The Problem Isn't Middlemen, It's Monopolies

from the ditch-the-monopolies dept

I love middlemen. Yes I do! Most indie filmmakers I talk to complain about distributors and "middlemen," but they're missing the real problem. Middlemen -- publishers, distributors, resellers -- can do excellent work. The problem is not middlemen; it's monopolies.

So many middlemen insist on monopolies, we've forgotten we don't need to grant them. They say that without a monopoly (aka "exclusive rights") they have no incentive to promote and distribute. Actually a monopoly gives a middleman no incentive, because no one is competing with them. Take away the monopoly, and the middleman has to compete with other potential middlemen (including the artist). Then they have an incentive to work. Rather than monopoly, they succeed on the basis of expertise (theatrical distributors already know how to track, ship, and manage prints), innovation (finding better ways to meet customers' existing desires and identifying new ones), and quality.

I'm very happy with the middlemen I work with. FilmKaravan, who distributes Sita Sings the Blues on DVD, promoted and placed DVDs in outlets and markets I was too lazy to reach. (They out-competed me, which is great!) GKids, who distributes the film theatrically East of the Mississippi, manages the prints professionally, finds great new venues for it, and promotes it cleverly without overspending. These middlemen do their jobs very well, and I'm grateful for the services and value they add to the film. They have my non-exclusive Endorsement.

I'm only unhappy with one middleman, an overseas distributor who uses their monopoly to block access to the film rather than facilitate it. For example, a professional conference held by their country's national television company, and attended by important players in the film industry there, sought a one-time conference screening of Sita, but the distributor refused to lend the local print. Lending it would have helped the film tremendously, but the distributor was focused on immediate money instead of on the long-term good of the film. Because I had foolishly granted this distributor an "exclusive endorsement" in their territory, there was no one else in a position to lend a print. (What distributor would take up a film knowing that the filmmakers' imprimatur had already been granted to a competitor?)

My endorsement wasn't a mistake. I want that distributor to make money, and lots of it! But endorsing exclusively was a mistake: although not as bad as copyright, it's still a kind of monopoly, and monopolies invite abuse. That is their nature. I now know that to get good work from a middleman, I can't grant them a monopoly. They need to feel that if they let an opportunity slip by, another middleman may jump at it. Business competition improves business performance; some say it's an essential incentive.

Middlemen will only have monopolies if artists keep granting them. They're not going to give them up on their own. It falls on us artists to simply refuse to grant these monopolies in the first place. A copyleft license sends a clear, simple, and non-negotiable message to middlemen that they need to innovate and compete to profit from the work. Only we artists can supply the incentives they need to do their jobs well; and we can only do that by refusing monopolies.

A middleman without a monopoly is a great help to art and artists. Rather than abusing monopolies, they provide valuable services. The better they are at providing services, the more successful they become. Competition keeps middlemen on their toes, and eliminates the lazy and incompetent. Monopoly does the opposite.

In sum, the problem isn't middlemen, it's monopolies. Yay for middlemen! I love middlemen!


Reader Comments (rss)

(Flattened / Threaded)

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    interrobang!?, Dec 31st, 2009 @ 6:23pm

    i was just finking that this sort of thinking works on regular men too. if you have to men competing for a ladies attention they tend to really go at it with luxury gifts and sweet words. but as soon as a guy is chosen he tends to not try as hard and becomes complacent. ime just sayin.
    happy new year

     

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    The Anti-Mike (profile), Dec 31st, 2009 @ 7:44pm

    Congrats Nina for becoming an Insight Expert. I am not entirely sure what qualifies you as an expert (except perhaps an expert in spending money before understanding licensing) but hey, what the heck.

    . Because I had foolishly granted this distributor an "exclusive endorsement" in their territory, there was no one else in a position to lend a print.

    In the end, this seems a common theme in your stuff. You foolishly did something, and then except the world to change for you.

    It's the nature of the planet, maybe it will bend a little more for you in 2010.

     

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      Jari Winberg (profile), Dec 31st, 2009 @ 9:48pm

      Re:

      Nina Paley: It falls on us artists to simply refuse to grant these monopolies in the first place.

      The Anti-Mike: You foolishly did something, and then except the world to change for you.

      So artists = world? And her own actions would have solved the issue for her and you go saying she expects the world to change? You need to try harder to find something negative from the article. That one won't convince anybody.

