A few years back at a Cato Institute conference on copyright, a guy from NBC Universal challenged me with the question of "how will we make $200 million movies?" if content is freely shared. As I noted at the time, that's really the wrong question. No one watching a movie cares about how much the movie costs. They just want to see a good movie. The question for a good filmmaker or producer or a studio should be "how do I make the best movie I can that will still be profitable?" Starting out with a "cost" means that you don't focus on ways to save money or contain costs. You focus on ways to spend up to those costs. That's backwards, and it's how you fail as a business.
Imagine if Dell or IBM or HP went around saying "but how can we profitably make $5,000 computers?" It's a silly question, and it doesn't get you to focus on things like reducing costs. And, it's important to note that technology keeps making the cost of making, distributing and promoting content cheaper. No, it's still not cheap to make movies, but you can make better and better films for less and less money these days.
Jim Harper (who, it should be noted, was the guy who invited me to that Cato event in the first place), reminds us of this with a blog post jokingly entitled How to Make a $200 Million Movie, but which actually shows how it's getting cheaper and cheaper to make a film these days. Specifically, he shows an amusing new short film from Futuristic Films, which looks pretty good and notes in the opening that the whole damn thing was shot with a Pentax K-7 DSLR, which you can find these days for around $800 or so:
After that he shows the following "making of" video that highlights how the fillmmakers were able to make such a film for very little money:
Now, no one will claim that the quality is equivalent to a $200 million movie. But it keeps getting better and better and better... at the same time that it's getting cheaper and cheaper and cheaper. Oh, and you might recognize the filmmakers in question. They're the same folks who made the movie Ink and then celebrated when a copy was leaked via BitTorrent, helping the film become incredibly popular, shooting way up IMDB's movie meter, making it (for a time) one of the 20 most popular films on the site, despite being a small indie production.
I would bet these guys aren't going around whining, "but how can we make a $200 million movie?"
You may remember last year all the press attention that came about when a work print of the movie Wolverine leaked out a month or so before the movie was set to be released. At the time, 20th Century Fox went ballistic and all of the talk was about legal threats and getting the FBI involved (in fact, the FBI eventually did arrest someone accused of the leak). However, in our post about the leak, we wondered if a better response might have been to not freak out and call the lawyers, but address fans who were downloading the leak as fans and treat them with some respect. Totally off the top of my head, I mocked up what Fox could have said:
Hey Wolverine fans! We know that you're all looking forward to the release of the movie next month. We're excited too! By now you may have heard that an early totally unfinished version has been leaked online. It's missing a whole bunch of stuff -- including some amazing special effects -- and honestly, this version isn't a finished product at all. We think you'll get a much better overall experience by waiting for the full finished product, but we certainly understand that some of you just can't wait (trust us, we feel the same way!). If that's the case, please, feel free to check it out, but please remember that this isn't even close to the final version. If anything, think of this as a "behind-the-scenes" peek of just what a movie looks like before all the real "movie magic" gets put in there. If you do check it out, we hope you'll join us May 1st to check out the finalized version as well on the big screen the way we intended for you to see this awesome movie. It's just a month away!
But, of course, that's not what happened at all. I still do wonder how people would have responded if 20th Century Fox had responded that way. While it's not quite the same scale, we now do have some information from a band who did choose to do something somewhat similar when their album leaked. It's obviously on a much smaller scale, but involves a similarly obsessive group of fans who were eagerly waiting for the content. In this case, it was the release of an album from a band called Man Overboard. The story is explained by the band's manager, where they quickly and actively responded to the album leaking a month ahead of schedule by not freaking out, and moving to treat fans who wanted the album with respect. In this case, it involved putting the album up themselves as well, and proactively communicating with fans. And the response was that fans loved it, with some pointing out they were buying the album just to show support for a band that would act that way:
The response could not have been better. Many fans praised us for being "adults" about the situation and countless fans were thankful they got a record they had been waiting for a month early. Other said they would buy the record just to support a group behaving in this fashion. On messageboards and blog comments we could not have gotten a better response,with at least two dozen compliments on how cool it was for us to release the record to our fans early instead of inflicting the usual torture of waiting upon our fans.
