Tag: Amazon

Dragon Box Sued by New and Traditional Film Studios

Picking up on the piracy-doublespeak theme of my last post, let’s highlight a favorite talking point among piracy advocates and apologists, the one that goes like this: If the major producers were just smart enough to make works available conveniently and affordably, people would stop pirating. That was always a lie. And it’s been proven a lie by the filmed-entertainment industry because a huge volume of content—more than any normal person has time to watch—has been made conveniently and affordably available, and yet piracy continues to increase. More than that, piracy has become so sophisticated that potential new users of pirate sites don’t have to be sophisticated at all.

Until fairly recently, a user generally had to be aware that he was visiting an infringing site to illegally download or stream a motion picture or TV show. If he was committed enough to his piracy, he’d have to follow some of the trends, know which pirate sites are doing what, invest in a VPN to hide his tracks, and spend some time searching for specific titles. Now, the process is made much easier with device-based piracy, often referred to generically as “Kodi Boxes,” after the name of one of the first products to enter this market. Essentially, these devices work like an AppleTV or Roku, but because they’re built on open-source operating systems, third-party “add-on” software was made available almost immediately to turn these devices into piracy boxes.

With add-on software, the user gets a Neflix-like graphic interface offering nearly any title he can think of for free. What the device does in the background is locate the target material on a pirate site’s server somewhere in cyberspace and then stream it from that infringing location via the box to the user’s screen. It’s all very clean and prettied up just like a legit product, requiring no more savvy than the use of a TV remote. It’s so easy that a small child can steal cartoons in her pajamas on Saturday morning without waking Mom and Dad for help.

Enter Dragon Box

On January 10, a complaint was filed in California District Court against developer Paul Christoforo and reseller Jeff Williams of Dragon Box—a device pre-loaded with piracy software and which is overtly advertised to consumers as a substitute for paying for cable, Netflix, Hulu, or any legal supplier of filmed entertainment, including online gaming. Plaintiffs, which comprise Netflix, Amazon, and six major motion picture studios, allege that Dragon Media Inc. intentionally facilitates and induces mass infringement of their works via the function of Dragon Box and the manner in which it is marketed to the public. Here’s the sample ad cited in the complaint:

That ad alone is sufficient to imply that this case probably won’t last very long—meaning Dragon Media Inc. won’t last very long because they don’t seem to have a claw to stand on. Advertising a device that delivers on a promise to enable consumers to watch subscription-based content without said subscription is about as clear-cut as selling bootleg DVDs out of a warehouse. I’m frankly surprised the defendants imagined they’d get very far with this one, operating out of Carlsbad, CA and blatantly promoting illegal access to just about every kind of media content available. Beyond the eight plaintiffs in this litigation, Dragon Box’s advertising implicates the sports and news interests, the cable and satellite providers, and so much more! Their interface even offer a menu selection called “In Theaters,” thus facilitating and promoting access to pirate streams of movies weeks or months ahead of their release on digital platforms. Because freedom I guess.

I imagine this case will conclude rather quickly with a summary judgment for the plaintiffs. It’s very hard to imagine Dragon Media sustaining a reasonable defense, let alone a prolonged one against basically the entire film and TV-producing universe, both large and small. In fact, because these devices are sold as a for-profit venture, providing a product designed to enable mass copyright infringement, the defendants should be glad not to facing criminal charges, rather than a civil suit. Of course, this probably won’t stop the piracy advocates from concocting some theory as to why Dragon Box is perfectly legal.

Piracy Boxes Change the Landscape

One of the reasons, piracy advocates convince themselves and others that their actions are harmless is that the damage done thus far tends to be relatively obscure. When piracy causes an independent filmmaker to lose the margin between profit and loss, her story is dwarfed by reports that Hollywood’s millionaires are still making millions. Or when producer Martha de Laurentiis blames piracy as a major factor in the cancellation of a hit TV show, and it’s just one anecdote in a market that is clearly replete with content.

