Movie Studios Suddenly Drop Lawsuit Against Limewire

from the you-can't-get-blood-from-a-beaten-dead-horse...-or-something dept

After a long legal battle, Limewire finally agreed to pay $105 million in damages to the RIAA to settle its infringement lawsuit. The RIAA had previously bandied about much higher numbers, including some rhetorical discussion of the upper limits of statutory damages, which would have put the total "damages" in the range of $75 billion, something the presiding judge pointed out would have exceeded the recording industry's entire combined income since the invention of the phonograph in 1877.

$105 million isn't as much as the labels wanted, but it was enough. Once that was secured, some indie labels filed suit in an attempt to score a little cash as well. In a move both unsurprising (lawsuits are better than innovating!) and surprising (Limewire's owner not entirely made of money), major movie studios like Viacom, 20th Century Fox and Warner Bros. filed a copyright infringement suit against the shuttered P2P service.

The studios actually moved for summary judgement in this case, stating that the same principles applied in the RIAA's win could be applied to their claims as well. That was back in October of 2012. Since that point, almost nothing has happened, as is evidenced by the lack of activity on the docket.

Now, with little fanfare and even less explanation, the studios are dismissing with prejudice their suit against Limewire.

And with a signature and a date today, the more than $200 million copyright lawsuit by Hollywood against the file sharing site is over. A NYC-based federal judge today granted final approval to Paramount, 20th Century Fox, Viacom, Disney, Comedy Partners and Warner Bros' request to dismiss their almost two year case against LimeWire and its founder Mark Gorton. Filed on October 30, the motion for a voluntary dismissal with prejudice was approved by U.S. District Judge Harold Baer Jr on Thursday.

Considering the studios have been more than willing to spend money to make money, it seems unlikely they would have dropped this case simply because Limewire would have put up the same sort of resistance it did in its battle with the RIAA. No matter how much the industry is "hurt" by file sharing, its leaders always seem to have their legal departments fully bankrolled. (This is due to the fact that the labels and studios frequently convert their lawsuit "winnings" directly into more lawsuits. The artists that are getting so screwed by file sharing continue to be screwed by their so-called "representatives," who rarely kick over any percentage of the settlements unless publicly shamed into doing so.)

Deadline's theory is that the studios were offered a little something for their time by Limewire itself.

However, sources tell me that the studios received a hefty multimillion-dollar settlement.

That may be, or it could be that a long-defunct service that fell out of public favor years ago may not be the best opponent to waste a largely symbolic victory on. Remember, the studios and labels don't just want to extract damages from websites and services -- they also want to "educate" potential file sharers by exploiting the statutory damages provision to its fullest. Nothing educates better than fear, apparently and reminding people that they could on the hook for up to $150,000 per violation is much more "enlightening" than being bound by any mathematical realities.

Filed Under: copyright, movie studios
Companies: limewire

Why Haven't Any Movie Studios Become The 'Fan Friendly' Studio?

from the makes-you-wonder dept

Copycense points us to a recent, if short, David Pogue blog post, in response to a reader question, complaining about the ubiquitous unskippable FBI warnings at the beginnings of DVDs. The questioner asks why the industry bothers with them, when all they serve to do is annoy legitimate customers (infringing copies cut that stuff out). Pogue makes an interesting point in response, questioning why some studios don't stand up to become the "friendly" studio, in the same way that newer discount airlines, like JetBlue have tried to become a more customer-friendly airline:

I don't understand why some movie studio doesn't decide to become the Good Guys of the industry. Get rid of all those annoyances, all the lawyer-driven absurdities, and market the heck out of it. Be like the breath-of-fresh air new airline (as JetBlue was in its day) or cellphone company (like T-Mobile, the only company that drops your monthly rate after you've repaid the subsidy on your phone). Dare to be different -- and win a lot of customer loyalty as a result.

There are some smallish indie studios that are sorta trying, but that's not quite the same thing. Part of the problem, I imagine, is the overall ecosystem. Studios can't become "fan friendly" without pissing off the theaters (even if the theaters are probably overreacting). Still, it does seem like this is the direction that movie studios should be moving in. While there will always be some who will automatically distrust the big studios, I would imagine that if a big studio actually stopped treating people like criminals and embraced a much more fan-friendly attitude, it would pretty quickly find that fans were more than willing to reciprocate.

