Resetting The Balance To Save Copyright (Part III)

from the alternate-side-of-the-street dept

Summary of Parts One and Two: The essential balance of copyright between incentives for creators and the feeding of a rich and unlicensed public domain has been undone by a long series of misguided efforts to save copyright by making its rules both stronger and less enforceable at the same time. The industry’s tactics have backfired, eroding what was left of any moral authority for obeying the law. And that was the chief (and most efficient) mechanism for enforcement all along.

The repeated and retroactive extension of copyright terms, largely at the behest of the Disney Corporation, has had the unintended consequence of creating a nation of felons, both technically and in spirit. According to one provocative study by John Tehranian, we all violate copyright unintentionally many times a day. And to the extent we realize it, we don't care.

To return to the parking analogy, the result of these legal changes has been to paint every curb a red zone—it's now illegal to park anywhere. The result is not perfect enforcement of copyright but its opposite. No one obeys the law or thinks they ought to. Getting caught is more or less a random event, and rational consumers won't change their behavior to avoid it.

The center will not hold. Large media holding companies are becoming desperate, expending their resources not to find new ways of making money but to secure passage of increasingly draconian laws (SOPA) and treaties (ACTA) that give them more, largely unusable new powers. Even if passed, these legal tools will do little to improve legal enforcement. But they are certain to cause dangerous and unintended new harms.

At the same time, the marketing machines of these same companies have convinced us that our right to enjoy content is inherent—the American Way. Once offered, we imagine free content should always be free, even if the rightsholder changes its mind or intended all along to attach conditions to consumption based on time or place or the ability to associate mechanisms, such as advertising, that allowed for indirect revenue generation.

Americans don't understand that subtlety, and rightsholders have given them no reason to try. Public education efforts have been pathetic. Instead of teaching consumers the costs and dangers to the delicately-balanced system from copyright infringement, they emphasize moral and legal prohibitions that are rightly perceived by consumers as petulant, cynical, and amusingly out-of-touch.

These campaigns, for starters, say nothing about the economics of content production and distribution. They are morality tales, narrated by fabulists who pride themselves, in their day jobs, on their mastery of manipulation and misdirection. It's as if Darth Vader sat down with preschoolers to talk about why they shouldn't throw stones at the Death Star because of the potential for property damage.

Consider just a few examples below: YouTube's mandatory copyright "school" for violators and the classic 1992 "Don't Copy that Floppy:"


Clearly, not much has changed over the last twenty years in efforts to change public perceptions and behaviors. The Hollywood that can produce blockbuster movies somehow can't make a PSA that isn't a self-parody.

I think the public can be educated, and should be. Here's where I part company with those who reject copyright altogether. The theory of copyright—limited monopoly in exchange for a rich public domain—is still a good one, and the system created by the English, adapted by early Congresses, had the virtue of being largely self-enforcing and therefore efficient.

It is the 20th and 21st century imbalance in copyright, and not copyright itself, that must be fixed. And it can be fixed. There is a way out of this dangerous and increasingly tense cold war between content industries and their customers. Here's a simple three-step solution:

1. If rightsholders want consumers to obey the law and support their preferred business model, they first need to stop making it impossible for consumers to follow the rules. Copyright needs to be weakened, not strengthened.
2. Content industries need to end the stalling and excuses—perhaps understandable in 1998, when I first wrote about digital distribution in "Unleashing the Killer App," but not now, nearly fifteen years later. They need to embrace digital media and new channels fully, even if doing so means tolerating a considerable amount of unauthorized distribution and reuse as working models for profit-generation rapidly evolve.
3. Public education needs to focus not on self-righteous indignation but on collaborating with consumers on finding ways to compensate creators for the value of their work. If consumers understood the economics of content creation and distribution, and given an easy way to cooperate, they'd do it.

Ironically, there's every reason to believe that embracing a relaxed copyright regime and encouraging creative reuse would actually generate more revenue for creators. That, in any case, has been the lesson of every form of new media to be invented in the last hundred years or more.

Each of them was initially resisted and branded as illegal and immoral. Each of them—from the player piano to the photocopier to the VCR to the Internet—has instead offered salvation and riches to those who figure out the new rules for working with them and not against them. (Hint: network effects rule.) Rightsholders consistently confuse each fading media technology with the true value of the content they control. The medium is not the message.

