Studios Fed Up With Funding The MPAA: Changes May Be Coming

from the about-time dept

A few years ago, the major record labels finally started to realize that, perhaps, shoveling many millions of dollars to the RIAA was a waste of good money, and they severely cut back funds. You may have noticed that, while the RIAA had taken the lead on the copyright front in the first decade of the new century, over the past few years, it's been a lot quieter than the MPAA. It appears that the MPAA may be about to go through a similar transition. Just a few weeks ago, we pointed out that the MPAA seemed to be desperately trying to justify its existence by doubling down on ridiculous and misleading claims about "piracy" and "content theft" rather than actually helping studios adapt to the modern era. We also noted that MPAA boss Chris Dodd was on something of an apology tour after the MPAA was caught completely off guard by the Sony Hack and did basically nothing about it, seriously pissing off execs at Sony.

There's a reason Dodd was groveling. It appears that the studios are finally realizing that maybe the MPAA isn't working in their best interests after all, but is just focused on justifying its own existence:

In a behind-the-scenes drama, the Sony Pictures chairman Michael Lynton last month told industry colleagues of a plan to withdraw from the movie trade organization, according to people who have been briefed on the discussions. He cited the organization's slow response and lack of public support in the aftermath of the attack on Sony and its film “The Interview,” as well as longstanding concerns about the cost and efficacy of the group.

While the MPAA convinced Sony to stay in, it appears that the major studios are thinking it's about time the MPAA shift its focus -- and tighten its belt a bit:

If adopted, their still emerging propositions might jolt the group into line with the new realities of a changing entertainment business. They might, for instance, open the association to new members and expand its interests to include television programs or digital content. They might also reduce the heavy annual contribution of more than $20 million that is required of each of the six member companies: Walt Disney, Warner Bros., Paramount Pictures, 20th Century Fox, Universal and Sony.

The report notes that they might even give up their super fancy DC headquarters (the "Jack Valenti Building") which is just blocks from the White House.

Of course, it's not entirely clear how the MPAA's focus will actually change. It wouldn't be surprising to find some studio execs still want to double down on backwards-thinking, anti-internet campaigns. But, at least some seem to recognize that Hollywood hasn't kept up with the times, and that's partly because the MPAA kept focusing them on the last war, rather than on updating for the internet era.

Kevin Tsujihara, the chief executive of Warner Bros., said he, like Mr. Dodd, welcomed an examination of the organization that would mirror a similar review of cost and mission at his company. “Now is as good a time as any” to look at fundamental questions, Mr. Tsujihara said in an interview. He added: “We haven’t, as an industry, evolved fast enough.”

And, as we've pointed out, it really seems bizarre that the MPAA spends so much on an entire "content protection" division. At least some of the studios appear to be questioning the value of that approach:

But those briefed on the position of several companies said virtually all the studios have chafed lately at the high cost of maintaining the M.P.A.A., along with its worldwide antipiracy and market access operations, particularly as Sony, Warner and others are cutting staff and costs.

Frankly, as we've argued for years, it would be great if the MPAA actually became a forward-looking organization that looked to help the industry adapt to the modern era. It appears the organization is going through an inevitable crisis after years of making bad bets. Hopefully, it recognizes that embracing the future, rather than fighting it, is the way forward.

Filed Under: chris dodd, content protection, hollywood, lobbying, michael lynton, sony hack, studios
Companies: mpaa, sony, warner bros.

The MPAA Isn't About Helping Hollywood. It's About Preserving Its Own Need To Exist.

from the shirky-principle dept

In the past we've discussed the Shirky Principle, named after a statement by Clay Shirky that:

"Institutions will try to preserve the problem to which they are the solution."

In some ways that's a corollary to Upton Sinclair's famous quote:

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

I've long believed that the MPAA has this problem in spades. The group, which is supposed to be about helping the big Hollywood studios, has long taken a very different positions. Five years ago, we wrote about how bizarre it was that the MPAA had an entire "Content Protection" division. As we noted at the time, the organization not only had a Chief Content Protection Officer, but also an Executive VP of Content Protection, a Senior VP of Content Protection and a regular VP of Content Protection, and probably a handful of Content Protection Minions or whatever they call their non-VP worker bees.

