Digital Production Buzz
April 24, 2014
[Transcripts provided by Take 1 Transcription]
Jonathan Handel, Entertainment/Technology Attorney & Reporter, TroyGould and The Hollywood Reporter
Michael Hiltzik, Business Columnist, Los Angeles Times
Jonathan Eric Tyrrell, Editor, PostPost.TV
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Larry Jordan: And welcome to The Digital Production Buzz, the world’s longest running podcast for creative content producers covering media production, post production, marketing and distribution around the world. My name is Larry Jordan and joining us is our co-host, the ever affable, incredibly handsome, bon viveur man about town, Mr. Mike Horton.
Mike Horton: Hello Larry.
Larry Jordan: Michael, it’s good to see you again.
Mike Horton: It is good to be here. I had a wonderful LACPUG meeting last night.
Larry Jordan: Oh, I’m so sorry I missed that.
Mike Horton: Yes, and I’m feeling the pain.
Larry Jordan: Well, you know, it’s not the meeting, it’s the beer afterwards.
Mike Horton: It’s the beer afterwards, yes.
Larry Jordan: And the pizza.
Mike Horton: I keep saying every month, “I’m not going to do this again,” but I do. I’m Irish, I can’t help it.
Larry Jordan: It was a great meeting, by the way.
Mike Horton: It was. Adobe was there last night.
Larry Jordan: I know, showing off the new stuff coming out from Adobe later on this year.
Mike Horton: Yes, and actually I got to see Prelude for the first time in a long, long time and it’s actually pretty dang powerful.
Larry Jordan: Oh yes. It’s a program that I like a great deal.
Mike Horton: Yes, it’s got some good stuff in it.
Larry Jordan: Thinking of good stuff, we have an amazing show today because this is a week with major news coming out of Washington. We’re going to start with Jonathan Handel of Counsel at TroyGould here in Los Angeles, who’s following the ground breaking Supreme Court case of Aereo versus ABC, which has implications for the entire media industry. We’ll be talking with Jonathan first.
Larry Jordan: Then, Michael Hiltzik, the financial columnist for the Los Angeles Times, joins us to talk about the FCC’s proposed new rules that were rumored to be out yesterday, talking about net neutrality that seems to indicate that the web may not longer be neutral.
Mike Horton: Let’s say the end of net neutrality.
Larry Jordan: And then Jonathan Eric Tyrrell is a film maker and consultant for post post, which is based in Vancouver, British Columbia. He joins us today to talk about how to improve our workflow to enable us to better track our media and other assets. You remember Jonathan, Michael, don’t you?
Mike Horton: Of course I do.
Larry Jordan: Well, I’m just making sure.
Mike Horton: Jonathan is a regular on our show, although he hasn’t been on our show for a while.
Larry Jordan: Not for a while, but he has for years past.
Mike Horton: And he was driving his Porsche.
Larry Jordan: Just a reminder, we’re offering text transcripts for each show, courtesy of Take 1 Transcription. Now you can quickly scan or print the contents of each show, as well as listen to it. Transcripts are located on every show page. Learn more at take1.tv and thanks, Take 1, for making it possible.
Larry Jordan: Michael, have you recovered from NAB yet?
Mike Horton: Yes. Well, actually Al Mooney and I were talking about that last night and we were both going, “Oh my God, we’re just tired.” We’re just both tired. There are too many events. It is something that sucks the life out of you.
Larry Jordan: Well, I think people should stop attending SuperMeet, then, shouldn’t they?
Mike Horton: Yes, I know. Maybe it was the SuperMeet, it wasn’t so much NAB. You know, it’s always a great experience but it does, it takes a while to recover.
Larry Jordan: It does, and there’s just so much to see and do and it doesn’t stop when the trade show closes, that’s for sure.
Mike Horton: No, no, no, there are a lot of events and there are still a lot of events to come up.
Larry Jordan: And if you want to find out what the latest news is from NAB, be sure to visit The Buzz’s coverage at nabshowbuzz.com. Nabshowbuzz.com. It’s got more than 80 interviews, more than 12 hours of just incredible shows, and analysis and breaking news on all the products.
Mike Horton: Everything that you can possibly want to know about NAB is at the Digital Production Buzz.
Larry Jordan: Well, we didn’t cover helicopters, but that’s on the next show.
Mike Horton: Yes, you should have covered those satellite trucks.
Larry Jordan: We’ve got ours. The Buzz is happening all seven days of the week and 24 hours every day. Remember to visit us on Facebook, at digitalproductionbuzz.com; or Twitter, @dpbuzz; and subscribe to our free weekly show newsletter at digitalproductionbuzz.com for an inside look at both our show and the industry.
Larry Jordan: We’re going to be right back with Jonathan Handel right after this.
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Larry Jordan: Jonathan Handel is an entertainment and technology attorney of Counsel at TroyGould in Los Angeles. He’s also the contributing editor on entertainment labor issues for The Hollywood Reporter and has a blog at jhandel.com. Hello Jonathan, welcome back.
Jonathan Handel: Larry, how are you?
Larry Jordan: We are doing great. How about yourself?
Jonathan Handel: I’m doing wonderfully.
Larry Jordan: Jonathan, the Aereo versus ABC Supreme Court case is generating a slew of headlines this week. Some have called it the most important court case involving television in the last 30 years. I want to explore the issues with you this week about that case, so let’s start by just defining what is Aereo, what have they done and how did they do it?
Jonathan Handel: Sure. It’s interesting, because that most fundamental question in fact almost has two answers and, as I look at it and as we’ll see in a moment, Aereo manages to be two things, like a perfectly balanced optical illusion, but only one of those two things is legal without a license and that is the reason that the broadcasters, it’s actually ABC versus Aereo, it’s the reason that the broadcasters, ABC and all the others in fact, sued Aereo.
Jonathan Handel: Now, what is Aereo? Aereo is a service on the internet that lets you watch live or DVR delayed, recorded broadcast television on your PC, your tablet or your Smartphone. So it allows you to watch live TV – Channel 2, Channel 4, Channel 7, not HBO, not FX, not A&E, it’s not a full replacement for cable. In fact, you could watch these same things on your TV at home, at least, by getting a $20 rabbit ear type antenna from Radio Shack or wherever and putting it up.
