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Hollywood YouTube Channels Hit With Hidden Cost

Hollywood YouTube Channels - H 2013
YouTube is offering free automated captioning, but “it’s not perfect,” admits rep Matt McLernon.

A 2010 law requiring closed captioning on all TV programming that airs online means an unexpected outlay of big bucks: Says producer Roger Corman, "We have no choice."

A version of this story first appeared in the June 7 issue of The Hollywood Reporter magazine.

YouTube’s fledgling subscription channels, introduced in early May, promise to be a golden opportunity for distributors and content owners to monetize movies and TV shows without a huge new investment.

However, for a small but significant minority of content owners, there's a hidden cost.

Thanks to federal law, all full episodes of movies and TV shows that have aired on TV must be closed captioned for the hearing impaired when shown online, often at considerable expense. Short clips, including news segments, are exempted.

For producers Roger Corman and Julie Corman, whose Corman’s Drive-In channel will repurpose about 400 B-movies, that means spending as much as $8 a minute for each 90-minute movie, with a deadline of March 2014 to get it done. “It’s an expense we had not calculated,” says Roger Corman, “but we have no choice.”

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That's because in 2010, President Barack Obama signed the 21st Century Communications and Video Accessibility Act, requiring programs that aired on TV be closed captioned online. The FCC issued rules to implement the law, and its provisions have been phasing in ever since.

Most movies and shows already undergo closed captioning for their original run, but for YouTube they also need to be coded for subscription video on demand (SVOD is how YouTube delivers the content to subscribers).

Roger Corman is not the only YouTube subscription channel programmer lamenting the extra cost.

Cinedigm has the Docudrama channel, drawing on 1,250 documentaries in its library. Jill Newhouse Calcaterra, Cinedigm’s chief marketing officer, estimates captioning will cost $500 to $600 per title. “It’s a huge expense for us,” she says.

Calcaterra estimates that they will, in total, have to caption 60 to 70 percent of their entire library of about 20,000 titles. “It’s a huge undertaking,” she adds, “involving a lot of manpower.”

Subscribers to the Docudrama channel will pay $2.99 per month.

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National Geographic Channel's Adam Sutherland, senior vice president of corporate strategy and business development, says the majority of their content already has closed captions from its airings on TV, but estimates it will still need to caption between 60 and 100 hours. “We are including CC [closed captioning] in all of our development going forward,” he adds.

A spokesman for Byron Allen’s Entertainment Studios, which has eight of the new subscription channels including Cars.TV, Comedy.TV and JusticeCentral.TV, says its shows are already captioned from when they aired on TV (mostly in syndication), but those have to be coded, and the captions will have to be “burned in” to the shows for SVOD use.

Acorn TV, with a lineup that includes British TV dramas The Queen, mysteries including the Murdoch Mysteries and documentaries such as Playing Shakespeare, costs $4.99 a month and is also facing a significant amount of closed captioning, but a spokesman says it was not a surprise.

“Since Acorn TV existed as a streaming channel well prior to the YouTube launch,” says Traci Otey Blunt, Acorn’s senior vice president of corporate communications and public affairs, “we already had caption requirements on our radar. Because of the ongoing court case against Netflix we were aware of the requirements.”

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Netflix was sued in 2010 by the National Association of the Deaf and others, even though it already captions much of its streaming programming. In October 2012, Netflix reach an agreement that ensures all of its movies and TV shows streamed on the Internet will be closed captioned within two years.

Despite this progress, advocates for the deaf have continued to complain the rules don’t go far enough. The critics say the new law only applies to full-length shows that have aired on regular TV, which means those that are originated for the Internet are exempt. They also are unhappy that short clips, including those from news organizations, do not have to comply.

YouTube rep Matt McLernon says the company is offering free automated voice-to-text captioning -- essentially software that turns voice into text -- but he admits “it’s not perfect.” YouTube also has a paid service, or providers can use outside vendors.  

That’s because proper captioning is labor intensive, requiring not only text but also cues for things like music and explosions.

So most companies are turning to the handful of professional processors like Deluxe, Technicolor and FotoKem. It’s a boon to their business.

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Deluxe, among others, offers a package of services to its customers that includes the captioning, the SVOD (or DRM) coding, content storage in the cloud and handling distribution.

“We’re seeing a great deal of demand for adding closed captioning capabilities,” says Chris Rittler, senior vp of sales and marketing for Deluxe Digital Distribution. “FCC regulations are really driving this throughout the industry.”

And it is not just for new or online content, adds Rittler: “As distributors develop deeper catalogs they are also adding closed captioning to content produced years ago.”

Roger Corman says that's their view, as well, for a catalog of movies that includes Brain Dead, Rock 'n' Roll High School, Dillinger and Capone and Jack Nicholson’s first movie, The Cry Baby Killer (1958). “So long as we’re doing it for most of our films,” says Corman, “we might as well do the whole thing. It’s coming anyway.”

Corman says there are other laws and FCC rules already being discussed that will mandate captioning for everything online.

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One effect of all this need for captioning is the impact on the cost. “I would say recently supply and demand seems to be increasing prices,” says Rittler, “because there is so much demand.”

As if captioning for the hearing impaired weren’t enough, there is a also DV, or Descriptive Video, audio descriptions of a movie or TV show for the benefit of the blind and visually impaired.

While it isn’t required yet in the U.S., it has been mandated in Canada since 2003. Cineplex Odeon, one of Canada’s largest theater circuits, has committed to providing DV in 133 Canadian theaters by year’s end.

“I think very soon it will be something that will have to happen,” says Diane Johnson, CEO of DV Works, a 10-year-old company based in Vancouver.

DV Works recently contracted with Viacom to DV caption 200 SpongeBob SquarePants episodes and has done movies including Side Effects, starring Catherine Zeta-Jones.

“It really is moving along quickly,” says Johnson.