Are the MPAA and RIAA out of their minds?

Are the MPAA and RIAA out of their minds?

Summary: Current syndication and distribution business models are dead and so too will be the MPAA and RIAA if it does not embrace change.

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I wrote yesterday (published earlier this morning) that some form of the Anti-Counterfeit Trade Agreement (ACTA) will likely become law around the world in the near future. In the U.S. the user has few resources available to defend against ACTA violations (if treaty passes in its 'rumored' current form) except to hire your local 'specialist' lawyer. Many argue that ACTA's proposed laws will create anarchy in cyberspace. Downloading is a fact of life. The arguments used for and against protect intellectual property rights are crisscrossing the internet. The battle lines have been drawn: Internet users vs. Media syndicates.

The giants ABC, CBS (owners of ZDNet), NBC, and Fox have operated in the same manner since the early 1930's. Radio led to motion pictures and eventually television. The industry began its evolution with BASF's invention of magnetic tape to record audio and eventually video. All through the 1950's when it became popular to record audio and video to archive programming, media companies never felt threatened until blank media became popular to purchase by consumers in the 1960's. At the same, media companies began to see the value of syndication rights, monetizing their intellectual property. The first modern clash of copyright infringement over selling of blank media had begun. The lobby for strong copyright protection is a common front, not just with the MPAA and RIAA, but also with the Actors Guild, Entertainment Software Association and others.

Marketing dollars drives media consumption. The Internet has drastically changed where those dollars are now spent. It's a multi-trillion dollar global market. How media collects advertising revenues goes beyond the scope of what can be discussed in this article. There are ways conglomerate media companies can compete with the independent media outlets. They did so believing it was an equitable playing field until the Internet changed the world and for now, they do not know how to change their ways. Advertisers have evolved while adapted media moguls have not.

Advertising can be embedded into content, which enables distributed content for free. Producers of content argue against this model because it dates marketing materials and potentially 'locks' in the value of the product's distribution channel. Technology exists that allows rotation of advertising content. Media companies are so used to template distribution channel methods (syndication) of their content that it is hard to change their ways. New 'digital' media is forcing change. They need to learn how to adapt to the new world or die. To argue that that dilution of their revenue sources is a poor argument, let alone a defense.

Internet distribution of media creates classic double entendre meaning of copyright protection. How users listen or watch media no longer is pigeon-holed into television and radio. From a user's point of view, what difference does it make if watching a copyrighted works via cable, over the air or on the internet for free? Cable TV fee's to watch programs known as carriage is a red herring to any argument. In some markets you can pick packages of content, often forcing users to purchase provider content they don't want with ones they do. What is the MPAA and RIAA stand on this issue? No comment.

VCRs have been accepted for decades. A user can record and archive content and share video tapes. They have never have been charged for infringement on a wide scale basis. It has been argued that a user could be charged for copyright violation if the user lends the recorded material to a family friend but I have never heard of wide spread copyright case reaching court of users. A search warrant for tapes makes it almost impossible. How do you prove a user did so in the first place? The Internet changed all that with the ease of use to distribute content with the creation of peer to peer.

Because it is now easier to find copyright infringers, is that sufficient rationale for the change of tactics? If it has been going on for the last 40 years without equal prosecution of ALL users, does that not make ACTA advocates look pretty stupid?

The manufactures of blank media were sued often, but not end users. How ironic media producers wanted to restrict use of blank media that they themselves required to syndicate their content. Did the MPAA or RIAA sue Sony for the Walkman, or generic MP3 players, iPod and win? How blatant can it be to talk out of both sides of their mouths? Sony makes recording devices and owns one of the largest collections of film and music. It should sue itself.

DMCA / DRM protection rules should be understood and acknowledged as recognition of creativity and intellectual property rights. Every author owns their content. How one monetizes the content is a different issue. File sharing of protected works in what traditionally is published for a fee, is not what should be argued. How the revenue model works is the question. If an author does not want to have users read, listen or watch their materials free, don't fall for the trap that you should have free and pay models working in tandem. The distribution of content has been stuck in legacy business models that have not changed in 50 years. Advertising revenues are open to new formats like Internet TV or Web portals. The media industry needs to wake up and get with the new world and educate its members on how best to use the Internet to create revenue. It can protect its content value without draconian laws. If the law is to be enforced, enforce it on everybody, not just a select view. The MPAA / RIAA should go door to door for every alleged copyright infringement, of every type, including tape, CD, DVD and hard drive stored in a 'consumer' home. Better hire a few million lawyers too.

