I vacillate between both sides of the piracy issue. I used to pirate, when I was 14 and had no money. About the time I turned 16 or so I realized it wasn't a good idea and pretty much went without if I couldn't buy it; I saw no reason why other people couldn't do likewise, and got pretty annoyed at the casual piracy at the time. Having graduated from college and moved into a nice job, I buy stuff pretty much on the basis of "it looks interesting and it's only two bucks," and I can't bring myself to care about the pirates at all anymore. They're not part of my worldview.

If you can make the process of buying something simple enough and pain-free enough, I think that most people who can afford it will buy it. Others will pirate it because they can't afford it, and I think that there's a compelling argument to be made that many of those will eventually become regular consumers when they've got the money to do so. There surely is a group of dyed-in-the-wool douchebags who will never buy anything they can pirate because they are, at their cores, Bad People, but them's the breaks--I've come to the gradual understanding that these people are shitty human beings who will screw others so long as they don't have to look them in the eye to do so, and all you can do is write them off.

But I think that, for the most part, if you treat your potential customers right, they'll do right by you. (The same is not true, I think, of "donate what you want"--I strongly feel that method of revenue generation encourages people to pay as little as they can rationalize, and what even nominally 'good' people can rationalize is really really small. But that's another topic.)

I think that the concept is that piracy is a symptom of a broken market, not the cause of a broken market.

If something costs more than someone thinks it is worth, or they have difficulty obtaining it in an 'easy enough' manner, they will revert to piracy. However, if something is available at an appropriate price point with easy access, then piracy will diminish (down to people who only think that everything should be free).

As far as the 'donate what you want' concept, Panera Bread has a few locations that are like this [1]. I can't remember the details, but I think that it all ended up evening out. They would give you a suggested cost, and you paid what you wanted/could.

[1] http://www.usatoday.com/money/industries/food/2011-05-16-pan...

In Super Crunchers, it describes a meeting between Epagogix, some potential investors, and some Hollywood heavyweights. The investors quizzed the movie guys on why they didn't want to buy in - the movie guys said that even if Epagogix could get 100% accurate, they wouldn't use it. If they used it, they would lose some of their own influence, and so they wouldn't get invited to the right parties. The investors loved that response, because it meant that the market was ripe for disruption. Epagogix wasn't so happy, though.

When broadcasters control a channel, they don't just get to tax it. They get personal perks as well.

You might think that the purpose of toll boothes is to pay for roads. People who work in toll boothes might think it's the other way round.

TV channels are the same - you might think execs are there to ensure only good shows get access to limited screen-time, but they think that limited screen-time exists to keep them in a job.

Thank you content industry...

The advertising has to be short and not take up a huge portion of the video. Also, smartphone and tablet compatible formats, please.

Now, if we're talking 10 minutes of content and 20 minutes of advertising,... no.

Are they in some DRM'ed format with a player which mandates playing the ads without skipping? No, absolutely not.

It's a null issue anyhow because it's not on the table. Everybody wants to stream you stuff so you can't keep it, and can't accidentally derive any unanticipated value from it. I honestly have no idea what would get people to give up the idea of streaming stuff to you.

I just forked over nearly $100 today to buy access to Big Ten Network live streaming of football games for the 2011-2012 season. I did this because I need this access and there was no better option. There were free options, trust me, a little googling and I can get any NCAA football game for free, but Big Ten offered the best quality of service at a great price.

Regular TV. Why can't you learn from the football guys? I honestly have no idea how to access American broadcast TV from Europe. Outside of waiting 20 years for reruns of Twin Peaks to appear on basic cable.

It seems that they could ask you to sign in to a service, offer free show in segments, and build in local (or at least relative) advertisements.

I'm told web ads cost less than traditional ads. With growing numbers watching plus interactivity, I don't get that. But even so, for generations TV has made its job to take in insane amounts of money on the back of free programming. I find it amazing that given the ability to spread their show faster and cheaper the more people watch it, they're now having trouble with this.

Please, let me give you my time and eyeballs. Stop suing because we want to watch the shows you've told us are available for free, our entire lives.

Amen. They should be thrilled their product is getting torrented so much- it means people like their product so much, they will commit crimes to get it. Few businesses are blessed with the problem of too many rabid fans.

I get around this by using a seedbox. Downgrade your internet service to save some money and share the seedbox with a few friends - you'll end up spending the same amount per month.

You can use SFTP to get the files from the seedbox to your computer and you'll be able to completely avoid detection by your ISP.

Also, commercials tend to go stale. You want to switch commercials based on season or even current affairs. This doesn't allow you to do that, T.V. and streaming video does.

Don't get me wrong, I'm all for it but I think these are two major issues potential advertisers will struggle with.

i.e. Hulu.

After not watching TV except when with friends and using ABP in my browser for several years, I've become hypersensitized to ads. I simply cannot stand watching them.

Also I'm not actually going to watch the ads. It's not very hard to skip ahead. So how much can they really be paid for those ads?

