The Wicked and Dissembling Glass

Photo by Yaroslav Gerzhedovich

Last week, MPAA CEO Christopher Dodd spoke in San Francisco about fostering better collaboration between the entertainment and Internet industries.  Not surprisingly, two voices from the tech industry, TechDirt and the Electronic Frontier Foundation rang out with rebuttal. Mike Masnick, editor of TechDirt, called Dodd a “predictable dissembler” and proceeded to attack him personally for “lacking the vision” for his role.  The EFF posted this article, which strikes a more conciliatory tone that only makes for an even more insidious version of the proverbial pot calling the kettle black.

Now, I don’t have any strong feelings about the MPAA or Mr. Dodd per se.  I agree with some functions of that body, disagree with others, and am generally neutral on most of its activities.  In January, I wrote that I considered the protest against SOPA to be generally dysfunctional and that well-meaning people were being used as puppets by the Web industry, playing on a historic distrust of the media industry.  So, let’s clear one thing up right now:  as of this moment, the Web industry outspends entertainment on straight-up lobbying and on general PR, including the work of the EFF.  As an aside, I feel a little silly using the term Web industry when one company, Google, owns more than 90% of search and advertising worldwide.  Is there a U.S. company more monopolistic at this point in history?

Still, the Web folks continue to get away with portraying themselves as the underdog and also as the champions of free speech. Thus, the EFF article states, innocent of the slightest hypocrisy, “But let’s not forget that he [Dodd] serves as the chairman and CEO of one of the most influential lobbying groups in Washington, and that the actions of the industry have yet to back up his rhetoric.”  The writers of the article aim to sound open-minded while warning the reader not to trust “Dodd’s influence” despite the fact that the EFF’s Northern California friends enjoy far more influence, if lobbying dollars are the true measure.  Let’s also not forget that the Web industry has left more than its fair share of unfulfilled rhetoric on the table.

While Web-centric pundits continue to raise the specter of SOPA’s return as an emotional tug on our senses, we should remember some of the odd dissembling that came from the bill’s opponents on January 18.  Remember these slogans?  Good intention, bad law.  End Piracy, Not Liberty.  These reasonable-sounding mantras were designed for general consumption by a public that doesn’t follow these issues on a regular basis; and they imply that the Web industry agrees that online piracy is a problem but that SOPA and PIPA were not the solution.  The question remains, though, what solutions has the Web industry offered since declaring victory in the name of liberty over these bills?

So far, this industry has continued to pump out fears regarding any legislative action designed to protect copyright; it has increased its lobbying efforts and expenditures;  it has perpetuated the implication that copyright itself is anathema to free speech; and it has continued to insist that the solution to piracy is to embrace it as a business opportunity rather than to confront it as a threat.  These are not the actions of an industry looking to collaborate to solve a problem. Perhaps because it’s not their problem.

Both the EFF and TechDirt articles in response to Dodd cite a Congressional Research Service Report (see embed) that they claim makes Dodd out as a liar with regard to the importance of filmed entertainment as a component of GDP as well as the industry’s role as an employer.  But, as is often the case with data, truth is in the voice of the interpreter; and it looks to me as though TechDirt and EFF are reading what they want to see in the numbers.

[gview file=”http://illusionofmore.com/wp-content/uploads/2012/10/Wyden-Memo-from-CRS-on-Movie-Industry1.pdf”]

First, the entire report is based on best available information only from the major studios listed on Page 1.  Hence, the employment number is meaningless, because anyone who knows the motion picture business, knows that the lion’s share of work is done by people who never receive a paycheck from these companies.  The report does not reflect, for instance, the independent production companies who produce most of the filmed entertainment in the U.S.  A quick glance at a web page for just one company, Participant, lists 50 projects completed or in production. If we average a conservative but realistic 150 roles per project (not including actors or directors), that’s 7,500 contract jobs ranging from entry-level to high-paying through one production company since 2004.

The report also would not include a four-person, middle-income shop in NYC doing motion graphics this year for a TV network. These people most certainly are employed by the entertainment industry, and so are several hundred shops just like them around the country. Then of course, there are tens of thousands of industry professionals who support themselves, their families, and their communities by working variously on TV shows, documentaries, low-budget features, commercials, and industrials, all of which are affected by the overall health of the motion picture industry, even at the top rungs of the ladder.

In the TechDirt article, Mike Masnick uses the CRS report to simultaneously assert that the movie business is doing just fine (i.e. studio executive salaries) and, by the way, it isn’t really all that important to the economy (i.e. small contribution to GDP).  Studio CEO salaries, right or wrong, have very little to do with the overall health of the American film industry, especially in a discussion about the effect of online piracy on filmmakers of every size.

