What's Worse Than Letting The Lawyers Run Your Entertainment Company?

from the who's-in-charge-over-there dept

Mon, Apr 2nd 2007 2:39pm — Carlo Longino

There are plenty of examples of the damage lawyers can do when they're effectively allowed to run entertainment companies, as their efforts to protect copyrighted material alienate fans and kill off the promotional value of content. But perhaps even worse than letting lawyers run an entertainment company is putting it in the hands of your anti-piracy chief. According to an article in the New York Times, Warner Brothers Entertainment's head anti-piracy exec reviews all the company's digital distribution deals -- which would go a long way towards explaining its "strategy" in this area. The exec even has the gall to portray the studios' deal with BitTorrent to set up a crappy store selling DRM'd content as something groundbreaking, when it's just the latest studio-backed download site that puts locking down content above everything else, including building something consumers would actually want to use. That's what happens, though, when you let your company be controlled by somebody whose only job is to try and stop piracy. It's simple -- if that's your top priority, your products will reflect it, and subsequently, so will your bottom line. Sure, maybe nobody is pirating movies from the legal BitTorrent store, but hardly anybody's going to be buying movies from it, either. When stopping piracy is the top goal, everything else -- including actually making money -- is going to suffer. These are the sort of people who say you can't compete with free, so they focus on the fruitless, impossible task of eliminating the free content, instead of figuring out how to change their business models and make money in spite of the free content.

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26 Comments

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B_Billy, 2 Apr 2007 @ 3:01pm

Alright!!! More stuff I won't buy!!!
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Anonymous Poster (profile), 2 Apr 2007 @ 3:25pm

It just amazes me that these people DON'T GET IT. You'd think, with the numerous blogs and articles and whatnot pointing out the flaws in their business models and DRM-laden products and their "treat customers like criminals, even if they aren't" approach to distributing content, at least ONE of these pinheads would actually read it, sit back, and use his brain to think that it may not be such a good idea to do that voodoo that **AA do.
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Geoffrey Kidd, 2 Apr 2007 @ 3:27pm

"Up the Organization"
The book was written by the guy who put Avis (car rentals) on the map at a time when car rentals were Hertz and "all the other guys."

One key piece of his advice was to keep your accounts and your lawyers on tight leashes and *NEVER EVER EVER* let them run the company.

It's a pity that the Corptocracy hasn't listened to him.
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Beefcake, 2 Apr 2007 @ 3:37pm

True of Everything
If you carry that idea to brick-and-mortar retailers, it's like locking the doors so no one can come in and shoplift.

If you carry that idea to a blog, it's like disabling comments so no one can say anything like "fuck".

If you carry that idea to automotive safety, it's like disabling the ignition so no one can drive and get in an accident.

If you carry that idea to border security, it's like building a wall so no one may enter or leave illegally.

But since it's the entertainment industry, it's pure genius.
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Joe Smith, 2 Apr 2007 @ 4:01pm

Risk Aversion
The role of corporate lawyers is to identify and avoid risks through legal processes. Creative, entrepreneurial people are, by and large, not drawn to the practise of law.

Business is all about entrepreneurship and risk taking. If you draw your corporate executives from the legal profession you are getting executives with the wrong personalities and the wrong training.
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Anonymous Coward, 2 Apr 2007 @ 4:41pm

hey...

for all you guys who are open to free/non-drm content, what's your solution?

or, better yet, for you guys who develop software, and are screaming that there should be non-drm content, you wouldn't mind if i "purchased" your software, and then i proceeded to give it to 50,000 of my closest friends would you.

i'm sure you also wouldn't mind if we all screamed/called your company clueless for not getting it, if you guus just don't simply give yor apps away for little or nothing.

if you charge me a fee for accessing your web services, you don't get it (if i feel you're charging me too much) and you should in fact give it to me for whatever i want to pay.

peace..
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Anonymous Coward, 2 Apr 2007 @ 4:55pm

Re:
If I write a game and you give it to 50,000 people, first and foremost, I will be thrilled that 50,000 people are playing my game. So please do so. By the time those 50,001 people are finished doing my marketing for me, I can monetize it anyway I can dream of.

That's the point.
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Pseudonym, 2 Apr 2007 @ 5:39pm

On a related note...
According to John K, the only thing worse than a lawyer running your entertainment company is a lawyer creating your entertainment.
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Anonymous Coward, 2 Apr 2007 @ 5:52pm

I find it funny how most of the people that are like poster #6 are missing the point and assuming that we are just saying to give everything away.

The point is not everything has to be locked down and purchased several times (ala DRM locked music) to be profitable.
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RandomThoughts, 2 Apr 2007 @ 5:56pm

OK, I understand that DRM isn't a popular thing with most people, but here is my question. If DRM worked and didn't cause any problems with consumers using their purchase on any of the devices they owned but didn’t allow them to share their purchase with anyone, would that be ok?

