While there are still ongoing arguments over whether or not bloggers should be considered journalists when it comes to keeping their sources and source materials confidential, there's another arena impacted by all of this as well: documentary filmmakers. A judge has ordered a documentary filmmaker to turn over "cut" footage to Chevron from the filmmaker's documentary about Chevron's involvement in pollution of the rainforest in Ecuador. Chevron believes that there may be footage that will help it get a lawsuit filed against the company by Ecuadorians dismissed. While the filmmaker argued that the works were protected, the judge shot that down in saying that since there were no confidentiality agreements signed, that the material is not confidential. That seems like a rather broad ruling over whether or not a journalist can protect their sources. Do all journalists now need to sign confidentiality agreements with sources?
For a couple years now, the MPAA has been asking the FCC to break your TV/DVR, and let them effectively put a type of DRM (by enabling "Selectable Output Control" or SOC) on video content, such that you will not be able to access the content via third party devices, such as your DVR or your Slingbox. Effectively, they want to break the ability of your equipment to work. You wouldn't be able to legally record the movie that was playing on your TV. The MPAA's argument here makes absolutely no sense at all -- and when they're called on it, the doubletalk comes out.
The MPAA's argument is that if it could block people from recording movies, they could release the movies on things like PPV before they release them on DVD, adding yet another window to the long list of windows that Hollywood uses. It's still not clear how more windows helps anyone but Hollywood, but they keep claiming this is some sort of consumer benefit. The thing is, their argument makes absolutely no sense at all when you look at the details. First of all, there was nothing whatsoever stopping them from releasing movies on PPV prior to the DVD release. Nothing. You don't need DRM to do it. In fact, some major studios already do this without breaking your TV in the process.
Of course, the MPAA's response is that it would never release movies this way without SOC, because then people would copy them and... um... piracy... oh mygod... Hollywood is dying. Or something like that. But that makes no sense. First, as noted, some studios already release movies this way. They don't need SOC. Second, the whole claim that this will lead to more unauthorized file sharing is a total red herring -- because all of the movies they're talking about were already in theaters -- and once a movie is in the theaters, it's already available widely on file sharing networks. There is no increase possible, because the content would already be widely available. On top of that, of course, as the GAO just noted, the MPAA's ridiculous claims of losses from "piracy" are totally bogus.
Given all that, it seemed ridiculous to think that the FCC would give in... but late last year the reports were that the FCC had already decided to give in to Hollywood, and today the FCC made it official (pdf):
The FCC's reasoning is bizarrely troubling and blatantly wrong. First, it claims that the studios "are unlikely to offer the service absent the ability to activate SOC." But... as noted, some studios already do offer such a service. On top of that, why is it the FCC's job to give the MPAA yet another window? Windows are anti-consumer, not pro-consumer. But, the FCC claims it's good for the consumers, and the MPAA's victory announcement makes the same ridiculous claim:
"This action is an important victory for consumers who will now have far greater access to see recent high definition movies in their homes..."
That logic is backwards. Basically, Hollywood is saying that it held the public hostage until the FCC let it break your TVs, and because the FCC caved in and Hollywood will release the movies it easily could have released before, consumers win. When someone is taken hostage and the family pays up, that's not a "win" for the family. As Public Knowledge points out, this appears to be the FCC doing this just as a favor to Hollywood.
Of course, in typical Genachowski FCC fashion, this ruling tries to walk that line between each side, in that it didn't grant the MPAA's full waiver, but tries to limit it, by saying it can only be used on films before the DVDs are released or for 90 days on a particular film (whichever comes first). The FCC will also "revisit" the issue in two years -- even under threats from the MPAA that if the FCC could revisit this issue, that uncertainty would lead the studios to scamper away, run and hide and not offer this service out of fear that the FCC would take away their right to break your TV. The FCC thought that was silly. It's not clear why the FCC didn't believe the MPAA's threat not to invest if the ruling could be reviewed, but do believe the threat not to release movies on TV earlier without this ruling... but that's the way this particular FCC seems to function.
In the meantime, now that the FCC has opened this door, expect more efforts to expand it much wider. Already -- before it had even been approved -- there was talk among politicians that it should be expanded to cover sporting events as well -- because, you know, we can't have people DVR'ing a sporting event any more.