We earned loyalty from our fans and made them into evangelists by doing them right, which coincidentally also did us right. A win-win situation that most labels turn into a lose-lose situation. We could not be more thankful to have a smart label and team that made us able to benefit from something that is usually thought of as a catastrophe.
Nice to see some people making this work. Somehow, I doubt we'll see many of the "big" guys figure this out any time soon, unfortunately.
The movie industry keeps sending very, very mixed messages. It keeps insisting that its business is being decimated by file sharing, but then keeps putting out reports bragging how well it's doing. Reader ethorad points us to a page put up by the UK Film Council about the movie business in the UK, where it makes a pretty compelling case that the movie business is thriving, despite all the reports of doom and gloom. Some key highlights:
The core UK film industry has grown 50% over the last 10 years
UK box office takings at record levels, with growth of over 60% over 10 years
They have had a 500% return on their investments in film
More films are being released, up over 30% in the last decade
Independent films are performing quite well, taking in nearly half the revenue of major studio films
All of these points seem to go against the claims of an industry being decimated. Rather than the predicted decline in attendance, attendance is way up. Rather than the predicted decline in making films (both major studio and indie), more films are being made, and they're doing quite well. So... um... where exactly is the decimation happening?
It's always kind of amusing when you see a business owner make obviously false statements as they try to justify why everyone should be worse off, just so they don't have to adapt their business model. It's especially amusing in the movie theater business, where we keep seeing theater owners complain about shortening windows between theatrical release, and when a movie can be viewed at home. As we've noted over and over again, every time a movie theater executive makes such a complaint, they are effectively admitting that they're too clueless on how to compete. Even though they have huge theaters with great sound systems and seating, they're admitting that they either don't want to or simply cannot compete. If that's really the case, they don't deserve to be in business.
RickMan points us to the latest such example, written for the Hollywood Reporter by Gregory Marcus, the CEO of Marcus Theatres, where he runs through a whole series of fallacies in trying to convince Hollywood not to keep shortening film windows. Let's pick through a few:
I just saw Johnny Depp at the grocery store.
Dressed as the Mad Hatter, he was in the Redbox machine available for $1. All I could think was what a shame it was that this wonderful movie was being so terribly devalued.
First of all, it's not devalued. Price and value are not the same thing, and it's economically wrong to claim they are the same. Furthermore, it's not "devaluing" something if the market is pricing it more efficiently and accurately. Just because one part of the market artificially inflated the price through exclusionary and anti-competitive practices, don't blame the market for more accurately pricing things.
Windowed release patterns are brilliant. Release a movie to different outlets over time so it can be sold to the same person multiple times. First see it in the theater, then buy or rent it, then catch it on cable or TV. Shorten the window and risk losing the ability to sell the product multiple times.
When trying to convince the world that your system is better, it helps not to flat out admit that the system you like is the one that forces people to pay multiple times for the same thing. The reason windows are collapsing is because more and more people realize such windows are ridiculous and make little sense. And when that happens, they start routing around the legal ways of getting the content, and get it through unauthorized channels.
The real problem here, of course, is that Marcus is either too afraid or too confused to know how to compete. Even if all movies were released -- in an authorized fashion -- for free, I would bet that a smart theater owner could thrive. That's because a smart theater owner would recognize that people go out to the movies for the overall social experience. The better the experience, the better you can do. Everyone can always eat dinner for less money at home, but they go out to eat at restaurants for the experience and the ambiance and the fact that others do the work and take care of the details. The same is true for movies as well. But Marcus, here, is suggesting that his theaters are run so poorly that no one would want to come. That seems to be a problem for the board of directors of Marcus Theaters in reviewing the guy who is in charge of their strategy. It's got nothing to do with release windows.