And yet, there didn't seem to be anyone at the MPAA who had a title along the lines of "Chief Open Internet Evangelist" or "Chief Digital Business Model Strategist" or something along those lines, who could have been working with Hollywood to help transition the organization into the digital age. No, instead that transition has come in fits and starts with the MPAA itself fighting against most of the key moves and doing little to help forward thinking filmmakers and studios. In fact, if you talk to many of the up-and-coming filmmakers these days, they're just as angry about the MPAA's stance as open internet supporters -- because they realize just how counterproductive a "protection" regime is, rather than a "embrace the opportunity" regime would be.

Eli Dourado has written up a fantastic discussion of this very idea, by focusing on two key things that came out of the Sony Hack that, together, more or less highlight the point above: that the MPAA is not pro-Hollywood at all, but rather seems entirely focused on "giving itself a reason to exist, rather than solving the film industry's" challenges. Specifically he highlights these two things:

1. Leaked emails revealed the Motion Picture Association of America’s ongoing plans to censor the Internet to reduce digital film piracy.
2. The hack prompted a surprise, online Christmas Eve release of The Interview that let us observe the effect of a new distribution model on film revenue.

We have, of course, covered both of these, but Dourado puts them together nicely in context, showing how the MPAA's site-blocking/filtering/censorship strategy is one focused on destroying many of the opportunities of the internet, while the digital release of The Interview showed how embracing digital can actually be quite useful for Hollywood -- not that the MPAA wants anything to do with that at all.

When put together, these vignettes raise important questions about the future of the film industry and its lobbying efforts. Is the MPAA really representing Hollywood’s long-term interests in Washington, or is it trying to fight old battles over and over in an attempt to justify its own existence?

Dourado goes through the detailed history -- revealed by the Sony Hack -- of how, post-SOPA, the MPAA has regrouped to focus on ways to bring back site-blocking and censorship online, while simultaneously attacking Google at every turn (even when Google did exactly what the MPAA asked for and demoted sites the MPAA dislikes). As Dourado notes:

But the more striking point is what this strategy reveals about the MPAA: the organization still deeply believes in site blocking as more or less the solution to online piracy. It continues to position itself as an enemy of the open Internet.

From there, he discusses the success of the online release of The Interview, pointing out how well it did. Of course, some of that may have been because of all the (somewhat questionable) news about the supposed threat from North Korea, leading some to choose to watch it for patriotic reasons. Still, Dourado notes that, while there was piracy of the film as well, much of it came outside the US, because Sony initially limited the release to US only online. And the movie did make a fair bit of money online and, perhaps more importantly, got people to pay attention to its online efforts:

There is additional evidence that the online release was a win for Sony: its YouTube channel gained 243,000 new subscribers in the aftermath of the Interview release. As YouTube entrepreneurs like Michelle Phan would note, subscribers are as good as cash, a ready source of revenue for future online movie releases, if Sony decides to do more of them.

The Interview episode shows that the Internet need not be viewed only as a source of piracy. With a modest change in business model, it can also be the film industry’s next great distribution platform.

And then you get to the divergence question: which strategy is best for Hollywood and the film industry... and which strategy is best for the MPAA? Take a wild guess:

What is the best strategy for the film industry going forward? Should it continue to fight the open Internet, as it did with SOPA, and as it has continued to do through state AG investigations and lobbying the ITC? Or should it embrace the Internet as a potentially profitable distribution platform that is in any case here to stay?

It’s clear which strategy the MPAA, the lobbying organization, prefers. If the studios were to truly embrace the Internet, the MPAA would have a much diminished reason for existence. There is no one you need to lobby in order to release films online. Many employees, such as chairman Chris Dodd and general counsel Steven Fabrizio, would have little to do. The organization would have to go back to administering its film ratings system and asking states for ridiculous film tax credits.