For now, industry apologists—the MPAA, the RIAA, the U.S. Chamber of Commerce and others—are caught in a dangerous cycle of denial and anger. A growing number of consumers refuse to follow the current rules. So they lobby to make the rules stronger and the penalties more severe, amping up the moral rhetoric along the way.

But this only serves to starve the public domain more, undermining the basic principles of copyright. With the system increasingly out of balance, self-enforcement becomes even less likely. The law is impossible to obey, and rarely enforced. So consumers make up their own rules, for better or worse, with expensive and unnecessary casualties piling up on both sides.

Eventually, consumers and creators find the right balance and the most effective forms of compensation, regardless of the industry's efforts to cut off their nose to spite their face.

Then along comes another disruptive technology and a new round of customer innovation, and the cycle starts all over.

Rights holders remain stubbornly parked in the same old spots, afraid that if they move their vehicles at all they'll be doomed to circling the block forever, unable to stop until they permanently run out of gas.

The rest of us, meanwhile, are happily enjoying our flying cars.

Filed Under: acta, advertising, hollywood, john tehranian, parking, sopa
Companies: disney, mpaa, riaa, youtube

Did Hollywood Not Use Available DMCA Tools Just To Pretend It Needed SOPA?

from the transparency's-a-bitch dept

The more you dig into Google's new copyright transparency reports the more eye-catching info you find. Julian Sanchez, for example, has noticed the rather interesting timing of massive explosions in Hollywood studios using Google's DMCA takedown system for search... in correlation with key elements of the fight to get SOPA passed. For example, there's a really big spike in DMCA takedowns for search the week of November 14th.

Hmmm... what happened that week? Oh, that's right: the House Judiciary Committee hearings about SOPA, where part of the "evidence" for why SOPA was needed was the MPAA's anti-piracy boss Michael O'Leary insisting that doing Google searches on certain movies led you to links to pages where you could download unauthorized copies. He was wrong, actually -- as our own tests showed, they took you to legal versions. But isn't it interesting to see that, for example, the very first search takedown that Lionsgate sent to Google happened on November 15th? Similarly, it's interesting to see that right after the SOPA blackouts made it clear that SOPA was going to die... there's another new "burst" of takedown filings. Twentieth Century Fox appears not to have used the system at all until January 30th of this year -- or a week or so after SOPA was officially declared dead. How about Paramount Pictures, one of the more vocal supporters of SOPA? It filed just one search takedown prior to the whole SOPA debate. But about a month after SOPA was declared dead, suddenly Paramount started using the tool. NBC Universal certainly had been a regular user of the system all along -- but right after SOPA died, its usage clearly trended upwards -- whereas prior to that, its usage looked pretty flat.

In other words, you could certainly make a reasonable case that the studios went to Congress to complain about how they couldn't get rid of search results they don't like from Google... when they hadn't even tried to use the tools available which appear to do the job they wanted.

There certainly may be other factors, but it's possible that the studios had been holding back on using the tools as a way of providing extra "evidence" of a problem that had to be addressed by law. Again, as Sanchez points out:

How about before you break the Internet, you try USING THE F***ING TOOLS YOU ALREADY HAVE?

A reasonable question, but don't expect a reasonable answer.

Filed Under: dmca, hollywood, house judiciary committee, michael o'leary, sopa
Companies: google, lionsgate, mpaa, nbc universal, paramount pictures, twentieth century fox

Congress Proposes Giving Another $10 Million To ICE To Censor More Websites For Hollywood

from the not-cool dept

Ever wonder how many of your tax dollars are going to the federal government censoring music blogs based on no real evidence, but just the say so of the RIAA and MPAA? Well, in the newly proposed Homeland Security Appropriations Bill, just introduced in the Senate by Mary Landrieu, the federal government would like to set aside the following for the ICE (Immigration and Customs Enforcement) unit that is in charge of being Hollywood's private law enforcement wing:

Provided further, That not less than $10,000,000 shall be available for investigation of intellectual property rights violations, including the National Intellectual Property Rights Coordination

Yup. At least $10 million of your hard earned dollars may be going to ICE to help them continue to be Hollywood's private police force, censoring websites without evidence. This is for just one year. You'd think with that kind of money, ICE could actually hire its own actors for the PSAs it's been putting on censored sites, rather than "pirating" a video put together by NBC Universal.

