When I could last until the end of a Monday Night Football game, I remember being treated to dramatic readings of the NFL's restrictions on the use of the broadcast. Apparently they meant it. The NFL is reportedly sending cease and desist letters to organizers of large Super Bowl parties taking place in Las Vegas hotels and elsewhere. The NFL says these "pay-per-view" events violate the copyright laws.

Why is the NFL being a party-pooper? Well, some believe this is an effort to disassociate itself from the gambling at the Vegas locations. But the NFL says the chief concern is that the Super Bowl not become a pay-per-view event - and that the people drawn from their homes to these events are not counted in the Nielsen ratings that determine the advertising fees the NFL receives. Oh, of course. Show me the money.

The NFL's hard line may seem a bit extreme. But is a useful reminder of a basic economic principle: You get what you pay for. The NFL is paid to bring (Nielsen-counted) eyeballs to ads, and its incentive is to maximize that count. This is an inherent limitation on the business model for this broadcast (and others) - free content financed by paid advertising. It illustrates why simply "finding a new business model" to compete with free content on the Internet is a poor answer to today's piracy problem. The best way to get content providers to provide opportunities to enjoy excellent content in convenient formats is to promote effective markets for such rights. Consumers will get what they pay for.

posted by @ 8:14 AM | General

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