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Dust-Up: What's the true impact of illegal downloading on jobs and the arts? [Round 3]

Hulu_Blog

On the final day* of our piracy Dust-Up, Harold Feld, legal director of Public Knowledge, and Andrew Keen, advisor to Arts and Labs, discuss the impact of illegal downloading on the economy and the arts through the lens of copyright legislation. Do we need new laws or simply new approaches within the current legal framework?

Says Feld, who represents the opinions of many Internet users and online entrepreneurs:

[C]opyright holders need to understand that the best way to stop illegal downloads is to make the content available and affordable online in ways people want it. Hollywood lobbyists usually react to this with the same enthusiasm displayed by social conservatives when suggesting that free condoms in high schools help reduce teen pregnancies -- and for the same reason. It amounts to a confession that since you can't stop the conduct, you need to figure out how to acknowledge it and limit the negative consequences.

Says Keen, speaking up for the entertainment industry and artists within:

[W]hy would consumers pay for Netflix, Hulu or Spotify content if all the same movies and songs can be illegally downloaded for free? And that's, of course, why we need carefully considered, bipartisan legislation like COICA. Because without it, the United States' entertainment industry -- with its millions of middle-class jobs -- is in serious jeopardy.

Continue reading round 3 of their debate after the jump.

*IN CASE YOU MISSED IT:

Round one: How big a risk does illegal downloading pose to the entertainment industry?

Round two: Should the entertainment industry accept piracy as a cost of doing business?

--Alexandra Le Tellier

Photo: Hulu offers a variety of videos from cable and broadcast television. Credit: Hulu

Point:

Last time, Andrew accused me of making excuses for not wanting new legislation to stop illegal downloads while acknowledging that the problem is both complex and controversial. But it's precisely because the problem is so complex and controversial that new laws, rather than new approaches, can do more harm than good.

The Combating Online Infringement and Counterfeits Act, or COICA, that Andrew raised is an excellent example of what happens when legislators use a bazooka to go after shoplifters. Its central feature involves yanking Internet addresses for accused infringers out of the Internet’s domain name system registries -- roughly the equivalent of yanking area codes out of the phone system to stop gamblers from placing calls to bookies. A veritable who’s who of Internet engineers sent letters warning that the law might crash the DNS (and therefore the Internet), and it has prompted other countries to renew calls to transfer control of the DNS from the U.S. to the United Nations. I think most of us would agree that a “solution” like COICA that crashes the Internet or convinces our trading partners we can’t be trusted with the Internet’s address system goes beyond "less than perfect" to "catastrophic."

Remember, we already made a major overhaul to address infringement online in 1998, when Congress passed the Digital Millennium Copyright Act, or DMCA. Rather than trying to change the law again, why not try to make the existing law work better? To do this, the entertainment industry needs to do two things: First, start working with people instead of bullying them and treating them like thieves. For years, entertainment companies followed a scorched-earth policy against Google and YouTube. But when these same companies actually started working with Google instead, they developed a new set of tools under the existing law. Importantly, these tools don't only make it easier for copyright holders to search for possibly infringing material and file "takedown notices" -- the tool under the DMCA for removing infringing content. Google also committed to making it easier for those accused of infringing to challenge the takedowns, so that those wrongly accused get their day in court. More emphasis on these collaborative efforts -- that respect users as well as copyright holders -- can do a lot more over time than passing laws that do more harm than good. Fly v. Honey still works better than Fly v. Vinegar.

In the same vain, copyright holders need to understand that the best way to stop illegal downloads is to make the content available and affordable online in ways people want it. Hollywood lobbyists usually react to this with the same enthusiasm displayed by social conservatives when suggesting that free condoms in high schools help reduce teen pregnancies -- and for the same reason. It amounts to a confession that since you can’t stop the conduct, you need to figure out how to acknowledge it and limit the negative consequences.

But embracing the technologies that enable illegal downloads and finding ways to make money online have paid ever-increasing dividends for artists and creators every year. The same tools that make illegal downloads too easy to stop also create new opportunities and new business models. It's a different kind of business and not everyone who did well in the old world will do well in the new world. Instead of a dependable world of well-understood business models, we have a world where stars can be created literally overnight and billion-dollar businesses can go the way of Friendster or MySpace with frightening speed. And the technology that makes all these positive and exciting things happen is the same technology that makes it so easy to download files illegally.

Andrew may call this excuses, but I call it a reality check. The choice isn't between some new law that will stop illegal downloads or doing nothing. Because the technology that makes illegal downloads so easy is the same technology that makes all the good stuff on the Internet happen. New laws like COICA that try to target infringing content by messing with the fundamentals of the Internet that make the copying possible do more harm than good. Existing laws already allow copyright holders to go after the worst offenders. No law can stop all illegal downloads without also crippling the technologies that make the digital future so exciting and so potentially profitable for the artists and creators who can successfully embrace it. But we can use existing laws to work together and limit the damage -- as we do with shoplifting in the physical world. If we can collectively embrace the need to work collaboratively,  while simultaneously giving up on the idea that we can "wipe out digital piracy," we can begin to make real progress for creators and consumers alike.

