The very idea of major movie studios simultaneously complaining about movie piracy during the initial release of a film and instituting long release windows so that films are only in the theater for legitimate viewing has never made a bit of sense. As study after study has shown, one great way to reduce piracy for a film is to make it available for home viewing as early as possible. The reason for this should be obvious: in this case, piracy of a film is a sort of market study, one which informs the studios that a part of the public really wants to watch the movie at home as opposed to in the theater. Trying to force that part of the market into the theater by delaying home rentals or purchases no longer works, because piracy is an option. Stamping out piracy has never worked, but making the film product available the way the customer wants would, at least to decent percentages.
And it seems this decades long lesson may finally be finding purchase by its students in the film studios, as several major studios are reportedly considering slashing release windows by a third.
According to a Variety report, six of the seven biggest Hollywood studios are considering plans to allow new movies to be delivered via VOD into the living room between 30 and 45 days after launch for around $30. Fox and Warner are said to favor this structure but other plans are also floating around. Universal are reported to be pushing for a VOD release less than three weeks after launch, with Warner Bros. suggesting a shorter 17-day delay but with a larger $50 rental price.
Of course, any move to bring content to the home more quickly could have a profound effect on the many theater chains around the United States and present a serious stumbling block in negotiations. However, a proposal from Warner would see exhibitors receiving a cut of VOD revenues, if they agree to a narrowing of the theatrical release window.
Getting the theaters on board will indeed face headwinds and it's important to note that these plans are reportedly very early on in the negotiating process. Still, this only makes sense. The job of moviemakers is to give the public movies the way they want them. The job of theaters is to create an experience that makes people want to go to the theater. It can't only be the movie itself. The movie is the studio's job. It has to be the theater attracting viewers. If it isn't, that's on the theater companies, not the studios.
Still, it's frustrating that even these baby steps are facing so much pushback, because what the studios should actually do is much more severe than a 33% cut in the windows. There's a joke in atheist circles that goes like this: first there was polytheism, then there was monotheism, and they're getting closer to the right number all the time. This joke ports nicely to the case of release windows, where the best number available is zero windows at all. With that kind of innovation being too much to hope for from entrenched industries, let's at least hope that some of the more forward-thinking studios can convince the one studio that you already know is against this whole idea.
While the rest of the major studios are keen to move forward, Disney is reported to be against the proposal. For a company that came up with the artificial restrictions embodied in the Disney Vault, for example, that probably won’t come as too much of a surprise.
In which case I would kindly ask Disney to stop bitching about piracy. The other studios are at least trying something new instead of pushing the same doomsday talking points.
Back in 2014, much was made about piracy in Australia, specifically whether Aussies using VPN services to get the American flavor of Netflix should be more heavily combatted and how release windows for movies in Australia were pushing the public to pirate the film instead of waiting for it. While much of the conversation about Netflix was unfortunate, we did see some positive signs about release windows coming from distributors in Australia. One distributor, Village Roadshow, even had its CEO admit how badly a delayed-release window had boned them when it came to the wildly popular The Lego Movie.
Burke admitted last night that the delayed release of The Lego Movie in Australia after the release in the United States to coincide with the school holidays was a mistake.
"We made one hell of a mistake with Lego. It was an Australian film, we financed it together with Warner Brothers, it was made here in King's Cross. Because it was so important, we held it for a holiday period; it was a disaster," he said.
"It caused it to be pirated very widely, and as a consequence — no more. Our policy going forward is that all of our movies we will release day and date with the United States."
These kinds of revelations are a positive sign. Rather than shouting about piracy and copyright law, Burke realized that what spurred much of the piracy was his company's refusal to release the movie as soon as it became available. Instead, the company delayed the release to coincide with school holidays, theorizing that this would create a better opening for the film in Australia. The public, however, demonstrated that it would much rather see the film as soon as it should have been available, as it was heavily pirated in Australia.
So, lesson learned, right? Nooooooooope. Instead, Village Roadshow recently performed the exact same delayed-for-school-holidays release for a movie. The name of that movie? Lego Batman, because if you're going to do the exact opposite of what you pledged, you might as well make it as ironic a flipflop as possible.