He goes even further, pointing out that this stupid focus on "content protection" has been shown time and time again not to work, whereas embracing the internet seems much more likely to work. But, of course, it would leave the MPAA with less things to do. And thus, to me, it goes all the way back around to the Shirky Principle. The MPAA has to keep focusing on "the piracy problem" because it has set itself up as "the solution" to that problem, perhaps knowing full well that it's a solution that can never be solved. Yet, because of this, it guarantees a large role for itself, convincing gullible studio bosses to keep forking money over to the MPAA, so that its leadership can keep earning multi-million dollar salaries.

The real issue here is that, as younger, more internet-savvy filmmakers continue to bubble up throughout Hollywood, sooner or later more of them are going to realize what a farce the MPAA has become. And just like the MPAA's "content protection" strategy has totally failed Hollywood, eventually it's going to totally fail itself as well. That's what you get for fighting the future, rather than embracing it.

Filed Under: anti-piracy, content protection, hollywood, innovation, lobbying
Companies: mpaa

Chris Dodd Sounding Like A Broken Recording Industry

from the and-so-it-goes dept

Ever since the failure of SOPA, MPAA boss Chris Dodd has been making the rounds, giving the same damn stump speech over and over again. We've reported on it before, but he's done it again, this time at the National Press Club. As the transcript shows, it's the same old story.

Play up just how amazing the movie industry is because it "tells stories." Then, transition into just how many "jobs" the industry creates -- and focus on how those jobs aren't the glamorous ones, but those everyday people (the "little people" if you will) -- and always claim that there are over 2 million of them, even if that's massively exaggerated. At least this time he put in the caveat that he was including people who are both "directly and indirectly" in the industry (plus he admits that he's including TV people, as opposed to just movies) -- such as the people who "prepared our lunch today." Of course, I would imagine those people would likely be preparing lunch for someone else even if the movie industry disappeared. He also highlights that the industry creates jobs across the country, naming New Mexico, Georgia and North Carolina. Don't think those are by accident. Those are three states that have provided significant subsidies to the Hollywood studios, and are some of the very few such programs not rated as a dismal failure for the local economy. He claims that "You can go down a list of states all across the nation and find one economic impact success story after another." He conveniently leaves out that the evidence actually shows that most of these are actually not economic success stories at all, but dismal failures that funnel taxpayer money from states to Hollywood studios which bring in their favorite crews, and hire few locals.

But, then, of course, there's the key section on "technology" and innovation. At first he tries to play up all of the "innovation," but again, leaves out how many of these "innovations" wouldn't actually exist if the MPAA had its way in the past:

Because movies matter—to more people, in more places, who want to watch them at more times, across multiple platforms—the film and television industry is continuously innovating to meet that demand.

Today movies and TV shows can be viewed in theaters, on the big screen, or at home on TV screens, laptops, iPads, Kindles and smart phones.

There are more than 375 unique licensed online distribution services around the world that provide high-quality, on demand film and television shows, offering the easiest, fastest, safest, highest quality product and viewing experience possible.

That the industry was dragged, kicking and screaming, to support many of these things is sort of left out. Also, the fact that the industry has worked ridiculously hard at crippling many of these services, making them way too expensive and annoying (how many services require you to watch a video within 24 hours, because, apparently, no one in the MPAA has kids and recognizes you might want to start a film one night and finish it the next?) seems kind of important, but not mentioned.

There is one thing we agree on:

These innovations are great for consumers. I'm not exaggerating when I say a new golden age in television and film is being ushered in. You can watch more content than ever, through more channels, and the quality of the movies and TV shows is outstanding.

