RIAA Calls 4th Amendment Passe: Pushes For Warrantless Searches

from the entitlement? dept

Wow. It's been obvious to plenty of people for quite some time that the RIAA and the MPAA don't much care about things like free speech and due process rights afforded to people under the Constitution (see COICA and the PROTECT IP Act). But, I hadn't realized they'd gone so far as to blatantly disregard something like the 4th Amendment. Obviously, as we've been discussing lately, it seems like all three branches of the federal government have decided to crush the 4th Amendment, but they usually try to at least pretend that they're paying attention to the Constitution.

Not any more, apparently.

The RIAA has been pushing the state of California to pass a new law that would allow completely warrantless searches for law enforcement, allowing them to enter and search any CD or DVD manufacturing plant without either notice or a court order.

Yes, let's repeat that: the RIAA is pushing a law that would let law enforcement, without any oversight, without any probable cause, without any notice, enter and search any company premises that involves pressing CDs or DVDs, in order to assure that they're legal. Oh, and if said law enforcement discovers repeat violations, fines can be up to $250,000.

The RIAA claims that the 4th Amendment doesn't apply here because of all the recent attacks on the 4th Amendment by the courts:

The RIAA argued that courts had carved out 4th Amendment exceptions already. So far, it said, warrantless searches have been allowed at such businesses as automobile junkyards and repair shops, mines, gun and liquor stores, nursing homes, massage parlors, pawn shops and wholesale fish dealers.

The common trait, the trade group contended, was that the businesses were in "closely regulated" industries in which "the pervasiveness and regularity of the government's regulation reduces the owner's expectation of privacy in his business records."

It gets worse. The RIAA's Marcus Cohen honestly makes this sound like it's no big deal:

"We're literally talking about walking into a plant, walking up to the line and ensuring that, indeed, the discs are in compliance," he said. "I don't think the scope of the search is something a regulator needs to be worried about."

Oh really? And how about the RIAA member labels? How about, in exchange, they let some of us walk into their offices, take a look at their books and ensure that their royalty payments to artists are in compliance? I don't think the scope of such a review is anything to be worried about, right?

And, here's the crazy thing. Despite numerous legal experts saying that the bill is almost certainly unconstitutional, it sounds like it has a decent chance of passing. It's sponsored by California state Senator Alex Padilla and has already been approved by two separate committees, and will be heard on the Senate floor on Monday. If it passes there, it'll go to the Assembly. You can see the full text of the bill, SB 550 at that link, or embedded below.

It's really an astounding showing of the sense of entitlement of the RIAA that it feels that the 4th Amendment shouldn't apply. The RIAA and its member labels should be ashamed of themselves.

Filed Under: 4th amendment, alex padilla, california, cds, dvds, warrants
Companies: riaa

Netflix's Move From DVDs To Streaming Shows The Massive Value Of First Sale Doctrine

from the those-exceptions-are-important dept

We've pointed out many times in the past that exceptions to copyright (such as fair use and the first sale doctrine) may actually be a lot more important than copyright itself in "promoting the progress." For example, we've highlighted CCIA's study that uses the identical methodology used by the entertainment industry to claim that copyright contributes $1.52 trillion to the economy to show that exceptions to copyright law (again, things like fair use and the first sale doctrine) contribute significantly more. However, have we ever really quantified specific exceptions? We recently covered how the movie studios were upset about Netflix, and demanding much higher fees for allowing streaming -- and that actually highlights how damaging a loss of those copyright exceptions can be.

Edwad Epstein has a post over at TheWrap.com pointing out the massive differences in costs facing Netflix between buying DVDs that it can rent by mail and licensing movies for streaming. The key issue: the first sale doctrine. If Netflix wants, it can buy DVDs from any particular source and then use them in its business. It need not get any licenses with the movie industry. Yet, for streaming, there is no first sale situation, so it needs to license. And the differences in costs to Netflix are substantial. Epstein notes that it costs Netflix about $15 to buy each DVD, but to license a single movie title the industry wants $16 million for a two year license.

Where Netflix can buy 10,000 copies of a major title for $150,000 to mail out, it will need to spend about $16 million to license it for streaming. Such a hundredfold increase in price can obviously be deleterious to profits especially since Netflix still has to maintain its mailing centers, and buy DVDs, for the subscribers who elect to continuing using the mail-in service either because they prefer DVDs� higher quality and features or they don�t have the apparatus to receive digital streaming.

