Terminally Incoherent: What is killing Holywood!

Saturday, July 16, 2005

What is killing Holywood!

Finally, a concise list of that is hurting Holywood today. I found this on boingboing.

1. Hollywood cannot control its marketing costs or star salaries. The growing importance of DVDs increases the "needle in the haystack" problem for any single film and thus locks studios into more marketing, creating a vicious spiral.
2. TV is now so much better, and offers artists greater creative freedom. Why watch movies?

3. The Internet is outcompeting cinema, whether at the multiplex or on DVD.

4. Big TV screens are keeping people at home, which lowers box office receipts. This also hurts the long-term prospects of many DVDs.

5. The demand for DVDs has fallen because movie lovers have completed their core collections, just as the demands for classical CDs have fallen.

6. The demand for DVDs was due to fall in any case. Forget the collectors, you buy DVDs to have a stock on hand so you don't have to run out to the video store on short notice. Now everyone has a stock. Stocks must be replenished every now and then, but there is no longer a large new cohort simultaneously building up a stock from scratch.

I think this is dead on! Yet we keep hearing how it is this "piracy" that is destroying movie industry. I keep telling this to people, but they don't want to listen. The so called "piracy" is convenient for Hollywood. Hell, it's the best thing that have ever happened to them! They have finally found a perfect scapegoat they can blame for everything that is wrong with their industry.

And look at what they did to our language - there was a time when "sharing" was a desired social behavior. Now all of a sudden it is a crime that can put you and your family in jail. There was a time when a pirate was a guy with a ship, an eye patch and a parrot. Now, pirates are usually 12 year old girls who use Kazza.

As you may know I have a huge issue with the usage of words like pirate. The PR departments of few big movie and recording studios managed to brainwash millions of people by subtle language manipulation. You may laugh, and call me silly but I tell you - words like pirate, intellectual property and trusted computing - are great example of what could be Orwellian newspeak - a language redefined to fit certain agenda.

10 Comments:

At Sun Jul 17, 05:35:00 AM, Anonymous said…

Obviously the movie industry would focus their outward attention on piracy. Them pointing out to us that piracy hurts them theoretically could help get people to cut down on piracy. But then poiting out to us how "TV is now so much better [...] why watch movies?" won't. Yes, that is a problem they need to deal with, but of course their not going to advertise to us that that's a problem.

Hollywood doesn't need a scapegoat. Assigning blame doesn't help them. Yeah, I agree, they do focus a bit to much attention on piracy, and act unreasonably like solving that would be a cure-all to their problems, but that doesn't mean piracy isn't a real problem for them. It's just unrealistic to say that people taking a product for free doesn't hurt the company.

The pirates aren't mostly 12 year old girls. Yes, there are a lot of young kids who download a few songs, but the people the idustries are going after aren't those people. Out of 261 lawsuits, only one was a 12 year old. And, when you really look at it, age doesn't simply excuse actions.

C'mon! "Sharing" is still a good social value, and "stealing" has always been a bad one. It's not "all of a sudden [...] a crime." The internet is fairly new, so it makes sense that only in the past few years have they started fighting internet downloads. They've been fighting other bootlegging before that!

I do agree with you that the word use is stupid. That's a problem that goes much further then this topic though. "Pro-life" and "pro-choice" and even "democrat" and "republican" are designed to sound like more pleasant things than they are.
At Sun Jul 17, 05:36:00 AM, Anonymous said…

Sorry, I forgot to sign that. I didn't intend to be a shady anonymous post.

-Dan Copulsky
dan@copulsky
At Sun Jul 17, 06:04:00 PM, Luke said…

Thanks for the comment :) You have some good points but I have to disagree.

First of all, I do not believe that you can "steal" a song or a movie. Stealing implies me inflicting a tangible loss for the victim. When I copy a movie, the distribution company does not loose that movie. What they loose is a potential sale. I have a problem with this because the loss of potential sale assumes:

1. That I wanted to buy this movie in the first place.
2. That, once I download the movie I will not want to buy it for my DVD collection.
3. That if I would not be able to download it I would definitely buy it.