The really ridiculous thing about all of this is that it's taking away functionality from the vast majority of law-abiding TV viewers who bought their TVs and DVRs expecting -- reasonably and accurately -- that they'd be able to record whatever is on TV, because of an amorphous and unproven "threat" of "piracy" which is based on bogus numbers and totally irrelevant given that the movies in question will already be widely available on file sharing networks.
A couple of weeks ago, Netflix announced that it had reached a "deal" with Fox and Universal movies studios, in which it agreed to delay the release of their DVDs to its subscribers by 28 days. Netflix did the deal in order to maintain its access to movies for its streaming service, and the studios think it will help them sell more DVDs. The studios tried to get DVD rental service Redbox over a similar barrel by threatening its access to their DVDs. Redbox had already caved to Warner Bros., and has now done a similar deal to Netflix's, with Fox and Universal. And, just like all the earlier deals, this one's pretty stupid on the part of the movie studios. Let's go over why.
Redbox offers two main benefits to its customers: convenience and price. Its machines are everywhere these days, and its $1 per night price capitalized on the widespread consumer displeasure with Blockbuster and other rental chains' high prices and late fees. The Redbox customer is price sensitive; so is it really very likely that delaying the release of a movie by a month is going to get them to decide to shell out $15-$25 per movie to see it immediately after it's released? The same goes for Netflix subscribers. If they're already paying for their subscription service, why would they run out to buy a new release -- particularly when they already have to wait to get some new releases anyway. The studios think they can force customers to change their behavior by controlling access to new movies. All this plan is going to do is to illustrate to them that the part of the market they're aiming for with these delays really doesn't care enough -- or cares about other factors more -- to behave any differently.
Earlier this year, we noted that with Avatar still being popular in theaters, it looked as though the DVD release would occur while the movie was still available in a bunch of theaters, and wondered what if it would actually boost sales at the box office. For years, of course, movie theaters owners have whined that they can't possibly compete against home theaters, and have boycotted movies that tried to do a "day and date" release, where they offer the DVDs at the same time the movie is in the theater. This seems to ignore the fact that the theatrical experience is about the social experience of going out -- which is not the same as staying in to watch a movie at home (no matter how good your home theater system is). But most theater owners don't seem to believe this, and insist that if DVDs are out at the same time as the movie is in the theater, it will harm box office sales.
Avatar seems to suggest that's not true.
btrussell points us to the news of the record-breaking sales of Avatar DVDs this weekend. His point, in submitting it, is noting that the sales were so strong even though the movie has been widely downloadable and widely downloaded for months. So, despite the claims that file sharing is destroying the DVD market, it looks like people are still quite willing to buy.
But a more interesting point is the impact on the box office. Last weekend, April 16 - 18th, Avatar averaged $2,006 at the box office per theater. On April 22nd, the DVD was released. This past weekend (April 23 - 25th)? Avatar averaged $2,257 at the box office per theater. That's an increase of 12.5% over the week. That doesn't seem to fit with the theater owners' claims, now, does it?
Admittedly, a bunch of theaters stopped showing the movie this past week, probably falsely believing that with the DVD out, it would harm sales. But... the week before, a bunch of theaters addedAvatar back into their lineup. If we go back two weeks, we have a much more apples to apples comparison. The weekend of April 9 - 11, Avatar showed in 454 theaters, with an average take of $1,860 per theater for a grand total of $844,651. Yet, again, this past weekend, when the movie was showing in fewer theaters, 421, it brought in both a higher average take per theater at $2,257 and a higher grand total at $950,000. So if we compare those two weeks, with fewer theaters, there was a bump of 21.3% in box office sales after the DVD was released
As we predicted, it sure looks like the DVD release while the movie was still in the theaters actually may have driven more people to the theater, rather than taken them away from the theater.
A UK ISP has teamed up with the British Board of Film Classification (BBFC) to create a new parental control and filtering system that's based on the same classification system being used by the UK film industry. UK Wireless ISP Tibboh uses internet filter technology created by Netsweeper to classify websites under the BBFC's rating system (U, PG, 12, 15 or 18). Facebook and Twitter are given a "12" rating (only suitable for those over twelve), Blogger and Wordpress sites are given a "15" rating, while major news outlets are given a "U" certificate (suitable for everyone). The idea seems like a fusion of a bunch of ineffective and bad ideas. It's based on Internet filters that, of course, will block some useful content, but which kids will be able to bypass anyway. The filter system adds a new wrinkle by pretending it's possible to assign a valuable age restriction metric to information delivery platforms -- as if your kid couldn't possibly run into something foul via Twitter, in a blog, or in the news. The service provides the illusion of safety to people who'd rather pay twenty Pounds a month than pay attention to what their kids are doing -- or talk to them face to face about smart technology use.
