Three Strikes System In Australia 'Too Costly' For Industry; Seems Piracy Not Such A Massive Problem After All

from the kangaroo-courts dept

It was evident when the "three strikes" or "graduated response" was first proposed in France back in 2009 that it was a really bad idea. After all, in its crudest form, it cuts people off from what has become a necessity for modern life -- the Internet -- simply because they are accused of copyright infringement, an area of law that is notoriously full of uncertainties. Given that inauspicious start, it's no surprise that over the years, the three strikes system has failed everywhere, with some of the early adopters either dropping it, or putting it on hold. No wonder, then, that a latecomer, Australia, is also having problems with implementing the approach, as this report from c|net makes clear:

A three strikes scheme to track down individual pirates and send them warning letters about their downloading habits has been all but quashed, after rights holders and ISPs decided that manually targeting and contacting downloaders would be too costly.

However, as in the US, where the "six strikes" scheme is also flailing, the Australian copyright industry has no intention of seizing this opportunity to move on from this punitive approach. Instead, it wants to make it worse by automating the process. Village Roadshow Co-CEO Graham Burke, who Techdirt wrote about back in 2014, is quoted as saying:

"When automation occurs, instead of costing AU$16 or AU$20 a notice [about US$12 or US$15], which is just prohibitive, it will cost cents per notice," he said. "In other words, the ISPs will have an automated system that can be done simply, as opposed to at the moment it's manual."

Of course, an automated system is likely to be plagued by false positives even more than one operated by humans. The much lower cost involved -- cents rather than dollars per letter -- means that there will be no economic incentive to check for these in order to keep the numbers down, which are likely to balloon as a result. In other words, it seems clear that the three strikes system in Australia is about to get much worse -- and it was bad to begin with.

But there is one piece of positive news to emerge from this story. The Australian copyright industry says that it is not worth pursuing alleged copyright infringement cases unless the three strikes system costs almost nothing to use. Clearly, then, the real scale of the losses caused by online piracy is nowhere near as great as companies love to claim, otherwise basic economics would push them to use even a manual system. That's yet another reason to get rid of the flawed and disproportionate graduated response.

Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+

Filed Under: australia, automated, copyright, costs, graham burke, piracy, three strikes
Companies: village roadshow

Netflix And Infringement Called Out During Australian Copyright Forum, But One Major Studio Admits Windowed Releases Are Stupid

from the don't-overlook-the-self-inflicted-wounds dept

Being a good Australian means waiting weeks or months for movies or software and then paying an exorbitant amount for them. It took all the way until 2013 for the Australian government to finally allow its adult gamers to buy games for adults, after years of deciding that if the content was too harsh for the (government's idea of a) 15-year-old's sensibilities, then no one could have it.

All sorts of IP-reform discussions by rights holders and government reps have taken place over the last several months. Not included (much): the public, which is expected to purchase content and abide by the new rules, whatever they end up being. The foremost subject is still piracy, despite the fact that the business model(s) suck. (See also: the Australian Tax.)

And it's still what's on everyone's minds, at least indirectly. ZDNet reports on some interesting comments from the Online Copyright Infringement Forum recently held in Sydney, Australia. But at least there's some admission that the business model is at least part of the problem.

First off, Foxtel CEO Richard Freudenstein complained about Netflix.

The US streaming-video giant is rumoured to be launching in Australia in 2015, and ZDNet has reported that the company is already negotiating with content owners to obtain rights for the content that would be in the Netflix library should it launch in Australia.

Until then, the common industry wisdom is that roughly 200,000 Australians are currently subscribed to Netflix, using virtual private network services to make their IP address appear in the US to get around the geoblock, while paying for the service using Australian credit cards and entering in a US post code when signing up for the account.

This would seem to be an encouraging sign: Australians are going out of their way to pay for content. But that's not how Freudenstein sees it.

Freudenstein, whose company owns the licences for much of the content that Netflix would want to include in its library for an Australian launch — including Netflix's own shows Orange is the New Black and House of Cards — told ZDNet after the forum that Netflix has no right to be selling services to Australians without the rights agreements in place.

"I'm opposed because Netflix doesn't have the rights to sell those shows in Australia," he said.

"It's a contractual issue. We have the rights to those shows in this country, Netflix is not paying for those shows in this country, they shouldn't be able to show them."

While this may be a legitimate gripe, it only further highlights the convoluted travesty that is international rights management. It's not enough to get the OK from parent companies. You have to haggle with every other intermediary between your service and the end users.