Please don't say, "We need to give the consumer what he wants," because the historical implication was, "or your competitor will provide it," not "or the customer will steal it." The proper response cannot be to cede to the thieves' demands and earn less along the way.
If you don't realize that file sharing sites are competitors, you're never going to be able to adapt.
If I were the studio execs, I would focus on catching and punishing thieves and look for less destructive opportunities to grow my business.
Yeah, because so far, that's only served to draw more attention to file sharing and increase the rate at which it's done.
I'm sure it sucks to be in Marcus' position, where the old artificial scarcity he milked for profits is shrinking ever so slightly. I'm sure it must be tough to have to adapt and give people more reasons to actually come out to the theater. But his arguments make no sense for anyone other than himself. Shortening windows (or getting rid of them completely) provides more benefits to the consumers, and it's a move that the studios should have done long ago. It gives them more bang for the buck in terms of their marketing efforts, and it better segments the market. That theaters are unwilling to adapt to compete in a changing market is a problem for those theater owners alone.
Phillip Vector was the first of a few of you to point us to the current copyright "fight" that is going on between Tommy Wiseau and "The Nostalgia Critic," an online movie critic, whose real name is Doug Walker, who does video reviews of older movies. Unfortunately, the specific details on this are not entirely clear. I've asked "The Nostalgia Critic" to see the details, but haven't heard back, so the following is what I've pieced together from what's out there. First off, there's Tommy Wiseau, a guy whose claim to fame appears to be that he's made what's considered to be one of the worst movies ever made, The Room. It's been referred to as "The Citizen Kane of bad movies." It's one of those movies That is so bad that it's become a sort of cult classic for people to watch and laugh at.
So, apparently after a bunch of people asked, Walker did one of his video reviews of the movie. While it got taken down, others have put it back online. Here's the first part:
As you'll notice, in the review, he uses lots of clips from the movie itself, which he talks over and discusses (warning: it's long, and both the movie and the review get... cringeworthy often). Not surprisingly, he does mock the movie quite a lot. Apparently, Tommy Wiseau then issued a takedown. Here, the details are a bit fuzzy as the only "explanation" is that the Walker then made another video mocking Wiseau for claiming copyright infringement, but without providing details:
In that video (you have to get to about a minute and a half in before it gets to this point), Walker claims that his review was clearly fair use because it's a review, and also covered by the "satire/parody clause." He then goes on to mock the person who emailed him, who apparently was Wiseau himself using an alter ego.
Honestly, looking over the details that are available, I have two thoughts: the first is that this is not a clear cut case of fair use, as Walker suggests (even if it should be). The second, is that even if it's not fair use, Wiseau probably shouldn't have made the copyright claim... though, one could argue that it'll only act as greater publicity for his movie.
On that first one. Just saying it's a "review" doesn't automatically give you fair use rights. And there's no fair use for "satire," only parody -- and it's not clear that the review is actually a parody (or, for that matter, satire). Going through the four factors for fair use... you could make an argument either way as to whether or not it currently is fair use. It would really depend on the judge, and I'd actually guess that the sheer amount of the movie that is used would probably tilt the scales against fair use.
That said, I think this should be fair use, but it's not really clear that it is. Even so, this seems like the kind of thing that movie makers are better off embracing, rather than fighting. All the takedown has done is angered a whole bunch of people. Of course, you could argue that perhaps Wiseau is embracing the "this is such a bad movie, it's good" concept to such an extreme that he thinks the takedown will actually drive more business to the movie -- which might actually be a possibility. Whether by accident or by plan, this kind of takedown, might actually be a strategic use of The Streisand Effect to get his own movie more attention.
We already wrote about the recent Congressional committee hearings on intellectual property enforcement, where IP Czar Victoria Espinel blamed China. However, there were other speakers there as well, and perhaps the most interesting was from John Morton, the assistant secretary of Homeland Security's Immigration & Customs Enforcement (ICE) division -- the group that recently started working for Disney and seized a bunch of domains using questionable legal theories. We're still trying to figure out what the hell immigration and customs enforcement has to do with internet file sharing, and here was a chance to set the record straight.
