Gary Shapiro Slams Warner Bros. Chair On His Congressional Remarks

from the nice-work dept

Earlier this week, the MPAA went to Congress to see if the new Democratic leadership would start pushing their agenda more than the old Republican leadership did (though, even the Republicans were pretty friendly to the industry). Chances are, they're probably in decent shape since they got Hollywood buddy Rep. Howard Berman to head up the intellectual property sub-committee (as Larry Lessig said on this, it's like having a representative from Detroit head up the committee on auto safety). There was a lot of the usual complaints -- including continued attempts to highlight how many "regular people" the movie industry employs. Of course, that argument is based on a fallacy that employment alone is representative of an industry that needs protection. If the industry can't keep up with the times and can't come up with new business models, then of course it's going to impact lots of people -- but that's no argument for government protection. Otherwise, the government would still mandate protections for horse-drawn carriage makers. However, perhaps the highlight of the talk was Warner Brothers' chairman, Barry Meyer, ripping on Consumer Electronics Association head, Gary Shapiro. Amusingly, Meyer got upset that Shapiro used the phrase "unauthorized use" instead of "piracy," saying that it was an inaccurate representation. Of course, it would seem that "piracy" is a hell of a lot more loaded than "unauthorized use" -- which is a lot more accurate.

Gary Shapiro is certainly not one to back down from ridiculous comments from an entertainment industry executive, and has responded to Meyer's talk. Unfortunately, the folks at the CEA haven't yet learned the wisdom of putting things online in HTML format, and for some bizarre reason placed the response letter on their website as a Word document (yes, clicking that will open a Word document). They were also kind enough to send us a copy of the letter as well -- so we've taken the liberty of reprinting it in the extended section below. However, for those who don't want to read through the whole thing, we'll post a key section up here first:

You also said of your industry that "history shows that we are often adapters and embracers of new technologies." In the last few decades, the motion picture industry came late to digital television and actually used every means possible to block new useful technology. Consider:

• the lawsuit seeking to stop the VCR
• the efforts to pass legislation blocking video rentals
• the lawsuit against ReplayTV, a PVR start-up, (the company was bankrupted by the lawsuit)
• the lawsuit against ClearPlay, a company with technology that deleted obscene content
• the lawsuit against Sima, a company which sells editing technology to wedding videographers
• the lawsuit against Kaleidescape, a company that lets consumers send lawfully acquired DVDs around their home
• the lawsuit against Load 'N Go, a company which sold pre-loaded iPods with DVDs, as long as the consumer also bought the DVD.

The recent legislative efforts to mandate technological changes to stop copying, block the so-called "analog hole" and impose other "fixes" on the technology industry certainly make your claim of embracing new technology a bit hollow.

Once again, it looks like Gary Shapiro has done an excellent job highlighting how the entertainment industry digs their own grave.

---

February 8, 2007

Mr. Barry Meyer
Chairman and CEO
Warner Bros. Entertainment Inc.
4000 Warner Blvd.
Building Two, Executive Suites
Burbank, CA 91522

Dear Barry,

I learned of a speech you delivered Tuesday on Capitol Hill in which you excerpted extensively my keynote at the 2007 International CES. Although the use of my speech was a "fair use," your excerpts were unfair and out of context as any comparison of the speeches would reveal. More, your view and mine of the world are certainly different.

I agree that the U.S. motion picture industry is a national treasure, to be encouraged, rewarded and appreciated. It not only creates jobs, income and entertainment, it is the primary positive window to the world of American culture, values and language.

If you reread my speech, I am sure you would agree that it was all about the "new convergence" - the convergence of content, services and products - and how businesses must embrace change. Although I am flattered that you devoted your remarks to my speech, I fear that you left an erroneous impression on your audience regarding our position on digital rights. As I said in my remarks:

"Consumers are not pirates, and private conduct may be unauthorized, but that doesn't mean it is piracy. Consumers have the right to use technology, to benefit from innovation and to access entertainment while making sure that artists are properly compensated."

This excerpt reflects not just my personal belief, but the current state of the law.

Indeed the Sony Betamax holding is that in certain cases consumers may record whole video programming legally without the authorization of the copyright owner. Not all unauthorized copying is piracy, contrary to your remarks.