Furthermore, "skipping the ads" isn't that big of a deal. People do it on TV all the time by getting up to go do something else, changing the channel, muting the television, etc., when the commercials play. Those with DVRs or VCRs fast-forward, as a VLC user might. VLC doesn't really offer much better fast-forward features than the VCR; unless you also download a pre-defined chapter file (and I don't think many people hate ads that much), this is no different than using DVR/VCR and there's no point in paying less for these ads. VLC users will still visually see your logos, commercial, etc., while watching and I think that has value too, and again, the situation in that respect is no different from conventional methods.

I think the real logistical issue here is that it'd be much more difficult to insert localized ads. Hulu et al can use IP geolocation to target local ads (I don't know if they do or not, but it's possible), but a nationally distributed mp4 file would only have nationally distributed advertisements. This causes some havoc on the current pricing system, as it cuts affiliates, who manage the advertisements on conventional TV, out of loop. Perhaps the corporate guys like this, but as long as terrestrial broadcasts are the predominant form of distribution, corporate is always going to be careful not to disrupt the affiliates' revenue stream too much.

I would however consider paying to download shows without ads if they were cheap.

Here are a few factors that may make the proposed offering less favorable than the status quo, even if you factor in piracy:

(1) Windowing. First-run content is way more valuable than longer tail content. So sure, Simpsons episodes can go for $2 on Amazon and eventually come bundled on Netflix, but only after a wait. This is a more favorable situation for content. Different media and different windows command different fees, and this allows content producers to sell to different people at different times. In the case of Scrubs, for instance, Buena Vista/ABC produced the content, sold the first run rights to NBC (who paid ~20% of cost for first-run rights) and then later syndicates it to Comedy Central and others. They ultimately become available on DVD, iTunes, etc.

(2) Advertising revenue isn't enough. That's right, in many cases, only around half of value comes from advertisers. "But TV is free on my bunny-ears!" Sure...but not if you pay for cable. If you do, the cable guys have to pay retransmission consent to content guys, and those costs can be considerable. On cable, most if not all of the content revenues are from subscription fees.

(3) Bundling. Taking in subscription revenue allows content to take bigger risks on (potentially) great content, and to invest more in it upfront. Think about HBO. They cost a fortune, but I think that many would argue that they are worth it.

On a related note... I part of a new TV startup that addresses many of these issues. We're serious, we're venture-backed and we're disruptive. PM me if you're interested.

I don't know what the situation in the states is right now, but in the UK the majority of the big channels have Flash-based streaming versions of their shows available online very soon (hours) after they've aired (in the case of the BBC some of the shows are available live). The BBC is publicly funded - so no ads - but ITV and Channel 4, the other big players, do have ads, and most people, anecdotally, have no problem with this given the convenience.

I still download episodes of US shows I or my partner enjoy regularly, but if the networks were to offer these shows on their sites with ads I'd be more than willing to watch them there.

For overseas viewers the problem, as other posters have mentioned, is region locking. If the show is sold to overseas markets they cannot then offer the show to viewers in that market. The model needs to change and incorporate revenue sharing with these other markets - but history has shown us these big businesses are unable to do this sort of thing in a timely manner. And that could ultimately be their downfall.

I know it's kind of annoying/cheap sometimes when a camera zooms in on the Bud Light logo in a fridge, or when Don Draper says that he loves Smirnoff (lawl), but its the only choice that the studios have. They must turn to product placement as their primary source of advertising revenue.

Because if they just release it, realistically, somebody will just download the file, remove the ads, and reupload it so the net effect will largely stay the same. One huge difference is that people who normally dont torrent and stream (like my girlfriend and mom) would probably do this. Granted for every episode they download, I download 10, but its an improvement.

If they would offer torrents with ads, available IMMEDIATELY upon airing it (say the torrent is available the second the show airs or 20 minutes before or next week or whatever) and I could get it at a comparable speed (or faster) than TPB, then that would change things. Product placement is still much cleaner and more sustainable.

I hate product placement because it breaks the story and my suspension of disbelief.

But hey, maybe I would get more done that way.

or they could just mess it up terribly and ruin television forever.

The result was an unusual era of TV content that was exclusively ad supported and also generated far more revenue than it should have. That era is now coming to a close. This is a catastrophe for the folks who have come to live on the anomalous gravy train that has been broadcast TV in the 2nd half of the 20th century. Nevertheless, distributing and consuming video content has become easier and cheaper than ever, the industry will survive and thrive as new business models take hold.

The only way to do this would be a custom filetype and player, no? And the chances of of being able to stream that to your xbox or media player...

But with ubiquitous PVRs on the horizon (which will compete on their merits) the ability for the unwashed masses to skip ads automatically is pretty much upon us.

I think that the problem for television broadcasters is that they realise if everyone gets used to downloading shows to watch on demand, they'll become increasingly irrelevant. So, instead of cannibalising their existing businesses to reinvent themselves, most of them will kick and scream to try to delay the inevitable.

