Source : National Post

Broadcaster revenue chilled by Web viewing

There's a dirty little secret shared by Web users looking to access online content that is only available in the United States.

As U.S. television networks block international users from watching such top shows as Lost and Grey's Anatomy online due to complex licensing agreements, free software is widely and easily available that circumvents "geoblocking" practices.

Its availability could scuttle the business model Canadian broadcasters use when negotiating with U.S. television producers for digital, or online, rights.

Although representatives from CTVGlobeMedia Inc., Rogers Communications Inc., and CanWest Global Communications Corp. declined to comment, Alan Sawyer, a media strategist with Two Solitudes Consulting, says if the practice catches on among Canadian Web users, broadcasters could lose significant advertising revenue.

"The advertisers are just dipping their toes in the water and not throwing a lot of money at covering the disproportionately high broadband streaming costs," said Mr. Sawyer. "So when you are able to go to CBS.com to watch a show that a Canadian broadcast has the licensing rights to, it costs CBS money because [Canadian] advertisers aren't getting the same value out of you.

"It's lost revenue for the local broadcasters because they have the rights to make money out of that content."

It could be another hurdle in what is becoming a contentious issue between broadcasters and TV executives who are still struggling to monetize traditional media in a digital world.

"Broadband streaming of content is still an immature business offering for broadcasters," said Mr. Sawyer. "They're not making much money on it yet until they figure out how to make it attractive for people to go to their Web sites."

Put simply, here's how it works. Using what is known as a "virtual private network," a Canadian Web user logs on to a server that has an IP address that a Web site would read as Canadian and changes it to look as if it is American.

Although the technology has been around for the past decade, it is only recently that savvy online users have been able to figure out that it can also work to watch previously inaccessible digital content.

Furthermore, says entertainment lawyer David Zitzerman, you're not breaking any laws in Canada by bypassing country-specific Web sites.

Although the practice may violate a statute in the widely lambasted Digital Millennium Copyright Act in the United States, says Mr. Zitzerman, there is so far no copyright legislation in Canada that would prohibit anyone from visiting U.S.-only Web sites under the guise of a non-Canadian IP address.

"Copyright was economically maximized by geographic licensing," said Mr. Zitzerman. "But I don't think there's any legal basis to say they've done something inappropriate based on existing Canadian copyright law."

David Gorodyansky, president of AnchorFree Inc., a Silicon Valley-based software company that freely distributes software that can bypass geoblocking, says he just provides the software and cannot control the various purposes to which it is put.

"We've built this software to allow users to be private and secure online," said Mr. Gorodyansky. "We're simply providing an enable for users to do whatever they're interested in on the Web without any third parties tracking their information."

HOW TO:

Getting set up to access content that is unavailable in Canada on such country-specific Web sites as Pandora.com or Hulu.com takes only a few minutes. - To do so, one needs to download a program that disguises your IP address and tells the Internet that you're browsing from a U.S.-based location. - Software programs such as Anonymizer Inc.'s Anonymous Surfing program (at www.anonymizer.com/consumer/products for $30 for a one-year subscription) and HotSpot Shield from AnchorFree Inc. (www.anchorfree.com/downloads/hotspot-shield for free until 10 gigabytes are transferred) are inexpensive options and easy to install. - Once programs are installed and embedded in your Internet browser, they simply need to be configured to your Internet connection and you'll be watching commercial-free hit shows such as Lost or Grey's Anatomy. - However, you will encounter a noticeable lag when trying to access streaming content online. Since the programs must constantly divert your IP address through another server, the quality of your overall Internet experience would likely take a hit.

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