AUSTRALIAN moviegoers were left with a bitter, yet familiar, taste in their mouth in December when the distributor of the The Lego Batman movie announced it would have a delayed release date, premiering Down Under more than six weeks after it hits US cinemas.
According to the Village Roadshow CEO, “99 per cent” of the films distributed by the company line up with the US release date. But in this instance, they believe the loss of sales due to piracy will not outweigh the boon of the school holidays when Aussie families fork out at the box office.
So it's the exact same theory that the exact same CEO said didn't work a mere two years ago? Come on, guys. What has changed in two years to make them think it's going to be any different this time around? And, perhaps more importantly, what can the company possibly say when Lego Batman is being heavily pirated in the exact same way as The Lego Movie? It can't scream about piracy, or the public will simply refer them back to that thing they said two years ago when they admitted it was the fault of the delayed release. It can't pledge to kill the delayed windows, because it already did that and it turns out that it was a pledge worth nothing. Instead, Village Roadshow will be able to merely stay silent and not count the money it should have been making.
The statements coming from Burke this go around are far less encouraging.
“Yes, we will lose a lot to piracy, but the other side of the coin is the film is available when the audience that goes to these sort of films wants to see it,” he said. “When certain films go out in non-holiday periods, our audiences get very cross because the kids are not available to take them.”
Aside from the fact that this line of thinking didn't work with a nearly identical movie delayed in an identical way a mere two years ago, nothing about this statement makes sense. If you're losing a lot of viewers to piracy, that's because they don't want the release delayed. It can't be both that the film is heavily pirated and the public wants the delay causing the piracy. That makes zero sense.
I can't wait to see Burke's reaction in the window between the American release and the Australian release.
I really have no idea what to make of this fairly odd story. The richest man in China, Wang Jianlin, has apparently deputized MPAA boss Chris Dodd as his messenger to Donald Trump on the issue of China. As you may have heard, China is currently "seriously concerned" about Donald Trump's decision to publicly question the "One China" policy held for decades by US officials, which accepts China's position that Taiwan is a "renegade province" rather than its own autonomous country. Whatever you think of this policy, the Trump administration seems to have approached it with something approximating a diplomatic sledgehammer.
You can find all sorts of articles discussing how China might retaliate if this moves forward, but perhaps the oddest is that Wang is using Chris Dodd as his mouthpiece to influence Trump. Wang owns AMC, the largest movie chain in the US, which is where that connection comes in -- but Wang also has strong ties to the Chinese government:
Wang, who is China’s richest man, is a former commander in the People’s Liberation Army, and a current delegate to the Chinese People’s National Congress, as well as a member of an advisory board to the Communist Party. Some of his current and former businesses are closely linked to the family of current president Xi Jinping, the New York Times noted last year.
And, of course, one of Chris Dodd's major focuses as head of the MPAA has been to open up the Chinese market to Hollywood films. And that leads us to Dodd suddenly being the spokesperson asked to deliver the message to Trump to knock it off with the China stuff... or perhaps AMC employees go hungry. Really.
Yesterday, I met with the president of Motion Picture Association of America who said he wants to meet with Mr. Trump and asked me what message I would like delivered. I told him to tell Mr. Trump that I have $10 billion of investments in the United States and more than 20,000 employees there who wouldn’t have anything to eat should things be handled poorly, and nothing else mattered. At least in the film and television industry, you must understand that the growth of English films depends on the Chinese market.
Of course, like many threats from Hollywood about "job losses," this one appears to be massively exaggerated. Yes, Hollywood is increasingly relying on China for boosting its record-breaking revenue increases (remember how piracy was killing movies? Me neither), but the idea that 20,000 employees will suddenly go hungry over this aspect of the dispute seems like little more than posturing. Either way, this is just another weird data point in a very weird year on the politics front.
