THE BLOG
02/08/2013 03:33 pm ET | Updated Apr 10, 2013

The Internet Is Not Free

In my union, the Writers Guild of America, East, AFL-CIO, we pay close attention to the related issues of "Internet neutrality" -- that is, the concept that powerful private and public entities should not restrict people's ability to distribute and receive information and programs via the world wide digital distribution system -- and digital piracy. We want to ensure that our members and other creators can reach audiences directly with their audio-visual works, but we also want to protect our members from thieves who steal their TV shows, movies, and other programs and illegally distribute them online. The conversations are endlessly fascinating, as activists and scholars wrestle with the questions of how artists can earn a living in the brave new digital world; how to protect consumers' privacy; and how to ensure that people can share wisdom and information online unfettered from corporate and governmental control.

In the ceaseless debate about whether information yearns to be "free" on the Internet, it seems to me that one important fact is overlooked: Access to the Internet is not free. Consumers pay huge amounts of money to connect their computers and phones to the pipelines carrying the vast flow of content, but very little of that money makes its way into the pockets of the people who create that content. Instead, the money goes to the Internet service providers and others who control the pipeline. This, in my opinion, should change.

Traditionally, writers and other creators made money because television networks and movie studios sold access to their work. To watch a compelling show, a consumer tuned into one of the television networks and watched advertising as part of the bargain; to watch a film, a consumer paid for a seat at a theater that had licensed the work for the evening. As more and more content becomes available (lawfully or otherwise) on the Internet, people can watch what they want, when they want, and the points of distribution and access are much more difficult to restrict. The amounts that people are willing to pay seem to be slipping, even to the point at which otherwise-reasonable individuals succumb to the temptation to watch pirated content without paying at all. Seems great for consumers, but not so great for writers and others who devote years to developing their craft so they can create material that is compelling, informative, and entertaining. When art is free, artists starve.

People continue to figure out ways to "monetize" online content, of course. Marketers are discovering the enormous value of the personal information generated by people's online behavior, and this might become a source of revenue akin to traditional advertising dollars. Moreover, many consumers pay additional amounts to vendors for online access to content. For example, Netflix and Hulu Plus charge monthly subscription fees, while iTunes and Amazon.com sell or rent material that was first distributed on television or in theaters. So far, the brightest minds in the business have not figured out how to replicate the revenue streams currently generated by television advertising, theater tickets, and DVD sales, so the market for programs created directly for digital distribution has been pretty thin. Thus, if traditional television and cinema are displaced by the Internet, there will not be enough high-quality content for the ISPs to distribute unless we can figure out how to generate more money to pay people to create it.

I would suggest that creators of digital content think about how to tap into what is perhaps the most significant stream of online revenue: the money consumers spend, month in and month out, for fast and reliable broadband access. In 2012, the average American broadband subscriber paid $43 a month to access the "free" content on the World Wide Web -- more than $30 billion per year, and growing. Cable television companies recognized the enormous potential of selling wire-time to consumers years ago, and nearly half of broadband access is provided by companies that also provide audio-visual programming (i.e., cable companies Comcast and Time Warner and the hybrid telecom, Verizon.) Thus, the distinction is already blurring between "pure" ISPs that serve as mere pipelines for digital bytes on the one hand, and traditional producers and distributors of content like Disney and Sony on the other. Indeed, Netflix, Hulu, Amazon.com, and other digital entities such as Yahoo and YouTube, a subsidiary of Google, are already commissioning professionals to craft high-quality original content; they seem to be adopting the strategy of the cable television networks that develop premium shows to attract subscribers (e.g., HBO with The Sopranos and AMC with Mad Men). To put it another way, conduit-providers are becoming content-providers in the digital world just as they have been doing in the cable-TV world.

I suspect this trend will accelerate, and ISPs will recognize that, without compelling content for customers to watch, people will balk at paying big monthly bills for access to the Internet. And without a way to earn a living at it, creators will not be able to devote themselves to making that content. This suggests that creators and their representatives like the WGAE should think about additional ways to tap into the multibillion dollar flow of dollars from consumers to ISPs. Internet service providers need to ensure that there is are enough dramas, comedies, documentaries, news programs, and other material -- and that this content is of high enough quality that people are eager to watch it. This could be an important opportunity for writers and other creators to develop new sources of funding for their important work.