In a Bloomberg Businessweek interview last month, Megaupload founder Kim Dotcom talked extensively about copyright and business models. Dotcom, who has been criminally charged in the United States in relation to copyright infringement, was asked by the interviewer if he “believed in copyright.” Dotcom replied that he did, but argued that he did not believe in “copyright extremism” – a term he used to describe extended delays in content distribution, which often result in content reaching foreign markets months after it is released in the United States.
According to Dotcom, the solution to such “extremism” is a worldwide studio-run streaming platform rather than, as the Washington Post’s Brian Fung described it, “letting Netflix play the middleman.” Essentially, “extremism” is another way of saying that piracy is more a business model problem than a policy problem. Expensive and controversial copyright enforcement would be more efficiently supplanted with different business practices.
But this raises an obvious question: if there is a better way of doing things, why aren’t things done that way? The answer is that different stakeholders bear the costs of different solutions. Moving to worldwide online distribution entails risks borne mostly by industry stakeholders, who would be abandoning a time-honored content distribution strategy referred to as “windowing” or “release windows.” On the other hand, the risks of the current windowing model are known, and the costs of this model fall at least in part on taxpayers.
What Are Content Release Windows?
The traditional approach to distribution of film and some other content involves selective release through different and often exclusive channels, in different markets, for different times. This means content may only be available through a particular channel for a period of time. This period is dictated by the license, and it may occasionally be mandated by law. As a result, the availability of a given piece of digital content often appears to consumers to change arbitrarily.
The most sacrosanct window has always been that of initial theatrical exhibition. This is the time frame during which newly released films are exhibited in traditional movie theaters. Over time, the length and nature of this window has changed, and it has generally become shorter. As data from the theater owners’ trade association shows, the theatrical exhibition window has contracted over the last decade, but it still stands at roughly 120 days in the United States, and can be far longer in other markets.