On the plus side, Freudenstein at least sees this as a rights holder problem rather than a government problem, saying that rights holders need to pressure Netflix and its illicit users, rather than seek a legislative remedy. But that's only as far as Netflix is concerned. Rather than allow the content industry to handle with its own distribution shortcomings, Freudenstein thinks this area needs more government attention.

Freudenstein said that shows like Game of Thrones are played on Foxtel within two hours of airing in the US, but that such responses aren't enough; the government needs to step in and encourage ISPs to help reduce copyright infringement in Australia.

"If we sit and wait, and we don't introduce some schemes soon, there won't be an industry," he said.

He also said this, which puts him squarely on the other side of the divide between the rights holders and their intended audience.

"There will be a lot more cats on skateboards; we'll have a lot less Game of Thrones."

Because only major companies make anything worth watching, listening to, etc. Belittling the creative efforts of others is a terrible way to create interest in your own. Those representing legacy industries continue to pretend there's a massive gap in quality between their output and the general public's. They ignore how quickly that gap has closed in recent years and how that trend will only continue. So, they create a false dichotomy in order to talk legislators and gullible members of the public into siding with the plan to turn ISPs into copyright police: it's either Game of Thrones or cat videos. There's no middle ground.

More positively, Village Roadshow's co-CEO Graham Burke stepped up to admit his company had badly mishandled distribution of one of last year's biggest blockbusters.

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."

Better distribution won't eliminate piracy but it can put a dent in it. Comments delivered at this forum by Spotify indicated that the introduction of its service resulted in a 20% drop in file sharing. The (official) introduction of Netflix should have the same sort of effect. Simultaneous worldwide releases will also chip away at infringement.

The problem is that the rights holders pushing for government intervention have unrealistic aspirations. They want something closer to a complete elimination of copyright infringement, something that will never, ever be possible no matter how draconian the legislation. They're unwilling to accept a reality where a certain amount of infringement will always occur and that business models that decrease piracy will never carry the same margin as selling individual plastic discs.

Filed Under: australia, copyright, graham burke, infringement, windowed releases, windows
Companies: netflix, village roadshow

Australian Movie Studio Says Piracy Is Equivalent Of Pedophilia & Terrorism

from the fascinating dept

We've already mentioned how a number of comments have been submitted concerning Australian Attorney General George Brandis' Hollywood wishlist proposal for copyright reform in Australia. There are a number of interesting comments worth reading. I was pleasantly surprised to see the normally copyright-maximalist BSA come out against the proposal, saying that it will create a real risk of "over-enforcement, punishment of lawful conduct and blocking of lawful content including critically important free speech rights." Dr. Rebecca Giblin, who has studied these issues and other attempts to put in place similar filters (and how they've failed), has also put forth a very interesting comment.

The most bizarre comment, however, has to come from Village Roadshow. Village Roadshow is the Australian movie studio that the US State Department admitted was used as the token "Australian" movie studio in the MPAA's big lawsuit against iiNet. iiNet is the Australian ISP that the MPAA (with Village Roadshow appearing as "the local face") sued for not waving a magic wand and stopping piracy. iiNet won its case at basically every stage of the game, and that big legal win is really at the heart of these new regulatory proposals. Apparently, Village Roadshow's CEO still hasn't gotten over the loss in the legal case.

I read a lot of public comments to government requests. Comments from individuals may vary in style and quality, but generally speaking, comments from large businesses and professional organizations take on a certain very professional tone. You can see that in basically every comment listed in this particular comment period. Except for Village Roadshow's. The tone is both exceptionally informal and... almost frantic. The use of hyperbole is quite incredible. It claims without these reforms the entire industry will die, and says that infringement is on par with terrorism and pedophilia. Just the intro itself basically highlights the style and tone:

Piracy, if not addressed, will shut down the Australian feature film production industry entirely. It will rip out the heart of the cinema and TV industries, creating massive unemployment and slashing the profitability of taxpaying companies.

The problem is urgent. Village Roadshow estimates the theatrical business is down 12% as a result of piracy. Rupert Murdoch interviewed in Australia said: “between 15 and 20 percent of Fox’s revenue is being eaten up by illegal downloads”!

The problem is urgent as piracy is spreading like a highly infectious disease and as bad habits become entrenched, they become harder to eradicate. Also of course high speed broadband is just around the corner.

The dangers posed by piracy are so great, the goal should be total eradication or zero tolerance. Just as there is no place on the internet for terrorism or paedophilia, there should be no place for theft that will impact the livelihoods of the 900,000 people whose security is protected by legitimate copyright.

And this is from the company whose CEO is refusing to take part in a public Q&A about the issue because he claims that any such event will be "filled with crazies."