Those are big assumptions, and estimating millions of dollars in lost revenue using these shaky assumptions is shady to say the least.

Furthermore, there exist licensing schemes which promote sharing, and making derivative works such as Creative Commons. And they do seem to work. Cory Doctorows released most of his books up to date under a the less restrictive CC license. His books went through several print editions, and were selling like hotcakes despite being available for download.

I would never discover his writing if it wasn't for the free download option. I read his books online, I bought them in the bookstore, and I will buy more in the future.

So yes - I took Cory's work for free. Did it hurt him financially? No - I bought the book anyway. Then I blogged about it, mentioned him on several discussion boards and recommended him to my friends. Thanks to the free download, Cory got at least 2-3 more book sales he would never get otherwise.

I agree my comment about 12 year old pirates was simply a nasty jab at the RIAA. I do understand that most of the people sued were older than that. :P

Still, don't you think that the social phenomena of file sharing is so wide spread because there is something wrong with copyright law? If ~80% of the public willingly commits a crime thinking nothing of it, then perhaps the law needs to be revised?

And I agree, sharing is still a good social value - but only in selected cases. For example, can you share your ipod without committing a crime? After all, the other person can copy your songs!

Can you invite your friends from work to watch your new DVD together? After all, it is prohibited to use that DVD for "public" viewing. These things still fall in the "fair use" category.. But *AA organizations seek to abolish the "fair use" completely.

These things will be as illegal as sharing files online peaty soon. That's why I think we need to stop this now.
At Sun Jul 17, 06:21:00 PM, Luke said…

Oh... Two more things - if you don't want to post as "Anonymous" there is an "Other" option - there you can put your name and a link (which I think can be either a website or a mailto: link).

Two - I also do not completely agree with #2 on the list. TV is not all that much better - TV is not that great :P

But in some way this is true. Nowadays people get way more excited about the stuff that's happening on the reality show x or y, rather than on the latest blockbuster movie. So I guess it does cut into the mindshare so to speak :)
At Sun Jul 17, 07:35:00 PM, Anonymous said…

Okay, the word "steal" might be the wrong word to use, but I only used it once, in reference to you using it. I think you using "share" also makes it very one sided though, becuase there's clearly a difference between me "sharing" my candy and "sharing" my movies. There's clearly a need for a word that just says what it is without leaning towards one side.

Sometimes free releases help people, in the end, become more successful. But that doesn't mean it's always better for them. (I know I've downloaded music before instead of buying it). Regardless, even if it could be a good move for people to start making more things free, it needs to be their choice to make them free. Artist's rights should be protected.

I think there may actually be laws in regard to what counts as "public showing." I know you're not allowed to charge money, but it's certainly completely allowed for you to gather your household together to watch a movie. I believe the line gets drawn also between the number of people. If you're talking about five friends coming, I belive that it's allowed. If you're talking about your 100 coworkers, then I don't think it is. Quite frankly, I agree.

"That's why I think we need to stop this now." Stop what exactly? Having artists be allowed to sell their own work? Yes, it would be nice if more artist starting choosing to give work cheaper and with less restriction, but they need to be able to profit off of their work.
At Sun Jul 17, 08:38:00 PM, Luke said…

I completely agree that artists should have the ultimate choice of what to do with their work. They should be free to charge whatever price they want. Sadly, the artists have the least to say in this matter. It's the record labels, the distributors who ultimately set the prices, and profit from copyright laws. Artists only get as much money as the labels deem is appropriate (and only when it does not cut into the profit margin).

What I don't want is for the *distributors* to tell me what I can or cannot do with the product that I bought. Fair use is on the brink of falling into nonexistence through DRM and trusted computing platform.