Jonathan Handel: So why is Aereo making waves and why do the broadcasters not like it? The reason that Aereo is able to offer this service and to offer it at a low price point – at only $8 to $12 a month, much lower than even the lowest tier of cable – is that Aereo does not pay license fees or re-transmission fees, to be specific, to the broadcasters. The cable company, if you watch your broadcast TV on cable or on satellite, DirecTV or dish or on the telephone, AT&T U-verse or Verizon FiOS, any of those services, Cox Cable, Time Warner Cable, Comcast Cable, they all pay what are called re-transmissions fees to the broadcasters.
Jonathan Handel: Now, that money amounts to several billion dollars, not as much as advertising money but re-transmission fees are growing and advertising revenues are stalling and slowing, perhaps even declining – I’m not 100 percent sure, to be honest – but certainly in that direction and that’s because of the fact that people keep skipping over ads. People record stuff, they DVR and they skip the ads, or they watch the programming more than three days later and only the first three days count for ratings purposes. So if you do watch that ad and it’s been seven days, you might as well just skip it because no-one’s making any revenue off of that.
Jonathan Handel: How does Aereo do it and why did Aereo win in the lower courts? That’s the interesting thing. They rolled out specifically in New York for a particular reason based on certain legal precedents. They won in the District Court in New York, they won in…
Larry Jordan: Now wait, wait, wait, wait, wait, wait. Hold still, hold still. So what Aereo is doing is they are providing an individual antenna. That antenna feeds over the internet to an individual user.
Jonathan Handel: No, not exactly.
Larry Jordan: Ok, but wait, let me get to the rest of the question. Before you talk about the court case, you need to tell us who’s suing them and why.
Jonathan Handel: That’s right. The broadcasters are suing them because they say that this is copyright infringement. That what Aereo’s doing is essentially the same thing as what a cable company does, which is they make signals, including broadcast signals, available to you, but the difference is that the cable companies pay re-transmission fees. They pay fees under the communications laws and there’s a bit of confusion here because this is a copyright suit, not a communications lawsuit. We’ll pick another turn of the wheel and get to that in a minute, but that’s the reason for the lawsuit and the economic reason for the lawsuit is, as I say, that re-transmission fees are billions of dollars and they are a growing source of revenue, not a declining one, and the broadcasters want to preserve that.
Jonathan Handel: By the way, what is a broadcaster? We think of ABC as a broadcaster and you might be listening to our podcast here in Los Angeles or New York. But you might also be listening in another area and ABC might not actually be your broadcaster, even though you watch an ABC station. Each of the big networks owns and operates – they’re called owned and operated stations or O&Os – about ten stations apiece, mostly in the major markets, in the larger cities, so New York and LA, for example. Those stations – Chicago – are going to be owned by the actual networks themselves.
Jonathan Handel: What about the stations in the rest of the country? The stations in the rest of the country, a large majority of them are owned by station groups, companies like Hurst, the New York Times company used to own a number of stations – they sold them off as they’ve needed to retrench with the lawsuits, the difficulty they’re having in the newspaper business. There are other companies. In addition, there are stations that are individually owned, not owned by a station group. This sort of hodge-podge, these are the broadcasters. The major broadcasters, of course, are the networks themselves and the networks themselves have a great interest in preserving this money.
Jonathan Handel: Now, you started to get into the question of, how does Aereo actually work? And that’s exactly the right question – how does it work? Aereo, instead of having a big antenna that then feeds a signal to the end user; the way a cable system does, through a head end and into the user’s set-top box and then allowing you to record programming on your set-top box, your DVR. Aereo works differently.
Jonathan Handel: First of all, Aereo has thousands of antennae at each location. Aereo is deployed now in about a dozen cities or so. They started in New York, they rolled out to other cities, not Los Angeles though because there was bad legal precedent for them here. They have about, say, 10,000 antennae at a single installation, maybe more, thousands of them. Each antenna is the size of a dime mounted on a circuit board. The antenna doesn’t do anything until a user presses ‘Watch TV now’ or ‘Record TV for later’, either of those buttons on their menu. The antenna then tunes the station that the user wants to watch.
Jonathan Handel: If the user’s watching delayed, says record it for later, then the antenna sends that signal to a hard drive, obviously, and it’s a central hard drive in Aereo’s facility. Even if the user says I want to watch now, it actually feeds a signal to the hard drive and you get to watch not literally live, but six or seven second delay and you’re not watching a stream that comes electrically from the antenna, you’re watching a stream that comes electronically from the hard disk. So the antenna streams to the hard disk, the hard disk streams to the user.
Jonathan Handel: It’s an individual antenna per user, so even if you and I are watching the same program at the same time, we’re using different antennae. And it’s an individual section of hard disk, so we each will have our own copy on the hard disk of the same program, even though we might be watching the identical program and might have pressed record, or watch at the exact same time.
Jonathan Handel: Now, those factors are very important because think about what this looks like. If what you’re watching is actually something off a hard drive, it feels on the one hand like cable, like you’re watching cable TV. It also feels like you’re watching a DVR, in particular what’s called a remote storage DVR, an RS-DVR, because the hard disk is located at the central facility, not on your set-top box.
Jonathan Handel: RS-DVRs are not original to Aereo. Cablevision first introduced an RS-DVR in New York and Cablevision obviously had a license from content providers to provide linear cable service. But the content providers, the broadcasters and others, said, “You’re exceeding your license. We didn’t license you to be able to record this stuff and make it available to people like that. We only licensed you to be able to make signals available live.”
Jonathan Handel: The District Court agreed with that argument, but the Court of Appeal in New York said “no.” Under the copyright law what’s going on here when you have this one to one correspondence between the hard disk and the end user is what’s called a private performance. In other words, it’s a private transmission. It’s not something that’s open to the public unless you open up your house to the public, but then you’re violating the copyright laws in a completely different scenario.