In his opening remarks to the event, Rep. Howard Berman (who has been called the Representative from Disney, so it fits that he's happy that ICE now works for Disney) highlighted how this operation was "innovative thinking." (pdf):
Most recently, I was interested to read about the initiative
undertaken by Immigration and Customs Enforcement, or ICE, to seize the domain names of
Web sites that were unlawfully offering first-run movies. That is exactly the kind of innovative
thinking the Vice President called for -- and I am curious to hear from Assistant Secretary Morton
on how it came about, the obstacles that you faced, and how we can scale Operation "In Our
Sites" to enterprises that facilitate the theft of music, books and other products prone to
counterfeiting.
Note the sly trick (lie) from Berman here: suggesting that copyright infringement and counterfeiting are the same thing. You'll see this quite frequently these days (hello, ACTA), because it's easier to show actual problems from counterfeiting -- and nearly impossible to show problems from infringement. So by simply pretending they're the same, everyone can pretend that the "harm" from infringement is much worse. Note carefully that whenever anyone talks about the specific "harm," it always relates to counterfeiting. But when they talk about the "problem" they talk about infringement. It's amazing that no one calls them on this stuff.
Morton's talk was basically anchored with this kind of deception. You can read the whole thing here (pdf) or the embedded version below:
Let's dig into some specifics:
Simply put, American business is under assault from those who pirate copyrighted material and produce counterfeit trademarked goods.
And, we're off, with a simple conflation of two totally different things. Counterfeiting and copyright infringement are not the same at all.
Criminals are stealing American ideas and products and selling them over the Internet, in flea markets, in legitimate retail outlets and elsewhere. From counterfeit pharmaceuticals and electronics, to pirated movies, music, and software, these crooks are undermining the U.S. economy and jeopardizing public safety. American jobs are being lost, American innovation is being diluted and the public health and safety of Americans is at risk -- and organized criminal enterprises are profiting from their increasing involvement in IP theft.
Except, of course, you cannot "steal" ideas. And notice how the paragraph moves seamlessly back and forth between counterfeit goods and infringement. If infringement on the internet is the real problem, then why are they talking about "health and safety" which has nothing to do with people watching movies online. Furthermore, the whole "selling them over the Internet" may apply to counterfeit goods, but I thought the whole problem with content online is that people aren't "selling" it but giving it away for free? Why conflate the two unless your sole purpose is to confuse?
Finally, the GAO just dinged the government for buying into bogus industry claims about "lost jobs" and diluted innovation. So why is a government official repeating them?
Intellectual property rights are intended to discourage thieves from selling cheap imitations of products, which are often far less safe or reliable than the original products.
Please, let's be clear: Trademark law is designed to prevent consumer confusion over such imitations. Copyright law is entirely different and is designed to create incentives that "promote the progress of science." But, again, Morton is carefully conflating the two, because it hides the weakness of the idea that Homeland Security has any role in dealing with internet file sharing.
Intellectual property rights also protect the actor, director, writer, musician and artist from having a movie, manuscript, song or design illegally sold by someone who had no part in the artistry of creating it.
While true to some extent, again, "sold" over the internet? Wasn't the whole problem that all this stuff is available for free?
This increase in access to the Internet, while of great benefit for global communication and commerce, represents a very real threat to America's film and music industries. Their products are extremely susceptible to Internet piracy, especially as bandwidth increases. As a result of this growing concern, ICE counterfeiting and piracy investigations are increasingly directed to web-based criminals.