The big picture gives lie, the pirates will say, to the premise that piracy does much harm at all. And this conclusion then justifies the claim that copyright enforcement in the digital age is inherently draconian. These are the climate-change deniers among piracy advocates—the ones who cannot imagine how relatively small examples of harm imply that piracy, like all forms of harm, has a tipping point. Clearly, the millions of dollars invested in new production depend on a substantial majority of the market not pirating.

Meanwhile, we are currently witnessing an expansive and speculative period when companies like Netflix and Amazon are spending a lot of debt capital to produce new works and grow market-share, with only their subscription/rental platforms as revenue sources. I stands to reason that if a piracy-box market attained a certain volume, this would be an even greater threat to the digital-only producers than it is to the traditional studios releasing movies in theaters etc.

And, no I don’t care about Jeff Bezos either. In fact, I’m not a fan. But I do care about the creative professionals Amazon has to hire to make the recent Golden Globe winning The Marvelous Mrs. Maisel, or whatever else they produce next. And it’s patently absurd to assume that production will simply continue to grow and innovate if piracy continues to increase toward the tipping point, wherever it may be.

In this regard, devices like Dragon Box have tremendous potential to accelerate piracy toward the threshold of more demonstrative market harm because these boxes make access to pirate sites so easy, seamless, and invisible. Presumably, a plug-and-play device marketed in this way will draw consumers who would not otherwise engage in piracy. And if it were allowed to mature, this is a dragon that could easily burn up all the crops. Fortunately, I predict this case will conclude rather quickly and serve as a deterrent to the next “entrepreneur.”

IP Skeptic Doctorow Notices a Problem

Last week, Cory Doctorow reported on Boing Boing that Amazon has a growing counterfeit products problem on its hands due to a change in company policy that allows Chinese suppliers to sell direct on the platform, bypassing domestic importers. If accurate, the issue itself is not very surprising. What is surprising is that Doctorow does not acknowledge—at least not in this article—that the counterfeit outbreak he describes is an inevitable result of the anti-IP agenda he has personally supported for years.

At some point, one must toss that copy of The Declaration of the Independence of Cyberspace into the digital dumpster and accept that the internet is not a magical cornucopia whose bounty will flow only so long as it operates beyond the legal limits of the physical world. To the contrary, the virtual increasingly has significant influence on the tangible. Doctorow describes the following:

“In late 2015, there were a spate of warnings about knockoff sex toys on Amazon made from toxic materials that you really didn’t want to stick inside your body. Now this has metastasized into every Amazon category. Sometimes its clothes and other goods that have weird sizing, colors, or poor construction. Sometimes its goods that generate no complaints, but are priced so low that the legit manufacturers can’t compete, and end up pulling out of Amazon or going bust.

Or it can be the worst of both worlds: super-cheap goods that make it impossible for legit manufacturers to compete, coupled with low-quality knockoffs that generate strings of one-star reviews from pissed off customers, meaning that even if the fakes were chased off the service, the sales will never come back.”

Sound familiar? Doctorow observes that Amazon is making money on transactions that may defraud—or even endanger—consumers while simultaneously causing permanent economic harm to legitimate suppliers. Isn’t that what many of us have been saying would happen when IP rights are not enforced online—that the “free culture” fiesta would extend beyond the supposed “harmlessness” of media piracy and eventually manifest as physical goods that can maim, poison, or kill people? Or at least just rip them off?

Unfortunately, the broader battle over IP protection on internet platforms has been distorted by a naive belief in the harmlessness of pirating entertainment media and the assumption that IP only serves the big conglomerates who produce those works. This feeds a sense that IP in general is just a “protectionist” regime for entrenched corporations to slow innovation. When it comes to physical goods, though, suddenly people begin to notice that protecting IP happens to protect consumers. This is why for instance trademark infringement is not a minor transgression. The knock-off Polo shirt won’t get anyone killed, but the knock-off Graco car seat certainly could; and when one distribution service like Amazon is vying to be the “Everything Store,” the possibility for widespread hazard becomes clear.

