Free and Open: Video's Cambrian Explosion

"Where is it written that everyone who participates in the creative arts should be able to quit their day job?….My daughter has already figured out how she’s going to spend the money from the tour in the band that she hasn’t yet created because none of the band members have learned how to play instruments….The fantasy that your creativity is a career is a fantasy we all indulge in right up until we hit the real world."
Chris Anderson, at a recent presentation on his latest book, Free.

In the next few months Wikipedia, the online encyclopedia that allows anyone to edit entries, will start allowing visitors to add videos to articles. Users will be able to click on that edit button and add some demonstrative video to illustrate the point at hand, and then any other user will likewise be able to delete it. But then there’s a Wikipedia twist: anyone will also be able to edit that video, or create it from scratch using in-browser video editing, and any other user will then be able to say, that sucks, and re-edit it however they like. Don’t like that title card? Bam! Gone! Bad timing on that close-up? It’s off to the History scrap pile, just like any other piece of text. This is because the entire system has been designed around the ideals of the open video movement, including only using the free open source video codec Ogg Theora rather than Flash or H.264, and only accepting content under the Attribution-Share Alike Creative Commons License (colloquially referred to as copyleft). And the best editing and playback performance will be in the free open source Firefox browser, which users will be reminded of every time they try to access it in anything else (like Internet Explorer). Oh, and of course there will be no revenue model other than donations to Wikipedia, and everyone will be free to make public their previously untapped creative aspirations. Welcome to the new world, where all digital participants are created equal, even if they aren’t always capable of equal creations.

[If you would like your video to come up in Wikipedia’s editing engine, upload it to the Internet Archive or Wikimedia Commons and be sure to select the Creative Commons BY-SA license option.]

Veteran journalists and filmmakers alike are polishing up their resumes, contemplating the hospitality industry, and wondering: Who stole my career? Was it….everyone? Every little unpaid amateur upstart out there with a day job who agreed to write for free? Why do I have to be a celebrity to get paid for writing? Why are you asking me to put my film up for free on the Internet? These are all questions I’ve been asked by professional colleagues in the last week, sparked by the release of Chris Anderson’s (Editor in Chief, Wired; The Long Tail) latest book Free: The Future of a Radical Price (release by, ahem, Disney imprint Hyperion).

The companies behind Wikipedia’s new video feature came together at last month’s Open Video Conference, hosted at NYU, a forum for people who are likely quite sympathetic to Anderson’s world view. Like the open source movement (whereby software and web applications are created with public code that can be edited by the community and distributed for free), and closely affiliated with it, the open video movement believes that video file formats should not require proprietary paid plug-ins in order to create and play back video. They also believe strongly in the tenets of fair use, and the need to rewrite our current copyright laws.

As for the groups most involved in the Wikimedia project, it’s worth taking a look at their own revenue models. Firefox is a product of Mozilla, a nonprofit foundation which makes a very large percentage of its budget through Google search royalties; Wikipedia is also a nonprofit foundation, as is the Internet Archive; Metavid is supported through grants and UC Santa Cruz. Xiph.org, the nonprofit foundation behind the open video codecs, is a loose collection of volunteers with no revenue. Kaltura (who funds the in-browser editing work of Michael Dale for Wikimedia), while open source, is a for-profit company whose model adheres largely to the precepts of freemium offers a free basic version, but paid pro and enterprise levels. Almost all of these companies fit squarely into categories outlined by Anderson.

The majority of the events at OVC were catered to the existing open video community, which has never had a forum quite like this to meet. They were pleasantly surprised by their own numbers. But several panels stood out as bringing in a hard dose of reality. "Industry Perspectives on Open Video" featured representatives from YouTube, blip.tv, Boxee and Adobe. Boxee’s Avner Ronen took the day as an opportunistic champion of openness— Boxee is an open source platform and recently had a run-in with Hulu. On the other side, of the three times I’ve seen YouTube representatives at conferences, they’ve always managed to alienate the audience and appear like they know nothing about the content industry, despite that fact that they’ve done great work breaking open the content world to make it accessible (and have an outstanding commitment to nonprofits). Adobe’s Jennifer Taylor, while generally sympathetic, did point out her and Adobe’s commitment to content protection—i.e., DRM, a nemesis of open. None of these people were greeted with boos, even though YouTube and Adobe’s’ habits of protecting content (Adobe) and tracking down abusers (YouTube) were criticized in other panels.