You talk about changing business models, but I just don’t see how allowing free access to music (or any other digital content encourages more of that good content. Keep in mind that the long tail works for the aggregators, not the individual artists or content creators. In the end, if labels are not paid for their content, they will change their business. Do we want a world filled with YouTube performers? I can watch American Idol for that.
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Chris Westland, 2 Apr 2007 @ 6:03pm

Warner Bros. 'strategy'
I sat through a Warner presentation on piracy last November. Central to their slide show are a series of fanciful arguments (and I kid you not ... they really believe this stuff) that knife-wielding Asian triads are now giving up drug trade and prostitution for ... get this ... pirating Warner Bros. videos because the mark up is so much higher than drugs or white slaves.

This is the same Warner Bros. who used to own the biggest ISP in the US (AOL, remember them) and as a result owned the first really successful browser (Netscape, remember them) and one of the industries (like him or not) early visionaries -- Steve Case.

So what happened ... why didn't Warner develop YouTube (and sell it for 1.6 billion); or BitTorrent; or My
Space to promote their music; or NetFlix; or yadda yadda yadda ... They sure had more money and people than any of the firms that have successfully changed the content distribution model ...

Well, this article explains it ... they are a bunch of dinosaurs run by Luddite lawyers and anti-piracy zealots. Instead of rethinking their business model in terms of the current realities in technology, they want to lock the world into 1970s technology so they can keep their good times rolling.
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Charles Griswold, 2 Apr 2007 @ 7:47pm

Giving Away Content for Profit
To #6 (A/C) and #10 (RandomThoughts): Yes, you can make money on stuff that you give away for free. For two successful examples of this, see Magnatune.com and the Baen Free Library. In reference to the Baen Free Library, authors have found that whenever they offer a book as a free download, sales of that book go up.
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RandomThoughts, 2 Apr 2007 @ 8:02pm

Re: Giving Away Content for Profit
Charles, I checked out the links, I am no audiophile, but I didn't recognize any of the artists. I also checked out the authors.

Looks to me to be mostly indies and unsigned artists. I don't have a problem with indies trying to build an audience, but I can't see this model working for popular artists. I guess it depends on how much money someone is looking to make.

I think the real test for the EMI/Apple DRM free deal is this. If consumers won't pay extra for the DRM free ontent, will that prove that all the talk of wanting to buy content but only if its DRM free was just talk?
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Chris Westland, 2 Apr 2007 @ 8:57pm

'Giving away'
Obviously in the current market, it's only going to be the indie bands that use the free services, because they are the only one's who need the service and the publicity.

The bigger issue is how the proceeds are shared. Warner doesn't actually make movies or music -- the artists, directors and production companies do that (there is no more studio system, sorry). And they don't deliver the content; movie theatres, TV networks and DVD players do that (and they don't manage or make these). Warner is just a gatekeeper that cuts contracts and arranges some financing in order to skim proceeds of the top. They could do a lot more, and I think that they had the opportunity in the 1990s to be the next Google. But that's not their nature.

You can see what happens when one of the artists challenges Warner's arrangement by looking at Peter Jackson's beef with Warner over being shortchanged 30-60 million from earnings from Lord of the Rings (which Warner just lucked onto anyway). Jackson got his own lawyers, sued, won ... and Warner punished him by locking him out of the Hobbit prequal.

Who's an example of a company that delivers content for free, and makes a lot of money doing it -- the 'Big Guy' ... Google. Sure, it's not all video or music, but eventually I think Google will be the big player (or Googlezon), and I think that Eric Schmidt will figure out ways to keep making money without having to bludgeon it out of the artists and their admiring fans.
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Charles Griswold, 2 Apr 2007 @ 9:47pm

Re: Re: Giving Away Content for Profit
You're right about Magnatune. Most (if not all) of the artists are independent (although whether or not they're "unsigned" could be debated). The Baen Free Library is another matter, however. The authors that are offering their books for free download range from relative newcomers to well-known and -respected authors.

Getting back to the music, Magnatune is not the only site to offer free music. Harvey Danger has their "Little by Little" album available as a free download, and has a page explaining why.
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Anonymous Coward, 3 Apr 2007 @ 1:18am

Re: Re: Giving Away Content for Profit
I just checked the authors and I books for at least 8 of them. Baen is a Sci-Fi publisher so if you don't read Sci-Fi, you won't know them.
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malhombre, 3 Apr 2007 @ 2:28am

Try this free source..
Sorry if this posted twice, it's 4:30 in the AM here...

http://www.archive.org/

Tons of free media, esp check out the live music achive - thousands of shows, hundreds of bands, many are top names ( and many are indies ) but there are some terrific bands in there: Phil Lesh and Friends; Umphrey's McGee; Addison Groove Project; String Cheese Incident...the list goes on and on.
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Vincent Clement (profile), 3 Apr 2007 @ 4:55am

Re:
And when has DRM or as it was called in the 'old days', copy protection, ever stopped the distribution of music, movies and software? Why bother with something that adds no value to the consumer?
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RandomThoughts, 3 Apr 2007 @ 6:27am

Its called fighting shrinkage. Security guards in a store do nothing to enhance the customers value, yet they are there. When you walk out of a shopping club, there usually is a person checking your cart to make sure you paid for everything. That does nothing to enhance the customer experience. The cameras in the casinos, stores, banks and airports all are there to reduce crime.

