Digital Video Recorders, once considered a mortal threat by the entertainment industry, have now become its new best friend. It's just the latest example of how the industry's constant warnings of the dangers of "piracy" frequently turn out to be baseless hysteria.
Remember 2001? Digital Video Recorders ("DVRs") like TiVo and ReplayTV were poised to win mainstream adoption, allowing consumers to fast-forward past advertisements more easily than before. In response, the entertainment industry behaved predictably — it freaked out and filed a bunch of lawsuits.
Industry analysts claimed that DVR "potentially threatens the very lifeblood of how television is funded and how it's used for marketing and advertising." A coalition of television studios including Viacom, Disney, and NBC filed suit against SonicBlue, makers of ReplayTV, arguing that skipping commercials "effectively circumvents the means of payment to copyright owners for the programming being viewed... (and) thus constitutes copyright infringement."
Fast-forward eight years, and these claims turn out to be — surprise! — wrong. This weekend, The New York Times announced that "DVR ratings now add significantly to live ratings and thus to ad revenue."
A mystified NBC President Of Research called the situation "completely counterintuitive." But the reason behind the revenue isn't counterintuitive at all — it's obvious: When consumers are granted the ability to watch television whenever and however they want, they watch more TV — not less. That's a simple result which could only be "counterintuitive" to an industry that all too frequently treats its own best customers like criminals.
It's a cycle that by now has become sadly familiar: When the industry meets a new technology, it panics and fights it tooth-and-nail. Eventually, the industry loses this fight, often squashing innovation or arbitrarily singling out a few citizens for punishment along the way. Finally, the same technology ends up benefiting the same short-sighted industry — but rather than learn their lesson, the same corporations are usually busy repeating the same cycle all over again with something else. It happened with the VCR, the audio cassette, and even the turntable.
With a track-record like this, it's mind-boggling that the entertainment industry's schemes to "fight piracy" retain any credibility whatsoever. Unfortunately, thanks in large part to the industry's deep coffers, many in government continue to take their claims seriously. As a result, the UK is close to implementing a "three-strikes" policy of disconnecting illegal file-sharers from the Internet — even as a new poll reveals that those same file-sharers are the industry's best customers. Here in the USA, Hollywood is once again lobbying the FCC to introduce "Selectable Output Control" — a scheme which would grant the industry veto-power over new technologies.
Until legislators learn to stop trusting the entertainment industry's faulty "intuition," laws will continue to hurt innovation, consumers, and — yup — even the very industry they've been designed to protect.