For example, fair use entitles you to make a backup copy for personal use (for example, burning a copy of the CD to listen in your car). With DRM this becomes illegal - because in order to burn the CD you need to circumvent the DRM which is a crime.

Let me give you another example - you and your friend chip both chip in for the new DVD set which costs say $60. Each of you pays 50% of the price. Now you can't cut the DVD in half but you can burn a copy. It would seem to be fair to do this since the other person paid the same amount of money as you did. Yet this is illegal.

Finally - the public viewing issue is even more shady. Say you have a big party/reunion/whatever. You invite bunch of people, and they decide they want to watch the new movie/game/fight on payperview. So you pass a hat around the room to cover the costs of paying for the viewing. Say there was 50 people attending... Did you break the law? Let's say you decided to charge the people for food drinks and etc as well - and you somehow made a profit on the party.

It seems reasonable scenario to me, and it could fall under the "fair use". But then again, using the "piracy" logic, you just made payperview company loose ~50 sales, and you made profit on it. In the eyes of copyright brokers you are nothing but a dirty, bootlegging pirate. And there are allot of people in Washington lobbying "fair use" out of existence.

This is what I think needs to stop. The slow de-legalization of fair use needs to stop now. I'm all for artists being compensated for their work. But I don't like to be raped by the distributors who seek to limit my rights as a consumer.

Yes, I could choose not to buy their products. I often do - as a rule, I don't buy anything with DRM on it. Yet, my refusal to buy their crap is promptly recorded as "sale lost to piracy".

Because I object to how they do their business I'm automatically branded as "pirate" and treated as criminal. This is why I say "piracy" is the best thing that happened to the entertainment industry in years. They can use it as an excuse for everything.

As consumers, we can no longer just choose not to buy their products because we object to DRM and silly copyright laws. If we do, they will assume we copy illegally, and use these numbers to legislate more restrictions, and explain the need for more DRM.

This is a never ending cycle - the more we object the more DRM will be implemented.

I'm really scared that one day I may tell my grandchildren (if I have any) that in my day we used to download movies from the internet - and they will laugh at me. Then they will go and report me to the thought-police, and I will go to jail :(

Anyways, thanks for posting :) Please don't think I'm attaking you or anithing. I'm actually enjoying this discussion.
At Sun Jul 17, 10:19:00 PM, Anonymous said…

It's a problem that people aren't respecting artists’ creations. The companies wouldn't need to try to stop people from making copies if people weren't using copies to give to all there friends for free. (And to say people aren't copying stuff would be ridiculous, I know what the people around me and even myself on occasion are up to).

This, unfortunately, puts those companies in a place where to prevent it, they have few other choices then to start building the technology that can't be copied. This ends up destroying legitimate, legal uses of copies. For example, I like to back up my music on the computer so I can listen to things without carrying my CDs all over.

Your solution, simply to stop DRM, ends up letting abuse continue. It makes it impossible for artists to collect the money due to them. The companies won't and simply can't do that.

We need another solution. Going along the lines of the free book downloads that encourage print books sales, free copies might be one direction to go, but for something like movies, if you don't pay that for the movie itself, there's little for the artists/companies to actually charge for. I know Grateful Dead/The Dead lets people make and distribute free copies of music, but they at least can make money off of the tours, and since they're a bunch of hippies, they're just not as concerned with money. And if there are artists who aren't complete hippies, they should have a way to ensure they get the profits they deserve.

I think there needs to be another solution. I agree, DRM is a threat. But just stopping it cold isn't going to create a working system.

---

And now, a minor argument:
In your example about splitting a DVD set in half, I agree that it should be illegal to make a copy for a friend who paid half. If people were intended to be able to get a copy of the set for half the price, the set would be priced half as high. On the other hand, if all the two friends need is one set to share (they are roomates perhaps), then the can split the price and have one set to share. What if I got 1000 people to each pay a penny of a ten dollar movie, should we each deserve a copy since we paid an equal part of the price?
At Sun Jul 17, 11:19:00 PM, Luke said…

Well, for one I don't see the artists getting poorer. The popular actors/singers get paid very well. Sharing does not cut into their share as much as it cuts into the profit margin of the distributors.