Presumably, Amazon will recognize the potential loss of consumer confidence if their counterfeit problem grows. The company could take mitigating measures akin to the effective, anti-fraud practices employed by eBay, which weighed heavily in its favor in a 2002 litigation with Tiffany over fraudulent products being sold on that platform. That Doctorow writes the following, however, is the real hypocrisy that needs to be addressed:

“Amazon is bending over backwards to refund customers who get bad fakes, but either can’t or won’t stem the tide of fakes themselves (I run into counterfeit editions of my books on Amazon all the time). It may be that it’s more profitable to offer refunds to customers who get bad products than it is to police the millions of SKUs that are pouring in now that Chinese industry has a direct pipeline to Amazon’s customers.”

Doctorow is criticizing Amazon for tackling the counterfeit problem one infringement at a time while failing to take broader measures to “police” its own platform to “stem the tide.” Is that not a familiar refrain copyright holders have been singing about mass infringement of their works on platforms like YouTube? I think it is. Either these platforms are under the control of their owners or they’re not. Either we want a digital market that protects suppliers and consumers, or we don’t. And we can’t have the former without shedding this naive premise that the technology itself obviates the need for intellectual property enforcement, or that IP is exclusively a barrier to access, information, or innovative services.

This subject actually refers back to the first article I wrote about any of these issues—one that appeared in December 2011 in Stars & Stripes supporting SOPA/PIPA because of their associated provisions designed to mitigate counterfeit products entering the military supply chain. You remember SOPA, right? Certainly, the cadre of “digital rights” activists won’t let you forget it as they chronically insist that all proposals to protect any kind of IP online are basically SOPA in disguise. (See Guide to Critiquing Copyright in the Digital Age).

Likely, nobody remembers that Tittle II of SOPA contained anti-counterfeiting provisions as did a companion bill to PIPA called the Combatting Military Counterfeits Act, authored by Sheldon Whitehouse (D-RI). These provisions and proposed amendments would not be protecting US consumers from Amazon-purchased counterfeits more than the existing statutes (Title 18) already do, but the bills did go further to protect against certain types of counterfeiting, and both bills expanded the principle that trafficking in counterfeits online poses a serious threat to consumer safety.

As Doctorow’s observations forecast, someone’s eventually going to get hurt. And unfortunately, that’s often what it takes for people to demand any kind of action. Or we could change the conversation before that happens.

Toby Mundy’s Defense of Books

I draw your attention to this wonderfully unsentimental yet passionate defense of books by Toby Mundy.  The publisher at Atlantic Books, Mundy offers his personal views on the devaluation of the medium for the thought-provoking site Medium.com.  Specifically, of course, he draws our attention to Amazon and its Wal-Mart-like ability to muscle publishers (and by extension authors) into lowering prices toward the existential threshold.  But from a cultural perspective, Mundy makes a sound plea to consumers not to confuse the book with the information it contains and, thus, not to be lulled by artificially cheap prices into setting fire to the basic economics that make a diversity of books possible.  Mundy writes:

“To price a book in the way information is priced is based on a rather one-eyed view of its value. As any textbook author will tell you, Information is undoubtedly part of a book’s utility. But that is only part of the story. A second purpose is to provide readers with transporting Experiences, usually from reading fiction. A third is to impart current Knowledge. When TS Eliot asked plaintively in ‘The Rock’, ‘Where is the knowledge we have lost in information?’ he was reminding us that these two things are not the same. Knowledge comes from the interpretation of information, experience and facts. It comes from the stories we tell about those things. Perhaps it is the capacity to create these stories that make us human.”

By contrast, Mundy opens his piece quoting Russell Grandinetti, Amazon’s VP for Kindle, who accurately says that books compete for our time with other things like Facebook, Twitter, and Candy Crush Saga.  But this somewhat common market view is only a half truth whose half-lie leaves out exactly the point.  There may be individuals who read books and play Candy Crush Saga, but I am confident that they do not value both equally.

See Toby Mundy’s full editorial here.