You also said of your industry that "history shows that we are often adapters and embracers of new technologies." In the last few decades, the motion picture industry came late to digital television and actually used every means possible to block new useful technology. Consider:

• the lawsuit seeking to stop the VCR
• the efforts to pass legislation blocking video rentals
• the lawsuit against ReplayTV, a PVR start-up, (the company was bankrupted by the lawsuit)
• the lawsuit against ClearPlay, a company with technology that deleted obscene content
• the lawsuit against Sima, a company which sells editing technology to wedding videographers
• the lawsuit against Kaleidescape, a company that lets consumers send lawfully acquired DVDs around their home
• the lawsuit against Load 'N Go, a company which sold pre-loaded iPods with DVDs, as long as the consumer also bought the DVD.

The recent legislative efforts to mandate technological changes to stop copying, block the so-called "analog hole" and impose other "fixes" on the technology industry certainly make your claim of embracing new technology a bit hollow.

We both agree that those who profit from the unauthorized, mass redistribution of content do so illegally. And we both agree that the creative community deserves fair compensation for its works, which are enjoyed by so many around the world. Where we apparently disagree is in how to treat ordinary, law-abiding citizens. Consumers should not expect free, but they do expect freedom -- the freedom to enjoy their lawfully acquired content when, where and how they want. That freedom is enabled by today's digital world and should be embraced by the content community.

Consumers have gone digital at breakneck speed, spending billions of dollars a year on "new convergence," but they are increasingly frustrated by the limitations placed on their lawfully acquired content by some major movie studios and record companies. The fact that Microsoft's Bill Gates and now Apple CEO Steve Jobs are speaking out against unreasonable digital rights management demonstrates the rising tide of consumer resentment against burdensome DRM measures that make the average consumer out to be a bootleg bandit in ineffective attempts to quash the truly criminal element.

As the Los Angeles Times editorial page today says:

"DRM systems hurt the people who actually pay for music by making the tracks they download harder to use. The record labels (and the Hollywood studios too) should stop trying to use DRM to give people less than what they're used to getting when they buy songs and concentrate instead on developing compelling new ways to discover and enjoy music."

I also said at CES that "new products and technologies challenge old businesses but create new opportunities and partnerships." Some of your peers graced the CES keynote stage last month and proved me right. Content industry business models can not only adapt but seize these new opportunities to thrive in the digital world. CBS' President and CEO, Les Moonves, showcased a partnership with SlingBox that allows viewers to download and share video clips of their favorite programs with friends. Disney's President and CEO, Bob Iger said, "the best way to combat piracy is to bring content to market on a well-timed and well-priced basis." I applaud these content industry leaders for their vision and example at a time when others are spinning their wheels trying to halt progress through lawsuits and legislation.

I want to ensure that the innovation and partnerships unveiled each year at CES keep driving America forward, which is why CEA will continue to promote the preservation of fair use and non-commercial home recording rights. We are a proud member of the Digital Freedom Campaign, which joins artists and innovators to provide a voice for individuals to protect and expand these rights, advocating against efforts to restrict them and limit new technologies.

I believe a dialogue is important and would like to extend an invitation for you to join me at CEA's Third Annual Digital Patriots Dinner next month where hundreds of industry and government leaders will celebrate achievements in technological innovation and balanced policymaking. The dinner will be held at the Ronald Reagan Building in Washington, DC on March 27 and we will be honoring Michael Dell, chairman of Dell Inc., as well as a few key federal legislators.

I also invite you to join me as my VIP guest at the 2008 International CES, January 7-10 in Las Vegas, where we will gather technology, content and service leaders in an environment conducive to doing business.

Our new technologies will both challenge and provide opportunities for content providers and it is vital that we continue to engage each other and experiment with new business models, partnerships, strategies and leadership. We simply ask that it be less through legislation and Congress and more through the marketplace.

I look forward to future, productive discussions.

Sincerely,

Gary Shapiro
President and CEO

CC: Dan Glickman, Motion Picture Association of America
Robert Iger, Walt Disney Company
Leslie Moonves, CBS