As for the significance of filmed entertainment to the economy, again, the GDP part of the report is narrowly focused on box office sales in the U.S. and Canada for the major studios listed.  This leaves out huge segments of economic value in the for-profit, industry as a whole.   (It should be noted that this not a flaw in the report itself, only in how the limited data is being used in this context.)

Strangely enough, Masnick sees no irony in the fact that he says, on the one hand, that the film business doesn’t amount to much economically and yet somehow, Hollywood manages to wield tremendous lobbying power.  In fact, were we to take this report as the only relevant data, it shows clearly that Disney, News Corp, Viacom, Sony, and Time Warner combined don’t make as much as Google all by itself.  So, ask yourself who’s likely throwing whose weight around in Washington?

SOPA and PIPA may well be dead, even in revised forms; but currently on life support, I believe, is the Web industry’s ability to keep playing David to media’s Goliath, all  the while crying, “freedom” in order to effect policy in its favor.  It won’t take too much longer for the general public to figure out that the members of the newly announced Internet Association are no more deserving of our blind trust than any other wealthy, vested interest. This is just business and politics as usual; and I would ask what wicked and dissembling glass makes the the wizards of Silicon Valley believe they’re always the good guys?

© 2012 – 2013, David Newhoff. All rights reserved.

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5 comments

  • This promises to be an interesting discussion; I’ll bite. 🙂

    Let’s start with your last paragraph: I have no idea what the wizards of Silicon Valley think, but other than with the SOPA/PIPA/ACTA like laws, they really haven’t gotten much public support. Judging from the European privacy laws for instance or the anti-trust investigations, politicians are far from being pro-big tech at the moment. I wouldn’t worry too much about people blindly following their lead.

    And then there’s new copyright legislation. I think this comes down to a number of questions:
    – What problem would you like to solve?
    – Is the new law effective in accomplishing that goal?
    – What is the price of implementing such law?
    – What gains will come from implementing such law?
    – Are the pains worth the gains?

    I’ll consider myself tech for a moment, even though my work has little to do with copyright infringement (I’m a chip designer in the telecom industry), and even though I’m am amateur musician.

    To tech industry (which often also relies heavily on copyright law), the goal is the reduction of copyright infringement. The problem is that we don’t see a practical way of accomplishing that. Look at all the TPM/DRM and lawsuits Microsoft has thrown at the problem, and how much have they accomplished? You take down one platform for infringement, and 10 more come into existence (how far have we come since Napster?). And it’s only getting harder. We can already hold practically every book and every piece of music ever written on a portable hard disk, and it won’t be long before video will join it. Not much longer, and that hard disk will become a USB stick. How do you stop copyright infringement from natural persons under such circumstances? So we come to what we CAN do: offer the best legal platforms possible, and trust that in general people will do the right thing if given a good and fair alternative to infringement. We’re not getting much help in that department from the entertainment industry though, who insist on all sorts of non-functional TPM/DRM solutions that only serve to make the legal alternative less interesting to customers, and/or licensing cost that far outweigh any profit that could ever be made. No wonder that companies like Google and Amazon are currently directly contracting artists, and do their own publishing.

    The entertainment industry on the other hand seems mostly focused on legislation that punishes and/or kills the current platforms used for infringement (often out of date before the court case has finished), and making third parties do the police work for them. The reasons the tech industry isn’t jumping for joy over such legislation are simple:
    – We believe it focuses on the wrong problem.
    – While the laws may be somewhat successful in accomplishing the goal the entertainment industry set, they will just shift the infringement to the next platform, so it hardly puts a dent in the actual infringement.
    – The price of implementing those laws are usually reasonable to pretty high, and most of the cost will have to be paid by the tech industry (and its customers).
    – The gains of the laws are minimal, since they don’t so much accomplish a reduction in infringement as a shift in platform.
    – As such, the pains are no where near worth the gains.

    Also, these laws generally pay little more than lip service to due process, allowing either for the government to directly take action without a court order, allowing for ex-parte decisions or giving third parties legal immunity for taking action on their own. That generally doesn’t sit too well with the public, nor with small businesses and start-ups and their VCs.