The Onion once ran a piece titled "I invented YouTube back in 2010." The joke, of course, is that YouTube launched in 2005. This month's Stupid Patent of the Month is just as ridiculous. US Patent No. 8,856,221, titled ‘System and method for storing broadcast content in a cloud-based computing environment,' claims a mundane process for delivering media content from remote servers. This might have been a somewhat fresh idea in, say the mid-1990s, but the application for this patent was filed in 2011.
The patent suggests using "at least one server" that should have "a memory that stores media content and a processor." The server then communicates with "a consumer device" that can send messages and receive content. Aside from these prosaic details, the patent makes only a half-hearted effort to distinguish its supposed invention from the massive array of cloud-based media services that already existed when it was filed. For example, the description suggests that existing services were inadequate because customers might pay a flat monthly fee yet make few downloads. The patent recommends tailoring customer cost to the content actually downloaded. But even if that was a new idea in 2011 (and it wasn't), routine pricing practices should not be patentable.
Overall, the '221 patent contains little more than rote recitations of long-existing technologies ("[a] list of media content may be provided to the consumer and displayed on consumer device display, e. g., via a website displayed in a web browser") and pricing models ("[t]he cost amount may be based on factors such as playback time"). The patent's claims, which describe the formal boundaries of the invention, merely list steps for using this conventional technology.
In addition to being obvious, the claims of the '221 patent are invalid as abstract under the Supreme Court's decision in Alice v. CLS Bank. Under that case, an idea does not become eligible for a patent simply by being implemented on a conventional computer. In fact, the '221 patent goes out of its way to emphasize that "any kind of computing system" is suited to perform the claimed functions. In our view, it would not survive a challenge under Alice.
The '221 patent is owned by Rothschild Broadcast Distribution Systems, LLC ("RBDS"). We were unable to find any sign that RBDS engaged in any business other than patent litigation. It is based in, you guessed it, the Eastern District of Texas. Court records show that RBDS has sued about 25 companies, ranging from startups to The Walt Disney Company.
The inventor of the ‘221 patent also won the August 2015 Stupid Patent of the Month for a patent on a drink mixer connected to the Internet. That patent, which had claims so broad it arguably covered the entire Internet of Things, is owned by a company called Rothschild Connected Devices Innovations, LLC ("RCDI"). After one of defendants went to the expense of challenging the validity of the drink mixer patent, RCDI dismissed the case without collecting a cent. This is classic troll behavior, forcing defendants to choose between paying the high cost of defense or a license fee that the patent owner does not deserve. We believe that RBDS's litigation similarly has only nuisance value.
We need broad patent reform (including venue reform) to stop this wasteful patent trolling. We also need reform at the Patent Office so that it doesn't issue terrible patents like this in the first place. Contact your Senators and tell them to pass patent reform.
The National Association of Theatre Owners (NATO) is sounding the alarm over a recent deal between Netflix and iPic, in which the luxury-theater chain will screen 10 movies simultaneously with their release on the streaming service.
You would think that a theater owners' association would represent theater owners first, rather than the studios that have long battled any sort of innovation/disruption in its windowed release schedules. Of course, theaters are first on the food chain traditionally, so that probably explains the NATO head's statement, which comes across as a strange mixture of veiled threat and Stockholm Syndrome.
In a statement, NATO chief John Fithian warned that while iPic was free to make its own decisions, “We all should tread lightly and be mindful that over the years, the film industry’s success is a direct result of a highly successful collaboration between film makers, distributors and exhibitors.”
Yes, let's tread lightly and be mindful that creating artificial scarcity is a fool's errand, but creating an experience that people will leave the house for is something that can't be delivered over an internet connection. This defense of the way things have always been done -- phrased the way it is here -- sounds like NATO distancing itself from iPic, the way one distances themselves from close relatives with multiple indecent exposure arrests.
NATO head Fithian goes on to claim that day-and-date releases won't work because they've never worked in the past.
“Simultaneous release, in practice, has reduced both theatrical and home revenues when it has been tried,” Fithian said in a statement. “Just as Netflix and its customers put a value on exclusivity, theater owners and their customers do too.”