The filing also quotes Steve Jobs from Walter Isaacson's book:

“From the earliest days at Apple, I realised that we thrived when we created intellectual property. If people copied or stole our software we’d be out of business. If we weren’t protected there’d be no incentive for us to make new software or product designs. If protection of intellectual property begins to dissipate, creative companies will disappear or never get started. But there’s a simpler reason. It’s wrong to steal. It hurts other people. And it hurts your own character.”

Of course, there's that other famous Steve Jobs quote that is a bit more accurate:

"Picasso had a saying -- 'good artists copy; great artists steal' -- and we've always been shameless about stealing great ideas."

And, at least for that quote, we've actually got video of him saying it rather than having it paraphrased through a third party.

Village Roadshow's filing actually claims that Brandis' proposal does not go far enough in making ISPs liable and forcing them to magically make piracy disappear:

Vitally, in Village’s view, the question of “reasonable steps” presupposes the clear establishment of ISP’s being potentially liable for infringement on their services. It is crucial that this first step be properly legislated – and then ISP’s will approach the consultation process with a legal incentive to co-operate. As the Discussion Paper states “Extending the authorisation liability is essential ….”. Village is concerned that the proposed amendment to Section 101 of the Copyright Act suggested in the Discussion Paper does not clearly achieve this, and supports clear drafting to achieve that objective.

The underlines are in the original. Village Roadshow says that it would love to be able to bombard ISPs with notices in a graduated response (i.e., three strikes type) system, but that it will refuse to do so if it actually has to pay for each notice (apparently Village Roadshow not only wants ISPs to be the copyright cops, but it wants them to do so for free).

The entire comment filing comes off as ill-thought-out ranting, or last minute answers to a take home exam of a procrastinating junior high school student. Perhaps my favorite example of this is in response to the question "How can the impact of any measures to address online copyright infringement best be measured?" and Village Roadshow starts off its response:

Powerfully this will be measured by the results.

Powerfully, this comment is not.

Filed Under: australia, comments, copyright, george brandis, graham burke
Companies: village roadshow

Australian Movie Studio Boss Skips Out On Public Q&A, Claiming It Will Be Filled With 'Crazies'

from the respecting-the-public dept

Last month we wrote about a new copyright reform proposal in Australia, which is basically Hollywood's wishlist. It was put together by George Brandis, who completely flat out ignored the proposals of the Australian Law Reform Commission (ALRC), despite it going through a long and detailed process to come up with quite reasonable reforms. Instead, Brandis buddied up with Hollywood insiders representing US interests, and totally ignored consumer groups.

In response to the proposal, Communications Minister Malcolm Turnbull (who has, apparently, been pushing for more reasonable rules to dilute Brandis' extreme proposals) said that a public hearing would be held in September to discuss the proposal, getting a variety of stakeholders in the room together, including consumer rights groups. The major Australian studio, Village Roadshow (the "token" Australian studio in the failed Hollywood-driven effort to sue ISP iiNet a few years back), has apparently decided to opt out of attending the session. While the company's CEO Graham Burke originally said he couldn't make it because he'd be overseas, he actually told Turnbull that he was skipping it because he didn't want to deal with "crazies," by which he apparently means the public who are concerned about their rights being trampled:

“My company is not prepared to participate in the forum. As expressed to you previously these Q and A style formats are judged by the noise on the night and given the proposed venue I believe this will be weighted by the crazies,” Burke told the Minister.

[....]

“What is at stake here is the very future of Australian film production itself and it is too crucially important to Australia’s economy and the fabric of our society to put at risk with what will be a miniscule group whose hidden agenda is theft of movies,” Burke told the Minister.

Nice to see what they really think of the public and concerns about how the new rules might trample free speech, an open internet or the nature of innovation. It's a pretty weak argument, showing real desperation when someone insists that the concerns being raised by public interest groups and ISPs about significant legal changes that will have a major impact on the internet as a whole, are just "a miniscule group whose hidden agenda is theft of movies." No one's "agenda" is "theft of movies." People are legitimately concerned about the consequences of putting liability on ISPs over actions of their users. The near certain response is to lead to massive censorship, blocking of free speech, and much greater expenses for consumers -- none of which will have any real impact on infringement of movies.

It seems quite telling, actually, that Burke apparently recognizes that he has no good responses to these concerns, and can only respond through insults and ad hominems.

