P2P is for piracy… and we will use it
Rick Cotton, NBC Universal’s top lawyer, sat across the table from me at a Midtown restaurant just blocks from Cotton’s base at Rockefeller Center. Apparently, media moguls do it’s not breakfast on the food of puppies and children, as some customers seem to think; bagels, toast, and oatmeal are the order of the day. George Kliavkoff, NBC’s first “Chief Digital Officer,” has also joined us to talk policy.
“I wonder if it is necessary to equate peer-to-peer protocols like BitTorrent with piracy?” I asked after the orange juice arrived.
Thoughts on that question are important. As general counsel for NBC Universal, he has been one of the strongest US proponents of the idea that ISPs have certain duties to begin processing the unpredictably large amount of illegal P2P traffic that passes through their networks. AT&T has publicly committed to taking up the challenge, and Owu hopes to see more action from other ISPs.
“Well, I think the answer today is yes,” he said. “It’s obviously peer-to-peer powerful, and in fact in the future may be an important condition of the efficient transfer of the right content. But today, in terms of using that bandwidth, very powerful pirated content. There’s probably a percentage of mixed porn, but one doesn’t talk about the right content.”
Owu and Kliavkoff are charming, intelligent, and interesting to talk with—but they also live a life of conflict, and it shows as we talk. Take peer-to-peer discussion, for example, with the lack of “correct content.”
Rick Cotton,
NBC Universal’s
General Counsel
I asked about the current FCC hearing on Comcast’s BitTorrent “suspension,” where a company called Vuze is actually offering the right kind of content using BitTorrent (to say nothing of BitTorrent, the company, which it same thing).
“You have to start with the first proposition,” said Cotton, “which is: we should be concerned in general about the fact that 50 to 75 percent of the total bandwidth of the broadband ISPs is today taken by P2P traffic that is a very strong truth. Pirated? I have to tell you, I think the answer to that is yes.”
George Kliavkoff,
NBC Universal’s
Chief Digital Officer
He went ahead; P2P protocols themselves damage the Internet by passing bandwidth costs from content owners to ISPs. Cotton told the FCC in a recent filing, “P2P applications shift the costs of central storage and distribution to end users and their hotline providers.”
In addition, the installation of P2P applications “may slow down the processing speed of (customers’) computers, expose the contents of their hard drives to third parties and expose them to potential copyright liability,” NBC’s filing said. notice. Worse, P2P protocols “increase the degradation” that Comcast’s RST packet solution attempts to solve.
Enough is enough: P2P is a hotbed of piracy, it’s bad for ISPs, it messes up the Internet, it can kill computers, and it hurts corn farmers in Iowa. It seems safe to say that NBC won’t be using BitTorrent anytime soon.
So it came as a complete surprise when, at the end of our wide-ranging conversation, Kliavkoff dropped a bombshell.
“We’re coming up on an announcement of using some peer-to-peer technology for sharing some of our own content,” he said. “We think that all peer-to-peer technologies are very useful for sharing large files, they can reduce bandwidth costs a lot, and in general they are technologies today without a business model. a lot of costs and we happy to share some of those savings.”
I beg your pardon?
NBC: Old media is not enough
It’s not that NBC is hypocritical, stupid, or bad; it is that the transition currently engulfing media business is both a burden and a source of bold new opportunities. NBC hopes to transform itself from an old media giant into a new media pioneer that makes its content available through MySpace, AOL, and Comcast, allows embedding and clipping, and fully supports the emerging world of widgets. and web applications. With NBC’s Hulu officially launching today, Kliavkoff estimates that its video content will reach more than 95 percent of the US Internet audience through its major gateway partners.
It’s “a groundbreaking thing for big, old, traditional media to do,” he said, and rightly so. Instead of outsourcing Internet video to distributors like YouTube, NBC and News Corp. have partnered on a bold plan to do digital distribution themselves.
The site was not built up on the weekends by a group of hackers slaved out of the basement, maybe; Hulu is “tens of millions of dollars.” Both Owu and Kliavkoff face “a lot of concern to get to the board level that the material on Hulu is not available next door on a pirated basis,” and it’s easy to see why with that kind of money at stake.
This is the concern that drives Cotton’s crusade against illegal file sharing. He is convinced that the piracy problem is costing NBC Universal real income and that the scale of the problem is increasing to discourage investment in “carrots,” good solutions like Hulu.
“With all the pirated material out there, it creates huge disincentives to content owners who need to invest in new content,” Owu said, “and it just hurts consumers over time.” After all, if two video stores sit next to each other in the local mall and charge one price for DVDs while the others are free, illegal copies go out without penalty, what incentive does the owner of the right video have? Have to spend any money buying new DVDs?
It’s a fair question, so I asked Cotton why NBC has invested millions in a service like Hulu. File transfer, although rampant, is apparently not enough of a problem to stop this type of investment yet, but Owu suggests that if large projects like Hulu fail to show returns, it may not be many attempts more in the future. He is fully aware of the need to use both carrots and sticks, to “compete with free” while trying to close the illegal distribution channel, and he sees both efforts as complementary; “hand in glove,” he called them.
Which brings us to the stick: ISP filtering.