Conveniently ignored is the fact that past day-and-date releases have never been fully embraced by studios and, as a result, have been handled ineptly and cluelessly. These have been done on an extremely limited basis and almost always with an exorbitant price tag attached.
There's probably a tad more defensiveness than usual in NATO's statement. Now that there's a group containing respected directors and producers backing a day-and-date release startup, the "threat" is more substantial than a few streaming providers whose libraries have been stripped to nearly nothing by major studios over the last few years.
Theaters aren't going to go away completely. Under-performers who can't offer an experience worth leaving the house for will fall by the wayside, but day-and-date releases will only slightly hasten their demise. If there were more experimentation, everyone involved might find new ways to make money. But as long as people like Fithian are in charge, nothing will move forward. It a small roll out of Netflix films to theaters -- solely for the purpose of allowing the streaming company to get some entries in the Oscar race -- results in these sorts of statements, any chance of studios and theaters moving on from traditional windowed releases is still a long way off.
California Gov. Jerry Brown on Saturday signed legislation that requires certain entertainment sites, such as IMDb, to remove – or not post in the first place – an actor’s age or birthday upon request.
The law, which becomes effective January 1, applies to database sites that allow paid subscribers to post resumes, headshots or other information for prospective employers. Only a paying subscriber can make a removal or non-publication request. Although the legislation may be most critical for actors, it applies to all entertainment job categories.
Quotes from actors' guild representatives and "industry leaders" present this as a positive change. Supposedly the removal of this information will result in fewer actors and actresses from being passed over for roles because they're "too old." Ageism may be an industry-wide problem but the correct solution would be to change Hollywood culture, not tap dance across the First Amendment.
“We are disappointed that AB 1687 was signed into law today,” said Internet Association spokesman Noah Theran. “We remain concerned with the bill and the precedent it will set of suppressing factual information on the internet.”
“Requiring the removal of factually accurate age information across websites suppresses free speech,” Beckerman wrote. “This is not a question of preventing salacious rumors; rather it is about the right to present basic facts that live in the public domain. Displaying such information isn’t a form of discrimination, and internet companies should not be punished for how people use public data.”
That's the problem with this law: it shoots the messenger rather than addresses the underlying problem. The government as a whole has passed many laws aimed at reducing discrimination, but in this case, the California assembly decided the onus should be on data aggregators that have absolutely nothing to do with the process of casting films.
It's unlikely this law will survive a Constitutional challenge, seeing as it prohibits the publication of facts. While any website can voluntarily choose to withhold this information, adding the government into the equation makes it a form of censorship.
The crafters of this law are claiming this speech suppression will benefit the little guy (and girl) the most:
[California Assemblyman Ian] Calderon said the law was more for actors and actresses not as well known as big stars.
“While age information for Hollywood’s biggest stars is readily available from other online sources, this bill is aimed at protecting lesser known actors and actresses competing for smaller roles,” Calderon said in the release. “These actors should not be excluded from auditioning simply based on their age.”
Calderon is correct. Actors should not be excluded simply because of their age. But that's a problem studios need to solve. And if they can't and legislators like himself still feel compelled to step in, the law should target discriminatory hiring practices, not IMDb and other sites like it.
Today is "International Talk like a Pirate Day." While it's a lot of fun to act like a pirate, drink rum and catch up on Errol Flynn movies, piracy is also a serious issue with real economic and legal significance. As electronic devices become an increasingly ubiquitous part of our lives, the content we consume has moved from analog to digital. This has made copying – as well as pirating – increasingly easy and prevalent.
Adding fuel to the flames of this rising "pirate generation" has been the content industry's recalcitrant and often combative attitude toward digital markets. Piracy, and the reactions to it, has had an immense impact on the daily lives of ordinary Americans, shaping their digital experience by determining how they can share, transfer and consume content.
As soon as electronic storage and communication technology was sufficiently developed, digital piracy became accessible. Whether it's a song, movie, video game or other piece of software, you could suddenly reproduce it without having to steal it off a shelf or obtain any specialized machinery to counterfeit it. Additionally, if you wanted to listen to an mp3 of the latest Britney Spears album on your computer, there weren't many lawful options. This led to a surge in online piracy and helped foster a culture of online file-sharing.