       

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        The Anti Mike, Dec 31st, 2009 @ 10:04pm

        Re: Re:

        Don't listen to the impostor; he never learned how to read in troll school.

         

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          Pjerky (profile), Jan 1st, 2010 @ 9:44am

          Re: Re: Re:

          Wow Anti Mike, your an idiot. I agree with Jari, she doesn't expect the world to change. She is simply showing what she has learned from her own mistakes.

          Nina was showing that by using an exclusive contract in another country she wasn't able to promote her movie as much as she wanted because the distributor that had the contract was unwilling to promote it in all ways best suited for her movie. This unwillingness was because, with the distribution rights locked in, they had no incentive to do anything but the most profitable things for them.

          Imagine this, lets say your company hires a marketing firm to promote your business, but that firm has an exclusivity clause that prevents you from using multiple firms. Now all the firm has to do is promote as much as the contract requires, no more and no less. So their only incentive is to fulfill the contract plus anything that will gain them more profit (such as per lead profits from internet leads).

          They no incentive to provide good service nor go the extra mile for you. However, if they had to compete to keep your business on a regular basis then they would have to work as hard as possible to keep your company happy and they would have to remain competitive in their pricing.

          So "The Anti Mike" stop trolling Techdirt, you are not appreciated.

           

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      Matthew Cruse (profile), Dec 31st, 2009 @ 10:24pm

      Re:

      Missed the Point again TAM. She does not expect the world to change for her, she was compare/contrast two different types of agreements with two different middlemen. One had a non exclusive agreement and did great things. The other had an exclusive agreement (monopoly) and sabotaged her work in the long term for a short term gain. Merely pointing out the benefits of non-exclusive agreements

       

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        The Anti-Mike (profile), Jan 1st, 2010 @ 12:17am

        Re: Re:

        No, I caught her point, but I think she misses the greater point: She is the author of her own miseries. Accepting a contract that removes any promotional uses by the creator is about the same as shooting yourself in the foot. Don't blame the guy next to you, you did it to yourself.

        Further, we don't get the other side of the coin: why this deal, and not another? What are the benefits? Was this the only distributor willing to pick up the movie in that country at all?

        A long story, but it's missing key information.

         

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          Richard (profile), Jan 1st, 2010 @ 7:12am

          Re: Re: Re:

          "I think she misses the greater point: She is the author of her own miseries. "

          Actually that's exactly what she said.....

          "......endorsing exclusively was a mistake: "

          she didn't miss anything - you did!

           

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            The Anti-Mike (profile), Jan 1st, 2010 @ 7:52am

            Re: Re: Re: Re:

            Richard, I saw that, but her whole story is one of misery that she herself created. She attempts to blame other parties, but in the end, it's her signature on the bottom of an exclusive contract.

            She is doing what many people do these days: Always trying to find someone else responsible for their problems. "I know I did wrong, but if this other person had just done this, I would have been fine". It's a crock, because there is little or no acceptance of responsibility. It doesn't matter what the distributor did or did not do, that isn't where the harm occurred. The harm occurred when Nina Paley signed an exclusive contract with no right to show her own work by herself.

            It is always someone else fault. Is nobody responsible for their own actions anymore?

             

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              Richard (profile), Jan 1st, 2010 @ 8:15am

              Re: Re: Re: Re: Re:

              I read your comment and then I read her post - and then I read your comment again and I just can't see how you can possibly be reading the same post that I am.

              Her general tone is positive.
              The only negatives that I can find are self deprecating ones.
              She doesn't "blame other parties" like you claim.

              I conclude that you are working to a set of assumptions - and if the facts don't fit your assumptions then you ignore them.

              I expect you will do the same with this comment too - so it will be the last response I will make to your comments - it is just impossible to have a discussion with someone who has such a blatant disregard of the facts as you appear to have.

               

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                The Anti-Mike (profile), Jan 1st, 2010 @ 9:11am

                Re: Re: Re: Re: Re: Re:

                "The Problem Isn't Middlemen, It's Monopolies"

                The problem isn't middlemen, it's people who sign contracts without realizing the terms.

                 

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                  Richard (profile), Jan 1st, 2010 @ 9:39am

                  Re: Re: Re: Re: Re: Re: Re:

                  One last time - couldn't resist you set yourself up sooo well...

                  The problem isn't middlemen, it's people who sign contracts without realizing the terms.

                  i.e. the problem isn't burglars - it's people who don't secure their houses properly....

