Archive for February, 2008

One of the many conceptual challenges for content owners is the notion of content as property. Intellectual property, as demonstrated by its extensive and complicated entry on Wikipedia, is not like material goods or physical property.

Theft of a song, whether it be by an illegal recording, a file share, or just playing it for money without having the right to, does not remove the value of the song from the rights holder. No matter how many copies of last night’s Best Picture are on dark net websites today, Miramax, the distribution company, still has as many prints in theaters today as it did yesterday.

This distinction, and the time that has passed while the RIAA and the MPAA make the argument that theft of intellectual property is the same as stealing your bicycle or lawnmower, has created a window of opportunity for others to build the case that the exclusive exploitation of IP is not a community good, and in some cases, should not be protected. These are not wild eyed counter culturists, but democratically elected members of Sweden’s Parliament in some cases.

This isn’t just semantics. Many members of the industry live and breath the MPAA interpretation. This version of reality makes the promise of prevention of theft seem possible, despite the repeated cracks of the various schemes to make it so.

The resulting belief in this notion of theft has led the RIAA to routinely send threat (see “Campus Attitudes: a microsample”) letters to the nation’s institutions of higher learning, based upon statistics gathered by web crawlers. And based upon that metric – number of letters sent out- file sharing of music by university students is falling. Does that make the strategy a good one? Not if making the industry a pariah among the young matters. Does the metric really mean less theft, or that students have found a different channel to use for file sharing?

The ‘opportunity cost” of pursuing copyright infringement in this manner, which is both pursuing a mythical ‘silver bullet’ of preventative technology, and generating distrust with customers, instead of enforcing the rights of copyright holders against enterprise thieves, is unknown. Using the internet publishing space as a metric, the MPAA and the studios have expended years making themselves among the least popular corporations in our economy.

Enforcement is a proactive, positive solution that will put content holders in a position that builds trust with customers, makes catching IP thieves easier, as well as supports convictions. USVO’s SmartMarks are part of this positive response to the challenge. We look forward to making sure that the night after the Oscars, the movies you want to see will be available in a free and trusted marketplace, to watch when and how you want, in a fair exchange with the rightsholder.

While we are enjoying the most prosperous era in history, confidence in the economy has ebbed to where politicians were able to cobble together a ‘stimulus’ package in a few short weeks. It is interesting to take this pause in the evolution of our society to take stock of several things. As this page is hosted by USVO and focused on content security, I won’t take up much space on the amazing ironies that this prosperity has created beyond noting that where a few decades ago, poverty in this nation was paired with hunger, today it is correlated with obesity.

Instead let’s do a bit of investigation into the world of content security, specifically that of films, or motion pictures, or well video. Depending on what you enter, the terms matter, at least to Google. The search “film piracy” brings you a Wired article from December 2003 on the theft of “Lord of the Rings”. While not stating that the original was shot on a camcorder, the article does quote the MPAA’s assertion “that about 90 percent of films on peer-to-peer networks originated from camcorder versions of films.” At the time of the publication, this was not a crime in California, or in many other states.

The top of the pile result for the Google search for “movie piracy” is also an article. This one from July 2004 PCWord magazine also cites the MPAA, “The Motion Picture Association of America warned against a “growing global epidemic” of movie piracy over the Internet this week, citing a survey of Internet users in which nearly one in four respondents had illegally downloaded a movie online.” In this article an actual research survey was conducted by an independent consumer and market research company, not a criminal expert.

The first result in the Google search for “Video Piracy” is a “Brief Background in Video Piracy” from a Stanford course project by three undergrads on how the DMCA is likely to fair in curbing piracy. They too cite the MPAA for information. One of my favorite bits is from their conclusion “There is something decidedly unethical about a law that allows corporations to tell you where you can watch movies or listen to music, how frequently you can do it, and what movies you can watch.”

The second result on the Google search adds some perspective on the issue. Three years ago CNET News.com featured an article titled “The answer to video piracy?” Time passed is sufficient to illustrate that the answer, whatever was suggested, failed to stop piracy. The suggested solution, proven in the roll out of cable delivery in the 70’s, has not been implemented. The various interested entities, including the studios (“content providers”) and technology vendors can’t agree on how to protect them from theft.

The fact is that the studios are big enterprises with many different channels by which they realize return on content. They both produce, and acquire from others the content. They invest in content, partner with other investors, shift risk totally to others, and then buy content from still others. They all are involved in theatrical productions, television, both live and pre produced, radio, print, and often with multiple units involved in each form. They sell retail products to consumers, clothing and accessories as well as content, wholesale product to other distributors, and discount clearance items when appropriate. They are the big dogs in a very small parade of major media companies. It isn’t surprising that they rarely agree, in particular with technology based companies dependent upon content to make their technology relevant.

As a long time participant in that marketplace, I can tell you that these are the companies one wants to do business with if volume, profitability and longevity are part of the business plan. That said, being partners with these companies means that one is always in the effect of their thinking, calendar and internal issues. Every vendor to the major studios has a love hate relationship. They love having some of the most recognized companies in the world as clients, often servicing a hit show or title, enjoying the ride of association with culturally significant impacts.

The frustrations can be that these are not transparent operations. Highly competitive, both internally and externally, they are not optimized for efficiencies financial or human. Few of the studios publish organization charts, or indexed by department phone directories. Keeping the structure obscure helps the more experienced weather the challenges of aggressive newcomers. Hollywood, being a vampire for the young both on and off screen, has an appetite for ambitious energy, and only the savvy veteran stays above the incoming tide.

So while we at USVO can only tell you a little about our major studio client, we can tell you that we love having them, and are frustrated that we can’t tell you more. Such is to be expected when serving the giants of any industry, we intend to stay in the territory and take what comes with it. History has shown that it pays off.