The music industry historically has a reputation for being hostile to, or at least slow to embrace, digital markets. Yet there were also some major artists who were early innovators in the space.
Before Spotify or iTunes, there was BowieNet. This music-focused internet service provider launched in July 1998 and gave users 5MB of space to create and share their own websites, content and chat. On BowieNet, according to Ars Technica: "[f]ans could get access to unreleased music, artwork, live chats, first-in-line tickets, backstage access, tickets to private, fan club-only concerts." David Bowie saw the potential to help his fan base access his content and discuss it in a social way in the early days of the internet, before Facebook or Myspace. He remarked at the time: "If I was 19 again, I'd bypass music and go right to the internet."
Bowie wasn't the only early music pioneer of the internet. Prince was also an early unsung hero. In the early 2000s, he created NPG Music Group, later Lotusflow3r. He even won a Webby Lifetime Achievement Award in 2006. Unlike BowieNet, NPG and later Lotusflow3r provided releases of full albums.
As musicians and users were experimenting with new ways to share content on the internet, the United States was working with other World Intellectual Property Organization (WIPO) member countries to create the most comprehensive "digital" update to the Copyright Act. In 1998, President Clinton signed into law the Digital Millennium Copyright Act, which implemented U.S. WIPO treaty obligations, as well as several other significant titles (including the Vessel Hull Design Protection Act – which pirates of the nautical variety might care about). Of particular importance were the sections providing for "safe harbor" (Sec. 512), which protected service providers from infringing content generated by their users, and "anti-circumvention" (Sec. 1201), which was meant to stop pirates from hacking digital rights management (DRM) and similar restriction technologies.
Indeed, it has not been smooth sailing. The DMCA has subsequently generated great controversy from civil society groups, internet companies and the content industry itself. As Cary Sherman, chairman and CEO of Recording Industry Association of America, stated back in 2015:
Unfortunately, while the system worked when isolated incidents of infringement occurred on largely static web pages—as was the case when the law was passed in 1998—it is largely useless in the current world where illegal links that are taken down reappear instantaneously. The result is a never-ending game that is both costly and increasingly pointless.
While lawmakers were hard at work trying to find ways to quell online piracy, the courts weren't taking a nap. Indeed, going back to the 1980s, there were important judicial fights that would set the stage for how content would be handled on our electronic devices.
The U.S. Supreme Court's 1984 Sony Corp. of America v Universal City Studios Inc.decision coined what is known as "time shifting," referring to a user's ability to record a live show using the Betamax to watch it later. The court's decision set the precedent that a manufacturer would not be held liable for any contributory negligence or potential infringement where they did not have actual knowledge of infringement and their devices were sold for a legitimate, non-infringing purpose. As Justice John Paul Stevens wrote in the majority opinion:
One may search the Copyright Act in vain for any sign that the elected representatives of the millions of people who watch television every day have made it unlawful to copy a program for later viewing at home, or have enacted a flat prohibition against the sale of machines that make such copying possible. It may well be that Congress will take a fresh look at this new technology, just as it so often has examined other innovations in the past. But it is not our job to apply laws that have not yet been written.
But not everyone was so enthusiastic. Jack Valenti, former president of the Motion Picture Association of America said in a congressional hearing two years prior [regarding VHS technology]:
We are going to bleed and bleed and hemorrhage, unless this Congress at least protects one industry that is able to retrieve a surplus balance of trade and whose total future depends on its protection from the savagery and the ravages of this machine.
The 9th U.S. Circuit Court of Appeals would take another approach in 2000s A&M Records v Napster. The court affirmed the district court's ruling that peer-to-peer services could be held for contributory infringement and vicarious liability. Even though their service merely facilitated the exchange of music as an intermediary, they were on the hook. Judge Marilyn Hall Patel wrote in the district court's ruling:
…virtually all Napster users engage in the unauthorized downloading or uploading of copyrighted music; as much as eighty-seven percent of the files available on Napster may be copyrighted, and more than seventy percent may be owned or administered by plaintiffs
Napster lodged several defenses, including fair use, but the most important (in lieu of the Sony decision) was the concept of "space-shifting," referring to the process of a user converting a compact disc recording to mp3 files, then using Napster to transfer the music to a different computer. Patel concluded Sony did not apply, because Napster retained control over their product, unlike Sony's Betamax, which was manufactured and sold, but not actively monitored.
