Global mode undermines local content and regional rights

Exclusive rights are a must for Sky and free TV to stay relevant. Photo / Greg Bowker

Advocates for global mode and open internet access are undermining local content and the survival of the New Zealand production industry.

Campaigners for open access have blasted TV networks as "bullies" for lodging a legal bid against "global mode" - a technology that allows New Zealanders easy backdoor entry to cheaper and better TV services in the United States.

But the networks are warning that the free internet people should be careful what they wish for.

Global mode - used by CallPlus internet service providers Orcon, Flip and Slingshot - makes it easy to have backdoor access.

It runs roughshod over networks which pay top dollars for exclusive New Zealand rights.

Even the Consumers Institute has attacked the broadcasters, led by Sky TV and including Spark, Television New Zealand and MediaWorks.

Nobody doubts geographic "blocks" that split the world into different copyright areas are breaking down over the next decade. But nobody yet knows what system will replace it.

CallPlus does not appear to want to form relationships with existing pay TV services. Instead, it has opted for a quick hit by using global mode to hitchhike on US services.

Now the networks have called them out with legal action.

CallPlus, and the early adopters and geeks who believe the internet has swept aside the rule of law, are defending the right to make money off shows whose copyright they do not own. Others back open access as an ideological ideal.

There is no interest about how the breakdown in geographic areas is affecting the selling of New Zealand TV overseas through the loss of smaller distribution channels.

More significantly, no interest in how the breakdown of geographic markets will affect the ability of New Zealand producers to make local content.

The economic argument is simple enough. Local content is much more expensive to make than importing foreign programming, for which the return on the investment is often significantly higher.

The fact is that geo-blocking is breaking down. New international players like Netflix are pressing for a system of buying global rights, bringing uniformity across their networks. Studios are working on ways they can do that while not losing the money they earn from dozens of smaller geo-blocked markets. The EU is also moving to develop Europe-wide rights for content, much to the chagrin of the TV companies.

Exclusive rights are a must for Sky and free TV to stay relevant. The networks pay Hollywood studios big money and bring forward the play dates so that the public are seeing episodes close to or at the same time as they are screened in the US.

A US drama costs a fraction of local ones and in some cases taxpayers give subsidies to ensure local content provide the networks with an adequate return. In effect, overseas shows make viable the cost of local content.

So the notion of global mode - skirting around exclusive regional rights - undermines local content and the New Zealand production industry.

If Call Plus wins the legal case it will have a significant effect on the New Zealand content sector and that will mean either less local content and/or more taxpayer subsidies.