Jonathan Handel: Because of that, this is not violating copyright, because what copyright law prohibits is an unlicensed public performance. So even if I have a regular TV, leave Aereo aside, and I invite the public into my house – not just my friends but I’ve got a 100 seat home theater, let’s say, and I just open it up to the public. Now I’m violating the law. That’s why bars have to get special licenses and pay higher fees in order to show sports games and, if they don’t, they might get caught and they face damaging lawsuits when they do.
Jonathan Handel: The copyright law does not prohibit private performances or private transmissions; it prohibits public ones without a license. So look at what Aereo did. They took the RS-DVR architecture and attached an antenna to it and what the user is accessing is an RS-DVR. They’re watching a recorded program, whether there’s a seven second delay, or whether they watch it seven hours later or seven days later. They’re watching off a hard drive, just like they would be with an RS-DVR. So Aereo says, “You’ve got that one to one correspondence between sectors on the hard drive and the individual user and this is therefore a private performance.”
Jonathan Handel: What about that antenna? Well, these are free over the air signals. We have the right to supply an antenna to the end user and let the end user make use of the antenna, because no-one disagrees that an end user can put an antenna on their roof. We’re just supplying that same service.
Larry Jordan: Jonathan, take a breath. If they look at it purely in terms of, this is a way to record a private performance, like a DVR, then that decision was settled 30 years ago.
Jonathan Handel: Not 30 years ago, because this is a remote storage DVR. 30 years ago, and you make a good point, the Supreme Court upheld the legality of video tape recorders in your home, video cassette recorders. The Second Circuit decision in the Cablevision case said that is a private performance and that’s a fair use right to time shift, to record something and watch it later, and so therefore we’re going to look at this and say, “Here’s a private performance as well, it’s one to one and so we’re going to allow a remote storage DVR.” That was two or three years prior to Aereo.
Larry Jordan: Now, I’m reminded of a lawsuit that occurred two years ago, in fact we covered it here on The Buzz, which is the ivi.tv lawsuit against the broadcasters, which Ivi lost in its final court challenge. Is there a similarity between what Ivi was doing and what Aereo is doing?
Jonathan Handel: I don’t think so. I’ve taken a look at that and the Ivi case is cited briefly in the brief scenario, but it’s a different situation because they did not engineer it to be a remote storage DVR type mechanism. I think it doesn’t have that ‘one to one private correspondence’ and so it didn’t raise the issue and make for what is a very difficult case.
Jonathan Handel: Whereas here, and if you want we can talk about how the Supreme Court approached this case two days ago when it came to argument…
Larry Jordan: I will, but I’ve got one more question first. We tend to think of broadcasters as wanting to have the largest audience possible to get the most viewers, but this really isn’t the size of the audience issue, it’s the potential of losing the re-transmission fees. In other words, if Aereo gets away with this, the broadcasters say, “Cable companies will come to us and say we are not going to pay re-transmission fees because Aereo isn’t.” Is that the crux of the financial argument?
Jonathan Handel: Well, it is one of the pieces of the crux of the financial argument that the broadcasters are making, although there are some claws to that argument. One is that it turns out that cable companies have to pay re-transmission fees. They don’t have the option not to. The way the law is structured, if you qualify as a cable company – which Aereo does not, Aereo is not a cable company under the precise definition of the law and even the US government agrees and the government, by the way, weighed in at the Supreme Court on the side of the broadcasters, but even the government agrees that Aereo is not a cable company.
Jonathan Handel: If you are a cable company, you have to pay re-transmission fees and so there’s some question as to the force of that argument. The broadcasters have also said, “If Aereo does this, we will take our programming off the air and make it cable only and/or streaming only,” but that raises the question that the broadcasters never bothered to mention of, well, gee, then what happens to the unused spectrum? And the answer there is the FCC will reclaim it, as they are doing aggressively with some spectrums right now that are no longer used by the broadcasters, and they’re very aggressive, a lot of it because they want to make it available for wireless uses.
Jonathan Handel: I think there’s some real skepticism to be had when the broadcasters say that because they’re not going to want to give up that valuable asset.
Larry Jordan: So then what happened at the Supreme Court?
Jonathan Handel: Well, let me just say in addition, Les Moonves, the head of CBS, said that “Even if they lose at the Supreme Court, CBS won’t be financially affected,” which is very hard to square with the argument that gee, we’re going to lose all this valuable money.
Jonathan Handel: So what happened at the Supreme Court? Well, what happened was actually, much along the lines of what I essentially predicted in an article in The Hollywood Reporter. I wrote a very detailed analytical piece, where I talked to experts around the country and they all concurred that this was a hard case and that it’s very evenly balanced and there’d be a struggle between on, how do you view this? And the court would be very concerned about, on the one hand, these warnings that the future of broadcasting is at stake, and on the other hand warnings that, if you fine against Aereo, you’re going to imperil not just RS-DVRs, but aspects of the cloud computing industry. Because if you think about buying something from Amazon and storing it in your cloud locker, buying an audio visual program, a TV episode or something, and what if 10,000 people bought the same episode and a thousand of them watch it at once?
Jonathan Handel: Well, that sounds a little bit like Aereo also, and yet clearly that’s legal. The court, to answer your question, it was the most amazing thing. They were struggling openly. You had Justices saying things like, “I’ve read the briefs,” and by the way there were amicus briefs here up the wazoo, there were a total of 40 Friend of the Court briefs, just a flood of briefs here, and Justice Breyer said, “You know, I’ve read the briefs and I still can’t figure it out. If I rule for you or against you, what is the effect going to be on other technology? I’m very, very concerned about that,” and that same theme percolated.
Jonathan Handel: At the same time, the other theme percolated, which is one of the Justices saying, “You know, you look a lot like a cable company except you’re the only one that’s not saying re-transmission fees. How can that be legal?” And they were struggling with that as well, so this is not a conventionally political case. It’s not one of those where you look at Republicans versus Democrats and five to four and Kennedy is the swing vote, you know, the way a gay marriage case or a gun rights case might go. It’s not a case where you can even look at them and say, “Well, Republicans really love big business,” because Republicans don’t like media companies so much, and so it doesn’t fall in that direction.