The courts would continue ruling in a similar manner as other peer-to-peer services found themselves in the courtroom. At times, users would be targeted. And in the 2003 case of In re: Aimster, the pirates' bluntness for wanting to bring the music industry to its knees did not help the situation
What you have with Aimster is a way to share, copy, listen to, and basically in a nutshell break the law using files from other people's computers…. I suggest you accept aimster for what it is, an unrestricted music file sharing database – (posted by zhardoum, May 18, 2001)
Naturally with all of the music-sharing services were being shut down, the pirates found a new way to connect, share files and shape the industry. Which brings us to BitTorrent and websites like The Pirate Bay and Swepiracy. Torrenting does not require a central server, does not require direct streaming from one peer to another and the host does not contain any full file contents. All of the content received is from other users.
Sweden brought Pirate Bay to trial for both civil and criminal penalties. Per E. Samuelson, the site's attorney, lodged the now-famous (and familiar, for U.S. copyright scholars) King Kong defense:
EU directive 2000/31/EC says that he who provides an information service is not responsible for the information that is being transferred. In order to be responsible, the service provider must initiate the transfer. But the admins of The Pirate Bay don't initiate transfers. It's the users that do and they are physically identifiable people.
The defense was unsuccessful. Which brings many questions to mind for future cases — how will courts begin to rule with such complex systems of file transfer as fragmented torrents? Targeting users is widely unpopular, especially in the United States, where statutory penalties range from $750 to $300,000 per willful infringing use and $200 to $150,000 for non-willful infringement.
Efforts around the world have continually been made to combat piracy. But maybe it's time we take a fresh look at the market. As the Copia Institute observed in a recent report, whenever there are new ways to share content legally, users ultimately respond by employing those technologies.
On this International Talk like a Pirate Day, let's take a moment to remember the pirates and how they have helped shape the internet era. While CD sales and digital downloads may be declining, new streaming services are on the rise (vinyl records are also doing remarkably well). The digital revolution has, indeed, changed how we consume and access our music. It has given us access to (nearly) everything, through services like Spotify and Apple music, at a reasonable price and with unparalleled convenience.
From the consumer's perspective, you now carry hundreds of hours of music on your phone and listen to it whenever you want – no need for one of those bulky CD binders. The slot where the CD used to go in your car is now an auxiliary cable jack.
From an artist perspective's, these are new challenges that require adaptation. Particularly in the case of music licensing, our pre-existing laws are unnecessarily complex, cumbersome and antiquated. However, innovative technologies and services are not to blame. Instead, we should seek new and equally innovative ways for artists to be compensated through more direct and transparent payments (such as Ujo).
While our copyright laws are far from perfect, we still have substantial freedom to remix, repurpose and share creative content online in a social context. This is essential to online free expression, digital commerce and the proper functioning of the internet itself. As additional discussions in Congress and in the courts move forward, let's make sure we keep it that way.
For many years now, the MPAA and the various studios that make it up have filed various lawsuits against various internet platforms for not waving a magic wand and making piracy disappear. This also appears to be their big complaint against Google, which has bent over backwards trying to appease the industry and it's still not enough (of course, that may be because what the industry really wants from Google is money, not stopping piracy). But now the shoe is somewhat on the other foot as Sony Pictures is being sued for failing to stop piracy. Really.
The case stems from the infamous Sony hack from a year and a half ago, where all of Sony Pictures' emails were released onto the internet. Possibility Pictures is suing Sony claiming the hack created a breach of contract in its failure to stop piracy of its film, To Write Love On Her Arms (TWLOHA), a 2012 movie starring Kat Dennings, based on the true story of the struggles a woman went through leading to the founding of her charity (which goes by the same name as the movie). While most people focus on the emails from the hack, it should be noted that before those emails were released, the hackers released some pre-release films... including TWLOHA. And that, Possibility claims, is a breach of Sony's contract.