The less popular artists (ie. not Britney) already start to realize that giving away free copies is good for them. Even the more successful ones do this - case in point - Grateful Dead.

I agree - we all are social beings. We we copy stuff for friends and family. You do it, I do it, and your neighbor does it. If I did I street survey, I bet an overwhelming number of people would say they do it too. Why do we have a law that prohibits something that is a widely accepted social practice? People were doing this since VCR's became available, and somehow artists are not dying out of hunger.

This is a law that was lobbied by a special interest groups - record labels, and movie studios. These people built empires on a business model that aims to maximize profits, by raping and abusing the consumer.

Again, I'm all for compensating the artists for their work. Yet, there is this big conflict here. People like to share. People want to share. People WILL share whenever possible. If you need to stop people from sharing in order for your business model to work, then perhaps you need to rethink it.

Something should change. There must be a way in which we can both keep the artists/distributors happy and not suffer from DRM and other consumer-unfriendly practices. I don't know a perfect way to fix the problem here. I simply know that something needs to be fixed.

One way is promoting CC like licensing. Other is to educate people about how DRM is bad for the consumer. And DRM is evil - once you have a widely accepted DRM "standard" you can use it for further abuse.

For example, certain company which is very active in DRM field (Microsoft) may decide not to produce their DRM tools for a certain competing platform (Linux, Apple, Sun etc..). In effect they make it illegal to use anything protected by MS DRM on non MS platform. If MS DRM is used to protect 90% of the digital media then we have a big problem.

If you open up a new company making an excellent software which views/records media, your competitor who is also the DRM maker can refuse to give you the license for using their DRM technology.

Ultimately DRM technology is designed to allow pay-per-view or pay-per-minute systems. That is where all of this is heading. You buy a DVD for $40, and you need to pay $10 every time you press the play button. You paused it to go to the bathroom? Well, tough luck - that'll be another $10 for resuming the movie.

Stopping DRM does not mean that Entertainment industry will collapse tomorrow. There is no slippery slope here. It will simply mean that the entertainment industry will not increase their profits by some 300% in the next 10 years by implementing some crazy DRM related scheme, and we will keep the option to exercise fair use.

Regarding the DVD set argument: yes, I think if 1000 people paid a penny each they should get a copy. In my eyes, the DVD set distributors just gained 1 sale. This 1000 people probably would not buy this expensive DVD set if they had to pay the full price each. :P Of course one could argue that the company lost between 999 sales because of this. But I would say, that my assumption is equally good as their assumption. I assumed no one would buy it - they assume all would.

The point here is - information is different from physical merchandise. You can't easily copy and share a car or a laptop. But you can easily copy a movie, or a book. Therefore you can't sell information and then expect people not to copy it just as if it was a physical object.
At Mon Jul 18, 10:39:00 AM, Luke said…

Yay! I inspired a blog! Wohoo!

Yes, I admit. DVD example == Horrible logic - but I did that to prove a point. :P

The bottom line is - DVD is nothing but a data storage media. It is information. And the nature of information is that it is easy to copy. Once you "sell" your information to one person it is no longer "contained" - it enters circulation, and will be distributed whether you want it or not.

Preventing the information flow by introducing technological barriers in form of DRM is not a solution. It hurts me as a consumer because I'm no longer able to use my information in the way I want to (for example play the DVD on the Linux box). Why should I suffer, because you failed to account for "copying" in your business plan? This is not how free market is supposed to work.

If you want me as a consumer, and you don't want me to copy - then make me a better offer. Make it more convenient for me to buy from you! Make it so convenient that I wont even think about downloading!

For example - offer the song for download on your ultra-super-high-speed server. Make your product really good quality with no DRM, and make it affordable.