Filed Under: censorship, congress, hollywood, ice
Companies: mpaa, nbc universal

Why Hollywood Is Doomed: It Takes Sensible Advice Like 'Make Good Movies' And Turns It Into A Screed About Piracy

from the wow dept

Last week, Rob 'Cmdrtaco' Malda (and, can I just say that I think it's awesome the Washington Post allows Rob to keep "Cmdrtaco" in his byline?) wrote a perfectly reasonable (perhaps even tame) column with the admittedly inflammatory title Why Hollywood is doomed. But if you read the actual article, it basically argues that the answer to Hollywood's problems is not to focus on passing bad laws in a quixotic and pointless attempt to "stop" piracy, but rather do what they should be best at: making good movies. He also suggests a much bigger threat to Hollywood than any amount of piracy is (*gasp!*) bad word of mouth:

While Hollywood blames piracy, at least for now, I put the blame squarely on texts and tweets. These days, a month-long $100 million marketing campaign culminates in a 24-hour social network frenzy. The first $10 million-worth of ticket purchasers influence the potential $90 million-worth with knee-jerk reviews broadcast via their smartphones. These viewers determine if the movie will make a profit.

Ultimately, Hollywood, here’s the secret: Make good movies. “The Avengers” is simply fantastic. It’s no surprise, since the film’s director, Joss Whedon (of Buffy and Firefly-fame), is known for making cult, ensemble TV action. His most recent film, prior to “The Avengers”, is “The Cabin in the Woods” -- still the most fun movie of 2012.

This is perfectly reasonable advice. If Hollywood actually focuses on making top notch movies, it seems pretty clear that people have no problem paying. The success of the Avengers is hardly the only data point to show this.

So how do the folks at the MPAA react to such reasonable advice? They start whining all over again. In fact, they sent out their "big guns," starting with Michael O'Leary (basically Chris Dodd's righthand man) to attack Malda by totally misreading his column:

The Washington Post’s Rob Malda’s recent blog post appears to argue that the success of a particular film at the box office somehow means that concerns about widespread piracy are misplaced. This is a bit like condoning shoplifting if it’s done at a successful store. Of course, we shouldn’t. And it overlooks the economic damage – and the damage to consumers -- of turning a blind eye to such forms of theft.

Except that's not what Malda said at all. He said the concerns were misplaced because good movies can still get tons of people to pay -- far more than ever did in the past. This isn't saying that shoplifting is okay from a successful store. It's saying that there's little to no evidence that such infringement actually has a negative impact, because it seems pretty damn clear that people are still quite willing to pay to go see a good movie.

From there, O'Leary goes on to misrepresent the already ridiculous White House report that tallies up jobs in "IP-intensive" industries, but ignores the fact that very few of those jobs exist because of IP laws. In fact, an awful lot of those jobs come from industries (tech) that have fought the hardest against the expansion of IP laws, and have worked hard to reform them. On top of that, the report clearly states that it's not intended to be used for policy purposes, but that hasn't stopped the MPAA and all its friends from mentioning it every chance they get:

According to a recent Department of Commerce report, IP-intensive industries such as film and television support 40 million jobs and add $5 trillion dollars to U.S. gross domestic product annually – nearly 35 percent of America’s economic output. 2.2 million American jobs depend on the film industry and television industry alone.

We think that the hard work of those people should be protected. But the reality is that rampant online theft undermines the ability of IP-intensive industries like ours to invest in new ideas and new products if it’s simply accepted fact that they will be stolen – often before they even have a chance to hit the marketplace. Copyright protections are critical to keeping the creative industries vibrant so they can continue to employ millions of Americans and produce the films and other creative content that have become such a vital part of our cultural fabric.

O'Leary conveniently leaves out that this same report noted that these "IP-intensive industries" are currently growing faster than other industries and pay people more than other industries. I guess that doesn't fit with "the story" that the sky is falling and they need special protections.

As for those protections, last I checked, we were supposed to live in a capitalist free market economy, where even the most basic economics student learns that you don't "protect" industries, you let them compete. And if they fail, they fail. The fact that O'Leary wants the government to be protectionist for his industry, rather than letting it compete in a free market pretty much makes clear what he thinks his own industry's chances of survival are.

And he's mostly right... because it goes right back to what Rob said. For the most part, they don't seem to make that many good movies these days. They've focused on crappy, formulaic, derivative flicks. Every so often a good film gets out, but Hollywood has become afraid to make good movies most of the time. Perhaps if it spent more time focusing on that, and less on whining about how it needs to be protected, it wouldn't have so many problems.