First of all, $16 million for a single title? Yikes. Someone please tell me that's only for the really big titles. But, even if the numbers are slightly off, think about the obvious impact here. When you make the product much more expensive, you're definitely going to limit its availability to the public. Netflix will either choose to stream fewer movies or it will have to increase its own prices, creating a net loss for the public. In this case, the right of first sale allows Netflix to bring the cost of doing business down by an order of magnitude, since it is not wholly locked to the studios.

Of course, it's a little more complicated than that. As we've seen with Redbox kiosk DVD rentals (and, to a lesser extent, Netflix), the movie studios have worked hard to get around first sale rights, by telling wholesalers not to supply DVDs to DVD rental companies if those companies won't cough up some sort of revenue share plan. Those actions (which certainly seem to violate antitrust laws) suggest that the studios recognize how much value there is in killing first sale rights.

But as a society, this should concern us greatly. The move to digital actually allows the studios (and other content producers) to effectively kill off such first sale rights. We've seen this in other industries as well. There have long been questions about whether or not you can sell an iTunes song you legally purchased -- and the video game industry has been so desperate to kill off the secondary market, that it's quite excited about the move to digital.

This should be a concern for everyone, however. Studies have shown that a robust secondary (used) market actually helps drive the primary market and makes it larger. If you know you can resell something you bought, it makes you more willing to buy it (minimizing your risk) while also increasing the value of the product (since it can bring in some money on the back end). Yet, in the big content business's short-sighted attempts to kill off the secondary market by going digital, they may do harm to the primary market as well.

Of course, the real issue is going to be that, one of these days, someone's going to test the first sale rights on digital goods too, and I would imagine that there will be quite a giant lawsuit around that.

Filed Under: buying, copyright, dvds, first sale, licensing, movies, streaming
Companies: netflix

Movie Studios Purposely Crippling Rental DVDs In Misguided Effort To Get People To Buy

from the taking-away-features-is-not-a-strategy dept

What is it about the entertainment industry that actually makes them think that it's a smart move to take features away from consumers? They seem to focus on building business models by pissing off as many people as possible, and then wondering why those people seek out alternatives. Case in point, visual77 points us to the news that movie studios are increasingly offering up feature-limited DVDs for the rental market, and then encouraging you to buy the DVD itself if you want all the features. As Consumerist reports:

Consumerist reader Joseph brought this to our attention after he spent $3.99 to rent the DVD of Scott Pilgrim Vs. The World from Blockbuster. When he went to the disc's main menu and attempted to watch the Blooper Reel special feature, he was greeted by a screen telling him: "This disc is intended for rental purposes and only includes the feature film. Own it on Blu-Ray or DVD to view these bonus features and complete your movie watching experience."

This is the same thinking that leads the studios to seek to have rental places delay movies for a month. The entire business model seems to be centered on creating artificial scarcities that piss off people. Is it really so difficult for the industry to realize that they can make more money by adding value and actually delivering what people want?

Filed Under: dvds, features, movies, rentals, value

Movie Exec Says Studios Should Stop Sending Out DVD Screeners For The Oscars

from the this-has-been-tried dept

One of Jack Valenti's last great "battles" as the head of the MPAA was his fight against DVD screeners sent out for the various movie awards events. Valenti felt that sending screeners of all the nominated movies was a key factor contributing to unauthorized copies getting out into the world and on the internet. So he instituted a ban on sending out such screeners. This pissed off just about everyone. A bunch of really famous movie directors demanded that he drop the ban and the LA Film Critics Association actually canceled their own awards event in protest. Then, a bunch of independent film producers sued the MPAA. Basically, everyone pointed out that without the screeners, many of the voters simply wouldn't be able to see the movies being voted on, and that would hamper any awards effort -- especially for more independent films. Eventually, a judge sided with the producers, and explained to Valenti that he could not ban DVD screeners.

The following year, he came up with another plan, which involved special screener DVDs that only played on a special DVD player, which each voter would have to get and set up themselves. In other words, it was a "solution" that was a huge pain in the ass for everyone -- especially those who already had a perfectly good home theater setup. After a few years of everyone bitching and complaining about this, the MPAA finally relented in 2007, and went back to just sending out normal DVDs as screeners.

Apparently, some folks in the industry don't know their history. At the "Content Protection Summit" that we recently discussed, a VP from Summit Entertainment, the indie studio who has had some success lately thanks to the Twilight films and The Hurt Locker, apparently told the audience that the industry should get rid of DVD screeners, and who cares if it inconveniences people. She specifically said "we're going to have to agree to be inconvenienced." Apparently, she's totally unaware of how badly that worked out last time around -- especially for independent studios like her own.