Filed Under: australia, copyright, copyright reform, george brandis, graham burke, malcolm turnbull, public comment
Companies: village roadshow

Australian Media Company CEO Accuses iiNet ISP Of Piracy 'Lies', Says Illegal Filesharing Is Theft

from the elegant-explanations dept

For many years, Techdirt has been covering the dogged efforts of the Australian ISP iiNet to stand up for its users against bullying by the copyright industries. After Hollywood lost its big lawsuit against iiNet back in 2012, things went quiet until recently, when the installation of a new government in Australia has led to years of careful research in the field of copyright being thrown out, and a return to dogma-based policy-making that has no time for the facts.

An interview by Luke Hopewell in Gizmodo Australia with Graham Burke, co-CEO of the Village Roadshow Australia media company, provides further evidence of how Australia is stuck in the past when it comes to copyright. It's striking how it trots out just about every tired and discredited argument in favor of harsher punishment for those allegedly sharing unauthorized files, along with the repeated claim that iiNet is lying:

"What iiNet are saying to govt is 'oh, let's just have everything available at the same time, cinema and everything and the [piracy] problem will go away. They know that's a lie because of the music industry. In June alone there was 1.2 million illegal downloads of music, and that's released at exactly the same time everywhere," Burke said.

Nobody claims that making everything available at the same time will make piracy go away completely. That's partly because the "piracy problem" in Australia as elsewhere is often more a problem of poor service, as this story from TorrentFreak last year makes clear:

News Corp owns 50% of pay television company Foxtel, the outfit with the rights to show Game of Thrones in Australia. At last count during August the company had around 2.5 million subscribers, but despite the show being legally available to them, the News Corp CEO said that 20% of Foxtel customers still chose to watch the show illegally.

This shows that even when they have access to the legal services, a significant number of people turn to illegal downloads, presumably because they are more convenient -- a pretty damning verdict on the state of the commercial offerings. Making everything available immediately won't solve that problem -- only offering well-designed legal services will -- but research shows that easy availability through legal services does cut down the level of illegal filesharing, which is presumably what iiNet is trying to get the Australian government to understand.

Next, Burke comes out with a favorite trope of the copyright maximalists:

Piracy produces less of a financial burden for the music industry, according to Burke. Producing an album only costs around $300,000 at the top end, whereas the cost of making a film in the studio model starts at $5 million, and ranges right up to $200 million for epics like Skyfall, Man of Steel and Avatar to name a few.

Of course, that makes the huge and unjustified assumption that such $200 million "epics" are an indispensable part of cinema. In fact, one of the exciting developments in recent years has been the democratization of film-making through high-quality, low-cost video technology that lets people make films for thousands, not millions, of dollars. As Burke himself points out, piracy isn't really a problem for such productions -- another argument in their favor.

He then moves on to another discredited idea -- three-strike schemes -- plus some more name-calling:

"It's sad that to forward their case, [iiNet] use what they must know is a fabric of lies. They're saying that there's no proof that graduated response works. They're instancing a number of countries where graduated response was frustrated by lobbying and the power of Google, which pays little to no tax in Australia and creates nothing," he said.

Graduated response was not "frustrated by lobbying", it failed because it is an inherently flawed idea, based on fear, not fairness. And it's telling that Burke tries to distract attention from this by introducing Google and its irrelevant tax affairs here, even going so far as to say that Google "creates nothing". Since people use its free services, and in vast numbers, they presumably see value in them, which means that it most certainly does contribute to Australia, just not in the form of making films or music, say. Bizarrely, Burke then goes to accuse iiNet of the same sin:

They [iiNet] are also demonstrating the fact that their business model is predicated on selling time, and of course they want the present regime to continue. [Pirates] have a smorgasbord of content online that they are accessing, and paying iiNet for the systems to do so. This is a company that has produced nothing in Australia."

But iiNet is not a production company, it's an ISP. It provides access to the extraordinary, multi-faceted riches of the online world, of which unauthorized content forms a very small and unimportant part, despite the copyright industries' obsession with this particular component. The amazing possibilities that access opens up to its customers is what iiNet "produces", and it arguably provides rather better value than money spent buying -- sorry, licensing -- a film or two.

Burke saves the best for last:

"If people are given elegant explanations of why [downloading content] is theft, the bulk of people will be reasonable."

Yes, it's the old favorite "filesharing is theft" argument, which is not just wrong, but so widely known to be wrong, that not even "elegant explanations" could ever make it right. Indeed, it's partly because people like Burke continue to make this ridiculous assertion -- as well as casting slurs on anyone that dares to challenge their purely self-interested view of the Internet -- that the general public holds the content industries in such low esteem.

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Filed Under: australia, copyright, graham burke, isps
Companies: iinet, village roadshow