It's mostly amusing, apart from the fact that all the kicking and screaming ends up in pain for us because part of it involves bribing congress critters to protect the incumbents failing business models.

This is the kind of stuff broadcasters should start experimenting with now. Stop looking for a permanent solution and try things out. Why do you think fast food chains have test markets for new products?

I get the double whammy of 1) I feel all good and whatnot of making sure the content produces get some money (even if it's realistically, like, 10% of what I payed to get the series), and 2) I have rather high quality masters that I can then rip rather high quality copies to a hard drive.

Also, this is faster than just torrenting the shows at similar quality. (maybe a few days, regardless of the show compared between a day and more than a week, depending on the popularity of the show)

Is it? In my experience, most DVD/Blu-ray rips of TV show boxsets are released online before their retail date because an employee at a Wal-Mart somewhere grabs a copy and sources it to a scene group.

As for the actual download time, I'd say it's faster than ripping the DVDs as well, not to mention the hassle of inserting/removing 5+ DVDs is just annoying.

I can't think of any scheme except maybe releasing content through torrents that no one would care about enough to cut the ads out within 5 minutes of it being posted.

Wait - maybe intense product placement/integration into television shows? It's inevitable really; with DVRs most people aren't watching traditional commercials anyway. Maybe content producers need to, as a group, get over the artistic squeamishness they have about setting scenes in a Taco Bell...

Maybe the answer might be as per jrockway's comment below: http://news.ycombinator.com/item?id=2958478. Ditch ads, put up a massive torrent site with killer bandwidth, charge 50 cents a torrent. Entire season for 7 bucks, no risk of prosecution? Might be worth it to most people. Trickle of cash recieved in perpetuity? Might be able to finance pretty high quality shows.

OK - flight of fancy coming: How about an investment market for television shows and movies? People put together trailers, pilots, or maybe just announcements and attachments to a project, and people can buy shares in that project based on how many absurdly cheap downloads they think it can wrangle, and they buy those shares on the same site where the torrent will be hosted for download. The gambling prospect would be a pretty good incentive for people to already have credit card attached accounts when it comes to downloading, and good investments could pay for your habit, or even bring a return. These shares could be traded in perpetuity, and would pay dividends monthly of the download revenue minus the infrastucture cost.

Even farther down the rabbit hole: The cost per download could be determined by an (open) algorithm combined with a voting system by the current shareholders. If they're not liking their return, they could state what they think the ideal price would be to maximize that return, and that price would be weighted with their amount of ownership to determine the current price of that content. Maybe to simplify that system, they could be given simple upvotes and downvotes? I feel that the math could be worked out.

This would incentivize shareholders to market the content themselves in social and in blogs.

Completely crazy talk: Free downloads of collections of trailers. Shareholders of one film could vote to dilute and give shares in their content to the shareholders of content that is sure to attract a large group of eager downloaders, in order to have the trailer to their film or sample of their show included in a collection that the known anticipated content will also be on.

-----

Maybe this is an efficient way to motivate people to

1. Invest in the shows that they like, 2. Proselytize about the shows they like, 3. Watch (and pay trivial amounts for) content in order to be familiar with the market (especially obscure content, to get an edge.), and 4. Set by guessing the prices that people would be likely to pay for content.

For me, this might be the MMORPG/fantasy baseball from hell. I'd be futzing around with my investments and looking for new things that were coming out all day.

edited: for clarity.

I've read of many promising films that never get made because they can't get funding. For example, Tom Hanks owns the movie rights to Arthur C. Clarke's 2061, MGM owns 3001's, and Morgan Freeman owns Rendezvous with Rama's. And who knows who owns Neuromancer.

As for downloads, some torrent sites offer "fast, direct downloads" for a fee. Someone is making money from bittorrent users and it's not Hollywood (but there's nothing stopping them).

The scene will probably just ignore the bittorrent copies. Over-the-air digital is already a pristine copy at a much higher bitrate so would be the preferred source.

it seems to me that content available online experiences immediate devaluation. why am i going to pay more to place an ad during your content when i can target the same audience for pennies elsewhere online? why am i going to pay the same for syndication or for physical media?

streaming license costs will continue to rise until they reach equilibrium with existing revenue streams with the corresponding rise in access costs, or decent quality streaming will cease to exist (legally). likely the latter will happen simply as a result of the former.

i pay for netflix, because they have added value by being convenient and available on lots of devices without any fuss. simply being legal is not a real advantage, and certainly not one i am willing to pay for.

Don't Bitcoin's encode all transactions that they have been used for into the coin? Unless you use some intermediary to launder your payment bitcoin provides the ultimate in publicising your spending. And if you use an intermediary they'll be tracking your transactions.

It's actually easier to skip ads while watching downloads.

For reference, I would regard access to every television show ever produced and streamed reliably, at high definition when available, as worth $150-200/month.