My most recent Forbes column is entitled, “We All Hate Advertising, But We Can’t Live Without It.” It’s my attempt to briefly (a) defend the role advertising has traditionally played in sustaining news, entertainment, and online service, and (b) discuss some possible alternatives to advertising that could be tapped if advertising starts failing us a media cross-subsidy.

What got me thinking about this issue again was the controversy over satellite video operator DISH Network offering its customers a new “Auto Hop” capability for its Hopper whole-home HD DVR system. Auto Hop will give viewers the ability to automatically skip over commercials for most recorded prime time programs shown on ABC, CBS, FOX and NBC when viewed the day after airing. It makes the viewing experience feel like the ultimate free lunch. Alas, something still must pay the bills. As innovative as that technology is, we can be certain that it will not make content consumption cost-free. We’ll just pay the price in some other way. The same is true for online services since it’s never been easier to use technology to block ads.

So, what is going to pay the bills for content as ad-skipping becomes increasingly automated and effortless? Stated differently, what are the other possible methods of picking up the tab for content creation? Here’s a rough taxonomy:

I.     CHARGES

A.     Direct Fees (Periodic billing / Pay-per-view)

B.    Indirect Charges (Tiers / Bundles / Package pricing)

II.     ADVERTISING

A.    General / Mass market ads (Billboards / Banner ads / Pop-up online ads)

B.     Targeted ads (Directed pitch)

C.     Integrated (Product placement / Payola)

D.     Sponsorship / Underwriting

III.     PHILANTHROPIC

A.     Individual  (ex: Arts & opera funding)

B.     Foundational (ex: Knight Foundation)

C.     Governmental  (ex: CPB / BBC model)

IV.     INTERNAL CROSS-SUBSIDY  (Profitable division subsidizes unprofitable / “loss leader” strategies)

There are probably other ways of subsidizing content creation, but those are the primary methods. I have no idea what combination of strategies will sustain content going forward, but I think advertising is likely to play a diminished role in the mix as it becomes increasingly easy for us to filter it out of the mix. But the content creators will just shift costs elsewhere and raise the prices for programming through direct and indirect pricing techniques. Do you like HBO’s pricing model? Pay-per-view? Paywalls? Well, it doesn’t make a difference whether you do or not because you’ll likely be seeing a lot more of those models in your life in coming years if advertising fades as a subsidization method.

Alternatively, as I also note in my Forbes piece, “we could see a lot more Texaco Star Theaters in our future, with major companies essentially owning specific shows or networks.” Such program sponsorship and content underwriting has always been with it, but it could really explode as a cross-subsidy method if traditional advertising starts failing. “But it will be challenging for every show or website to find its own corporate benefactor, and it will also raise issues about undue influence and bias,” I note in my essay.

I hope no one seriously believes that philanthropic models can fill the gaps. Even if we saw a significant uptick in voluntary charitable giving or even taxpayer support for the arts and media, there’s no way in hell it will possibly begin to cover the the bill for what advertising support covers today.

In the end, I can’t help but think how great we’ve had it when it comes to advertising. As I also noted in my essay, advertising has been “the great subsidizer of the press, entertainment, and online services” historically and benefited us tremendously even if we haven’t appreciated that fact. “It’s possible that no single industry — not newspapers nor search engines nor anything else — has done as much to advance the storehouse of accessible human knowledge in the 20th century as advertisers,” argues Washington Post columnist Ezra Klein. Klein is exactly right, yet it doesn’t really make a difference how important advertising has been to us if we fail to appreciate that fact and increasingly take steps to exclude it from our lives.

As that becomes easier and easier to accomplish, we shouldn’t bitch and whine when the bills (literally) come due for the content we all desire. As always, there is no free lunch. We’ll pay the price one way or another.

Additional Reading:

• my recent Charleston Law Review article on “Advertising, Commercial Speech & First Amendment Parity”
• Ezra Klein on the Importance of Advertising to Media
• The Hidden Benefactor: How Advertising Informs, Educates & Benefits Consumers
• There is No Free Lunch! No Advertising, No Media
• PFF’s Mega-Filing in the FCC’s “Future of Media” Proceeding

A new report says the opposite, though perhaps “legacy” entertainment companies are failing to keep up.