The film studios have convinced Netflix to sign deals that expand the company's access to streaming film licenses -- in exchange for agreeing to delay new releases by 28 days. Studios, of course, think this will somehow magically ramp up user purchases of physical DVDs, though it seems the primary result is going to be a lot of confused consumers, who see new releases for rent in one place, but not in another. But the studios are likely quite pleased with themselves, given the deal gives them more license negotiation power -- and allows them to charge companies more money if they want a perceived leg up on Netflix. If nobody is willing to pay, the studios figure they've still managed to create a wider delay window (the exact opposite of what should be happening in the broadband age).
But Blockbuster quickly jumped at the opportunity, throwing money at the studios, not only to avoid the new release delay, but so they could use the opportunity to mock Netflix instead of having to innovate. DirecTV has also now decided to play along, and will be paying for the honor of offering new releases under the "DirecTV Cinema" brand. Like Blockbuster, it didn't take DirecTV long to brag that unlike Netflix or Redbox, they'll be getting Avatar the same day it hits store shelves:
"As many as 400 new movies will be available this summer through DirecTV Cinema. Titles from Universal Studios Home Entertainment, Twentieth Century Fox and Time Warner Inc.'s Warner Bros. will be given to DirecTV subscribers 28 days before they can be rented on Netflix, said Paul Guyardo, DirecTV's chief sales and marketing officer"
Granted this might not hurt Netflix much, given the fact that DirecTV agreements with the studios ban them from offering subscription service, so if users want these new releases -- they have to pay between $4.99 and $5.99 per title -- nearly the cost of a Netflix subscription. You also had better hurry up and watch your movie, given that under a 2008 DirecTV agreement with the studios, movies you store on your DVR will be automatically deleted after 24 hours. While the studios think layering restriction upon restriction onto how, where and when customers can consume their product is helping them save the traditional DVD -- all they're really doing is delaying the inevitable death of physical media, annoying and confusing customers, and making it harder for people to consume their product.
If you haven't seen Red Letter Media's excellent reviews of the Star Wars films, The Phantom Menace and The Attack of the Clones, then you might want to carve out three hours out of your day and watch them (the reviews are 70-minutes and 90-minutes long, respectively) -- they're incredible. (Warning: he does use some NSFW language occasionally.)
"The thing is, I'm no lawyer. But I had someone actually talk to a copyright lawyer, and they didn't know what to make of the reviews. It's a new thing, You can get away with using a clip from a movie for the purpose of review or commentary, but can you dissect an entire film like that? There's commentary and it's part satire [because of the character, Mr. Plinkett] and part review and part educational as well because there's elements of filmmaking insights."
Stoklasa's reviews are innovative and entertaining and take movie reviewing to a whole new level by remixing movie clips into the review itself. In doing so, they are emerging as a whole new art form. While more traditional movie reviews and satire can use clips of movies as a result of fair use, Stoklasa could be treading on new ground with his works. That said, this could be an interesting case if he were to get sued, because he would likely win, which would then redraw the boundaries for fair use, which would be a great thing. So, Mike Stoklasa, please don't let the threat of copyright lawsuits stop you from continuing to produce your excellent reviews -- to do so would be a travesty.
The complexities of Hollywood economics are something of a mystery to most Hollywood outsiders who don't understand how the money flows from movie-goers to the producers, movie distributors and the studios behind major films. Despite a ton of reporting (and even some studies) focusing on ticket sales at the box office, Edward Jay Epstein points out that box office revenues are far from being the bread-and-butter of Hollywood:
Box office sales no longer play nearly as important a role. And yet newspapers, as if unable to comprehend the change, continue to breathlessly report these numbers every week, often on their front pages. With few exceptions, this anachronistic ritual is what passes for reporting on the business of Hollywood.
So what is the actual business model for Hollywood movies? Epstein notes that only about a tenth of the total revenues for the major movie studios comes from American theaters -- and the lion's share of revenue comes from licensing deals in the form of DVD sales, TV broadcasting rights and all sorts of other distribution deals. It's no wonder, then, that the industry is so anchored to intellectual property rights and so focused on doing anything to preserve its lucrative licensing business.