Filed Under: fan friendly, fbi warning, movie studios, movies, warnings

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

Movie Studios May Be About To Learn That Netflix Has The Leverage

from the over-and-over-and-over-again dept

You know how movies studios keep making the same movie over and over and over again with just slight changes? It seems that the entertainment industry simply has a problem recognizing that doing the same thing repeatedly won't lead to different outcomes. In particular, the entertainment companies continue to think that because they own the content, that they somehow have leverage against the new generation of distributors -- missing out on the fact that it was always the distribution side of things that gave them the leverage, rather than the content itself. That is, they're overvaluing the content and undervaluing the services that make that content useful. That's why the record labels were unable to realize that they handed Apple tremendous power over digital music sales. It's why the record labels still don't seem to realize that they need YouTube more than YouTube needs them.

Now it's the movie studios' turn.

Jeff Nolan points out that the movie studios are apparently pissed off at Netflix, saying that they're trying to renegotiate deals on tougher terms. As Nolan points out, those studios may discover they have a lot less leverage than they think. If a studio pulls its movies from Netflix, those studios may find that it hurts them a lot more than it hurts Netflix, which has increasingly built a dominant position in the movie distribution space. Yet, of course, because these firms overvalue the content, they don't seem to be able to see this coming, despite all the foreshadowing...

Filed Under: leverage, movie studios
Companies: netflix

NY Times Buys Bogus Movie Industry Complaints About Piracy

from the let's-get-real... dept

The NY Times is running an article entitled "Digital Pirates Winning Battle With Studios." From the title, it's pretty obvious what it's about -- but the article seems to take a lot of talking points from the movie studios. It's not hard to figure out the main source of the article: NBC Universal's Rick Cotton is quoted throughout. Cotton is a lawyer who has proven time and time again that he's a bit clueless when it comes to business. It's unclear why NBC keeps having him comment publicly about business issues. Every time he does, it just gives people more reason to realize how poorly NBC Universal is managed. Cotton was the guy who proudly talked about how NBC made it more difficult for people to watch the Olympics. He's also the guy who (with a straight face, we believe) claimed that the US gov't should shift Justice Department money from stopping real crimes to focus on copyright infringement because (no, really) doing so would help poor corn farmers who went out of business because people weren't buying movie theater popcorn anymore. Apparently people who watch movies at home don't eat popcorn (and apparently, he forgot to check and discover that corn farmers have been doing quite well lately).

How he has any credibility on these issues is beyond me.

But, the NY Times reports, without a hint of skepticism, about the fact that The Dark Knight was so widely available online, representing a huge failure for the industry. You know which important part the reporters left out? That it was also the highest earning movie of the year. In other words, piracy is not the problem. People are plenty willing to pay to go to the movie theater if you give them a good reason to do so. In fact, The Dark Knight did a good job of that, offering special IMAX showings that you absolutely couldn't recreate on your computer screen or big screen TV.

Did the NY Times point this out? Nope, it said that the downloads were "a visible symbol of Hollywood's helplessness against the growing problem of online video piracy." No. That's not true at all. It was actually a visible symbol of the fact that the existence of free downloads is not the problem so long as the industry actually makes an effort to give people a good reason to pay.

Then, the reporters note that "each episode of "Heroes," a series on NBC, is downloaded five million times, representing a substantial loss for the network." Substantial loss? Really? Can they actually back up that statement? The people who are watching this show are fans of the show who want to consume the product from NBC. Downloading the show is a way for them to stay engaged -- making them more likely to later watch the show on TV (with commercials) or on sites like Hulu. It makes them more likely to go out and buy a DVD later. Or to engage in any of probably 1000 business models that could create compelling tie-ins with the show. Those business models aren't difficult to come up with, and we'd be more than willing to help, if NBC Universal just gives us a call. Nor does the NY Times mention that one of the big reasons why Heroes is downloaded so frequently is because NBC's braindead decision to not let Hulu be watched outside the US. Only an entertainment industry lawyer could think that having more people want to watch your show represents a "loss."

It's an opportunity.

It's really sad that the entertainment industry keeps trusting execs who view such opportunities as threats, and that the media takes their word for it.