The government's stance on this issue is puzzling. On one hand it wants to protect intellectual rights while on the other it wants to open up the internet to be a free and open world to all. It is even going so far as encouraging users to bypass security measures of closed countries like North Korea, Iran, and China. It is encouraging the use of Internet applications and media that are banned in countries through a variety of technologies like proxy servers and encryption methods that by-pass government controls, the very same technologies file share users use every day. Negotiating the ACTA treaty in secret is only fanning the flames. The MPAA and RIAA have been adamant on this requirement for the past two years. Public distrust of such tactics will only fuel further opposition to any sense of property rights.

If the MPAA and RIAA are going to restrict how viewers can see content then it should enforce pay rights across the board for every method it uses for distribution. Radio broadcast of music for free should be banned. Over the air T.V. signals should be banned for any television production that offers free viewing of material that is chargeable elsewhere. Public viewing rights at movie theatres should be free if the content is to be redistributed on television at a later date. There's only so many ways you can bake the same cake. The syndication business model has to change. Middleware agents are a dying breed in the digital world. Internet multimedia producers which create content solely for the internet audience will win if the moguls fail to change their ways.

Going after teenagers because they have downloaded 500 songs for their use and sharing them with friends is going to backfire. Music distribution services have opportunities to offer revenue streams increasing their profits, not diluting them. The more aggravation the MPAA and RIAA create within the Internet world, the more likely their content will be ignored. Rather than spending money on lawyers and tying up the judicial system, invest in new distribution content web portals, advertising software applications and content delivery technology. Doing so  creates wider audience, thus revenue opportunities, than being stuck with a piracy war that cannot be won. The industry fails to recognize the potential self destruction as this unfolds.  Some actors and musicians are beginning to realize this and are taking matters into their own hands. The era of the rich getting richer is tilting from the select few and leveling the playing field.

I don't blame the writers, actors and production companies so much as I do the broadcast and syndicate middlemen in this fight. The food chain -- Paramount, Twentieth Century Fox, Sony and others which are addicted to this revenue for seed money for programming and music -- is what is fueling this debate. Current syndication and distribution business models are dead and so too will be the MPAA and RIAA if they do not embrace change.

Additional resources:

When is an employer allowed to read your email?

Internet vs. US Constitution

Warner Bros. recruiting students to spy on file sharers

The FCC should be the regulator of ACTA treaty

FCC's National Broadband Plan: Net Neutrality, R.I.P.

FCC releases 'Connecting America: The National Broadband Plan'

FCC may set aside free wireless spectrum for Internet broadband

FCC, Comcast, others testify before Congress: NBC Universal-Comcast merger

Online piracy laws: Is it just about the money?

Canadian MP: Tax media devices to pay for copyright infringement

British Telecom chief: File share users should be fined, not disconnected

British wireless internet users - you're guilty

Net Neutrality: Why the Internet will never be free. For anything. So get used to it

AT&T to FCC: Open to Net Neutrality ideas - with conditions

Net Neutrality: You own the Internet - make sure it becomes Law

Internet: A threat to government or the other way around?

Electronic Frontier Foundation links net neutrality to copyright

United Kingdom National Archives

French solution to illegal download and copyright infringement - tax Google and Yahoo

Google loses book copyright case in France

Lobbyist: Canada cans copyright deal in exchange for U.S. dropping Buy America

European Parliament notice to ACTA negotiators: Open up discussion and be transparent to the public

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14 comments
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  • Do you fully understand what you're saying?

    I have no love for the MPAA and RIAA, nor do I think it should be illegal to copy your own purchased materials to your media center computer setup, but it is so I don't.

    I only have 15 DVD's, everything else I've wanted to purchase I've done so online, and is playable thru Media Center. For someone with 250 DVD's, then what do they expect, for then to but those same movies digitally for a total of $3,000? Well, that I'm against, and of course they're all for it.

    That's downright wrong.

    But to say that it's wrong to charge for a CD while playing it free over the air is assine.

    The free comes with restrictions: you have to listen to ads, and only hear the song when the staion decides to play it. It's called advertising, just one way (and one that works quite well) of getting the songs to the public to hear. If they like it they buy it so that you won't have to lisetn to ads, and can hear it werever and whenever you like.