We've seen a lot of alternative proposals for making money from movies, but if the box office sales are really just a fraction of the movie industry's revenues, why are theatrical releases made out to be such a big deal? Perhaps instead of delaying the release of movies to home theaters, certain movies should be released to Netflix/RedBox/Blockbuster first -- and then only the titles that have enough demand for the big screen should make it to a theatrical release. Obviously, there's the argument that if an audience could watch a movie at home for ~$1, there would be no reason to pay $10 to see the same movie in the theater. But that assumes there is nothing special about seeing a movie on the big screen.
Given the example of how Paranormal Activity only screened in nationwide cities after fans demanded it, offering movies that people actually want to see in theaters may be a better way of filling seats. Or maybe there really is no reason to go to movie theaters anymore.
Netflix recently decided it would be a good idea to strike a deal with Warner Brothers that involved delaying all new Warner Brothers releases by 28 days. Film industry executives somehow believe this strategy is going to help them sell more DVDs, though as we've been discussing, the deal as designed seems just as likely to confuse the hell out of consumers as it tries (and fails) to prop up less innovative companies. Why would Netflix agree to such a deal? It was the only way they could get Hollywood to loosen their vice-like licensing grip on the number of titles they allow Netflix to stream via broadband.
Netflix says its deal with Universal will give it the "benefits of reduced product costs;" it does not make a similar assertion about Fox. Both deals do however let Netflix build up its instant-streaming catalogue. Fox, for instance, says it will make all prior seasons of several hit TV series, including 24, Bones and King of the Hill, available to Netflix instant-streaming subscribers, while Universal says it is doing the same with some "premium domestic titles," like Gosford Park.
Not too surprisingly, the press release announcing the deal tries to pretend that the deal is about "providing consumers with attractive options" when it does the exact opposite. Netflix goes on to insist that by restricting how consumers can consume studio content, they're actually making film delivery more "flexible" and "convenient" and that the deal is just "a win all around."
Granted, Netflix customers who really only use Netflix's streaming service may not care about this, especially if they're not all that interested in new releases. Still, that doesn't make keeping your product out of customer hands any smarter of a business plan when you're trying to compete with piracy. One of the first major titles to be impacted by the deal will be Avatar, which thanks to this "convenient" deal won't be available on Netflix in any form until 28 days after its April 22 street release date. Customers annoyed by that delay might go buy the DVD, or hey, they might just go download it via Bit Torrent, where they aren't forced to wait for no particularly good reason.
A few years back, we wrote about the oddity of Hollywood studios often paying newspapers or others for "the rights" to a particular news story. But, there's no legal reason why you need to do so (with -- potentially -- a few exceptions for the more modern concept of publicity rights) in most cases. That's because a news story is based on facts, and you can't copyright facts. You also can't copyright an idea. Now, there are plenty of good reasons why movie studios do pay for such "rights" even if they don't need to. For example, by licensing the rights, they also get access to certain people who know the story better than others. It also can lend an air of legitimacy to the movie. However, perhaps one reason why studios license the rights to an idea or a news story is because they don't even realize they don't have to.
That's the only explanation I can come up with for the ongoing lawsuit between two movie studios over who can make and/or release a movie about people seeking advice in love by leaving letters at the supposed gravestone of Juliet Capulet (of "Romeo &" fame). Apparently, two separate studios made movies on the topic, and one is suing to stop the other from releasing the movie.
There's Summit Entertainment, who is releasing a movie called Letters to Juliet, which they made after licensing a book by the same name, that told the story of the letters left at the gravestone and of a girl who responds to one of them. But then there's EPV Enterprises, who is asking for Summit's movie to be blocked, noting that it's working on a "Juliet" movie itself, called Dear Juliet -- which it licensed from a group called Club di Giulietta, who has (in real life) been responding to those letters.
While the two movies may be based on the same premise, it sounds like they're very different in terms of the actual story. And we've certainly seen similar movies come from multiple studios around the same time (Antz/Bugs Life, Dante's Peak/Volcano, Deep Impact/Armageddon, The Illusionist/The Prestige, etc...). While Summit says it's working to settle the lawsuit before a ruling is reached, it seems likely that it should prevail in any lawsuit as well. You can't copyright facts or basic ideas -- and it doesn't look like these two movies are the same -- just built off the same idea.