    On top of that, the wording of those laws are usually so incredibly bad, that they rarely accomplish what they should, but at the same time cause serious damage to technological innovation and/or the structural framework of the internet. DNS blocks were a particularly clear example of that, but the same goes for anti-circumvention laws. SOPA and PIPA were supposed to be focused on foreign companies, but due to bad definitions, both TPB and MU would have fallen outside the scope of the law at that point in time (TPB later got a .se domain, and would now have fallen within the scope of SOPA/PIPA).

    As for the online protests: it is without doubt that most of the people protesting had no idea what was actually in the laws the protested against. Sadly, judging from their own words, neither did many of the proponents. I did read the bills, and sadly all of the things sites like arstechnica and techdirt warned about were true (they also updated their protests as the laws were changed, unlike many other sites), so in the end I think the protesters were right, and it was good that these bills were killed.

    • Thanks, Pieter. I always appreciate your thoughtful responses, however, this piece wasn’t really meant to be a defense of legislation so much as a response to the PR game being played, which is for general consumption. Hence, my “blind trust” comment is aimed at the average user, who strangely believes that the Web industry stands for freedom of speech while the entertainment industry is all about censorship and control. I’m all for holding any party responsible for their actions, but this whole notion of little tech vs. big media is false by every measure and is even contradicted by people like Mike Masnick as mentioned in the post. Either Hollywood is a big player or it isn’t. When these folks want to scare people about government control, Hollywood is a monster lobby; but when the conversation turns to economics, Hollywood doesn’t amount to much. This is just one of many reasons TechDirt and the EFF do not meet the integrity test in my opinion.

      Interesting that you bring up Google and Amazon working directly with artists because this is what I have always felt would be inevitable. But let’s not kid ourselves. If Google Studios replaces Warner Brothers, it’s very likely going to work according to practices that exist right now, except for the fact that Google could end up owning the production, distribution, and the revenue stream. This hardly sounds democratizing to me. This is a big subject and one that deserves more attention than I can give it right now (also I don’t have a crystal ball), but in a macro sense, I tend to see all companies in this fight as ultimately vying for the same thing — people’s attention — which is part of the reason I think it’s fought in the way it is.

      Hence, with this piece, I’m really addressing the overall methods of PR spin and the way tech mouthpieces continue to portray the Web industry. If we are ever to have productive dialogue on these issues, the general public has to stop believing that companies like Google are not 800lb gorillas deserving of as much scrutiny as retailers, manufacturers, and even media conglomerates.

      Needless to say, you and I don’t agree on the specifics of SOPA, and we’ve done a few rounds on that subject. Please don’t think me rude for not wanting to debate the specifics of legislation that is a dead issue. I firmly believe that abolition of copyright is the goal of many in (or at least near) the Web industry and that it wouldn’t matter how any piece of legislation is written. Hence, I’m focused on the language and tactics being used as we move forward, if indeed forward is the direction we are moving.

      • Well, it’s true that Hollywood has never been a financial giant compared to the tech industry. Their lobbying efforts however have been very effective in the past for two simple reasons:
        1. It is rare that the tech industry internally agrees on something.
        2. Until recently, most of the tech industry didn’t care one bit about lobbying Washington.
        A rather strong exception to number 2 are the telcos, who made lobbying into an art.

        I completely agree with you that Google, Apple, and Amazon, being companies, aren’t that likely to be that much better for artists in the end, unless we keep a very close eye on them. That’s why I think it’s important that the new copyright contract legislation makes it through the European parliament, to give artists stronger rights against publishers. Considering the incredible financial and market power of these three companies, I think such laws are very much needed, and soon. I also think that anti-circumvention laws should be repealed, because while they’ve had no impact on copyright infringement, they’ve given 2 out of these 3 a virtual monopoly in their markets.

      • In general, I think it’s a mistake to compare what most people think “Hollywood” is to almost any other industry. Film production at this point is highly diffuse, an each project is its own business entity, if you will. One film, properly funded, might employ 100 or so contractors for a period of time and then have an economic impact that ripples beyond the production itself. Obviously, all economic activity ripples out, or it wouldn’t be economic activity. My point is that media entertainment is an economic giant, if you look at the whole industry and not just at the major studios. Also, I wouldn’t assume that even the studios are necessarily any better at agreeing with one another than the denizens of Silicon Valley.

        As for lobbying, it appears to be the case that Web tech is really coming into its own in this regard, but efforts to change the political landscape to favor this industry have been in the ether since AOL and dial-up modems. John Parry Barlow’s “Declaration of the Independence of Cyberspace” is pretty old and remains embedded in the rhetoric we hear today.

        Beyond that, I can’t comment on pending legislation in Europe, but it sounds interesting.

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