Filed Under: movie industry, movie studios, piracy, rick cotton
Companies: nbc universal

Details Emerge On Australian Lawsuit Against ISPs For Failing To Stop Piracy

from the that's-the-best-you-can-do dept

Last month, we wrote about the lawsuit filed by various movie studios, against Australian ISP iiNet for failing to wave a magic wand and wipe out piracy. Apparently, the reason the studios thought they had a slam dunk case was because they hired an "investigator" who signed up with iiNet's service, purposely shared movies, and then had the studios complain to see if iiNet would cut him off. Since it did not, the studios claim that iiNet knew about piracy and did nothing about it. Leaving aside the point that it wasn't actually copyright infringement in the case of the investigator, since he was authorized to distribute the content, and the takedown notice would likely be a false notification, iiNet's response (which we mentioned when the case first came out) seems to still be dead on:

They send us a list of IP addresses and say 'this IP address was involved in a breach on this date'. We look at that say 'well what do you want us to do with this? We can't release the person's details to you on the basis of an allegation and we can't go and kick the customer off on the basis of an allegation from someone else'. So we say 'you are alleging the person has broken the law; we're passing it to the police. Let them deal with it'.

So, iiNet did take appropriate action. It alerted the police that a company felt laws were being broken. That seems like it should be the extent of any ISP's engagement when sent such flimsy evidence.

Filed Under: australia, copyright, isp, movie studios
Companies: iinet

Movie Studios Sue Australian ISP For Not Waving Magic Wand And Defeating Piracy

from the blame-someone-else dept

A few years ago, after realizing that blaming consumers wasn't a particularly effective strategy in covering up for the entertainment industry's own inability to adapt to a changing market, industry insiders chose a new strategy: blame ISPs. That sent them down a path of trying to force ISPs to do a variety of things, such as installing filters, policing their networks for copyright-infringing material and, of course, kicking users off their networks. In the mind of entertainment industry execs, a failure to do any of these things should be a crime. Note how the industry totally shifts responsibility here. Rather than admitting that they should change with the market, it's always someone else who needs to change to protect the entertainment industry's obsolete business model.

While the industry has been able to get some politicians and ISPs to agree (amazingly, often against their own best interests), it's now gone a step further. A bunch of the biggest movie studios (Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, and the Seven Network) have teamed up to sue Australia's largest ISP, iiNet, for failing to stop copyright infringement. iiNet, you may recall, is the same ISP that has been mocking the Australian government for requiring filters. So, naturally, it's response to this lawsuit is rather direct. While the studios complain that iiNet isn't doing anything, iiNet responds that this is not true at all. They pass each complaint on to the police, because if there's a crime, then the police should deal with it:

They send us a list of IP addresses and say 'this IP address was involved in a breach on this date'. We look at that say 'well what do you want us to do with this? We can't release the person's details to you on the basis of an allegation and we can't go and kick the customer off on the basis of an allegation from someone else'. So we say 'you are alleging the person has broken the law; we're passing it to the police. Let them deal with it'.

We are not traffic cops. We can't stand in the middle of it and stop the individual items that might be against the law. These guys are asking us to be judge, jury and executioner.

Even better, iiNet's CEO Michael Malone gets to the heart of the matter:

I think they genuinely believe that ISPs have a secret magic wand that we are hiding and if we bring it out we can make piracy disappear just by waving it. And it doesn't exist.

Indeed, but that might mean that the entertainment industry has to actually take responsibility for their own business model failings, and they can't do that. So they have to blame others.

Filed Under: australia, blame, busines models, copyright, isps, lawsuits, movie industry, movie studios
Companies: disney, fox, iinet, paramount, seven network, sony, universal, village roadshow, warner bros

Better Ways To Deal With File Sharing Sites

from the negotiating-is-just-a-step dept

There's an interesting article over at TorrentFreak about how the movie industry in Georgia (the country, not the state) has been negotiating and making deals with various file sharing sites, since there aren't really laws against such sites in the country. The studios are often able to delay movies from appearing on those sites until a few weeks after they hit the theaters by "negotiating" agreements with the sites. Of course, it's expected that the laws will eventually change in favor of the studios, and these negotiations will cease and be replaced by lawsuits. What strikes me as odd, though, is that the studios don't go beyond "negotiating" with these sites. Why not do more to actually embrace the sites? If a movie is posted for download, why not offer additional incentives to actually go to the theater, while promoting the experience of going out to the movies and seeing it on a really big screen, rather than downloading a low quality version for a computer screen. Such incentives could play into the marketing aspect of the movie, offering those who download a discounted ticket to the theater, or a discount on buying the actual DVD, which will contain extras. In other words, target those who clearly want to see the movie, and then offer them real incentives to go out to the theater.

Filed Under: file sharing, georgia, movie studios, movies, negotiating