Jonathan Handel: Where is the government on this? The government actually told the court not to overturn the Cablevision case, when Cablevision was on appeal in the Supreme Court, so they left it at the lower court stage. Now the government says that you should fine for the broadcasters, but when they try to argue in their brief, the government’s brief and Cablevision Company itself filed a brief, they tried to argue that you can preserve RS-DVR but distinguish Aereo and separate it out differently. But when they try to make that argument and you look at the intellectual phases for it, it’s not really compelling and that’s the difficulty.
Jonathan Handel: One of the experts I talked to said, “The trouble with this case is that, no matter which side you argue, you end up leaving a piece of the puzzle broken on the floor and I just hope,” he said – this was a law professor – “I just hope that the court doesn’t go in essentially like a bull in a china shop and break something in the law and make a mess of it.”
Larry Jordan: Now, Jonathan, when is the decision expected?
Jonathan Handel: Probably the end of June. It’s expected by then, it probably will take ‘til then.
Larry Jordan: And where can people go on the web to learn more about this issue?
Jonathan Handel: Well, the best place, I would say immodestly, would be The Hollywood Reporter, where my colleague Eriq Gardner and I have been covering Aereo. There will certainly be lots of coverage in competing outlets as well, but thr.com.
Larry Jordan: Is there anything new in the coverage besides just raw speculation? Because the oral arguments are over and I need a really short answer. Is it really just guessing until the court rules?
Jonathan Handel: It is. The only other thing you can do is you can go to the Supreme Court website and read the transcript and tomorrow you can actually listen to the, they’ll be posting the oral argument itself audio.
Larry Jordan: It’s an amazing case and, you’re right, whatever they decide, the industry is going to change, either computers or broadcast. Jonathan, for people who want to follow you on your blog, where can they go?
Jonathan Handel: The best place is jhandel.com, which actually is now my individual website and it includes a news page with blogging on it.
Larry Jordan: Amazing how it grows. Jonathan Handel is of Counsel at TroyGould and the contributing editor on labor issues for The Hollywood Reporter. Jonathan, thanks for joining us today.
Jonathan Handel: Thanks very much.
Larry Jordan: Take care. Bye bye.
Jonathan Handel: Bye bye.
Larry Jordan: Well, if your brain doesn’t hurt enough from having the Aereo case go on Tuesday to the Supreme Court. On Wednesday the Washington Post broke news of a potential FCC ruling on net neutrality, which equally has a huge impact on what we do as media creators, so we went to the expert. Michael Hiltzig is a Pulitzer Prize winning columnist for the Los Angeles Times, author of five books including ‘The New Deal: A Modern History’. He’s written a lot about court decisions and the whole issue of net neutrality and he is the perfect person to talk to today. Hello, Michael, welcome back.
Michael Hiltzik: It’s my pleasure.
Larry Jordan: No, no, no, Michael and I are both looking forward to chatting with you about this.
Mike Horton: Every time I talk to a Pulitzer Prize winner, I get giggles.
Michael Hiltzik: Well, let me assure you that real life doesn’t really change.
Larry Jordan: Well, we’re going to be impressed, I don’t care what you say. Michael, the last time you were on The Buzz was in January, which was when there was an Appeals Court case looking at net neutrality and you gave us a background on that. But it has continued to percolate throughout the industry and this week the FCC was reported to be getting ready to release proposed new rules redefining net neutrality.
Larry Jordan: Before we discuss what the FCC did, could you give us a definition of what net neutrality means?
Michael Hiltzik: Sure. Well, the term is very simple and its words tell you what it is. Basically, it’s the principle that a user has the same access to every website or service on the web equally. No matter what it is, and that is to say that your internet service provider cannot favor some services or some sites over another. The internet service provider, in most cases it’s a cable operator today, really basically cannot get in the way. Comcast or Time Warner or whoever it is has to provide the same access for every website, every service to the user, no matter what.
Larry Jordan: Well, I was just reflecting on this and allow me to ask a really simple question – if I’m a home user, my ability to access the internet is based upon how much I pay. If I don’t pay a whole lot of money, my download and upload speeds are slow and if I pay a lot of money, my download and uploads speeds are fast. How does net neutrality factor into that?
Michael Hiltzik: Well, you’re right about that. What you get as a user in terms of your upload and download speeds is the same. The point of net neutrality is that it should be the same for every website you access. It doesn’t mean that somebody who spends less money should have the best service, equal service to somebody who spends more money and pays more for bandwidth. But whatever you’re paying for bandwidth, every service you access should have the same speed, and that’s the difference.
Larry Jordan: Ok, so net neutrality means everybody has the same access to all the legal websites that are out there. Given that definition, what happened yesterday?
Michael Hiltzik: Well, what happened yesterday is that the FCC finally came out with, or at least telegraphed that it was going to come out with new rules that, in fact, will allow ISPs to charge more for faster access to the user for some websites. In other words Netflix, if Netflix decides that it wants super fast transport on the internet through, say, Comcast or Time Warner, it can pay for that and it can reach you as a user faster, you can have better service. You can have a clearer picture than, say, a competing video service that isn’t paying that same price, and that’s a real violation of the principle of net neutrality.
Larry Jordan: Well, Tom Wheeler, the FCC Chairman, was quoted as saying that the FCC has not changed its position because originally they were totally in favor of net neutrality. Wheeler said, and I quote, “The same rules will apply to all internet content as with the original open internet rules and, consistent with the court’s decision, behavior that harms consumers or harms competition will not be permitted.”
Michael Hiltzik: Well, I think Tom Wheeler is putting his thumb on the scales a little bit here. Basically, what he’s saying is that the rules that the FCC is going to promulgate, and of course this is a proposed rule, it eventually would have to be approved by all of the Federal Communications Commissioners. That hasn’t happened yet, that’s going to take months at least for it to work through the system. Basically, he’s saying that the FCC will allow ISPs, will allow cable operators, to make these distinctions based on how much you’re getting paid by websites or services and then it will go back and look at some of these deals and make a determination as to whether they violate the principle of net neutrality.