So why did the MPAA fight nearly every one of these changes all along? And why is it still trying to do so? Well, then we get to the usual talk about how the next wave of "innovation" isn't about providing more value to those consumers. It's not about extending the golden age. It's about how can Silicon Valley help the MPAA stop piracy:

This is why it's so crucial that we protect this content from theft. Because consumers deserve to enjoy first-generation versions of their favorite films—not secondhand, pirated films-of-films shot and recorded inside a movie theatre on a mobile phone.

First off, it's not theft. Stop saying it is when it's not. It just makes you look totally out of touch. Second, you know what helps consumers get good works? Making them available in convenient ways at reasonable prices -- something the big studios frequently work against, despite his list of services. Finally, you know how to beat the "secondhand, pirated films-of-films shot and recorded inside a movie theater on a mobile phone"? You offer more convenient ways to view the actual product. I don't know why Dodd and the MPAA think that anyone really wants to watch a crappy cammed version of a film shot from a mobile phone. They don't. Give them legitimate reasonable options and they prefer that.

We must strike a balance between the desire for a free and open internet and the protection of intellectual property. The future cannot be about choosing one over the other—between protecting free speech OR protecting intellectual property—it must be about protecting both

There is no "balance" needed here. What we need is a free and open internet, period. Protecting IP is a fool's errand. Focus on providing more legitimate services with better service, more convenience and reasonable pricing and there's no need to protect things. People pay for Netflix, Spotify and others because they're simply more convenient. Do more of that and stop worrying about piracy.

We can and must have an Internet that works for everyone, and we can and must have protection for the creative industry’s genius that intellectual property represents.

This assumes that protection is a reasonable goal. It's not. It will always be costly to protect and will always have collateral damage. Considering you can solve the problems merely by providing better services, stop worrying about piracy, and just start helping more companies innovate cool additional value.

There should be no confusion. For the more than two million Americans whose jobs depend on the motion picture and television industry “free and open” cannot be synonymous with “working for free.”

I'm sure whichever staffer wrote this line thought it was really clever, but what does it even mean? No one is asking anyone to work for free. Just moments before in the speech, Dodd was talking about how the industry was doing great and growing. More movies than ever before are being made and there are all sorts of new opportunities. Focus on those.

To protect IP, and the openness and freedom of the Internet, we must together innovate our way through these challenges. Fortunately, Silicon Valley and Hollywood are making some progress on this front.

No, the challenge is not how to "protect content." The challenge is "how can we make money" and the tech industry has been providing answers to that over and over and over again, creating new and useful tools and services that help the creation, promotion, distribution and monetization of movies. And the industry has either fought to block or simply looked down upon nearly all of them, until suddenly they're "big enough" to matter, and then they take credit for those innovations. Don't "work together" on the useless goal of "protecting content." Focus on innovating in a way that makes consumers better off.

It's a simple thing: are you adding value to the consumers, or are you trying to stop them from doing something? If you're doing the first thing, you're moving in the right direction. If you're doing the latter, you're throwing money away on the impossible. While Chris Dodd represents the movie industry, the joke around here for a while has been that industries fighting the future "sound like a broken recording industry." Dodd's been telling this same tall tale for a year now, and it's time he got some new material. Stop focusing on ways to stop people from doing stuff, and start looking for ways to help them get more value.

Filed Under: chris dodd, content protection, copyright, innovation, movies, piracy, stump speech
Companies: mpaa

When You Have A 'Chief Content Protection Officer,' You're Doing It Wrong

from the protection-vs.-enablement dept

Back in October, I was on a panel in Hollywood with Kevin Suh of the MPAA, whose title was "VP of Content Protection." Kevin was quite nice and I enjoyed the conversation with him, but as I noted in my blog post at the time, just the fact that the MPAA has a "VP of Content Protection" suggested how misdirected the MPAA's strategies are these days. What I didn't realize is that there's a whole bunch of folks with similar titles. Hillicon Valley has an article about how the MPAA's content protection staff is shuffling roles, and it mentions how Suh has been promoted from VP of Content Protection to Senior VP of Content Protection (congrats, btw). But the article also points out that his boss, Mike Robinson, has been promoted to Executive VP of Content Protection and his boss is "Chief Content Protection Officer" Daniel Mandil.

