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Comment by paol | Hacker News Reader

This might sound radical, but I think a system of compulsory licensing should be instituted.

It worked for radio and it worked for physical video rental (in fact that's the reason netflix's physical rental catalog has almost every movie while their digital catalog has few and keeps shrinking)

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Why, services would have to compete on customer service, quality and price! That would be terrible.

Fortunately now that net neutrality has been eliminated, that's literally impossible. Comcast can and will prioritize their own streaming services to the detriment of their competitors.

Unfortunately, Netflix' physical rental catalog is shrinking significantly as well. I assume they've just stopped refreshing much of their back catalog.

I generally agree that the fragmentation is a PITA. It would be nice to have an all-you-can-eat subscription for any content that's available digitally. Of course, then people will complain that their now bundled subscription offering costs $100/month and they can't just consume a la carte.

The analogy to cable bundles isn't perfect but it's similar in some respects. People don't really mind that they have maximum choice. They just want a cheaper price because they don't personally consume all the options on offer.

A middle ground could be rentals per series or movie such as on iTunes or Amazon Prime.

That middle ground is pretty much Amazon with Amazon Prime Video today. Netflix presumably wants to remain an all-you-can-eat subscription service--which has the advantage that I know anything available on Netflix is "free."

Yup, no transaction costs to have to deal with, no thoughts about should you go somewhere else. Netflix is all about one thing. Giving the best video experience they can at the cheapest price. Amazon is all about getting you into the ecosystem. Most of the time they don't have anything compelling.

What is the economic rationale behind such a scheme? There are almost no barriers to entry in either the content-creation market or the content-distribution market. Indeed, the barriers are lower than ever thanks to digital media workflows.

It's kind of like saying we should have a law to force car manufacturers to sell to any dealership, so Toyota can't have Toyota dealerships versus Ford having Ford dealerships. Maybe there is a hand-wavy argument that it would make car shopping more convenient, but is there an actual market failure that would justify regulatory intervention?

It should be noted that compulsory licensing for music is just an accident of history with no sensible economic foundation: http://digitalcommons.law.wne.edu/cgi/viewcontent.cgi?articl....

Lower barriers to entry aren't a bad thing though - I'm perfectly happy having a lot of competition in the content distribution or content creation markets. It drives innovation and ultimately results in a healthier market and more consumer choice.

I think the possible danger that compulsory licensing would prevent is that companies can use their market power in one area to starve out competition in another. For example, once Disney launches their streaming service, they could easily capture a large portion of the market due to their dominance in content creation

If the worry is that Disney will use market dominance in one market to capture another (ala Microsoft and browsers), the solution is antitrust action against Disney, not forcing compulsory licensing on all content creators whether they have market power or not.

I guess my point is, if this is a natural consequence of vertical integration between content creation and content distribution, a more general approach could make sense (you could make the same argument to a lesser degree about HBO or even Netflix).

But what you're positing is a consequence only where vertical integration is combined with horizontal dominance. If I don't have market dominance in content, there is little risk that I'll be able to translate that into dominance of the streaming market.

At the same time, there are huge downsides. You take all the negotiating leverage away from the content creators and give it to the distribution middlemen.

I didn't realize that music was more or less unique in this regard until a few years ago. I assumed that, for example, if I wanted to put on a play I could pay some royalties to someone and that was that.

But then I ran across a story about how some theatre in Boston had to get into a negotiation with a playwright because he didn't want to give them the rights to perform his play. (Don't know the whole story but it was a smallish theatre company that puts on good but not normally outstanding productions.)

It's not even all of music but just a subset of music that has compulsory licensing. If you want to use a band's song in a commercial for your product you can't if they won't let you.

You also see this flare up in politics from time to time generally when a GOP candidate plays a song from a liberal leaning band at events and the band demands that this stop.

Yep. Music used for commercial purposes (in the sense of used for marketing, advertising, etc.) still needs to have rights explicitly cleared.

I'm also not sure if everyone is part of the royalty umbrella organizations and fall under that regime.

Indeed. Otherwise within 5 years Disney may end-up buying both HBO and Netflix, because those two can't compete without content (especially after Disney pulls Marvel's IP from Netflix, which will wipe out the large majority of Netflix's own successful shows).

And let's not forget who keeps fighting for draconian copyright laws every 20 years -- Disney. I don't think we want Disney to become any larger/more powerful.

It is long past time for Disney to get trustbusted.

Netflix gets to keep its "original" Marvel programming.

https://www.forbes.com/sites/alishagrauso/2017/08/09/disney-...

I agree for rentals/purchases, e.g., I should be able to rent any movie from Vudu, Apple or Google Play. The real problem though, is that people just want to pay Netflix $10/month, and that obviously can't support anything more than it's very limited catalog.

What do you mean by "compulsory licensing"? I skimmed the Wikipedia article but I'm missing how it worked specifically for video rental but not streaming services.

The parent comment is conflating two different things.

Commercial radio stations and others can get a blanket license for playing songs, e.g. https://www.ascap.com/music-users/types/radio. Furthermore, if you want to cover a song you can automatically get a license to perform that song. The artist can't typically withhold that right the way a playwright, say, can.

Physical video rental, like the sales of used books, is allowed under first sale doctrine. You can't make copies and sell but, so long as you're lending or selling a physical copy that you bought, you're good.

My understanding is based on my brief time doing college radio, so I may be wrong and welcome corrections.

Basically, it means there doesn't need to be any formal agreement between the broadcaster and the IP owner. If you own a radio station, you can play whatever song you want (provided it doesn't violate things like obscenity rules), and the IP owner can't say boo. The IP owner gets compensation, but they don't get to dictate what radio stations get to play their songs.

Yeah I'd wish there was a way to make exclusivity contracts illegal.

Sell your TV show to all the streaming services instead of one.

It's mostly working for patents too, with FRAND.

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