Filed Under: chris dodd, cmdrtaco, hollywood, michael o'leary
Companies: mpaa

Hollywood Talent Turns To Kickstarter To Escape 'Institutional Censorship'

from the exodus dept

In discussions about artists like Amanda Palmer using Kickstarter, plenty of people continue to insist that their success was made possible by their traditional industry backgrounds. We've already gone over lots of reasons why this is silly, most notably the fact that such artists do a lot of work and certainly don't coast on anything. But it also usually ignores the artists themselves, who more often than not clearly say that they are going it alone because traditional structures were holding them back. The fact that creators who have received some amount of benefit from labels/studios/publishers decide to move on anyway, and then see their careers grow, doesn't say less about platforms like Kickstarter, it says even more.

This sentiment is not limited to music, or to independent creators. Kickstarter is getting a lot of attention, and that's bound to attract bigger and bigger names. The latest, sent in by jtomic, is a feature film called The Canyons which involves some pretty serious Hollywood talent. The script is written by Bret Easton Ellis (author of American Psycho) and directed by Paul Schrader (as in, the guy who wrote Taxi Driver and the screenplay for Raging Bull). Ellis, Schrader and the producer are putting up a bunch of the money themselves and turning to Kickstarter for the rest—all because they want to escape the confines of Hollywood:

The film is a collaborative effort stewarded by former Lionsgate producer Braxton Pope as a response to the changing landscape of the film industry. Pope, Ellis and Schrader are partly financing the film themselves through Pope’s new company Sodium Fox in order to maintain complete creative control of the distinct source material. According to Schrader, “We all experienced the frustrations of financing and institutional censorship. But now, with advances in digital photography and distribution, we can tell a story in the manner we choose. Movies are changing and we’re changing with it.”

They expand on this in the video, which includes some excellent comments from all three creators. Pope talks about how the Hollywood process encourages "groupthink" and makes it hard for a film to stay true to the artists' vision. Schrader and Ellis both compare the current revolution in film to that of a hundred years ago when the medium was in its infancy, and are clearly excited about the prospect of making a film without notes from meddlesome studio execs.

There are some pretty cool funding tiers too, many of which are unsurprisingly sold out. The cast itself is being largely crowdsourced through an online audition platform, netting undiscovered talent from around the world, and anyone who pledges at least $10 gets to vote on finalists. For $500, Ellis and Pope offered to watch your short film and share their honest reactions (with links) to their followers on Twitter & Facebook (all 10 slots for that one are already sold out). For $1,500 they'll do the same with a feature-length film. For $5,000, Ellis reviews your novel (again, sold out) or Schrader gives you notes on your script (a few left at time of writing). One lucky backer has already snagged the single $10,000 "De Niro's Money Package", which comes with a money clip autographed by Robert De Niro and given to Schrader on the set of Taxi Driver.

So there can be absolutely no doubt that these guys are using their momentum from the traditional Hollywood system to make this project possible—but I'm at a loss as to how that says anything good about Hollywood. I doubt any of these creators had any real need to finance a film themselves, but they saw a growing opportunity to go directly to their fans and make movies the way they really want to make them, and they jumped on it. That's not coasting on the past—it's embracing the future.

Filed Under: american psycho, braxton pope, bret easton ellis, hollywood, paul schrader, raging bull, taxi driver, the canyons
Companies: lionsgate

Chris Dodd Rewrites Hollywood's History To Pretend That It Came About Because Of IP Laws

from the well,-sort-of dept

Ah, Chris Dodd. Can you open your mouth without saying something ridiculously misleading? Sometimes, it doesn't seem possible. The latest is that he's claiming that strong IP laws were the reason Hollywood was created:

The truth is that neither the content nor the technology industries could survive without strong protections for intellectual property.

Many of you are familiar with how the name Hollywood became synonymous with the birth of the American film industry. It was in Jacob Stern’s horse barn, at the corner of Hollywood and Vine, the story goes, that Cecil B. DeMille screened the first full length feature film 100 years ago.

Well, when it comes to the tech sector, replace “Jacob Stern’s horse barn” with “Mark Zuckerberg’s dorm room” at Harvard, and you have almost the same story with the birth of Facebook.

In these and countless other examples throughout our history, the ability to give birth to an idea and convert it into economic success, whether it is the content of a film or the technology of the internet, depends on copyright and patent protection

Of course, that's all hogwash. Well, in a very twisted way, he's right. Hollywood did come about because of strong patent protection, but not the way Dodd seems to be suggesting. Instead, the reason that filmmakers moved out to Hollywood was because it was about as far away as they could get from Thomas Edison, who held the patents on basic filmmaking technology, and demanded exorbitant licensing fees. So the main reason that Hollywood is in Hollywood is because they were seeking a place to hide from patents.