    How can you say free content with ads on the internet is a great idea, then turn around and say it sucks via radio? It's the same thing.

    Same with TV, Cable ect: Free gets it out there so you know it exists, purchasing it pays for the free, and owning it lets me watch it whenever and were ever I want.

    You can't lump it all together and say its all really the same thing.
    AllKnowingAllSeeing
    • Over the air and CD songs are never the same

      Over the air songs are usually heavily edited for time and content (like movies on TV). Sometime they are even bastardized to give it a different sound.

      Now, for every song you like in a CD, changes are that 11 of the SUCK. That is why most people stop buying CDs and why iTunes is so popular.
      wackoae
  • Content and media

    We need to make a separation between content and delivery. Radio, CD, and a LP are all media. 'Dark Side of the Moon' is content. When I listen to the radio I accept the stations selections and timing in exchange for putting up with the advertising. Fair trade.
    I pay for a CD of my choice. Full control for money. Fair trade again.

    Where I have a problem is the big media companies want it both ways. They want to overcharge for the media and at the same time give the artist pennies per unit. They also strangle the distribution and advertising channels to exclude freelance artists.

    Here is the challenge. Some bright young geek needs to figure out how to distribute the content in a way that the artist gets paid a fair price and the distribution mode takes a small percentage to pay for the logistics. When that hits critical mass the whole thing will solve itself.

    Are there any artists out there that have full control of their works? I think I might want to buy some of your stuff.
    lars626
    • Thought the internet solved distribution

      for both the indie and the contract artists - the brick and mortar is the sufferor in that chain.

      As for fair trade, doesn't really exist does it? What you buy , be it vinyl album, a cd, dvd or such is controlled by the most stupid catch-22 law that imply you have a right to copy your purchase (as a backup) but it's illegal to make the tools to do so if you're not the copyright holder - so who won, the content providers who sell you the item, don't provide a copy / backup mechanism, aren't obliged to do so, and threaten and/or lie to you about your rights if you do so, and attack anybody who's got the software skills to enable such for anybody but themselves. They've successfully changed and extended copyright over the years, and made sure that our rights and privileges are toothless and near nil in affect. No wonder they suffer such public perceptions of cartel and thieves themselves, though theft by either side is wrong, especially to real artists. Until the flaw in fair use and end user media shifting as well as tools to do so, those media organizations are public enemies for the long haul for a lot of people and still out of their minds.
      Boot_Agnostic
  • Solutions, solutions

    I am heartily sick of your verbose repitition of the state of copyright and Internet piracy, ending with 'The syndication business model has to change.' I thought ZDNET was a breaking news site, not a constant rehash of yesteryear's boring non-events? In future please make use of your undoubted knowledge in suggesting solutions, instead or regurgitating tired cliches until all readers are bored out of their skulls.

    1. The principal piece of relevent history, which you fail to mention in your imitation of 'War and Peace', is that in previous industrial revolutions the incumbent providers all went out of business or shrank considerably. Are there global giants in canal transportation for example? I didn't think so.

    2. There is no technology problem: CISCO keep pumping up the bandwidth for core transmission, fibre will run to the home at 1Gbs rates, Intel keep doubling compute power every 18 months, disk capacity continues to expand dramatically. We already have enough. So no storage and transmission difficulties.

    3. If the middlemen are the problem ... then let's destroy them. Simple as. Let's not allow a lingering death prolonging everyone's agony. Put them out of business in a controlled manner to protect their employees and the economy. That's a job for the Government and watchdogs. If the best those self-serving, beureaucrats can dream up is an anti-consumer global pact then there will indeed be technology war ... and I, normally Mr. Moderate, am preparing to join it!

    4. The form of the solution should be similar to that agreed by the Gambling Industry in the UK nearly 10 years ago now: a consumer-friendly solution initially to the disadvantage of the incumbents but constructed to support a big increase in the level of business ... so that everyone could be happy after a few years. [It would be worth you studying this transformation.] For example if it was easy for everyone to obtain Photoshop CS5 cheaply, that's 6 billion times 10 cents, then Adobe's profits would rise with such a model.

    5. The architecture of the solution is straightforward. Google (amongst others to prevent monopoly) host a far superior version of The Pirate Bay, AKAMAI distribute popular downloads wordlwide, the major telecomms companies are shrunk to provide core services and the edge is managed as autonomous OPLAN's (initial funding supported by the Government where necessary). These OPLAN's won't just provide networking, they will support thin client connections to shared computing power (by that time chips will have 80 cores no doubt) for the disadvantaged.