                  (could have done the "raporist" version - but I think that it is in bad taste...)

                   

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                    The Anti-Mike (profile), Jan 1st, 2010 @ 1:20pm

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    Again, sorry, but Nina CREATED the monopoly (by granting it). All through the time frame of this movie she has shown to be making mistakes (first on licensing the music, and now on how she licenses the movie).

                    Her experiences show exactly how you end up with monopolies to begin with, people either not reading all the fine print, or not thinking past "I got distribution".

                    She is the author of her own misery in this case, yes she admits it, but the title of the post and such isn't right: She basically did the contractual version of "moron in a hurry", and complains about the outcome.

                    *sigh*

                     

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                      Marcus Carab (profile), Jan 1st, 2010 @ 1:52pm

                      Re: Re: Re: Re: Re: Re: Re: Re: Re:

                      You keep trying to make it sound like she's whining or something, but I'm sorry, I just don't see it. She's not "complaining", nor is there any "misery" - she explains why the outcome of the situation was not ideal from a business perspective, and why she should have done differently.

                      Nothing about this post is a complaint! It's a piece of advice (with the key line in bold, I might add) to other artists, making her case for why she doesn't think it's a good idea to grant monopolies to distributors:

                      It falls on us artists to simply refuse to grant these monopolies in the first place.

                      That's all this article really asserts, along with her personal argument for why she believes it's true. And all you seem to be able to do is make fun of her with these weak attempts to frame her as a fool who got played and is now complaining about it, absolutely none of which I see in the post... what is the matter with you?

                       

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                        The Anti-Mike (profile), Jan 1st, 2010 @ 11:56pm

                        Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                        I am not trying to make it sound like she is whining, I think it is more like a "woe is me" tale from someone who seems to have a whole bunch of these woeful tales to tell.

                        My take:

                        The Problem Isn't Middlemen, Isn't Monopoliesm It's People Signing Contracts Without Understanding Them.

                        Monopolies in entertainment are only created one way, by signing on the dotted line.

                         

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                          Anonymous Coward, Jan 2nd, 2010 @ 12:38am

                          Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                          And the quote is pointed out again:

                          "It falls on us artists to simply refuse to grant these monopolies in the first place."

                          All you're doing is repeating what she's already written. Good job, you can parrot.

                           

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                            The Anti-Mike (profile), Jan 2nd, 2010 @ 6:51am

                            Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                            It isn't to parrot, geez, you guys are dense sometimes.

                            The story isn't structured to raise that point, it's to show how evil monopolies are. But she buries the concepts of how they are created.

                            She created her own monopoly hell, and that is key. You would think that an "insight expert" wouldn't do something so silly.

                             

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                              Marcus Carab (profile), Jan 2nd, 2010 @ 8:35am

                              Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                              Mike, read these lines from the article, and explain to me how the point of her own responsibility is "buried":

                              - So many middlemen insist on monopolies, we've forgotten we don't need to grant them.

                              - I had foolishly granted this distributor an "exclusive endorsement"

                              - My endorsement wasn't a mistake. ... But endorsing exclusively was a mistake

                              - Middlemen will only have monopolies if artists keep granting them

                              - It falls on us artists to simply refuse to grant these monopolies in the first place.


                              Seriously, I don't see your point and I don't think anyone else does either. If I'm dense then you must be gaseous.

                               

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                                The Anti-Mike (profile), Jan 2nd, 2010 @ 4:22pm

                                Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                                Just read the title. 'nuff said.

                                 

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                                  Anonymous Coward, Jan 2nd, 2010 @ 7:43pm

                                  Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                                  Or, you know, you could read the post. But you never bother with that, I know.

                                  Don't fall in that hole; you're digging it pretty deep.

                                   

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                                  Marcus Carab (profile), Jan 3rd, 2010 @ 7:22am

                                  Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                                  No Mike, not "nuff said". You have to actually respond to the points I am raising if you want to be part of a discussion (remember how you said we should all value your opposing point of view and the way it makes us think?)

                                  So since you have no responses to me beyond "read the title", I will take it as your assent that I'm right, and that your argument here has no foundation except for a 6-word title that you don't like the phrasing of.

                                   

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                              Marcus Carab (profile), Jan 2nd, 2010 @ 8:36am

                              Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                              Oh great, Anti-Mike succeeded in breaking my brain. I called him "Mike"

                               

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                          Marcus Carab (profile), Jan 2nd, 2010 @ 8:30am

                          Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                          I am not trying to make it sound like she is whining, I think it is more like a "woe is me" tale

                          You must love semantics, because to me "whining" and "a 'woe is me' tale" mean just about the same thing.

