What may be more interesting here is that this decision comes soon after Warner Bros. (the studio) bought Turbine. Warner Bros., as a movie studio, isn't exactly known for embracing "free," so it's nice to see that they're actually okay with expanding this program. Maybe they'll actually learn something to take back into the other parts of the business...
It's actually a patent infringement lawsuit, but unlike most patent infringement lawsuits, the company suing, Medien Patent Verwaltung (MPV), claims that it actually met with Warner Bros. and "disclosed the technology" to the company. While I have to admit that I find it quite amusing to see Warner Bros. accused of "pirating" its "anti-piracy" technology, when you look at the details, it seems like a typically ridiculous patent scenario, with some random company suing for patent infringement over something another company came up with independently.
Making things even more amusing? In the lawsuit, MPV mis-identifies its own patent, incorrectly using the title of a patent.. held by Warner Bros! MPV's patent 7,187,633 is titled "Marking of a data medium material for information intended for reproduction." Warner Bros., though, has a different patent, 7,206,409, titled "Motion picture anti-piracy coding." But in the filing... MPV refers to the title of its own patent as "Motion picture anti-piracy coding" and never mentions Warner's actual patent by that name. Ooooops. Oh, and the WB patent? Filed before MPVs...
We've covered the ongoing fight over copyright termination rights lately, as it's quickly becoming a big deal. While the whole concept shows part of how messed up copyright law has become, one element included to help artists (rather than just big companies) when copyright terms were extended, were opportunities for the original artists or their estates to "terminate" the assignment of copyright to a company. The details are highly technical and a bit of a mess, and the entertainment industry has worked hard for years to try to bury termination rights (most famously when the RIAA had a Congressional staffer -- who was hired just months later to a high-paying RIAA job -- slip some text into a bill in the middle of the night that took termination rights away from musicians, until musicians freaked out and Congress backtracked). Even so, the big entertainment industry companies have been fighting against every attempt at artists or their estates reclaiming their copyrights for years. The most famous case was the case over Superman's rights -- which concluded last year with the estate of Jerry Siegel winning back certain rights (while letting Warner retain other Superman-related rights).
The lawyer who represented the Siegel estate, Marc Toberoff, has been pushing content creators and their estates to understand (and make use of) termination rights for a long time. And it's no surprise that we're now seeing new efforts under way from musicians and others, including comic book artist Jack Kirby. Kirby, not surprisingly, is also represented by Toberoff, who isn't just representing these artists in helping them get back their copyrights, but he's apparently set up his own production studio to help make use of those copyrights once he helps the artists get them back.
Apparently, Warner Bros. (a frequent target of Toberoff) has had enough and has decided to sue Toberoff personally, claiming that... well... basically that he's a jerk and a savvy business person, which I didn't quite realize was illegal. Specifically, they seem to be claiming that Toberoff "manipulated" the creators of Superman, having them hand over a large percentage of the rights to the character if he was able to successfully manage the termination. Part of Warner's complaint is that Siegel and Shuster had apparently signed agreements promising not to exercise their termination rights, but as I'm sure Warner's lawyers know (they must know this, right?), you cannot contractually give up your termination rights, or all entertainment industry companies would require that in their standard contract.
Frankly, reading through the complaint -- which you can read below -- it looks like Warner is attempting to retry the Superman termination rights case that it already lost:
While I still think there are all sorts of problems with termination rights in copyright law, and have no doubt that Toberoff had plenty of reasons beyond helping artists get back their copyrights in agreeing to represent these artists, it is somewhat amusing to see Hollywood flail around so desperately to try to keep absolutely monopolistic control over these rights. Of course, if the copyright law that was in place when Superman was created was still in place, the character of Superman would no longer be covered by copyright at all today, but would, instead, be in the public domain. So, forgive me for feeling little sympathy for anyone involved in this tug of war over who gets to exploit the creation for more money.