In "Public Media, Open Content and Sustainability," both sides of public television and radio were represented. Those from Europe and Canada felt they had a mandate to release all their content online for free, as already paid for by the public through taxes and donations. But those from the U.S. were much more passionate about the need for paid systems. It’s been my experience that most media companies, even nonprofit ones, have been slow to accept the rising pressure to release their content for free online, holding out for the hope that some kind of revenue model will emerge.

There is a strong counter-culture feeling in the open video world. Because of the bad rap the torrent and pirating community has gotten from content owners, many of these very talented programmers have been pushed further into an activist, anti-mainstream role. What makes video creators most nervous is their suspicion that the underlying belief of this community is that all content should be free and open. This is a threatening position for anyone who has incurred the large cost of content creation, and wants to retain ownership and control of how their work is disseminated. Especially so when the ability to cover the costs of content creation is still in flux, to put it lightly. But the reality of the situation is that groups can circumvent pretty much any attempts at anti-piracy measures, especially when they draw on the anti-copyright community. All you need is a screen capture tool. Or a video capture card. Or a piece of code. Any broadcast video or DVD can make it up online.

Link TV has a difficult time acquiring the streaming rights to many of the documentaries it broadcasts (even though we do respect the streaming DRM and geofiltering requirements sometimes posited by partners) because we’re currently committed to offering video for free, and distributors fear that the free streaming will cut into their as-yet-unrealized online profits. In recent months several feature-length pieces of Link TV acquired video have been posted illicitly online, and in all instances the dissemination of these programs has led to an increase in interest in our programming, and a raised awareness of our content. While we certainly haven’t condoned or encouraged this behavior, we’re starting to see that it’s now a part of life, especially considering that we have unique programming that can’t be found on Netflix or iTunes.

This is the Cambrian era for online video—for all online content really. Before now, distribution was a simpler organism. The means of distribution were streamlined, the path fairly limited and clear, and if we didn’t hear from most people that was OK, they were just consumers. Now—in a flash—we have been flooded with a burst of energetic output in all creative fields, from photography to writing to filmmaking, and while there’s a lot of crap, there are a lot of talented, previously overlooked people out there, who now also have a means of distribution. At the same time, all sorts of new business models have sprung up, failed, mutated and been retried. But, just like in the early Cambrian era’s explosion of new life forms, we have no real idea which ones will win out, and which ones will be regarded as dead-end freaks.

The problem we face right now is that none of them seem to match the current costs of content creation. But what we should all agree on is that nothing will be the same—we’ve let the genie out of the bottle. If we’ve learned anything from the music industry, it should be that you can’t hold on to the way things were, you need to accept and look forward. Anderson’s Free has garnered vitriolic attention from a highly threatened professional community who are looking around them wondering why the world has been turned on its end, but Anderson mostly just describes the era for what it is, then makes some hopeful predictions about which species of business model may win out in the end. You can disagree with his predictions and hopes, and even his simplifications of the current situation (not to mention the past). You can even quibble with his general negligence of the developing world. But you can’t deny the overwhelming WTF of the current moment. Free is king online right now. Ad revenue has not caught up. It’s very difficult to put a barrier around content.

But at the same time, let’s not pretend that this is true for everything. It’s a Cambrian world out there. Look at Netflix and iTunes.