By any measure, it appears that we are living in a true Renaissance era for content. More money is being spent overall. Households are spending more on entertainment. And a lot more works are being created.

Good news! Check out: “The Sky is Rising.”

The Federal Communications Commission (FCC) has just released a Notice of Inquiry (NOI) in the matter of “Implementation of the Child Safe Viewing Act; Examination of Parental Control Technologies for Video or Audio Programming.” (MB Docket No. 09-26)  This NOI was required by S. 602, the “Child Safe Viewing Act of 2007,” which Congress passed last October and President Bush signed into law on December 2nd.  The measure requires the FCC to examine:

(1) the existence and availability of advanced blocking technologies that are compatible with various communications devices or platforms; (2) methods of encouraging the development, deployment, and use of such technology by parents that do not affect the packaging or pricing of a content provider’s offering; and (3) the existence, availability, and use of parental empowerment tools and initiatives already in the market.

The Act defines the term “advanced blocking technologies” as “technologies that can improve or enhance the ability of a parent to protect his or her child from any indecent or objectionable video or audio programming, as determined by such parent.”  Importantly, the Act also directs the agency to look into blocking technologies that “may be appropriate across a wide variety of distribution platforms, including wired, wireless, and Internet platforms” and which “operate independently of ratings pre-assigned by the creator of such video or audio programming.”   The Act requires that the FCC issue a report to Congress about these technologies no later than August 29, 2009.

When writing about the Child Safe Viewing Act shortly after its introduction in the summer of 2007, I noted that the measure potentially represented the beginning of “convergence-era content regulation” at the FCC.  Those two clauses highlighted above are of particular importance in that regard.  Congress has essentially invited the FCC to engage in unprecedented oversight of media platforms and ratings systems that the agency previously had very little ability to influence. 

First, the Act’s stipulation that the FCC examine advanced content blocking technologies that “operate independently of ratings pre-assigned by the creator,” seems to imply that existing voluntary rating and labeling systems cannot be trusted. That is a dangerous presumption that suggests the FCC might be able to come up with better media ratings on its own. But the fact that the agency has been empowered to look into rating systems for media content outside its area of authority (ex: movies, mobile media, online video) means that the agency might now be potentially placing greater pressure on media providers and distributors in those fields to “clean up” their content that same way that the agency pressures TV and radio broadcasters.

Similarly, the Act’s requirement that the agency look into blocking technologies on “wired, wireless, and Internet platform” is an open-ended invitation for the FCC to oversee content on platforms and mediums that the agency previously had no control over.  This clause on page 4 of the FCC’s NOI is telling in that regard:

The Senate Report also explains that the Act requires the Commission to consider technologies that may be appropriate across a variety of content distribution platforms “[i]n recognition of the fact that television content is currently being made available over the Internet and over mobile devices.” This language suggests that Congress intended that we focus on television content and the variety of platforms over which such content can be displayed and consider technologies capable of blocking inappropriate audio or video content transmitted as part of such programming.

In some ways, this makes all the sense in the world. The fact that Congress and the FCC have long been engaged in the regulation of content by its means of transmission to the viewer or listener has always been a bit silly. Basing regulation on what Randy May has called “techno-functional constructs” has resulted in a jurisprudential Twilight Zone in terms of speech regulation: identical words and images transmitted over one medium end up being regulated different than when transmitted over another. (See my article “Why Regulate Broadcasting?” for more discussion.)  Traditionally, this has meant broadcasting drew the short straw when it came to First Amendment treatment, with their analog signals or digital bits being deemed worthy of less First Amendment protection than the signals or bits transmitted over cable, satellites, fiber, or even print media.

As lawmakers increasingly realize that an age of media abundance and technological convergence has made those silly techno-functional constructs even more preposterous, we can expect Congress to introduce more legislation like the Child Safe Viewing Act and encourage FCC scrutiny of content regardless of its means of transmittal.  But such proposals raise a number of interesting questions, including:

(1) Does the FCC have the statutory authority to be regulating (or even investigating) speech on those other platforms?  What are the First Amendment issues at stake here?

(2) Assuming it has some authority, if the FCC finds that “advanced blocking controls” are not present, or do not work effectively, what remedies would the agency pursue?  (Can you say “universal ratings”?)