You know, cars represented a very real threat to America's horse and buggy industries. Would customs officials have blocked automobile manufacturing as well? The job of Homeland Security is not to pick which technology wins or to protect the business models of some legacy companies within an industry. And it's not actually a "threat." It's an opportunity for those who know how to embrace it. Remember, the movie industry continues to do quite well -- and it was the one who claimed that the DVD business would kill it. If this were a few decades back, would ICE be blocking all DVD imports because it represented a "a very real threat to America's film industry"? After all, that's exactly what the industry claimed, just as they are doing now. Why does Morton and ICE simply believe it this time when the industry has been wrong every single time about technology threats?
ICE has a legacy of engagement in IP theft enforcement -- stretching from our past years as U.S. Customs Service investigators to our present role as Homeland Security investigators. ICE is a leading agency in the investigation of criminal intellectual property violations involving the illegal production, smuggling, and distribution of counterfeit and pirated products, as well as money laundering violations.
Sure, the role is supposed to be about blocking counterfeit goods at the border. That's got nothing to do with file sharing online, so why dump it in there?
Representatives from the Motion Picture Association of America (MPAA) and RIAA assisted participating customs authorities with focused training, targeting and analysis...
Once again, we see biased industry players "training" government officials. Given the "training" we've seen both the MPAA and RIAA create for schools, why does it seem likely that they leave out certain important things (fair use, anyone?)?
ICE is an active member of the U.S. delegation negotiating the Anti-Counterfeiting Trade Agreement (ACTA). The goal of ACTA is to work with other countries interested in promoting strong enforcement of IPR. ACTA aims to strengthen legal frameworks to bridge existing gaps between laws and dedicated enforcement....
Someone's off message. Remember, ACTA isn't supposed to be about changing legal frameworks or laws.
Last month, the IPR Center launched Operation In Our Sites, a new initiative aimed at Internet counterfeiting and piracy.
Please. Be honest: it was aimed at piracy. It had nothing whatsoever to do with counterfeiting.
On June 30, more than 75 ICE agents participated in this enforcement action, which resulted in the seizure of assets from 15 bank, PayPal, investment, and advertising accounts.
And, um, also raising all sorts of legal questions about Homeland Security's right to just seize domains. On top of that, as many are starting to point out, just because you seize the domain name, it doesn't mean you take down the actual site. And, all this will really do is drive file sharers further underground.
Interestingly, as the new owners of the domain name, ICE has been able to determine the number of visitors these sites have received since seizures. Within two days of ICE's enforcement action against these pirating web sites, over 1.7 million visitors saw the banner. This number is more than the daily total of "hits" the sites were receiving when they offered pirated movies and music. In other words, the government's warning banners have "gone viral," and Internet users are actually seeking the web site out to view the banners themselves. The resulting public education about pirating is a significant result of this enforcement operation.
You might want to ask those visitors what they learned. Because many learned that Homeland Security is focused on stopping file sharing, rather than important things like stopping terrorism. People who are visiting those sites aren't suddenly saying "hey, wow, now I know it's illegal and I'll stop."
The IPR Center recognizes that law enforcement cannot fight IP theft alone and we look to partner with private industry in our efforts. In a market economy, no one has a greater incentive for protecting intellectual property rights than private industry. Companies want to protect their investments in research, development, manufacturing, sales, marketing and product distribution.
No. They want to protect their profits. They want to protect the monopoly rents guaranteed by the government. It's really quite scary how Homeland Security admits that it's protecting the business models of certain industries over those of other industries. This is not the role Homeland Security is supposed to be playing.
I have no problem with Homeland Security stopping legitimately harmful or faked products at the border. That makes perfect sense. But no one has explained what any of that has to do with seizing domains from file sharing sites. Conflating trademark infringement and copyright infringement, and acting as if they're the same thing, while highlighting the harm of fake drugs and then lumping in downloaded music and movies is extremely disingenuous. It's too bad our tax dollars are being used to prop up companies who refuse to adapt, and the lengths to which government employees will go to, in an effort to rationalize such blatant extension of their mandate in order to help out key companies.