    So if you want to do something useful Hanchard ... get to work on the economics of this solution ... or suggest another. When we have the figures it will become clear the extent to which the old business model has been ripping us off. By the way iTunes and Apple's lock-in strategy is toast. (Apple ... toast ... get it?)

    HAND
    jacksonjohn
  • There are successful Luddites in America

    A number of incumbent industries and professions have managed to thwart technological advances over the years, most notably in the legal and education professions. The media cartels are simply trying to emulate their success.

    The key to success in this area is to destroy any free-market aspect, by rigged regulations, artificial barriers to entry, and restraint of trade. ACTA does all of those in spades, in fact it is one of the most anti-capitalist works in decades.
    terry flores
  • RE: Are the MPAA and RIAA out of their minds?

    The MPAA and RIAA are merely trade associations.

    They may reflect the current views of their member corporations but sooner or later, these companies will see that their unwillingness to leverage the technology to their own advantage (and to the advantage of their customers) is costing them dearly.

    These companies will come around, one-by-one, or they will go broke and be displaced by other companies willing to balance the needs of their content providers and their customers with the needs of their shareholders.
    M Wagner
  • RE: Are the MPAA and RIAA out of their minds?

    They will hit teenagers, while ignoring their loses from professionals and semiprofessionals here in Asia.

    I can find first run movies being sold by vendors in the local open market here in the rural Philippines before the movie even opens in Manila.

    As for software, even if you "buy" it, a week later a window pops up and you usually find it's not "genuine Windows".

    As for songs, I don't know...I listen to "elevator music", but my granddaughter gets the latest ones mp3 download from the vendors too.

    The point is that if one had to pay "full price" one couldn't afford it at all (which is why my secondary computer uses Ubuntu).
    tioedong@...
  • The establishment of a police state

    The ACTA law is naked, unethical if not illegal (violation of equal protection law) grab for money. Namely, pay off politicians to pass it, collect money from violators as long as the law lasts. The perps know the 'law' has no chance of lasting. The question is whether it is a profitable project whereby income is greater than pay offs. Watch the law die and pass go and start again with some variant.
    What is even worse than these frivolous 'laws' is that it is all being developed in secret. It is a police state approach. Medical care, economic stimulus, media law, develop a profitable law in secret and blitzkrieg on the public. Health care, hold your nose, reform comes with sixteen thousand IRS and around 50000 FBI enforcers to make opponents go away. More and more our government is starting to look like the TV show V and perhaps it is worth developing ties to organizations off the radar.
    jdubow@...
  • The content providers need a new tactic or they will die

    I have watched this debate for years now. Yes I download, invariably to watch something I would have regretted paying full price to see, which after viewing is deleted. If they simply offered them for streaming, WITH advertising embedded, I would probably watch. Some content providers are already catching on, showing ads before you get to see the content - NASCAR is one such site smart enough to see the future. I listen to Jango.com for my music and again willingly accept the ads in order to listen. These bigger companies had better get with the times, or they will find themselves fighting for an ever decreasing part of the pie.

    On the other hand, if they want us to hate them even more, they are going in the right direction. The MPAA and RIAA will only succeed in creating and feeding an anarchistic underground that is destined to grow with ever stupid protectionist move they make.
    Mr Messy
  • They are just upset that there are too many people...

    that have my opinion on how music and audio that is downloaded off of the pay per download sites should be encoded to max quality instead of the popular cassette quality every one like to use. If i buy music it will be encoded at the highest possible bit rate and the highest possible sample rate. I don't care if it means that the 10 songs i just downloaded using itunes is 800MB and takes 30 min to download. But since they don't i will never buy the music online. Sorry until this changes a lot of people will not buy. Various bit rates and sample rates could be offered but they (music companies) refuse to offer what some people want so the loose out on money. If i download a song and it is not at the max bit rate and sample rates for the format that i downloaded i will demand a refund for offering defective product.
    dougogd@...
  • They have already lost and that is why!

    They have already lost, and by going after the very people who bought there product they have made a whole generation stop buying.