(3) Just what sort of resources will be required to allow the FCC to police all “wired, wireless, and Internet platforms”?

I don’t want to go overboard here and suggest that the agency is going to jump right onto the censorship bandwagon and start regulating everything under the sun thanks to S. 602.  Again, to be clear, the Child Safety View Act only authorizes the agency to study to market for advanced blocking tools.  It’s hard to argue against “the study” of anything.  But what concerns me here is the specter of regulatory creep. As I concluded in an earlier essay about the measure:

We have to hope that the FCC doesn’t use this “study” as an excuse to undermine existing voluntary parental controls and private content rating efforts or, worse yet, embark on an effort to impose new speech controls or mandatory rating and labeling schemes on media content. If they follow that path, a serious First Amendment battle awaits.

Is that a valid concern, or am I over-stating things? Well, consider this.  Between pages 15-20 of the NOI, in a section on”Content Available over the Internet,” the agency poses dozens of questions about new digital technologies and services including: Hulu,YouTube, TiVo, iTunes and the iPhone, iPod and Mp3 players, peer-to-peer networks, wi-fi hot spots, Teen Second Life, and even video game consoles.  In fact, on page 16 of the NOI the agency asks: “What impact, if any, does the interface between video gaming systems and the Internet have on children’s online safety?”  It’s certainly a legitimate question for public debate, but is anyone else besides me uncomfortable with the fact that the Federal Communications Commission is asking it?  If, like me, you’ve spent you’re life fighting over-zealous FCC content regulation, then you might appreciate my concern.  Will the FCC soon be fielding complaints about the next installment of “Grand Theft Auto”?  Are uncensored “Saturday Night Live” clips on Hulu suddenly going to be subjected to broadcast TV-like indecency fines?  Is my iTunes podcast fair game for federal regulators?  Again, I hope none of this paranoia is justified, but I think there are reasons to be concerned.

The more constructive path forward for the FCC is to help highlight the useful tools and rating systems already on the market and encourage parents to take advantage of them if they feel so compelled. As FCC Commissioner Jonathan Adelstein noted in his statement about the NOI, “Blocking technology strikes a balance beneficial to all parties involved: it allows us to protect our children while respecting the creative and expressive rights of content creators.”  Indeed, as I have argued in my book on “Parental Controls and Online Child Protection:”

The ideal state of affairs, therefore, would be a nation of fully empowered parents who have the ability to perfectly tailor their family’s media consumption habits to their specific values and preferences. Specifically, parents or guardians would have (1) the information necessary to make informed decisions and (2) the tools and methods necessary to act upon that information. Importantly, those tools and methods would give them the ability to not only block objectionable materials, but also to more easily find content they feel is appropriate for their families.

If the FCC can help build public awareness about such user-empowerment tools, that’s wonderful. I’m all for that. But it’s what the agency might do above and beyond that which has my spider sense tingling.

Anyway, you can read the bill and the NOI below and judge for yourself. [Note: The version of S. 602 below is the version passed by the Senate. The final version agreed to by the House stripped out Sec. 2, the findings section, and Sec. 3 became the new Sec. 2. For some reason, the GPO never produced a final PDF version of the bill as passed by the full Congress. If someone else has it, please forward it to me so I can post it here.]

S602 Child Safe Viewing Act http://d.scribd.com/ScribdViewer.swf?document_id=12963165&access_key=key-1uqqvj45uwpa1z9qihzq&page=1&version=1&viewMode=list

FCC NOI for Child Safe Viewing Act (MB 09-26) http://d.scribd.com/ScribdViewer.swf?document_id=12963105&access_key=key-12ctxrbeq6b7cuh98m6t&page=1&version=1&viewMode=list

Having covered free speech and media policy issues for many years now, one of the arguments I hear a lot is that we moderns have an unnatural fascination with murder, mayhem, and violence as well as gossip and celebrities. Social critics and proponents of media content regulation often wax nostalgic about the supposed “good ol’ days” when all we thought and talked about was enlightened and enriching topics.