                           

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                  Marcus Carab (profile), Jan 1st, 2010 @ 11:46am

                  Re: Re: Re: Re: Re: Re: Re:

                  It's starting to get comedic AM. I mean, come on! This post does not attempt to "blame" misery on anyone - she disagrees with a decision made by a distributor, acknowledges that it was her own mistakes that made the decision possible, and her main message isn't about complaining or blaming - it's about telling the story so other people can learn from it.

                  I am really having trouble seeing what you find objectionable here...

                   

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                    TDR, Jan 1st, 2010 @ 1:04pm

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    There isn't anything. He just wants to think there is. That's how he operates. Disagreement without thought.

                     

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                      Richard (profile), Jan 1st, 2010 @ 1:57pm

                      Re: Re: Re: Re: Re: Re: Re: Re: Re:

                      Anti-Mike is the black knight from Monty Python and the Holy Grail.

                      We have cut off his arms and legs (metaphorically speaking in terms of the debate) and he keeps pretending that he's OK and that we should come back and "face what's coming".

                      Anti-Mike has lost this argument several times over and still keeps pretending he hasn't by ignoring the facts.

                      What's he going to do - bleed on us?

                       

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                        Vincent Clement, Jan 1st, 2010 @ 7:51pm

                        Excellent

                        That made me chuckle.

                        the Black Knight continues to threaten Arthur despite getting both his arms and one of his legs cut off

                        Black Knight: Right, I'll do you for that!
                        King Arthur: You'll what?
                        Black Knight: Come here!
                        King Arthur: What are you gonna do, bleed on me?
                        Black Knight: I'm invincible!
                        King Arthur: ...You're a loony.

                         

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                        Fred McTaker (profile), Jan 2nd, 2010 @ 3:37am

                        Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                        I'm keeping score now.

                        Richard: +5

                        +1 for each great and true post so far. Monty Python quotes FTW!

                        Anti-Mike: -7

                        -1 for each idiotic attempt at trolling.

                        Nina Paley: +28

                        +1 for each comment, because she garnered the reaction, whatever the nature.

                        You lose Anti-Mike, in more ways than I can count.

                         

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                  The Groove Tiger (profile), Jan 4th, 2010 @ 4:02pm

                  Re: Re: Re: Re: Re: Re: Re:

                  The problem isn't Monopolies, it is granting those Monopolies that is the problem! Blah blah blah.

                  The problem isn't bad food, it is eating the bad food that is the problem! The problem is letting food go bad! The problem is the person who let the food that is bad now!

                  The problem isn't that people are bad drivers, the problem is that people skills at driving are bad!

                   

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      Anonymous Coward, Jan 1st, 2010 @ 1:37am

      Re:

      PLEASE ignore this (rude!) idiot so he'll go away.

       

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    SIMPLE, Jan 1st, 2010 @ 12:18am

    BAN corporations owning other peoples copyrights

    BAN corporations owning other peoples copyrights

     

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    Richard (profile), Jan 1st, 2010 @ 7:16am

    but lobbying by middlemen has created the monopolies

    Middle men as such may not be the problem. However the particular set of middlemen that we have ARE responsible for creating the default monopolies that are written into law since they have been lobbying for them for centuries now.

     

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    vivaelamor (profile), Jan 1st, 2010 @ 4:10pm

    Middlemen done right.

    I always point to Magnatune.com as a good example of a middleman service done right.

     

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    Chris in Utah (profile), Jan 1st, 2010 @ 8:56pm

    Bares repeating Mike

    Re:
    on Debate Heats Up On Liability For Buggy Software: Will Buggy Games Be Illegal?

    "Your saying a studio that goes to a publisher. There are plenty of studios that publish there own.

    In comparison look at the music industry. Its why your seeing a heavy trend of artist going indie. We're all tired of cigar smoking middle men getting the majority of your profits.

    I think society has forgotten how a well made product is released. It starts in a town and expands to the state and expansion of sales profit equals expansion of product distribution. This way you minimize loss off a bad product and not live off of somebody else's capital (bubble economy).

    At least these days you got the internet to go to town from that to full blown tweaked server hosting your software.

    Man do I miss BullFrog."