It's a bit ridiculous for Dodd to try to rewrite this well-known history, and pretend that Hollywood developed because of strong IP protections when the exact opposite is what happened. I realize that Chris Dodd spent most of his adult life as a politician, so perhaps it's a bit naive to expect him to actually tell the truth, but at some point someone who works for him (I'm sure there's someone on staff who has accessed the internet once or twice) might want to explain to him that people can fact check him these days with relative ease online. Perhaps the next version of SOPA can be used to block people mocking Chris Dodd's inane statements as well...

Filed Under: chris dodd, edison, hollywood, intellectual property, mpaa

Hulu Puts Gun To Own Head: May Require Users To Show Proof Of Pay TV Subscription

from the preserving-the-problem-to-which-they-are-the-solution dept

We've discussed in the past how Hulu's owners -- the major Hollywood/TV studios -- absolutely hate that Hulu is actually useful and convincing people to watch TV online. Because of that, they've been trying to destroy Hulu. Hulu's management -- which mostly seems to understand the internet -- tried to get out from under this potentially paralyzing ownership structure, but the studios (stupidly) telegraphed the message that they would block Hulu from getting their content, meaning that no one wanted to pay the ridiculous asking price.

Well, now it appears that phase one of making Hulu absolutely useless to people who might cut the cord from pay TV is going into effect, with plans to join the networks silly "TV Everywhere" setup and require users to have a pay TV subscription in order to access parts of the service. Hulu's main (non-studio) investor, Providence Equity Partners, sold its shares last week because it heard about this plan and knew it was suicidal.

In no rational world would Hulu move in this direction on its own. Hulu's key selling point is that it's the go-to source for cord cutters, helping it build up a very large audience. Taking that crowd out of its audience makes it close to useless. While the studios love this because they make so much money from pay TV companies, it's incredibly short-sighted in the long run. It's pure protectionism of legacy revenues, done by sacrificing the one truly innovative platform they've invested in.

Meanwhile, along the same lines, the THResq story that we link to above also notes that NBC Universal will, once again, seek to marginalize its own online coverage of the Olympics, by also requiring proof of a pay TV service. Way to raise a giant middle finger to all the cord cutters out there -- guaranteeing that they seek out alternative streams for which NBC Universal gets no money.

Filed Under: cord cutters, hollywood, pay tv, television
Companies: hulu, providence equity partners

SEC Investigating Hollywood Studios For Alleged Bribes To China

from the open-markets dept

When the MPAA came out with its annual report about the movie market worldwide, it showed that China was a huge growth market. However, now it appears that perhaps some of that growth was the result of Hollywood studios bribing Chinese officials. For years, China has limited how many Western movies can be released in the country. While Hollywood loves to decry all of the "piracy" in China, much of it is due to the fact that the movies can't be released there under the law. That's a situation where the problem is not piracy, nor the MPAA itself (even as it whines about Chinese piracy), but local laws. However, there has been a loosening of those restrictions lately -- and the SEC is exploring whether or not that came about due to bribes from the studios:

The Securities and Exchange Commission has sent letters of inquiry to at least five movie studios in the past two months, including News Corp's 20th Century Fox, Disney, and DreamWorks Animation, a person familiar with the matter said.

The letters ask for information about potential inappropriate payments and how the companies dealt with certain government officials in China, said the person, who was not authorized to speak publicly about the letters.

That said, there is an interesting tidbit in the Reuters article about all of this, that really serves to highlight how ridiculous the MPAA's fight against "piracy" is. It shows that despite the fact that piracy is rampant for Hollywood movies -- once the MPAA was able to get legit movies into the country, people flocked to the theaters. In other words, despite the cheaper pirated options -- or even free options -- people have no problem paying for the legit product when it's offered in a quality fashion:

China's booming middle class is increasingly willing to pay tickets prices for a cinema experience, forgoing cheap pirated DVDs and free internet downloads.

Once again, this seems to demonstrate why the problem is not piracy. If consumers are offered what they want in a reasonable manner, they are more than willing to pay -- and the Hollywood studios seem to recognize this implicitly (which is why they may have bribed Chinese officials to release authorized versions in that market, even with "piracy" being so common).

Filed Under: bribes, china, hollywood, mpaa, sec
Companies: 20th century fox, disney, dreamworks, news corp