A bunch of folks have sent over the story that TorrentFreak posted about Warner Bros. UK looking to hire a technology-savvy student for a year to be on its "anti-piracy" team. The job involves finding file sharing sites, monitoring them, and sending takedown notices. Fun stuff. But what caught my eye is that the job pays £17,500 for 12 months (or about $26,000). Considering that the industry pushes to fine people more than that amount per file shared, it certainly seems to be cheaping out to offer so little to the knowledgeable student they're hiring. If file sharing is really "costing" the industry so much, wouldn't the industry actually pay well to stop it?
It's tough to figure Warner Bros. out these days. It got both Netflix and Redbox to agree to delay renting new release movies for 28 days in an effort to get more people to purchase DVDs. For this, it got hit with a class action lawsuit. But now comes the news that it's signed a new deal with the financially troubled Blockbuster that has no such restriction. This has lots of people scratching their heads. The obvious answer is that Blockbuster is promising Warner a lot more money...
But there's a bigger issue here, which goes beyond just commentators scratching their heads: this is going to confuse a lot of customers at a time when that's the last thing Warner Bros. should be doing. Your average movie renter isn't paying attention to the silly games that Warner execs are playing, and all they want to know is how come they can't rent the latest release. If Warner somehow convinced all players not to rent until a certain date, then that would effectively have just shifted the release date further back (a dumb move in an age when windows are shrinking... but that's Hollywood for you). However, by having the movie available for rental in some places, but not others, it's now setting itself up for mass customer confusion, where people will hear that a movie is available, but then get pissed off that it's not available in their preferred rental system.
It's as if the folks in Hollywood haven't been paying attention to what happens to companies that aren't providing what their customers want.
Warner Bros. has been busy getting both Netflix and Redbox to agree to delay renting new release DVDs for 28 days, in the misguided belief that this will get more people to buy the DVDs. While Netflix has tried to spin this as benefiting customers it appears plenty of customers see otherwise. Specifically, at least one customer has filed a class action lawsuit against both Warner Bros. and Netflix, alleging that this is restraint of trade and has decreased the value of a Netflix subscription (thanks to Eric for sending this over). It seems unlikely that this lawsuit will get very far, but it certainly suggests that at least some Netflix customers are none too pleased with this move, despite Netflix's claims.
You may recall, back before The Pirate Bay trial in Sweden, a story came out about how the lead police investigator in the case just happened to take a job at Warner Bros. movie studio while The Pirate Bay investigation was still ongoing. This, obviously lead to quite reasonable questions of conflicts of interest, and even corruption. It's hard to see how anyone could justify a police investigator agreeing to a job with a party in a lawsuit that he was currently investigating. But, for whatever reason, the police decided to protect one of their own, and saw no reason for an investigation.
The job at Warner Bros. only lasted (as originally intended) for six months, and then the guy, Jim Keyzer, went back to work for the police. TorrentFreak is reporting that he's now in charge of the IT crime unit, which has the mandate to investigate file-sharing cases.
At the very least, this raises extremely serious conflict of interest questions. The guy was involved in an investigation, hired for a "temporary" job by one of the parties in that investigation -- and then after the job is over, he goes back to work for the police on other investigations that will almost certainly involve the company he took money from for six months. I can understand people taking jobs back and forth between the public and private sector, but the timing of all this seems very suspect, and it seems like the Swedish police should at least set things up so that the conflict of interest is removed, and someone else is in charge of such investigations for the time being.
Some of the movie studios (admittedly, not all of them) have been on a braindead fight against Redbox -- despite the fact that Redbox had created a service that people liked and were paying for and that generated revenue for the movie industry. There are still ongoing lawsuits, but today came the news that Redbox caved to Warner Bros., on the most important point: delaying the availability of new release movies until 28 days after the release. Yes, this is the same deal that Warner Bros. convinced Netflix to agree to last month. Basically, Warner Bros. is telling people to either not rent its video or to download them from an unauthorized source.