Reading through the full filing, the key breach appears to be of Section 16.7 of the contract, which includes an "anti-piracy authorization" stating:
So that's kind of amusing, since the clause is clearly designed to give Sony the power to send out threat letters and takedowns and use DRM and other such stuff -- but Possibility is basically turning it around on Sony and arguing that its failure to stop piracy shows that it did not use "appropriate technical measures." I'm not sure a court will go for this kind of judo move in flipping the anti-piracy authorization clause around to suggest that it puts certain contractual requirements on Sony Pictures, rather than simply authorizing it to do certain things as the language is clearly designed to do.
The lawsuit goes on and on about all of the great marketing plans Possibility had for the film (Justin Bieber's mother was going to tweet about it!), but apparently that was all ruined when the hackers, whoever they were, leaked the film. It also highlights Sony's earlier security problems, focused on the famed PSN hack, even though that's an entirely separate subsidiary from Sony Pictures. And then it spends a lot of time pointing to reporters who pointed out that Sony Pictures' computer security was abysmal. That's true... but it's not clear that's against the law. Basically, this lawsuit is mostly "Sony incompetent" and then "because of that our contract was breached."
Possibility then tries to show damages from the leak of the film.
The direct and proximate result of the foreseeable and avoidable Data Breach just four months prior SPWA's planned release of the Picture was an extreme dilution of the otherwise viable market for Plaintiff's Picture. The November 2014 Data Breach resulted in the unauthorized release of the Picture on multiple sites worldwide and destroyed the audience demand for the Picture. Following the Data Breach and worldwide pirated release of the Picture, SPWA abandoned the social marketing plans and lost all interest in promoting and marketing the Picture since it was otherwise available for free as a result of its failure to maintain adequate security of the Network. As an isolated sample of the damage caused the anticipated video-on-demand ("VOD") revenue stream of the Picture, note that in the first six days alone following the Data Breach, the stolen Picture master was downloaded-for-free a reported 19,949 times (an average rate of over 3300 illegal, revenue-free downloads per day).
So... a few things on this. First, downloads don't equate to lost sales, generally speaking, so the attempt to suggest that here without further evidence is pretty silly. Second, less than 20,000 downloads is... kinda weak. It certainly suggests there wasn't much interest in the film in the first place. Third, the idea that there's no market for a movie that's available for free online is easily debunked by the numerous movies that do quite well at the box office and in the home video market despite also being pirated online.
However, the more interesting bit is that this puts Sony Pictures in the fairly awkward position of potentially having to argue that piracy isn't really that damaging to a picture. I'm guessing that Sony Pictures and the MPAA want no part of that argument ever being filed in a court, because it will boomerang back to hurt them.
Either way, the filmmakers are demanding almost $9 million:
The amount of that revenue for which we seek payment, less amounts paid to date, is $8,738,331...
For a movie that not that many people seemed interested in?
Separately, Possibility notes that Sony pointed out that there's a binding arbitration clause in their contract, and Sony has already said that if there's a dispute it must be handled by such an arbitration setup. Possibility tries to get around this, but (unfortunately!) courts have tended to accept these binding arbitration clauses as valid.
If I had to put odds on it, I wouldn't give this lawsuit much of a chance of surviving. The attempt to turn an anti-piracy authorization clause into some sort of requirement to block piracy is a massive stretch. The mandatory arbitration clause is also a problem. Plus, the overall lawsuit is pretty weak. The claim itself is not very well backed up. Chances are Sony can get this tossed out quickly -- but it will be amusing to see if it has to argue that piracy isn't really that damaging. That would be fun.
Already on the shitlist of U.S. broadband companies for supporting net neutrality and opposing things like usage caps, Netflix now has a new factually-challenged enemy: Russia. Russia's Culture Ministry took over government film funding through the Cinema Fund in 2012, and more recently unveiled a list of approved subject matter should film makers in Russia wish to get funding. Approved subject matter should include tales that herald "traditional values," "the constructive actions of civil society" or "heroes fighting crime, terrorism and extremism."