The problem, of course, is that this assumes a key point: that content needs "protection." It wipes out even the possibility that there may be better strategies than focusing on trying to do the impossible and "protecting" content. It's sort of like an entire department tasked with demanding the tide never come in. Perhaps the MPAA could take some of that money it's used for "content protection" (whose crowning task so far has been to get Homeland Security to seize a bunch of domains on an extremely questionable legal basis) and instead put it towards encouraging and enabling new, useful and profitable business models. I guess it's just easier to have a whole department based on playing victim, rather than being proactive and helping filmmakers adjust to the market.

Filed Under: content protection
Companies: mpaa

What Kind Of Industry Sets Up A Group To Purposely Limit What Consumers Want? Apparently Hollywood

from the you're-doing-it-wrong dept

Jack Valenti ran the MPAA for an astounding 38 years, and was an amazingly effective lobbyist. Listening to pretty much anyone talk about the job he did -- whether they were on his side or opposed him -- you hear nothing but admiration for his skills as a lobbyist. Of course, he was wrong about almost everything, pointed the movie industry in the wrong direction multiple times, and did a lot more harm than good. He claimed that the VCR would kill the movie industry. He insisted that fair use does not exist. He practically ruined a bunch of movie awards shows by forbidding studios from sending out DVD screeners to the awards judges, since he was afraid they'd put them online. And, of course, he insisted that file sharing was terrorism designed to kill the industry (just like the VCR, obviously).

Still... he was a media and Congressional darling and could talk a great game. Amazingly, when confronted with his "Boston Strangler" comment years later, he actually had the gall to insist he was right about his comments on the VCR -- even as the industry was making more than 50% of its revenue on video sales and rentals.

Given all that, you had to imagine that his successor, Dan Glickman would have tough shoes to fill. And, indeed, to date about all that Glickman has done is repeat the same ridiculous claims as Valenti, but without the colorful and charming language. We've been hearing rumors for a while that the movie studios have been quite upset about Glickman, and may even look to push him out before his deal is up next year. Greg Sandoval, over at News.com is apparently hearing the same thing, and notes that the studios recently pushed the MPAA to totally revamp its antipiracy operations, upset about the way things had been handled.

Now, if you were hoping this meant that it was going to take a more reasonable stance to online file sharing and new distribution methods... you'd be wrong. Apparently, the complaint is that the MPAA hasn't done enough, because file sharing has only become more of an issue. It would appear that the studio folks don't seem to realize that this is inevitable. The answer isn't to demonize it, but to look for ways to take advantage of it. But, that's not what they've done. They've put new folks in charge and decided to stop calling it the "antipiracy" operation. Instead, it's the "content protection" effort. Both are absolutely the wrong way to look at things. If they're looking to protect the unprotectable, they are going to fail. Instead, they should be setting up a group that looks at how to use these new technologies to their advantage, rather than setting up a division that pretends it can stop the constant tide of progress.

We've been hearing from more and more movie makers who are recognizing how treating their fans right, while giving them a reason to buy is a much more effective means of reaching an audience than starting off on the assumption that everyone is a criminal. The movie business has always been based on selling ancillary products. Marshall Loew recognized this years ago, when he said: "We sell tickets to theatres, not movies." Yet, for years, the industry has done everything it can to treat its biggest fans like criminals. FBI warnings about punishment before movies. Searching people as they enter a theater and demanding they leave their cameraphones outside. Making the theater going experience less enjoyable. The reason the industry has faced problems isn't "piracy" but because the studios themselves never learned to treat customers right. Setting up a "content protection" division is like setting up a "performance limiting" group at a car company, or a "picture scrambling" group at a TV company. It's about purposely limiting what the technology allows and what consumers want. It makes no sense at all.

Filed Under: content protection, dan glickman, jack valenti, movie industry, movie studios, piracy
Companies: mpaa