The whole thing makes no sense at all. Warner Bros. mistakenly thinks that if people can't rent a particular DVD in the first four weeks of release, they're more likely to shell out money to actually buy the DVD. This is Warner Bros. pretending that it can influence customer behavior by denying them what they want. That's a strategy that has never worked well. What this means is that at the moment when Warner Bros. actually puts some marketing effort behind the DVD release, that movie will not be available from the most popular rental options. And, the bizarre reasoning put forth by Netflix that this would benefit customers by improving inventory and availability of movies is not seen in reality. So rather than pissing off some customers because a movie is not available, you're now pissing off all customers by making the movie not be available on purpose, and then effectively massively increasing the amount of time they have to wait to see the movie? Does no one at Warner realize that a lot of those "customers" will simply decide to go see other movies or to download an unauthorized copy instead?
Based on Warner Bros., logic here, why release movies at all?
With Netflix caving in to Warner Bros. and agreeing to delay offering DVDs for 28 days after release in order to get movies to stream online, it certainly pissed off a bunch of Netflix subscribers. But, you've apparently got it all wrong. A Netflix exec is now trying to explain how the deal is pro-customer because it will keep demand down for the DVDs, meaning that when they finally do come out, you may have a better chance to rent them. Seriously:
The most practical reason is that the savings derived from this deal enable us to be in stock completely on day 29. Remember that we're a subscription service and the way that you manage the economics of a subscription service is to manage the demand of any disc, depending on the economics of the disc. In the case of the most expensive disc, which in this case is a Warner Bros. disc, purchased through a 3rd party, those discs were out of stock for far longer than 29 days for most Netflix subscribers.
So what were able to is create a deal with them that gave them a little open running room in terms of creating a sell-through window ahead of rental, for us, and hopefully that they'll find enough value in that it'll extend to other retailers and other studios will take note and it'll extend across other studios as well. The net savings derived from technically creating a better customer experience have been redeployed in additional streaming content for all customers.
I'm still trying to parse this, but it really does sound like he's saying that Netflix couldn't handle the demand for new releases before, so by getting rid of them entirely, it may be able to handle them on the 29th day, since fewer people will care about renting that movie then. Now, you could claim that's a better customer experience if you ignore the 28 days in which no one on Netflix can rent the movie (though they can get it elsewhere). But if you realize that you're now taking away the ability to serve all of your customers for nearly a month at the point when their demand is likely to be the highest... well, that doesn't seem very customer friendly at all.
While not a huge surprise, it's worth discussing just how bad an idea it was for Warner Bros. Studios to get Netflix to delay renting DVDs of its movies for 28 days in order to offer up more streaming content. To recap, the very, very, very confused movie studios seem to think that the way to deal with increasing competition is to just add more windows to releases -- and one way to do that is to delay when you can rent a movie. In the studios' incredibly short-sighted thinking, they believe this will make more people buy DVDs -- the one area of the movie business that has been on the decline of late. At the same time, the studios have been pissed off at Netflix for routing around them and getting rights to stream movies from Starz, and as such, have been denying requests to stream more movies.
So, the compromise is getting Netflix to delay the rentals in exchange for more streaming content.
It's hard to express just how bad an idea this is for Warner Bros., and how far out of touch with their customers they must be to think this makes any sense from a business standpoint. What they are saying is that they are not going to give in to customer demand and offer them what they want, but actually make it more difficult, more annoying and more confusing for them to get what they want -- and (at the same time!) screwing up basic marketing plans as well. Now, when movies are released on DVD and the large group of people who prefers renting to buying goes online to their Netflix account to do so, they won't be able to. Four weeks later, they'll be looking for something else. And, for those who simply want to see it right away, they're now more likely to get it in an unauthorized manner.
Under what set of logic would it ever make sense to give the customer less of what they want in an era when increased competition from other sources is causing them to already wonder if they should buy your product?
