Recently, the RIAA (Recording Industry Association of America) has been going after illegal downloading like a crazed ferret with rabies. Downloaders, they claim, have been responsible for their economic demise of late (which, coincidentally, began just as the recession started, but don’t think that there is any connection to that). In response, the RIAA has tried to shut down the online services or ban the software that facilitate the illegal downloading of intellectual property, like the music that they own. Since that has failed, and KaZaA is going strong, they have gone even further, trying to get legal permission to write viruses that will cripple user’s computers, and issuing subpoenas to hundreds, even thousands of people who have used KaZaA or the other P2P software.

The movie industry is only somewhat less worried about illegal downloading, and even the makers of television shows are worried about their freely-broadcast content being shared, with the recent profits being made from DVD sales of these shows’ archives.

So to these content providers, the idea of content-on-demand over the Internet is at least a bit scary. If they make everything they have available online, what will stop people from making files of them and then sharing them?

Let us drop the issue of the music industry for this article, as I am focusing on video distribution. However, the issue remains the same. Will the makers of TV shows and movies lose huge amounts of revenue when all videos become available online? How will they make money off of it? How can they be secure when any security measures can, and ultimately will, be defeated by hackers?

Before answering that, let me bring up another issue: advertising. Everybody despises spam, and to a lesser degree, we dislike commercials. Most annoying are those damned commercials that are popping up even on things that we already pay for. When we go to movies, despite shelling out as much as $10 per ticket and more for snacks ($15 a head in Japan, though less for concessions), the last thing we want to see is fifteen minutes of TV commercials. Movie previews are fine, so long as they are kept in check–no more than three, please, and try to make them of a similar genre to the movie being shown. But unfortunately, we are getting bombarded with spam in the theater. Even when you buy a movie to own, on a DVD, you get commercials. The studio that made the movie may crowd in previews for the films they want you to buy, and to add insult to injury, many of the DVDs will not allow you to jump past the commercials–you have to sit through them every time you hit “play.”

Even computers are not free from this. A friend of mine recently paid about 200,000 yen (about $1700) for a new computer, only to find that every time she started up her machine, Fujitsu had built in commercial images that would pop up, and she was unable to get rid of them until she called Fujitsu up and got them to tell her how to disable them.

More and more, commercial advertising is popping up everywhere, and we are getting sick and tired of it. But it does not have to be that way.

Advertising is the core generator of revenue for television, and not a little for movies as well. Paying for content simply by suffering through commercials has long been the standard in the United States and elsewhere. And considering the thirst for free entertainment (partly evidenced by file swapping on the Internet), it is doubtful that this approach will be abandoned.

I can think of a system of free narrowcasted content, with high-revenue advertising that would be effective and not greatly disliked by the audience, yet would also stop illegal downloading of that very content.

The technology needed would, as I mentioned previously, require universal (or near-universal) high speed broadband connections within the country; large storage nodes throughout the country; and programming to weave in personalized advertisements into each narrowcast. This should all be available in the near future.

It would also require the ability to send the video signal from your computer to your television screen (not difficult with the upcoming generation of digital TVs).

Here’s the idea: owners of video content, including major studios and networks, would make all television programs and most movies available for free download on the Internet. Using the aforementioned system of video-on-demand narrowcasting, users could ask for and immediately receive a real-time, high-quality video signal for that content.

What each user would give is information. At first, a registration giving information on who lives at the residence and demographic information concerning them. Every month, one would have to re-input limited information, including what major purchases they would like to make, and which kinds of commercials they would prefer to watch. This information could then be used to target the commercial advertising far more effectively than it is at present.

You might instantly see some a problem with this: what about privacy? Well, the information could be anonymous–after all, the name of the person involved is not too relevant–and besides, we already give out that kind of information on a regular basis. Do you have a discount card for your local supermarket? Guess what–you’re giving out that information already. Adequate safeguards could be given, and the networks and studios could keep the information anonymous and secure and private, not sharing it with other advertisers, chiefly because the profits involved could be enormous.

Let’s look at the positives here:

Advertisers would get a far richer return on their investment. Today, an advertiser would be lucky if even a few percent of the audience of a broadcast to millions of people were interested in their product and able to buy it. Almost all of the advertising in this country falls on deaf ears. But personalized ads in narrowcasting would present a nearly 100% interested target audience. This would reap far better results than before; advertisers would be willing to pay more for this advertising, and would get even more for their money.

The content providers (networks and studios) would be in much better shape. Instead of having to rely on the highly inaccurate and opaque system of demographics they now suffer with, they would instead have an almost perfect view of their audiences. Instead of wasting unwanted advertising on mass audiences, they could hit the target every time, finding much more interest, generating much more advertising time, charging higher rates, and therefore getting far more revenue. Furthermore, they could cut out the middleman–local stations–completely, keeping even more for themselves.

And finally, the viewers would be in better shape: instead of having to be slaves to the TV schedule or to their VCR/DVR programming devices, they could call up any show or movie any time they want, and have full VCR-style control (save that you would not be able to fast-forward through or skip the commercials). Want to watch every episode of M*A*S*H from the beginning? Want to see an old episode from a TV show, but not wait around a year for it to show up on reruns? Hear about a great new show from a friend, but it’s already in year 3 and you need to watch from the beginning? This solution would be perfect for all of those situations. It would be very much like having a video library with all TV shows and movies, without having to keep any tapes or buy any DVDs.

And even the commercials would be better. Are you a woman who is tired of all the car and beer commercials? Guys, tired of the feminine hygiene ads? What if all the commercials were ones that you wanted to see? I’m a movie fan, and I like computers. If the commercials were all movie trailers and computer ads, I would probably watch those instead of heading out to the kitchen or bathroom. But if you still hate ads, there is still the kitchen and bathroom to visit.

But best of all for the content providers is that piracy for these items would be virtually eliminated. After all, piracy takes time and trouble, and is usually of lesser quality. Why do all that when all you have to do is watch a few ads that you probably will enjoy anyway?

There will be some victims of such a system, most notably the local TV stations; they will lose their most of their audience and content. Not much can be done about that. And there is the danger that, between now and then, everything from arguments over standards to just plain greed will disrupt the process. But what I have outlined above is what I see as being a pretty good end product.

Any thoughts? Please comment if you see any potential problems with this.