Michael Hiltzik: Now, that’s a lot different from a totally open internet, because what will happen is that ISPs will make these deals, AT&T, Time Warner, Comcast will start collecting profits from Netflix, Google and YouTube and whoever, and they’re going to have a vested interest in making it seem as though they’re not really violating net neutrality. It’s going to be much harder for the FCC to go back and unwind some of these deals after they’ve been established.
Michael Hiltzik: So Wheeler is saying, “Well, we’re going to look out for the principle and we’re going to make sure that none of these deals really violate the principle,” but I think it’s really the case that it’s going to be much harder for the FCC to do that. The FCC really is giving the game away and it’s handing the ball to the cable operators and to the wealthiest web services to do this, and this is a real problem, I think, for those of us who believe in net neutrality and who see the virtue in net neutrality.
Larry Jordan: Now, from a worst case scenario, looking at it from the end user’s point of view, let’s say that the FCC rules were adopted as proposed, and I need to stress that these are proposed rules which have not even become available for public comment, there are still, as you said, many months to go, but let us pretend the rules are adopted as you assume and let us assume that the worst happens – what happens at the end user’s end?
Michael Hiltzik: Well, what would happen is let’s say you’re a subscriber to Netflix. Netflix would make a deal with Comcast or Time Warner for this super turbo charged access. It would have a special speed all to itself. You’d get a great picture on your Netflix, but then Netflix, which would have to pay for that carriage, is going to pass the cost on to you. That’s one aspect, so you’re going to be paying more for your Netflix subscription.
Michael Hiltzik: The second thing that’s going to happen is that anybody who comes up and says, “We’re going to have a competing video on demand service,” is going to be truly disadvantaged. Some start-ups are not going to have the money to be able to compete with Netflix or YouTube for the same carriage and its picture isn’t going to look as good, it’s going to be pixilated, there’s going to be a lot of buffering and stopping and starting and it’s going to find it much harder to get customers. So essentially these big, rich services are going to have the equivalent of a monopoly over these services and this is really going to affect competition, and that’s bad because it’s going to basically block start-ups from getting a toehold.
Mike Horton: I’m trying to believe in our government and our ISPs in all this, the way it would work for the consumers, but even on the FCC’s page today, Tom Wheeler, under the heading ‘Setting the Record Straight’ on the FCC’s open internet rules says “This just isn’t going to happen.” Even with these start-up companies that might, because they’ll look at it on a case by case basis and commercially reasonable and these kinds of phrases that are thrown out throughout the blog. But you still think we should worry about this.
Michael Hiltzik: Well, the moment Tom Wheeler starts speaking about commercially reasonable arrangements, that’s a violation of the principle of net neutrality. The principle of net neutrality shouldn’t depend on commercial arrangements. It should be set in stone. It should establish that an ISP is a common carrier; it does not have the ability to favor some websites over others for any reasons.
Michael Hiltzik: Now, Wheeler will look at it and say, “Well, they made a commercial deal and it looks good to us,” but let’s not forget that an ISP has a lot of incentives to favor some services over others. In fact, some ISPs are going into the content business and they’re going to have an incentive to favor their own services over others. And if you don’t believe that that’s happening and if Tom Wheeler doesn’t believe that’s possible, all he’s got to do is look at the record of Comcast, which is the largest ISP now in the country and has a bid in to become even larger by merging with Time Warner, which is the number two ISP.
Michael Hiltzik: Comcast has already been caught favoring its own services over competing services and it was already subject to FCC discipline for doing this. So clearly Tom Wheeler has the evidence before him that this has happened before, it’s likely to happen again, there’s going to be much more incentive for it to happen more and more and the rules that the FCC is proposing will make it much easier for this to happen.
Larry Jordan: Now, muddying the waters is the results of the Appeals Court case that you and I were talking about in January, because apparently – and I don’t understand the case, which is why I’m going to toss it over to you – apparently the Appeals Court was not in favor of net neutrality. How did that ruling come out?
Michael Hiltzik: Well, that’s not exactly what the Appeals Court said. Now, let’s remember first of all that this was a lawsuit that was brought by Verizon, which is another big ISP. It’s a telephone company, but it does offer a lot of internet services to its customers, and it was very similar to a lawsuit that had been brought some years earlier by Comcast, and Comcast also wanted in. And what happened in both of those cases is that the court didn’t really say that there was anything wrong with the principle of net neutrality. What it said was the way the FCC went about implementing it was a violation of the law and that it had to find a different way.
Michael Hiltzik: In fact, the Appeals Court essentially told the FCC and told Congress that they could go back, Congress could rewrite the law, the FCC could impose net neutrality to a different regulatory system and that would be all right with the court. It really was talking about the mechanism and the actual regulations that the FCC use. It wasn’t talking about the principle of net neutrality. In fact, it said if you want to implement net neutrality, that will be fine with us. You have to do it the right way.
Larry Jordan: I was just reflecting, the FCC has been in favor of net neutrality for a long time and suddenly they’ve changed position. What’s the driving force?
Mike Horton: Well, I don’t know about the FCC, but Tom Wheeler was, wasn’t he?
Michael Hiltzik: Well, I’m not sure about either of those. It isn’t clear to me. The FCC and Tom Wheeler have paid lip service to the principle of net neutrality, but in their actions, the FCC, going back at least two Chairmen before Tom Wheeler have actually taken actions that made it much harder. The Comcast case that I just mentioned, really was a lawsuit over the very first attempt that the FCC tried to impose net neutrality, and the FCC had shot itself in the foot by changing the way it classified internet service providers under the law that made it much harder for it to implement these rules and to regulate net neutrality.
Michael Hiltzik: Comcast saw that, sued over the rules and, as I said, it won. Then the FCC tried again with another sort of cobbled together effort to impose net neutrality. Verizon sued over those rules and it won. But everybody can look at this, legal experts look at it and say, “There is a way for the FCC to do this.” They have to go back to before the Comcast rule and rewrite their own regulations and there’s nothing preventing them from doing that. So that’s something that Wheeler, by proposing this change, has refused to do.