If offer me a download speed comparable to bittorent, and a high quality product at a price that is not painful to me I'd be willing to pay! Hell, I'd rather go to your brand name download portal, quickly find my movie/song and be guaranteed fast download. If obtaining what I want at your download site is less hassle than searching for a torrent, hoping that there is enough people downloading so I can get a good speed, and then hoping that what I'm downloading is not a virus - I'll pay.

On the other hand, if I have a choice between buying an expensive DRM'd DVD, or spending several hours online downloading a rip of that DVD with the DRM removed I will always choose the later.

I'm more than willing to hand over my money to whoever will offer me a better deal. *AA organizations offer nothing new to me - they threaten me, they try to force me to use their crippled DRM'd product. Why should I buy from them.

I'll admit it. Like most Americans I'm selfish and I'm lazy. I do not care one bit if Britney earns two million this year or twelve. I don't care if the CEO of record company x drives a porche or a honda. What I care is me, and my convenience.

What happened to "customer is always right"? When it comes to movies and music this somehow mutated into "every customer is a thief". I'm sick of that!

The way to solve the financial problems of holywood and music industry is to figure out a way to make buying a brand new movie/song more convenient than making a copy. If that means they need to forgo 50% of their annual profits - so be it. I don't care!

I think people in entertainment industry make way to much money as it is. These people built their fortunes on a business model which is no longer functional. Technology outgrew copyright law! And the technology will not stop. It will become harder, and harder to stop people from sharing unless they do something drastic. Something like trusted computing + super DRM. And then we will live in a world when your computer tracks how many times you watch a movie, and when you try to copy it it alerts the police.

That industry should take a financial hit at some point in order to function properly. Otherwise they will keep spending money on defunct DRM, and will keep lobbying legislation that favors them. And we as consumers will get screwed in the end.
At Mon Jul 18, 08:06:00 PM, Luke said…

Well, the fact that this or that company stopped being profitable at some point is only a symptom - it illustrates the fact that the entertainment industry is in trouble.

Why is the company in financial trouble? Because it costs way to much to make a good movie! Why?

Because the sallaries for actors got out of controll. Why is it that A celebrity needs to be paid N million dollars to star in a movie? Why does it have to cost millions of dollars to make nice cgi?

But again, why should I suffer because of that? Why don't we cut the insane sallaries in half? Why don't they figure out a way to save money without treating me like a criminal?

I'm not saying all copying is ok. I'm saying that fair use is important. I want to be able to copy stuff for my personal use. Maybe I want to play it on my Linux box? Maybe I want to take it with me on a trip but I don't want to loose the original? Maybe I want to use clips from the movie in my fan made music video? I know few people who love to do that! DRM makes all these things difficult if not impossible.

I'm not a business analyst - I don't have pefect solutions for them. But I should not have to do that. I don't need to tell Wallmart how to make their prices low, and I don't have to tell starbucks how to market their coffe! If I don't like their products or their prices - I can choose not to buy there.

They loose sales, and get the message. When entertainment industry starts loosing money, it is automatically assumed that the customers are stealing and hence they need to be punished some more.

See - I'm a customer. I have money. They want my money. They try to sell me crap. Now, I don't like crap - so I simply say: no! I will not buy this. I don't like DRM, and I refuse to pay for it. Give me something that I like, and I'll buy it!

Next thing I know, I'm branded a thief, and a pirate. The company threthens to sue me, because I probably copy stuff illegaly, and someone tries to guilt me into buying the crap anyway because the artists are starving.

Why should I buy product that I don't like? Because miramax has financial trouble? Screw them. Maybe they should spend less money lobbying, and developing DRM.

DRM costs money. Software needs to be developed. Hardware needs to be built. Encryption and encoding is neither cheep, nor easy. DRM'd products on average are more expensive to produce than plain vanilla ones.

Terminally Incoherent

Saturday, July 16, 2005

What is killing Holywood!

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