    This was my thought on middle men. I wonder if I was your muse for this article. Mike, I do understand the need for a publicist, but that is delegation duties for an artist of any type.

    Personally, the issue of a bubble economy is becoming all to apparent. Housing and our federal government in the U.S.

    Don't get me wrong we need loans for initial innovation and later for Research and Development. After that you do not need any more funds for distribution. Just a good publicist to expand your market share not eat 50% of the products profits.

    There's a big problem with the cigar smoker Mike, it's that that 50% gobbled by the cigar need to be used to expand a product should be going to not only distribution but innovation as well.

     

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    Chris in Utah (profile), Jan 1st, 2010 @ 9:11pm

    1000 pardons Nina

    Ye know I should have looked at the author. But Mike has yet to let us edit comments ;)

     

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    Anonymous Coward, Jan 2nd, 2010 @ 8:26am

    In all candor it has never occurred to me that a contract is susceptible of being viewed as a monopoly.

    This raises a subtle point that many unfamiliar with copyright law do not fully appreciate. It is not at all a difficult task in many instances to substitute contract law for copyright law, with the former giving largely free reign for the inclusion of provisions that can make people long for the "good ald days" when copyright law and its associated legal doctrines kept overreaching in check.

    Via contract the entire notion of "fair use", a mandate pertinent to federal and state action to conform to the First Amendment, can be ground into dust because only private parties are involved. The First Sale Doctrine can lose all of its vitality by the simple expediency of appropriate contractual provisions. Current privacy rights can be sidestepped with alacrity. Copyright law, now the exclusive province of federal law, could be supplanted the contract law provisions of state, as well as those of US commonwealths, territories, and possessions.

    In fact, perhaps the only significant check on overeaching contractual provisions would fall to the appplication of federal antitrust law, a not altogether beneficial peg upon which to hang one's hat.

    It is disappointing that in their zeal to deride copyright law and seek its wholesale elimination such advocates fail to take into account these and other legal means that in large measure are kept in check by the preemtive force of federal copyright law, not to mention that its elimination would raise the spectre that each state (a sovereign entity) may very well be able to fill the void by enacting 50+ different versions of state conferred equivalents of copyright. In fact, prior to enactment of the 1976 Copyright Act state legislation and common law was permissible.

    One should be careful what he/she asks for regarding US Copyright Law. The cure might very well prove to be far worse than the current state of affairs.

     

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      Chris in Utah (profile), Jan 2nd, 2010 @ 12:18pm

      Re:

      Wait what?

      Your telling me that people should not govern themselves where ever they are? Are you actually going to sit there and tell me that a fed is better then the state rights?

      Did you forget your history lessons bud? Oh wait, that's right they don't teach how this country was founded anymore.

       

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      Chris in Utah (profile), Jan 2nd, 2010 @ 12:23pm

      Re:

      Forgot one thing. The only reason we have a problem with health-care these days is because the insurer company cant distribute a good product across state line.

      This prohibition, you better believe it its prohibition in the worst case of the word, of inner-state commerce is heresy! The solution is simple; Allow for inner-state commerce to freely market a cheep solution.

       

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      Mike Masnick (profile), Jan 4th, 2010 @ 1:09am

      Re:

      This raises a subtle point that many unfamiliar with copyright law do not fully appreciate. It is not at all a difficult task in many instances to substitute contract law for copyright law, with the former giving largely free reign for the inclusion of provisions that can make people long for the "good ald days" when copyright law and its associated legal doctrines kept overreaching in check.

      Hmm. I don't see that at all.

      Via contract the entire notion of "fair use", a mandate pertinent to federal and state action to conform to the First Amendment, can be ground into dust because only private parties are involved. The First Sale Doctrine can lose all of its vitality by the simple expediency of appropriate contractual provisions. Current privacy rights can be sidestepped with alacrity. Copyright law, now the exclusive province of federal law, could be supplanted the contract law provisions of state, as well as those of US commonwealths, territories, and possessions.


      Not at all. Such things would only be an issue to those agreeing to the contracts. You could not enforce those contracts on third parties.

      One should be careful what he/she asks for regarding US Copyright Law. The cure might very well prove to be far worse than the current state of affairs.

      And thus, we should shut up and take it? Yup. That's convincing.

       

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        Anonymous Coward, Jan 4th, 2010 @ 8:10am

        Re: Re:

        Are you really so close-minded that you are unwilling to entertain observations/comments based on experience in matters such as this?