The entertainment industry is famous for its bogus stats, claiming massive losses from things like file sharing. However, when those reports are looked at by any credible source, it's not hard to realize they're totally bogus. This also comes up in various lawsuits. For example, a Russian torrent tracker was shut down, and the operators of the site are now being accused of causing $1.25 billion (with a b) in losses for the movie industry. This is substantiated by... well... absolutely nothing other than movie studios insisting that it's true. I'm curious as to why they do this, because when they put forth such unbelievable numbers, it seems like they're only hurting themselves. No one believes that such numbers are even close to true and it just makes it that much more difficult to take them seriously. Then again, maybe they're just using some Hollywood accounting to figure out those losses...
It's pretty common for people who think that "ideas" can be owned to get upset when someone else makes a movie or a book that has a similar idea to one they had. These often lead to lawsuits that quickly go nowhere. It's actually quite rare to find a lawsuit over the idea of a book or movie that has legs, and it usually has to involve some detailed evidence. For example the famous Buchwald v. Paramount case involved a situation where Paramount had specifically optioned a very similar story (to what became Coming to America) from Buchwald, involving the same actor (Eddie Murphy) and director (John Landis) who eventually made the movie. That case showed direct involvement of many of the parties. Most of these cases are more along the lines of "hey, I had that idea and I sent it to movie studio X, so they must have seen it and copied it." Those don't get very far.
However, THREsq has the details on a lawsuit from a woman who does a half decent job of suggesting her lawsuit might be slightly more like Buchwald's than others -- though there are some really wacky aspects to this lawsuit, and I doubt that she'll win. This case involves Pamella Lawrence, who apparently wrote a book about an embarrassing thing (where her clothes were stripped off) that happened to her at a funeral in Jamaica which was caught on film. Her book had the catchy name "Caught on Video ... The Most Embarassing Moment de Funeral, July 11, 1994, Jamaican Volume 1." Two movies, with the much catchier name "Death at a Funeral" have come out in the last few years (one in the UK, and another remake in the US -- neither of which did all that well). Lawrence claims both were based on her book and video. At times, her lawsuit seems to go off the deep end. As THREsq describes:
The woman, Pamella Lawrence, is representing herself in court and has filed a lawsuit stuffed with outrageous claims, including racism, a plot to eradicate the female population of urban cities and allegations of inside jokes within the movie that were specifically intended to humiliate her.
Yes, apparently, because the first thing you want to do when infringing on someone's copyright is write into the script jokes intended to humiliate the person. Most of those claims seem like absolutely ridiculous stretches. However, as THREsq notes, this shouldn't automatically be relegated into the "nutty pro se" lawsuit bin:
Yes, many of the claims stretch reason, but Lawrence has also gone to extreme lengths to craft a 54-page complaint that almost looks and feels as if it was drawn up by a $500-an-hour attorney. She cites applicable laws and case citations (although none are required in complaints), copyright registrations, numerous exhibits and perhaps most impressively a frame work intended to bypass the legal pitfalls that typically trip up those asserting idea theft in Hollywood.
It still seems like a longshot, but she does describe meeting with studio execs, and even getting involved in a legal dispute previously that ended in a settlement. That all makes for much more interesting reading than the typical such lawsuit, but it still seems pretty thin on actual evidence of anything in the complaint. But, there's also so much pure ridiculousness in the lawsuit that whatever credibility is built up in the other parts may get lost in the deep paranoia. Again, from THREsq's summary:
Lawrence claims the defendants intended to destroy the "female competition" from the "inner city" in relevant markets by distributing the film, that Hollywood has a consistent pattern of discriminating against women as evidenced by the fact it took 82 years for a woman to win best director at the Oscars, and that this case is an example of why there are so few minorities at Sony Pictures
Yeah, that's not quite how you go about making yourself a credible plaintiff. On top of that, the "similarities" seem incredibly weak as well. Just because there are some generic similarities in characters or parts of a story, it doesn't mean that infringement or breach of any contract occurred. Still, if you want some entertaining reading in the form of a lawsuit filing, here you go:
Well, here we go. Remember how, a few months back, we noted how odd it was that the Justice Department (which, of course, employs many former RIAA/MPAA/BSA lawyers) was designating a special task force to fight copyright infringement? After all, copyright infringement is mostly a civil issue, between two private parties. For years, however, the entertainment industry has been working hard to convince the government to act as its own private police force, and following a totally one-sided "summit" with Joe Biden (who recently claimed that infringement is no different than doing a smash and grab at Tiffany's), suddenly the feds had a special IP task force... at the same time that it was downgrading the priority of crimes that cause actual harm, such as identity fraud.