Larry Jordan: Well, let’s take a look at the calendar. What’s the schedule for opening this for public comments?
Michael Hiltzik: Well, I believe that the proposal is going to be submitted to the public somewhere around the middle of May, I think May 15th is the working date. At that point, there will be months and months of public comments. You’re going to see a lot of experts weighing in, you’re going to see a lot of commercial ventures weighing in.
Michael Hiltzik: Netflix itself says, “It’s not in favor of this rule,” even though it certainly has the money to benefit from it. I think Netflix would like to see some more even handed carriage by the ISPs it’s got to deal with, but clearly they’re going to benefit. You’re going to hear Google weigh in on this, you’re certainly going to hear consumer advocates having their say and I think politicians will have their say. We should point out that President Obama, when he ran for office, spoke out very firmly in favor of net neutrality. So I think he’s going to be under some pressure to weigh in on this as well and to protect the principle.
Larry Jordan: So the public comments will open, at best guess, the middle of May with months to follow. So that means that we still have time to understand the issue and get our voices heard.
Mike Horton: And I hope you write about it, Michael, because you’re very influential.
Michael Hiltzik: Well, I’ll be writing about it as early as Monday.
Mike Horton: Thank you.
Larry Jordan: Michael, for people who want to keep track of what it is that you are writing, where can they go on the web?
Michael Hiltzik: Well, they can go to my blog, which is called ‘The Economy Hub’. It’s on latimes.com. The actual address is latimes.com/business/hiltzik and they can read my column in the LA Times. My column appears twice a week, on Wednesdays and Sundays, and the blog appears every day.
Larry Jordan: And, Michael, I read your column every time it shows up in the Times. You are always interesting to read and a delight to talk to. Thanks for joining us today.
Michael Hiltzik: Well, it’s kind of you to say so.
Mike Horton: Thanks, Michael. Fight the good fight, my friend.
Michael Hiltzik: All right.
Larry Jordan: Take care. Bye bye.
Larry Jordan: Jonathan Eric Tyrrell is a film maker, consultant and trainer for post post. He’s based in Victoria, British Columbia and has a roster of international clients. He’s also well known as an expert in post production workflow. Hello, Jonathan.
Jonathan Eric Tyrrell: Hello Larry. Hi Mike.
Larry Jordan: Mike will be with us in a second, he had to stretch and get a glass of water.
Mike Horton: I’m back. How’s your toe, Jonathan?
Jonathan Eric Tyrrell: It’s very well, thank you. But I want to know about this Porsche you imagined for me.
Mike Horton: Oh, that was the other Jonathan. We have a little inside joke about Jonathan’s Porsche.
Larry Jordan: We had a short video from Jonathan Handel a while back, and he was showing how he was driving a radio controlled Porsche and managed to drive it directly into the cat’s dish and drown the Ken doll that was sitting in the driver’s seat. We have never forgiven him for crashing his Porsche.
Mike Horton: That and the fact he’s a lawyer. Lawyer, Porsche. Porsche, lawyer.
Larry Jordan: Jonathan, talk to us about the state of the editing industry. What we’re looking at is remote collaboration and asset management. It seems like a lot of announcements were made at NAB. Give us a sense of how collaboration has changed over the last few years.
Jonathan Eric Tyrrell: Well, it’s interesting because I’m not sure that it’s so much that collaboration has changed. I think it depends on where you’re looking at the industry from. I think on large scales there has always been a lot of collaboration. And I think what we’re looking at now is a reinvestment in tools and kind of understanding that the digital world offers us opportunities to work in different ways.
Larry Jordan: Different ways how?
Jonathan Eric Tyrrell: Well, I think, again, one of the things that we’ve seen in the industry is that people have worked in disparate locations a lot. So effects might happen in Vancouver, for example, while main production is happening in LA. And so I think we’re seeing, with this advancement of digital technology, that people are being able to work and support those workflows in very different ways.
Larry Jordan: One of the things that I’m seeing come online are more and more ways of not only collaborating, but asset management. And I’m starting to see, I mean, we began to see it with Final Cut Server a few years ago, but we’re starting to see ways where the materials that we work with our assets and the way we work with them are needing to be shared outside a single editor and a single edit workstation. What software is rising up to take the place of Final Cut Server?
Jonathan Eric Tyrrell: Well, in my case, I can speak about Cantemo Portal. That’s actually…
Larry Jordan: I’m sorry, what software again?
Jonathan Eric Tyrrell: The software is Portal, the company is Cantemo.
Larry Jordan: Ok.
Mike Horton: Cantemo. That’s the American way of saying it. Cantemo.
Jonathan Eric Tyrrell: If you say so, but the guys in Sweden might have objections.
Mike Horton: Yes, ok.
Larry Jordan: The guys in Sweden aren’t here, so we win. So Cantemo is the company and what is Portal?
Jonathan Eric Tyrrell: Portal is a web based asset management solution. It exists in a web browser and it uses a lot of open standard web technologies, but it doesn’t actually have to, you know, when we talk about the cloud, it doesn’t have to live on the cloud. It can live on your private network, but you access it through a web browser.
Larry Jordan: Well, I think, without even taking my shoes off, I could count 15 different applications that do similar based web, cloud, server based collaboration. What made you decide that Cantemo and Portal was worth paying attention to?
Jonathan Eric Tyrrell: Well, I guess my story with this actually begins with Final Cut Server.
Larry Jordan: Oh, tell us the story.
Jonathan Eric Tyrrell: I bumped into Portal while I was working with Final Cut Server, when they gave me a demo. I counted all the things and thought, “Wow, I need to submit a feature request list to Apple, because I would really like Final Cut Server to do all of this,” and, of course, we know what happened to Final Cut Server.
Larry Jordan: It died.
Jonathan Eric Tyrrell: The guys at Cantemo actually then made a very interesting step. They approached myself and a number of other people who were involved in Final Cut Server and said, “What if we were to change the way that we bring this product to market, so that it would fit into the Final Cut Server space?” and then they’ve tried very hard and they worked very hard to build up the integration with the non-linear editor application, so we have integration with Final Cut Pro 10, Final Cut Pro 7, Premier Pro and Avid Media Composer.