        Copyright and patent law are subject to common law doctrines and statutory constraints that have no applicability in ordinary commercial contracts. In fact, contracts being almost the exclusive provice of state law, with but a few exceptions (antitrust being one of them) contracts are fertile ground for overreaching that is forbidden under copyright and patent law by federal preemption.

         

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          nasch (profile), Jan 4th, 2010 @ 9:44am

          Re: Re: Re:

          Mike's point (I think) is that if Nina Paley signs a contract with Middleman Inc., that has nothing to do with me. Regardless of the terms of that contract, what I can do with her film is still governed, at worst, by copyright law.

           

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            Anonymous Coward, Jan 4th, 2010 @ 10:26am

            Re: Re: Re: Re:

            Not necessarily true. Restrictions on transfer can be imposed. Intended beneficiaries of contractual provisions can be inserted. Liquidated damages can be specified. Indemnity provisions can be added. Etc.

            The point to be made is that contracts are not a panacea, and in many instances may result in an outcome far worse than is associated with a typical copyright infringement action. Please note that the operative word is "may" and not "will". I can envision circumstances where there would be little, if any, practical difference. However, I can also envision cirsumstances where the outcome under a contract theory could be far worse.

             

            reply to this | link to this | view in chronology ]

    •  
      icon
      The Groove Tiger (profile), Jan 4th, 2010 @ 7:26pm

      Re:

      Am I to presuppose that the grandiloquence of your sesquipedalian demeanor is purported to obscure the actual significance of your polysyllabic commentary, to the rest of us lacking in ostentatiousness of our pleonasic, and stuff?

       

      reply to this | link to this | view in chronology ]

  •  
    identicon
    my 2 cents, Jan 3rd, 2010 @ 3:16am

    remove monopolies no artist would treat you this way

    yea when you ahve the copyrights of a million people all you need to do is keep screwing the public that gave you the right
    if your one person you really would not treat people the way they do, cause peeps would just go elsewhere.

    CAPITALISM is ABOUT COMPETITION

     

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  •  
    identicon
    NullOp, Jan 3rd, 2010 @ 6:08am

    values

    Basic human nature fuels the want for monopoly. We don't want competition; not for food, mates or a living. Granting a middleman exclusive rights simply says "sell it if you can, but if not, then the work itself must be bad." If multiple sources for a work are available then free-market rules apply and, oh no, we shouldn't have that.

     

    reply to this | link to this | view in chronology ]

    •  
      icon
      The Anti-Mike (profile), Jan 3rd, 2010 @ 11:35am

      Re: values

      Monopolies in distribution are a double edged sword.

      In theory, competition should lead to lower prices, and it often does. But competition also often leads to financial losses for one or more of the competitors, which in turn leads to either competitors leaving the marketplace or being merged together. Think Sirius and XM. It happens all the time. Without media ownership restrictions, some market places in the US would see all of their radio, TV, and newspapers controlled by a very few groups.

      The reality is that sometimes a monopoly is the best financial arrangement that leads to the best market conditions: a stable market place.

      Let's say Nina signs 5 different distribution agreements for a single country. The costs for each one (and the dilution of sales) means that the product cost to the consumer is likely higher, or the payout to the artist is distinctly lower. There is potential that a monopolistic market, where the competition is product versus product rather than supplier to supplier might actual lead to better market conditions for everyone involved.

      How? The monoplistic distributor knows they will get 100% of the sales. Their costs are spread over more product, so their unit costs are lower. They can pay the artist more, they can charge a little less, and still make much more money than they would in a competitive situation.

      Some would say this allows for significantly higher prices because of the monopoly, but it doesn't work out that way because there are many movies in the marketplace, which means there is competition, just in a different place. Nina's movie has to compete with other more commercial products. Thus the price is market dictated.

      It's like anything. If you concentrate on a single point, you can see only monopoly. But it is a monopoly in a competitive system, which keeps it in check.

      It's like Mike's infinite distribution theories. If you look at them closely you can make the mistake of thinking that music or movies are an "infinite" product. But when you step back a couple of paces, you realize that movies and music are in fact a VERY finite item, with only a limited amount of new music and new movies released each year. It's the reasons that supply and demand still applies, just on the larger scale rather than in the narrow zone of distribution.

      It's the reason the public generally still values the product, and are mostly still willing to pay for it.

       

      reply to this | link to this | view in chronology ]


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