    Music stores closed by the hundreds and so fast that most did not know in till they tried to go and shop .
    I as whole family's have stopped buying music most ways because of what they have done. They are so desperate for money they went after kids and single mom's to get any amount they could to keep there life styles as they where.
    And like you said , if they are going after these kids then they have to go after everyone who has a recorded VCR tape of a tv show or music. Not just the ones they think they can get away with.
    Now I do not condone stealing of any sort, but if they would get there heads out and start setting up a modern way of selling their music and movies this would all but stop.
    But like you said it is to late , Now there are many sites with music that has bands that are not under there thumbs that have great music that you can download all you can eat. And these bands are getting out and making money, they have found that they do not have to use these fools to take over half of what they make to get known.
    I say good bye to the money grubbers, get out and get a real job and see how the rest of the world has to live.
    As you can see I am very mad at what has be let done, and this come about from people who have money and can buy the law to have done what they want.
    And to hold hearing's in secrete , well that goes against everything that the United States stands for! Why are the courts letting this happen and who can we trust to get it done right.
    Daedalu
  • Deficient approaches will continue to see deficient results

    Firstly, I have to agree with "dougogd" that whilst I am an active torrent and fileshare-site user, my major blocks come down to several major factors:

    a)QUALITY, QUALITY, QUALITY
    I always look to the highest quality formats, at least in terms of music (not willing to use up 6GB of D/L limit to download full DVD/Bluray rips given the average D/L limits in Australia, but still look for best quality DivX/Xvid up's possible). If the legit moguls persist in either DRM or average quality offerings for a premium price... forget it! I'll stick with hunting out either the best 320 bitrate MP3s or lossless which I then convert myself.

    b)LEGAL PREVENTION OF BACKING UP THE PRODUCT
    The legal right in most countries to make a back-up of legally purchased media content always seems to be cancelled out by counter-laws; such as the illegality of by-passing any copy-right protections, the development/use of RIP'ing tools not developed by the content owner etc. Screw that!

    c)LOCALISING STREAMED CONTENT VIEWABILITY
    The number of times I have gone onto network sites (yes, almost all US-based media producer/distributor based) to catch up on a missed episode of a favourite program. Guess what?? Because I don't live in the U.S. I don't get access to the content legally! WTF?? I'm already far enough behind the current content episode lists (if I stick to legal methods!) as free-to-air in Australia is p1ss-poor if one is not into "reality" TV... don't cut us out just because we actually LIKE your shows! Localise the ADs and open up your content.

    d)POOR LEGAL CHANNELS FOR DIGITAL DISTRIBUTION/CONSUMPTION
    The main LEGAL portal for purchasing media content is the iStore.... I DON'T THINK SO!! Sorry, but that means installing iTunes, and the fact is that that bloatware isn't going anywhere near ANY of my systems. Then there is Amazon, which SOMETIMES offers 320 bitrate, if the demand requires it on a case-by-case basis. Either way, I'm still charged far too much for 2nd-rate offerings. If only someone would have the smarts to start-up offering top-quality (non-DRM) content with low-price rates, they would quickly force the current moguls to rethink their business models by their own massive drops in gross revenue.

    e)MONEY, MONEY, MONEY!!
    Unlike the politically motivated and vocal minority, most of us look to illegal methods of obtaining content, because legal channels are either ridiculously expensive (here in Australia, ARIA has long kept the costs of CD's artificially inflated to "protect" local artist, so that new-releases usually start at $30+), or just plain unpalatable (ie, iTunes). Going though "alternative" channels means I can I can not only afford to listen to more music (many of which I would never have even heard of through legit channels), it also means I am more cashed up for concerts and festivals, which actually provide GREATER revenue for the artists themselves!

    What gets my back up the most in all these litigious-based approaches is that certain facts get skewed: the biggest losers in this whole file-sharing landscape are not the artists but the producers of the content. File-sharing does not eat away artists' profits as the fear mongers would have you believe. Not only would the vast majority of downloaders not actually bought the product, or have been able to afford it in each and every case, many would never have either been able to except through undesirable channels (ie, iTunes -> iStore), many would never have even heard of the artists in the first place, as many artists would have had ZERO local airplay! Far from taking money from the pockets of artists/bands, they now have many more (profitable) options when it comes time to go on tour.

    The losers are the producers/distributors who are becoming ever-more irrelevant... thus they are the main ones making all the noise!!
    kaninelupus
  • RE: Are the MPAA and RIAA out of their minds?

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