Of course, it shouldn't be much of a surprise that Summit Entertainment thinks this way. The company has built up quite a reputation for being an intellectual property bully. In the past 15 months or so, we've had multiple different stories of Summit's overly aggressive attempts at IP enforcement, often threatening or suing people doing completely reasonable things, such as creating a fanzine or filming a documentary about the town where Twilight is supposed to take place. And that's not even getting into questions about The Hurt Locker and its lawsuit campaign against thousands of file sharers -- because that was really done by the movie's producers, Voltage, rather than Summit. Of course, all these actions are doing is reminding me to avoid any pictures associated with Summit.

Filed Under: dvds, movies, screeners
Companies: mpaa, summit entertainment

Librarians Violating Netflix Terms Of Service To Better Serve Patrons

from the gotta-go-with-the-librarians-here... dept

Rose M. Welch was the first of a few of you to send in the news that librarians have realized that Netflix is a great way to expand the catalog of DVDs that can be loaned out, even though it violates Netflix's terms of service. Netflix seems a bit ambivalent about the whole thing, saying that they don't like it, and they would expect librarians would obey the terms of service (which this does not), but that they really don't want to sue libraries -- perhaps recognizing how awful that would look from a PR standpoint. While I applaud Netflix not going straight to the lawyers, is it really that big of a deal that libraries are using Netflix in this manner?

Filed Under: dvds, libraries, sharing, terms of service
Companies: netflix

Colbert Helps Save World From Polka Pirates

from the those-darn-pirates dept

A few of you have sent in the fact that the Colbert Report recently did a fun segment about a guy arrested for selling polka DVDs:

The Colbert Report	Mon - Thurs 11:30pm / 10:30c
Nailed 'Em - Polka Piracy
www.colbertnation.com
Colbert Report Full Episodes 2010 Election Fox News

For all the talk we hear about how DVD counterfeiters are connected to "organized crime" and "terrorists," a lot of the times it's really situations like this one, involving a guy who did a public access TV show about polka. Someone called him to see if they could buy some DVDs of the show, so he made a few DVDs and sold them. But the whole thing was a setup, and the next morning he was arrested. The whole thing shows what a joke some of these claims really are.

Separately, I do find it amusing to see folks like Colbert mock the overreaction to things like copyright infringement -- considering that his employer, Viacom, is so aggressive on spreading the myth that DVD counterfeiting is really about supporting terrorism and organized crime.

Update: Good discussion in the comments about what the specific charges were in this case. Apparently, the guy used government equipment to make the recording and DVDs, so the local government felt it was theirs -- and they sold their own DVDs, which this guy's DVDs undercut. He was charged with using city property for "personal gain." Oddly, there's an "embezzlement" charge as a part of this... More details here.

Filed Under: colbert, counterfeit, dvds, piracy, polka

Paramount Says 28 Day Delay On Redbox Makes No Sense; Doesn't Cannibalize DVD Sales

from the good-for-them dept

While some of the Big 6 studios have been incredibly anti-Redbox, Viacom's Paramount has always been the most reasonable towards the DVD-rental kiosk provider. So it really comes as little surprise that Paramount has announced that, after testing delayed movie releases through Redbox it sees absolutely no reason to keep delaying such releases and instead will offer new release movies on Redbox at the same time the DVD goes on sale:

"There were two conclusions we came to," said Dennis Maguire, president of Paramount Home Entertainment. "There hasn't been a cannibalization of DVD sales from Redbox, and Redbox was allowing us to expand our business and ultimately make more money" than if the studio held back its DVDs to Redbox for a period of time.

Of course, this is exactly what many people said when studios like Warner Bros., Universal and Fox demanded the 28 day release, but it's nice to at least see Paramount actually looking at the data and realizing that Redbox isn't the evil destroyer of Hollywood that some of its competitors have made it out to be.

Filed Under: delays, dvds, rentals
Companies: paramount, redbox, viacom

Kaleidescape Introduces Expensive And Almost Pointless Blu-ray Jukebox... And Hollywood Still Thinks It's Illegal

from the controlling-innovation dept

You may recall the legal fight over Kaleidescape. The company built a ridiculously expensive (tens of thousands of dollars) DVD jukebox that was clearly designed not for unauthorized file sharing, but for those with a huge disposable income to store their DVDs on the device so it was easier to watch or playback any DVD they owned (you couldn't transfer the movies off the device, so it was useless for further copying). Of course, as usually happens, Hollywood got upset, saying that this process of backing up your DVDs was illegal, using a twisted argument that the encryption on DVDs was broken by this system, and thus it's a violation of the DMCA. This is a massive problem with the DMCA's anti-circumvention clause, which says that even if the copy itself is legal, if it involves encryption, the process of making that (legal) copy, becomes illegal.