With Netflix now pushing into 190 different countries and launching in Russia last January, Russia has clearly become nervous about the influence the US streaming company could have on Russian culture and homegrown production efforts. As such, streaming services like Netflix have been saddled with a significant number of restrictions, including requirements that online video services must be run through a Russia-registered subsidiary, produce 30% of its content locally, and potentially apply for a broadcast license.
"Vladimir Medinsky, Russia's minister of culture and a loyal supporter of President Vladimir Putin, claims the online streaming service is on the US government payroll. Speaking to a Russian news service, he said the White House had realised "how to enter every home, creep into every television, and through that television, into the head of every person on earth, with the help of Netflix."
"It turns out that our ideological friends [the US government] understand perfectly well which is the greatest of the arts," he said, alluding Lenin's famous comment about the propaganda of cinema. "And you thought, what? That all these gigantic start-ups appear by themselves? That some boy student thought something up and billions of dollars flutter from above?"
Scary! Nobody denies that both countries have used oceans of disinformation and media propaganda to portray the other side in a negative light, but suggesting Netflix has much of a motivation beyond money is an entertaining leap. Medinsky's complaint is particularly amusing given that Russia was just exposed for running disinformation factories twenty-four hours a day whose sole function is to fill the internet with anti-Western bile. But regardless of which side is generating the propaganda; if your social values are so fragile they can be unraveled by a half-hour sitcom or a documentary, you may want to reconsider your ethos.
That said, the real villain in this latest chapter in the information wars isn't Netflix, but Netflix-produced shows and other fare that dare to show homosexuals as something vaguely resembling actual human beings.
MPAA boss Chris Dodd has apparently decided to take the fairly insane stance that what's good for the public is clearly bad for Hollywood. That's the only conclusion that can come from the news that he's actively campaigning against the EU ending geoblocking rules:
In a keynote address at the CineEurope convention this week, MPAA Chairman and CEO Chris Dodd described the unblocking goals as a threat to the movie industry. Encouraging participants to reach out to their representatives, Dodd described the concerns as “real, very real.”
“While the stated goals of these proposals are laudable – offering greater choice to European consumers and strengthening cultural diversity – in reality, these ideas could actually cause great harm to Europe’s film industries and its consumers,” Dodd said.
Opening up more markets and more users, while having less overall friction will be bad for the film industry? Only if it's run by complete idiots who don't know how to take advantage of a larger market. But, I guess that's the MPAA way!
Of course, it's not hard to understand what Dodd is really talking about. For years, Hollywood has been able to squeeze extra money out of a convoluted and corrupt manner of territorial licensing -- a system that may have made sense in a pre-modern world, but which hasn't made any sense at all in decades. But because the Hollywood studios abuse that system for profit, often making it impossible for people to see the content they want to see (and are willing to pay for), it doesn't want to change that system.
But, because it's Hollywood, they have a mythical fairy tale to try to make it all make sense:
“The European Union is made up of 28 different nations with different cultures, different languages, and different tastes. Forcing every film to be marketed and released the same way everywhere, at the same time, is a recipe for failure,” Dodd said.
“The ability of filmmakers and distributors to market and release their films where, how, and when they think best gives them the greatest chance to succeed,” he added.
Of course, this is the EU where (at least while the EU lasts... as may now suddenly be in doubt...) people are able to travel freely across borders. Which means that the country you live in may not be the country you grew up in, nor match the same cultural sensibilities. And, these days, it's entirely possible to market films through the internet to find their intended audiences. The idea that by getting rid of geoblocking you suddenly change any of the above points makes no sense. The films that are targeted in one geography can still be proactively marketed in those geographies -- it's just that they will also be available to people from those regions who now live elsewhere (again, making it accessible to a wider audience).
But, again, this is the MPAA that is so focused on locking things down and limiting consumers, it still doesn't realize that treating its customers badly is why the MPAA is so hated.