Treating customers like criminals? I don't feel like a terrorist when I am waiting in the security line at the airport (although in some airports it does feel like you are in jail) nor do I feel like a criminal when someone at Home Depot checks my cart on the way out.

DRM is needed, but it needs to be in a form that allows customers free reign to listen to their purchase on any devise they own, but not allow them to distribute it out to others. Just because it has not worked yet doesn't mean that its goal should just be ignored. There is a business decision that needs to be made, when the sales increase from adding DRM is greater than the sales loss from DRM, then DRM will continue to be added. Determining that is a difficult thing.
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downloader, 3 Apr 2007 @ 7:04am

Prove to me that I'm a thief
I love how all the companies running around claiming "we can't compete with free" have NEVER TRIED.

How long was the MP3 format around before the music industry started selling MP3s? Of course people had to download "illegal" mp3s, there was no way to get LEGAL mp3s.

Before these companies continue to act on the assumption that we would all rob them blind if given the slightest opportunity, I'd like to see some proof.

Can we sue them for defamation, for calling us all thieves?
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Ed, 3 Apr 2007 @ 7:56am

Re: by RandomThoughts
RandomThoughts Writes:

"DRM is needed, but it needs to be in a form that allows customers free reign to listen to their purchase on any devise they own, but not allow them to distribute it out to others."

I have no problem not uploading audio now, thank you very much.

While I am not a hugh audiophile in terms of music, my collection of audio books would put many to shame. And no audio I purchased has copy protection. I would personally love to use Audible, but will not, despite owning an Ipod, because of copy protection. I also own many portable and non-portable mp3 players (I never noticed just how many until typing this, counting computers, of order 20) . Most of which do not support DRM. Many companies are willing to sell audio books not only on CD, but actually on MP3 CD, with no protection whatsoever (The Mp3 CD costs about the same as a Hardcover). One company even includes a card inside the case, stating "This Audiobook was not forgotten hear, it was left behind for others to enjoy." They are actually encouraging purchasers to listen, and pass the legally purchased copy on to some one else. Personally I listen over & over to most things, and donate to a library the things I don't care for. You come up with a DRM solution that will not interfere with my using my purchased audio in any device I choose, at any moment, leaving copies in all my computers at work and home, etc. then maybe you can convince me. (Since I am but one person, no matter how many copies I have, I can't play more than one copy at a time, so have no MORAL problems with multiple copies). I believe in supporting an artist, even in supporting distributors within reason.

"Treating customers like criminals? I don't feel like a terrorist when I am waiting in the security line at the airport (although in some airports it does feel like you are in jail) nor do I feel like a criminal when someone at Home Depot checks my cart on the way out."

Maybe not, but how would you feel if you were forced to show a receipt, every time you went to a cabinet to get a snack, or a drink from the fridge. How about proof of age requirements before a beer bottle can be opened in your own home? This is DRM. You are not a potential criminal once, but every single time you play a song, or watch a DVD. If DRM is so good, why do DVD producers FORCE me to spend 60 seconds or so reading FBI/Interpol warnings, before watching a legally purchased DVD? EVERY TIME I WATCH IT. Some Series DVDs force you to sit through it before every episode.

I will continue to support artists I enjoy, and companies that treat me honestly, and expect the same from me in return.
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SFGary, 3 Apr 2007 @ 3:56pm

@20: the mp3 standard has been around since at least 90/91. But it did not gain wide usage and traction till the encoder became freely available and the WWW opened up. However just because the technology is available for free does not mean you can rip your CD and share it with millions of your best friends.

@6/7: You might want to give away your music or games but that is not necessarily the way other musicians want to make money from their creations.

I am no fan of DRM but the argument of giving stuff away and then figuring how to make money is silly. I wish I could use that argument with local gas stations. Give me the gas for free and make money washing my windshield...
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Chris Westland, 3 Apr 2007 @ 6:19pm

Re: Petrol and Music are two different products
... if you didn't already know that.

The difference is marginal cost ... it's zero for pure information, positive for petrol.

You can make money by giving information away ... how else does Google do it?
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Anonymous Coward, 16 Apr 2007 @ 11:53pm

At #19 -- 'fighting shrinkage' in a physical world with security guards, cameras, etc. does improve the customer experience by lowering prices, since stores have found (apparently) that it lowers shoplifting.

I challenge you to show me any evidence whatsoever that DRM has reduced p2p piracy -- especially DRM on things that are available in non-DRM forms (e.g. music). All it takes is one person to break the DRM, and then the DRM-free product (which is better than the commercial product in every way) is available for free to everybody via the Internet.

DRM simply INCREASES the cost to the end consumer, and only irritates those who were honest and actually paid for the item. The only benefit is for companies like Apple who use their DRM as leverage to maintain their digital and hardware monopolies.
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injection molding, 20 May 2009 @ 5:55am

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[ link to this | view in thread ]
injection molding, 20 May 2009 @ 5:59am

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[ link to this | view in thread ]