The indie film bubble has burst in perfect synchronicity with this strange explosion. Not only are there a thousand times more filmmakers out there, but we’re back to what for some feel like Cassavetes-era levels of indie distribution opportunities (i.e., virtually none—strictly a sideline pursuit). Except that this time around the distribution system has opened up. Which means that the filmmakers who don’t get picked up have some opportunities to make money. But not much money. Say, hypothetically, that an average documentary filmmaker on Hulu nets about $7 per 1,000 unique ad views (this is an educated guess). That means $7,000 for a million views. This actually fits closely with standard TV ad buy prices (and the top end of online ad buys), but this new model results in a revenue share with the content creator (see note below). Recent case studies suggest that the release of work on YouTube or other supposedly competing platforms (cable video-on-demand services) does not necessarily cannibalize sales. This article in Variety details how IFC’s Summer Hours and Magnolia’s The Girlfriend Experience both performed relatively well theatrically even with day-and-date VOD releases. And there’s currently still the hope of step-up sales—for example Monty Python saw a 23,000 percent increase in DVD sales after they released a selection of their most popular clips for free as embeddable videos on YouTube. But what happens when DVDs are gone?

On top of this, not only does content cost money to create or acquire, but content delivery costs are not in fact down to zero, even though costs do continue to decrease. The real world is messy. If you’re a modestly sized nonprofit video website, you might be paying $20,000 to $50,000 in video delivery costs a year, which, if you’re Conde Nast, is just a drop in the ocean, but if you’re, well, a moderately sized non-profit who gets funding mostly for things other than video hosting, is daunting. Daunting, but not a completely unreasonable percentage of overall costs, especially if prices continue to drop, and your foundation supporters measure impact not in dollars but view numbers. But the reality is, as soon as there is more bandwidth, video (or some other unforeseen technology) will suck it up. Double the bandwidth? Great, now we can encode at a higher bitrate so those amber waves of grain are actually waves, not blurry blocks. This is assuming, perhaps optimistically, that net neutrality wins out. You might say that nonprofits should just host all their video off of a free service like YouTube or the Internet Archive, but if they’re acquiring it, they are subject to intricate licensing restrictions, the same kinds of restrictions that led to this message on Chris Anderson’s blog, regarding his free text-based distribution of Free for one month (no downloads allowed): "Many of these versions, including Google, are U.S. only. This is just a function of the way global book rights work, and the fragmentation thereof." Hulu and iTunes work the same way—their services are severely limited outside of the U.S. Even if you manage to get a non-commercial license for a video, and you’ve made it embeddable on YouTube, that’s still not good enough for Wikipedia—you need to allow others to modify it, edit it and redistribute it however they like. That is a noble but extremely difficult requirement to meet. Some nonprofits will need to come up with new business models to sustain video on their sites, when donations and foundations don’t provide enough.

We’re living in a very interesting time for online video distribution in the U.S., filled with the pain of failure and loss of respect, and the elation of newfound attention. Despite Anderson’s disparaging words about his daughter’s imagined rock career, real talent remains a rare and oft rewarded commodity, and sadly one that might not surface to the top without a knack for self promotion. We are all now stakeholders in the marketability of our work. Set-top boxes are picking up, people are hooking their iPhones to their TVs, and the demographics of people who are watching video online are constantly expanding. Unlike a year ago, I can safely say that I watch a large percentage of my long form TV content online—it’s just far more convenient. If I have to, I pay for it. If I can find a slightly inferior copy for free, I will. I’m the type of person who infuriatingly fits into almost all of Anderson’s business models, as outlined. I don’t think I know what model will win out, and I’m not entirely convinced that the same big players won’t end up winning in the end. But at least I’m willing to take some risks and play the game. After all, it’s my day job.
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Note: This is assuming that the ad was sold for $20/1000 hits, factoring the revenue share percentages with the aggregator/distributor and Hulu. For an example of a more profitable ad, and some info about prime time cable ad prices, see this article.

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Wikimedia deputy director Erik Moller talks at the Open Video Conference:

Biographical note: Hannah Eaves is a periodic film journalist with a long, steady background in film, video and new media. Her writing has appeared in SOMA magazine, the Santa Cruz Sentinel, Imagining Reality: The Faber Book of Documentary Film, and online at GreenCine, PopMatters, Grist and elsewhere. She currently tries to keep her head above water as Director of New Media at Link TV, a Peabody Award-winning national satellite television station. In her spare time she dreams about her old, "laid back" Australian life, and the healing qualities of Victoria Bitter.