Larry Jordan: Now, Jonathan, you’re talking to Michael over here, so could you use smaller words to describe what the heck it is you just said?
Mike Horton: Yes, just don’t say anything about codecs or none of that kind of stuff. Don’t put a dot in any of your language.
Jonathan Eric Tyrrell: You’ve had a lawyer and a business analyst on before me.
Larry Jordan: And they did ok.
Mike Horton: Yes, but I understood them.
Larry Jordan: There was no codec going on there. What do you mean, fits into the Final Cut…
Jonathan Eric Tyrrell: Let me back up a moment. The thing about this is that, in many ways, it’s not seen as being a very exciting area. Mike and I have had that conversation before. But, in fact, I see it as a fundamental area, and you know that my background is actually in editing and part of the goal, for me, always in learning about the technology has been about being able to get on with the job of editing, rather than having to wrangle things.
Jonathan Eric Tyrrell: So for me, asset management is about being able to take control of where things are. Rather than having to hunt through bins, and I think the thing is that we all know editors who are very, very clever at how they organize and structure their projects and they know where things are, and they keep all of that there, and historically we had assistants who would go and get the film off the hook, that kind of thing.
Jonathan Eric Tyrrell: But actually, when I’m working, I want to be able to access something when I need it and I don’t want to have to look at everything. I want to look at the few things that could happen next. And so asset management for me started from there and then it expanded out to thinking how do we preserve and make use of the media that we’ve acquired for other projects and for other editors? Does that make it more human?
Larry Jordan: Yes, makes it much more human.
Mike Horton: I understood that. Thank you, Jonathan.
Larry Jordan: So with Portal, how would I take a Premier workflow or a Final Cut 10 workflow? I’ve got Final Cut open on one monitor, I’ve got this web browser thingy open on a second monitor. How does that integration help you find what you need?
Jonathan Eric Tyrrell: Well, I think all of the conversations you’ve had about Final Cut 10 and metadata begin to play into this. Again, we’re searching for metadata in the web browser and that’s one of the interesting things about the companies that are using these web browser applications, is that everybody knows how to use a website. From a training perspective, it becomes a bit of a moot point – “I’m showing you how to use a website today.” “Ok.” – and so everybody can use it.
Jonathan Eric Tyrrell: You search. With Portal, they actually have what’s called a media bin, it’s a little bit like a shopping cart idea where you can add items that you’ve found so you can continue browsing, and then you select the menu and choose ‘Open in Final Cut Pro 10’. And if you’re working with Premier, you can do the same thing but they also, like a lot of other companies, have a panel so you can actually search directly within Premier without having to go to the web browser.
Larry Jordan: So what it allows you to do is to access all the assets that you have imported into this media asset program so you can find the needle inside the haystack by just simply saying, “This is the criteria I need and what clips meet that criteria?”
Jonathan Eric Tyrrell: Absolutely. “What do I need now?”
Mike Horton: I can’t do that in Max OS 10 Server or Mavericks? I can’t do that?
Jonathan Eric Tyrrell: This is an interesting thing, because what you get into it – and I’m anxious with the work, but we’ll see how I go – the fastest… of what we’re putting on a hard disk and so, yes, you can organize things and put them into folders, but I bump into so many people who have messy desktops and actually it’s hard to find things.
Mike Horton: Oh not me, Jonathan.
Larry Jordan: No, I’m afraid to look at his laptop.
Jonathan Eric Tyrrell: I knew you wouldn’t be, Mike. Everybody, and I count myself in this, misfiles things or misorganizes things and the way that Mike decides to organize something might not the be way that Larry wants to organizes things, might not be the way that I want to organize things. And so what we’re trying to do with an asset management solution is find the human accessible way of being able to retrieve that data.
Jonathan Eric Tyrrell: And again, with a larger organization, sometimes that’s not just an editing staff, that might be producers and all kinds of other people who are involved in the production.
Larry Jordan: One of the things that you do is you make a living as a consultant and I’m sure installing asset management or Cantemo is one of the things that you do, but for people like Mike and I, can we install and populate and use this software by ourselves? Or do we need to have IT support and a team of consultants come in to put it together?
Mike Horton: Yes, we’re not talking Adobe Anywhere here, are we?
Jonathan Eric Tyrrell: One of the things about this is that, yes, you do need to work with an integration partner to set it up. And I think partly and, you know, Larry, your history with Final Cut Server, I remember when you first encountered Final Cut Server, your response was, “That’s very complex.”
Larry Jordan: Yes, I remember that.
Jonathan Eric Tyrrell: And what we’re talking about is a complex machine with many moving parts. And so part of the lesson Cantemo learnt from Final Cut Server was to not make the application something that anybody could download, because actually it’s better if somebody who understands the machine and understands the pieces of the machine comes and helps you set it up. Once it’s set up, I think that people find it very, very easy to use.
Jonathan Eric Tyrrell: That’s the trick, right? It’s one of these things where it’s a very complex machine behind the scenes, but actually the front and the user experience is very simple.
Larry Jordan: Walk us through an installation that you’ve done for one of your clients. You don’t have to name the client, but give us a sense of what you had to do to put this together and is it affordable by small shops or do you have to have a billion dollar budget to afford this?
Jonathan Eric Tyrrell: Well, you certainly don’t have to have a billion dollar budget, and it’s one of the things that I’ve seen, you know, one of the conversations that I often have with people about this kind of thing is that actually these tools have existed for quite some time but they have cost millions. And now we’re looking at tens of thousands of this kind of thing, and so you are seeing this commoditization of these types of tools, but it’s not the same kind of price as your Final Cut Pro end user license, if you’re going to buy Final Cut Pro from the Mac App Store. Portal isn’t there. As I say, it’s much more complex thing.
Jonathan Eric Tyrrell: Now, often, the way I think about this, and like you, Larry, I like to say I keep things simple, and the joke about this is that you keep looking at this and saying, “Well, I’m doing a complex thing,” but I think if Jonathan understands it, then anybody can understand it.