While Kaleidescape won in the lower court, the appeals court reversed, highlighting again how Hollywood (despite claims it would never use copyright law to block technology) uses the legal system to block technological innovation.

Kaleidescape has now come out with a new product that actually adds the ability to store Blu-ray discs as well -- which might be a surprise given last summer's ruling. However, in response to the ruling, Kaleidescape added one "feature" which it hopes will satisfy Hollywood lawyers: to play back a movie, you now have to put the original disc into the player. Yes, you read that right. This is a device designed to rip and store your DVDs -- and the only way you can play them back is to go ahead and put the actual DVD into the player to prove that you have it. In other words, it takes away the whole idea of the convenience behind the product.

And, guess what? Hollywood still isn't happy.

The AACS technology and licenses do not permit ripping of Blu-ray discs unless the copy has been authorized by the content owner, either by setting the Copy Control Information appropriately (and nearly all BD movies are set for “Copy Never”, just like DVDs), or by individual authorization through the Managed Copy process, which we anticipate rolling out at the end of this year or the beginning of 2011.

This is exactly what the law is not supposed to do. It's letting Hollywood set the terms of technological innovation, and blocking any concept of fair use or backup copies that are recognized as legal. It's giving Hollywood a veto on technology, and causing tech companies to jump through ridiculous hoops to disable obvious functionality, just because Hollywood doesn't like what it does.

Filed Under: copyright, drm, dvds, jukebox
Companies: kaleidescape, mpaa

Shanghai 'Crackdown' On Bootleg Discs Just Moves Them Underground

from the well-that's-useful dept

For many years, we've pointed out the futility of the entertainment industry's constant focus on "shutting down" any source of unauthorized material. Every time they do so, the content sharing continues to grow -- it just moves further underground and makes it that much more difficult for the industry to actually use it to their own advantage. It appears this happens not just online, but offline as well. We've noted recently that China has been paying lip service to external pressures to "crack down" on infringement, often by using copyright and patent laws to go after foreign companies as well. But it appears to also be playing itself out in other ways.

The NY Times is covering how Chinese officials have been going around to DVD and CD shops that have lots of unauthorized bootlegs, and telling them that for the World Expo (which begins May 1), they need to stop selling that content so directly. It appears most of the shops all responded in nearly identical ways: cutting their stores in half by putting up a wall in the middle, then placing legitimate discs upfront, and putting all the bootlegs on the other side of the wall, with a "secret" doorway. The effort was so consistent that some accuse Chinese officials of suggesting this to store owners. Some stores readily admit that after the Expo ends, they'll tear down the wall and return to a single storefront.

Either way, it's quite similar to what we've seen online. You can "crackdown" all you want, and it never actually slows down the trade in unauthorized content. It just moves it further underground... or, perhaps, behind a (not so) secret wall.

Filed Under: bootlegs, cds, dvds, shanghai

Blockbuster Using Its Deal With Warner Bros. To Mock Redbox And Netflix

from the getting-desperate? dept

You may recall that, at the end of March, Warner Bros. studios did a new deal with Blockbuster that seemed likely to confuse the hell out of consumers. That's because Warner Bros., in its backwards-looking wisdom, had already done deals with both Netflix and Redbox to not make new release movies available to rent until 28 days after their release. There is no good reason for this, other than it pisses off customers all around, and makes them less interested or inclined to bother watching Warner Bros. movies (hint to WB: you have competitors).

But the Blockbuster deal seemed confusing -- because most consumers wouldn't be following these silly deals and wouldn't understand why a movie had been "released" but wasn't available via their favorite rental service. Apparently, Blockbuster's answer to all this is to mock Netflix and Redbox for not carrying new releases. Seriously. Reader Daylyn sends in the following ad he recently saw that points out that Netflix and Redbox don't carry this movie: Apparently, this is all part of Blockbuster's new WB-partnered advertising campaign: "hey, the movie studios screwed over our competitors! rent from us!" Looking around, it appears a few others have noticed this campaign as well, which went into place quite quickly after the WB deal was announced.

Filed Under: delays, dvds, rentals
Companies: blockbuster, netflix, redbox, warner brothers