Now, it looks like law enforcement isn't even trying to hide the fact that they're taking orders from Hollywood. Dark Helmet points us to the news that Homeland Security proudly announced raids on nine different movie sites, which they accuse of infringing on copyrights. But what's most interesting is where the announcements about these raids happened: at Disney. And who else was there on stage? Execs from other studios. Yup, Homeland Security isn't even trying to make the slightest effort to hide the fact that it now works for corporate interests. It will announce legal activity from the companies, which stand to benefit the most from such activity.
Imagine if the FTC announced plans to charge Google with antitrust from Microsoft's offices? With execs from Yahoo and Apple on stage. Wouldn't people cry foul?
Not only that, but the guy in charge of the raids blatantly admits that it's now a homeland security priority to protect movie studio interests:
The head of ICE [Immigration and Customs Enforcement], John Morton, says that the number of illegal movie sites is dramatically rising both in the U.S. and abroad, and organized crime is behind some of them. ICE is putting movie piracy front and center in this new initiative, by making its first actions to protect the movie studios' intellectual property.
What does customs have to do with a domestic dispute over civil copyright infringement? And why are Homeland Security officials so closely involved with a few Hollywood Studios that they're not just protecting their business models, but also announcing these efforts from the studios' own offices?
I don't know anything about these sites that were shut down. I've never heard of any of them, but they're nine out of hundreds, if not thousands. It won't do anything to actually help Disney or these other studios. Users will quickly shift elsewhere. The content will still get released just as quickly.
The claims that these sites were run by "organized crime" could very well be true, but I'd like to see some actual evidence on that. It's a common refrain from the industry, but no actual proof has been presented. At best they've shown that some DVD counterfeiting operations have some mob ties, but that's not the same thing. Note that in the announcement no actual evidence of organized crime links were provided.
In a separate article, US Attorney Preet Bharara is quoted as saying that the government took these actions because "copyright infringement translates into lost jobs." Never mind the fact that the GAO just pointed out that such claims are highly questionable (especially the ones from the MPAA -- who won't provide their methodology), this raises a really serious question about government interference into private markets. The government's role is not to protect industries from losing jobs. It never has been. Otherwise it would have "raided" car companies for making horse buggies obsolete. Using that as justification has no legal basis whatsoever, and is really a very disturbing claim.
The whole thing appears to be a gross misuse of government resources to protect a few movie studios, which are unwilling to adapt to a changing market place. People should be outraged over such a misuse of government powers, but because these are "pirate" sites, everyone will look the other way.
Over the last few years, a few companies have been trying to set up financial markets for buying and selling movie derivatives. Effectively, it was a way to financially bet on the performance of certain movies -- whether long or short. There are all sorts of markets like this, and it's difficult to come up with any reason not to allow them -- but, of course, the MPAA cobbled together a bunch of complaints, including the idea that this would encourage more file sharing, as short sellers attempted to undermine the performance of a movie. So, it seemed like good news last week when regulators from the Commodity Futures Trading Commission voted to approve one of these operations, the Trend Exchange, from Veriana.
But it appears that victory was very short-lived, as Congress banned such offerings in the middle of the night last night. Basically, the MPAA was able to shove this issue into the Wall Street Reform bill which has widespread support, and politicians who didn't want to hold it up any more refused to take that provision out (which would have involved a fight).
Apparently Hollywood is so afraid of free markets that it has to oppose them every chance it gets.