It’s all complete nonsense. Anyone who has seriously studied our nation’s history — or, for that matter, the history of any country or civilization — knows that we humans have always been fascinated by the morbid and tales of debauchery, especially when those tales involve public officials or celebrities.

I was reminded of this again today when reading two articles in the Washington Post. One was an article by Shankar Vedantam, who pens the the always entertaining “Department of Human Behavior” column for the Post. His column today is entitled, “Why Fluff-Over-Substance Makes Perfect Evolutionary Sense.” He asks:

Why are we more likely to discuss a gossipy rumor at a party than a policy error that can actually make a material difference to our own lives? One explanation is that cultural mores attune us to certain stories — we live in an era where gossipy scandals rule. To test this, psychologist Hank Davis at the University of Guelph in Ontario examined hundreds of sensational stories on the front pages of newspapers in eight countries over a 300-year period, from 1701 to 2001. Remarkably, he concluded that the themes of sensational news were identical not only across the centuries but also in diverse geographic locales — from the United States to Bangladesh, from Canada to Mauritius. The stories that editors put on the front pages of newspapers — presumably stories that interested readers — included headlines such as “Crocodiles Tear Apart Thai Suicide Woman.” The stories were sometimes about important things and sometimes not, but they nearly always involved the kind of themes that people who are part of small groups like to know about one another: lying and cheating, altruism and heroism, loyalty and disloyalty.

Again, the more things change, the more they stay the same. For whatever reason, we humans have always been fascinated by the dishing of dirt.

Similarly, humans have always been interested in tales of murder and mayhem. A second Post article today reminds us of that. It’s a book review by Patrick Anderson of a new collection of essays on crime and murder: True Crime: An American Anthology, edited by Harold Schechter.

I’ve written about Schechter’s work before, especially his brilliant Savage Pastimes: A Cultural History of Violent Entertainment.

In that book, Schechter meticulously documents the prevalence of violent fare throughout the history of art and entertainment. He notes that even “the supposedly halcyon days of the 1950s” were replete with violent fare, much of it aimed at children. “[T]he fact is that — contrary to popular belief — there was a shockingly high level of sadistic violence and gore in some of the most popular commercial entertainments of the 1950s.” Mickey Spillane’s best-selling “Mike Hammer” novels were a prime example. “Even the most vehement critics of contemporary popular culture would be hard-pressed to find anything in today’s mainstream mass entertainment as alarming as the gore-drenched, gun-worshipping fantasies that Spillane and his publisher dished out for the delectation of millions of ordinary American readers in the supposedly halcyon days of the 1950s,” argues Schechter. He also recounts the extraordinary gore of “pulp” comics during that decade, which were often replete with macabre, masochistic scenes. Schechter also notes the top-rated television program of 1954, Disney’s Davy Crockett series, “contained a staggering amount of graphic violence,”including scalpings, stabbings, “brainings,” hatchet and tomahawk blows, and so on. The series finale takes place at the Alamo and contained, in Schechter’s opinion, a “level of carnage [that] remains unsurpassed in the history of televised children’s entertainment.” (Incidentally, the show aired Wednesday nights at 7:30 to target the elementary school crowd!)

Anyway, I have not yet had the opportunity to read Schechter’s new collection of True Crime essays, but Patrick Anderson’s review confirms the general thesis I have set forth here. He points out how many of the essays in Schechter’s compendium were written by revered American authors, and they are just as engrossing today as they were decades ago:

The anthology’s 50 nonfiction pieces, most originally published in newspapers and magazines, include some by authors as celebrated as Mark Twain, Nathaniel Hawthorne, James Thurber, Theodore Dreiser and Truman Capote. [and…] The New Yorker’s Annals of Crime series has employed the talents of Alexander Woollcott, James Thurber, A.J. Liebling and Calvin Trillin; their articles collected here include Liebling’s classic “Case of the Scattered Dutchman,” which concerns body parts found floating in the East River. The anthology is almost obscenely entertaining, if one has a strong stomach and a certain mind-set, but it is also a searching look at the dark underside of American reality, at an aspect of the human condition that both horrifies and fascinates us.”

Anderson really nails it there. There truly is “an aspect of the human condition” that leads us to remain interested in this stuff. It’s always been with us and always will with us. It’s silly for media critics and would-be censors to suggest otherwise.