-- Harold Feld

Harold Feld is legal director of Public Knowledge, a Washington-based digital rights advocacy group.

Counterpoint:

Harold, there you go again. Your demonization of the Combating Online Infringement and Counterfeits Act is an excuse to do nothing. You are stalling, Harold.  And while you stall, our entertainment industry is burning.

You've sensationalized a congressional bill designed to shut down rogue websites whose whole modus vivendi -- "central to their activity" in the bill’s language -- is the enabling of pirated materials. This is a bill designed to break up an "unholy alliance of search companies, ad serving companies, credit card companies and rogue websites."

It's a bipartisan bill sponsored by Sen. Patrick Leahy and co-sponsored by 19 senators including Republicans Orrin Hatch and Lindsey Graham and Democrats Dianne Feinstein and Charles Schumer. This is a bill that, while not perfect (it’' likely to be modified this year), offers a very sensible strategy for shutting down websites that enable and profit from piracy.

So what does Harold propose instead of carefully considered, bipartisan legislation to fight illegal websites profiting in the distribution and sale of stolen goods?

"Copyright holders need to understand that the best way to stop illegal downloads is to make the content available and affordable online in ways people want it," Harold argues. But he must be watching a different Internet than me. What I see on today’s Web are more and more sites offering the most wonderfully varied and affordable content. Take Netflix’s deals with the large media companies such as Disney and ABC, for example, which are creating more and more affordable and accessible streaming programming for only $7.99 a month. Or take Hulu’s deal with Criterion, which gives Hulu Plus subscribers streaming access to the entire Criterion Collection, which is essentially all the greatest movies ever made -- for $7.99, yes that’s seven dollars and ninety nine cents a month for unlimited viewing. Or take Spotify’s all-you-can-eat streaming model of music, which has been a big hit in Europe.

Netflix, Hulu and Spotify offer the highest quality, most instantly accessible and ridiculously affordable content on the Internet. And they are all entirely legal and have the backing of content owners!

Harold, are we watching the same Internet?

But why would consumers pay for Netflix, Hulu or Spotify content if all the same movies and songs can be illegally downloaded for free? And that’s, of course, why we need carefully considered, bipartisan legislation like COICA. Because without it, the United States’ entertainment industry -- with its millions of middle-class jobs -- is in serious jeopardy.

I'm not alone in my concerns. I recently talked with Jason Reitman, the young Hollywood director of hit movies like "Juno" and "Up in the Air." Reitman believes that unless we can address the problem of piracy, we risk losing the lifeblood of the American motion picture industry -- the independent production, what he calls "tweeners," movies between the YouTube home video and the large budget studio productions.

Given the already razor-thin margins on independent movies, Reitman fears that the very viability of independent films is being undermined by online piracy. What we could lose, Reitman warns, are movies like "Lost in Translation," "Reservoir Dogs," "American Beauty" and"Pulp Fiction," which have not only "pushed cinema forward" but have also enabled the blooming of young talent like Quentin Tarantino and Sofia Coppola.

The stakes, then, are high. Piracy is doing dreadful damage to American culture. But Harold wants to treat it like shoplifting and do nothing. I think that's irresponsible. By backing legislation like COICA, my goal is to protect American creativity and guarantee its survival in the Internet age.

--Andrew Keen

Andrew Keen is the author of the upcoming "Digital Vertigo: An Anti-Social Manifesto." He is also an advisor to Arts and Labs, a coalition of entertainment and technology companies. 

 

Comments () | Archives (9)

The comments to this entry are closed.

rumblestrip

Harold Feld gets paid for his work, why is he dedicated to making it harder for me to get paid for mine? People already commit home invasion robberies, does this mean he should not call the cops if it happens to him, or should he just keep his valuables on the front porch? Already the federal courts are not enforcing the copyrights we already have...advertisers are stealing arrangements (theoretically protected under current law) with impunity right now.

Marcus

"But why would consumers pay for Netflix, Hulu or Spotify content if all the same movies and songs can be illegally downloaded for free?"

Yes, that's why Netflix, Hulu, and Spotify have all gone out of business... oh, wait, no, they haven't....

"But Harold wants to treat it like shoplifting and do nothing."

Er, which is it? Treat it like shoplifting (i.e. prosecute individual cases under the existing legal framework), or do nothing?

The closer one examines Keen's argument, the more it resembled Gertrude Stein's description of Oakland: there's no "there" there.