Mike Horton: That’s when I say, “This tool was made for me.”
Jonathan Eric Tyrrell: I often talk to people about the process I use – and this is where I show my background – but I say, “If I was to ask everybody in the Production Buzz studio how do we make a cup of tea?” and I did that as a survey, do I think that I could come back and give my report to Larry and say, “Well, you know, Larry, nobody said plug the kettle in,” so we have this workflow, this series of steps, that are involved in making a cup of tea but we missed a fundamental part.
Jonathan Eric Tyrrell: So one of the first things I do when I meet with an organization is I sit down and we have that conversation – what is it that you do? And then what do you really do? – And so we actually then sit down and work through what are the components and sometimes, just as we’re training, it’s often a matter of saying, “Well, ok, today you’re doing it this way. I would recommend that you do it this way,” and it can be a radical shift, but the idea is that actually it’s an easier shift to make if we can help people understand the efficiencies that they get from it.
Larry Jordan: Is there a certain size company that could benefit from this? Or is it really based on the number of assets that you’re trying to keep track of?
Jonathan Eric Tyrrell: It really depends. I mean, again, my joke about Final Cut Server – and I would still say the same thing about Portal – is that as an individual I want to be able to manage these assets and I want to be able to sort through things. Now, the cost might mean that actually it’s not suitable for an individual, but one of the things about Portal today is that you can start with a five user license.
Larry Jordan: And how long do you think it takes to implement, say, I’m not talking New York Times with Final Cut Server, but I’m talking of a production house of, say, five to ten editors, how long is the implementation process?
Jonathan Eric Tyrrell: It really depends on the task involved and, again, the comparison that I would use here is that it’s a little bit like saying, “Well, how long does it take to make a film?” because you might say, “Well, ok, with five members of crew, we could make something quickly,” but it depends on the complexity of the task.
Jonathan Eric Tyrrell: But I would say that, if everything was smooth and in place, you could actually set something up and get moving within two months.
Larry Jordan: Ok. So it’s a process of a few months as opposed to a few weeks or a few days.
Jonathan Eric Tyrrell: Well, I’m saying two months, but we could say six to eight weeks.
Mike Horton: Yes, if it’s complex, maybe. If it’s not, piece of cake. Piece of cake.
Jonathan Eric Tyrrell: One of the challenges I have in trying to explain this to people, and this is why I use the example of making a film, because often we understand this idea of all the steps involved in a production whereas we might understand all of the steps involved in developing an asset management solution in a post production workflow on that scale. Is precisely this idea that we ask, “Ok, you’ve made a film before. How much does the next film cost?” and obviously there are so many variables in there that if you were to say, “Jonathan, we want you to tell us how much a film costs to make?” I would be negligent to try and tell you a cost just off the top of my head and it does require that conversation.
Larry Jordan: I think the key is that if you’re not able to keep track of the assets that you’ve got on your system and if you need to keep re-using assets and re-purposing assets, some sort of organizational structure makes a lot of sense. But also to set realistic goals that this is not something that you can throw a switch and poof! Everything is instantly organized and ready to go. I think you make a good point that working with somebody who’s installed it before can decrease your heart rate by…
Mike Horton: Yes, absolutely.
Jonathan Eric Tyrrell: Yes.
Larry Jordan: Jonathan, where can people go to learn more about what you’re up to on the web?
Jonathan Eric Tyrrell: You can find more about me at postpost.tv.
Mike Horton: And you can actually find out a lot about Cantemo there too, because it’s right there on the front page.
Larry Jordan: And the website is postpost.tv and Jonathan Eric Tyrrell is a film maker, consultant and a trainer for post post. Jonathan, thanks for joining us today.
Jonathan Eric Tyrrell: Thank you very much, Larry. Thanks, Mike.
Mike Horton: Thanks Jonathan. I want to see you in Victoria one day.
Jonathan Eric Tyrrell: Yes please.
Larry Jordan: Bye bye.
Larry Jordan: Michael, it’s been a different show today. We’ve had some amazing guests.
Mike Horton: Yes. The Aereo discussion was really fascinating, which is why I tended to listen rather than get into it, because it still seems to me, and if you look at the hearings, the Supreme Court hearings and what that is all about, the Supreme Court right now is leaning heavily against them. They just feel that they’re just stealing.
Larry Jordan: Well, we’ll have to see, because the question is always…
Mike Horton: But then Jonathan makes all these really good points and it is about copyright, it’s not necessarily about the questions that the Supreme Court is raising right now, although they’re saying things like 10,000 antennae. Come on, this is all about circumventing legal issues and legal precedent.
Larry Jordan: So what do you think the court should do?
Mike Horton: Right now, it seems like they’re going to go against them. I mean, that’s what it…
Larry Jordan: In favor of the broadcasters, you think?
Mike Horton: Exactly. It’s not paying the re-transmission fees, but Jonathan makes a point that maybe they can get around that. So I don’t know and it seems like this court is a little bit more tech savvy than I thought originally. They’re asking some good questions.
Larry Jordan: The questions they were asking were amazing. I was very impressed with that.
Mike Horton: Although I think they have tech savvy assistants, “Here, ask this question. They’ll make you sound smart.”
Larry Jordan: I want to thank our guests today, starting with Jonathan Handel of Counsel for TroyGould in Los Angeles; Michael Hiltzik, financial columnist and business columnist for the Los Angeles Times; Jonathan Eric Tyrrell, film maker and post production consultant.
Larry Jordan: There’s a lot happening at The Buzz between shows and it’s all posted to our website at digitalproductionbuzz.com. Visit with us on Twitter, @dpbuzz, and Facebook, at digitalproductionbuzz.com.
Larry Jordan: Music on The Buzz is provided by SmartSound. The Buzz is streamed by wehostmacs.com. Text transcripts are provided by Take 1 Transcription. Email us if you want to say hi to Michael, because he is lonely, at email@example.com.
Larry Jordan: Our producer is Cirina Catania, engineer Adrian Price. On behalf of Mike Horton, my name is Larry Jordan and thanks for listening to the Digital Production Buzz.
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