Paul Sweeting

While I have some sympathy for Andrew Keen's point of view he can't be serious in offering the Netflix and Hulu deals he cites as meaningful responses by the industry to meeting consumer demand for digital access to entertainment. There currently are no digital offerings from any studio that provide consumers with even the same level of content portability and interoperability across devices that DVDs have provided for more than a decade.

A DVD will play on any screen-connected device with a DVD drive, whether set-top player, PC or portable player. Ownership of a physical DVD, coupled with the first-sale doctrine, has enabled content lending, renting, borrowing, sharing and other value-adding functionality. To date, largely due to DRM restrictions demanded by the studios, no digital platform has been able to achieve similar levels of interoperability, functionality or flexible retail business models as the humble DVD.

From the consumers point of view, digital video platforms today represent a step backwards in terms of the value they deliver. From a basic business point of view I wouldn't call that an adequate response to the challenges and opportunities presented by digital technology.

Richard

The industry thought VHS would destroy them, but it brought in tons of $$$
They thought the DVD would lead to mass piracy of DVD's, but when priced
right consumers consistently buy them even now.

I don't know how much they lose per year, and neither do they.
The stuff they print is based as if every pirated item would have been bought
at full retail at the highest price, assuming they don't just pull a number out
of thin air in the first place. The reality is, most people who pirate would not
pay anything in the first place as they have no willingness to pay or sometimes
no ability to pay. This does not excuse the action, just points out that the
"loss" is far less than portrayed.

Piracy is not the big bad boogie man it is portrayed to be.
Independent movies were made when you had it shown only in the theater.
Later on you had TV, then Pay TV and pay per view, then VHS & DVD.
What piracy might do is stop some of the riskier over priced stuff getting
made. Then again, they still made transformers 2. Worse, they made
speed racer, a film I had wanted to see made since I was a kid, but not like
THAT. Yuck.

Music is selling less now for several reasons.
1) Most of it sucks and people find out faster it sucks.
2) Lots of it are just covers of music done better by someone else before.
3) The shift to digital singles allows consumers to buy what they actually want
rather than the packaged crap they are trying to move instead.

Movies are dying for much the same reason.
Too much of it sucks.
Put out a movie people want to see like Avatar (no I don't know why) and
you will make bank.

People WANT to compensate creators for good works because they want
more of it to be created. Most people are cool paying a fair price. Many
will wait a bit for the inevitable price drop, but that is still a revenue stream
that did not exist at one time.

The truth is piracy is not the blame so much as it is the excuse used by
management to excuse their poor choices of development.

damenbrazen

Mr. Keen, this is where you lost:

"Harold, there you go again. Your demonization of the Combating Online Infringement and Counterfeits Act is an excuse to do nothing. You are stalling, Harold. And while you stall, our entertainment industry is burning."

Alias

The entertainment industry's ancient business models do not excuse warrant-less searches, or blackmail threats against those who lack resources to defend themselves - much less breaking the Internet in various dangerous ways. New business replaces old - how about doing that.

Second, most people would rather pay for ease of access & being able to read, listen, and watch what they like. However, the price point isn't more than a physical version for substantially less rights, control, or resale value!

Come up with a good product at a reasonable price and there are consumers waiting to buy.

As for the claims of a "bi-partisan legislation" like COICA, would that be both sides of the "firmly bought by large corporations"? We've already seen the willingness to give up public good and public rights with the extensions of copyright and the DMCA - making "guilty until proven innocent" acceptable, making what was fair use with CDs into criminal behavior (e.g. being able to tape it to play in a different device) , and encouraging bad engineering to make it easier for criminals to be trivially successful.

Nanker Phelge

Who described Public Knowledge as a "digital rights advocacy group?" It doesn't advocate for the right to privacy or any other right that would interfere with the business models of Google and other large technology businesses. That's because it receives a substantial amount of funding from them.

Even if you agree with Public Knowledge that the leading problem in today's society is online copyright enforcement, describing it as a "digital rights advocacy group" is an outright lie. It's an anti-copyright group that receives about three-quarters of its funding from foundations and _about_ - not exactly, but about - a quarter from technology companies.

In the interest of accuracy, the Times should correct its description.

phlynhi

Mr. Feld has it exactly right. I used to D/L movies via torrent and other sharing methods. But with HULU and NetFlix, why bother? for 7.99 a month, I can watch all the movies I want. No more using up all my bandwidth for torrents, no more buying blank DVDs, no more downloading 1.3gigs to find out that it's fake, or poor quality... A premium account with a file storage company like Rapidshare costs more than HULU or NetFlix, so these companies have made movie purchases:
Easier than
Better than
Cheaper than
Safer than
illegally downloading them.

The proof is in the pudding and Apple, with iTunes, along with Netflix and HULU, have demonstrated that embracing a more efficient distribution method at a reasonable price is a winning business model. MPAA et al are burning in their zeppelins while cursing the areoplane as unfair.

Or Mechi

Keen is absolutely right:
http://bit.ly/eNcZHJ


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