Barry Diller Tries To Explain To Ari Emanuel That He's Wrong About 'Piracy' Being A Problem For Movies

from the get-past-it dept

Ari Emanuel -- famous for being either the Hollywood agent that Jeremy Piven's Entourage character is based on or being the brother of former White House chief of staff, now Chicago mayor, Rahm Emanuel -- has been banging the drum about the "evils" of file sharing in movies for a few years now. Multiple times he's made it clear that he was using his connections in DC to tell the federal government it needed to pass strict new anti-piracy laws that would make everyone else responsible.

So, it's little surprise that he trotted out the same tired, uninformed line at a recent conference. What was a bit surprising was to see Barry Diller push back on this. Diller -- the same guy who insisted that "free content is a myth" -- apparently told Emanuel that file sharing was no big deal, and that it wasn't a "threat" to the industry. Diller seemed more "concerned" about Netflix, which seems pretty silly (yet another example of the entertainment industry hating on those who actually innovate).

However, the two of them had a little debate with Emanuel insisting "the government has to get involved":
Piracy “is going to happen,” said Diller. “They’re making films available for streaming. As we go, you will see more distribution digitally. Piracy is a risk, but it’s small.”

The chairman of WME countered with Hollywood's party line:

“You can’t say piracy is not an issue,” he said. “I don’t believe it’s going away, it’s a big issue. The government has to get involved.”
Of course, that ignores that the government has been involved. And it's been involved in a big bad way... and it's had almost no impact. Even more amusing is that Emanuel mocked a new Hollywood Reporter person who was on the panel saying:
“I don’t want to give you a lesson here, but the business of the movie business is DVDs.”
That's amusing, because if Emanuel had his way a few decades back, when the movie industry insisted that VCRs were simply pirate devices, there would be no DVD market. It was out of an "infringement device" that a massive new opportunity was created, which Hollywood fought tooth and nail until it finally realized it could profit (and profit massively) from it. Yet, now, with absolutely no basis, Emanuel wants to repeat the same claims all over again.. and even more ridiculously use the DVD to support his position? Ari may be able to negotiate great deals for his clients, but he doesn't know what he's talking about on this subject.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Anonymous Coward, May 12th, 2011 @ 6:04am

    Really? VCRs?

    I don't remember being able to get pirate VCR copies of any movie I wanted within an hour any time I wanted at no expense or inconvenience except a click of the button.

    Which 1980s/90s were you living in?

     

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  2.  
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    Nicedoggy, May 12th, 2011 @ 6:14am

    I have more proof that copyright is ridiculous.

    http://www.zeropaid.com/news/93409/58yo-mentally-ill-scottish-nurse-convicted-for-fil e-sharing/

    Add that to the guy who was raided for CP without being the guy who did it and we can see the problems with more enforcement for something that is even clear if it is a real problem since movie studios had record profits in the last couple of years so apparently piracy has no effect on sales.

     

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  3.  
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    Nicedoggy, May 12th, 2011 @ 6:18am

    Re: Really? VCRs?

    Then you were not paying attention to the volume of VHS tapes sold at the time.

     

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  4.  
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    Chronno S. Trigger (profile), May 12th, 2011 @ 6:24am

    Re: Really? VCRs?

    Thus the fact that the movie industry completely overreacted to VCR piracy is unrelated to the movie industry completely overreacting to the Internet. This comparison should never be brought up again. *rolls eyes*

     

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  5.  
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    chris (profile), May 12th, 2011 @ 6:26am

    “I don’t want to give you a lesson here, but the business of the movie business is DVDs.”

    it was DVDs. the only time i've touched a movie on DVD in the last year was to burn one for a family member who is inexplicably stuck in the 20th century.

     

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  6.  
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    Eunos94, May 12th, 2011 @ 6:26am

    Re: Really? VCRs?

    Dear anonymous,
    Please quote Mike where he stated that VCRs could copy movies with the click of a button in hours without expense or inconvenience. Thank you.

    - Eunos94

     

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  7.  
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    Anonymous Coward, May 12th, 2011 @ 6:38am

    Re: Really? VCRs?

    You can do that with piracy? Good, get me a copy of The Granny. I haven't been able to buy or pirate that one. I have a bet to win on bad movie night with my friends and that movie assures my victory.

     

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  8.  
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    Anonymous Coward, May 12th, 2011 @ 6:40am

    DVDs, and by extension, Blu-Ray, is dead. Sure there are luddites.out there still collecting, but as seen by the dwindling numbers, people are stopping collecting in droves. It's not necessarily piracy that is causing that decrease. Why on earth would I want 5,000 discs taking up space in my house? Am I trying to get an appearance on Hoarders? With digital movie files, consumers can store those same movies on a hard drive without the physical space issues, a jukebox if you will. These morons that insist the business revolves around physical medium just look like fools to those of us that see the future. It is not our fault that your industry has not figured out a way to monetize the collecting of digital files yet. The physical medium cash cow is dead. Most would argue that the industry has already missed the boat on what should have been their next cash cow.

     

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  9.  
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    Anonymous Coward, May 12th, 2011 @ 6:40am

    The bigger question here is 'Why do they think their business is DVDs?' I thought they moved to Blu-Ray some time ago because they could deliver more content at a much higher price. Shouldn't their business be convincing people that the new format is the way to go?

     

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  10.  
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    The eejit (profile), May 12th, 2011 @ 6:49am

    Re: Really? VCRs?

    No, but someone else did. I know at least a hundred films that I could only watch due to being loaned a taped version.

     

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  11.  
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    Anonymous Coward, May 12th, 2011 @ 6:54am

    Response to: Anonymous Coward on May 12th, 2011 @ 6:40am

    Blu-Ray was dead before it got off the ground. People blame the format war for failure to adopt Blu-Ray. Failure to adopt happened because the next-gen medium and delivery system already existed before BR came into existence. You may have heard of it, its called digital files an the Internet. This is what consumers want. Personally I will never own BR as I hate the thought of some of that money going to Sony as royalties.

     

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  12.  
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    Anonymous Coward, May 12th, 2011 @ 6:55am

    Re: Really? VCRs?

    Umm, we were on earth. The place where prior to the vcr there was almost no way to pirate things at home. The vcr was a way that the average person could easily make their own copies of movies and tv shows and watch them where, how, and when they wanted to. Instead of recognizing that the market was shifting to allow more consumer choice, the industry tried to quick it's head in the sand and have the vcr and any device like it made illegal. Once they finally accepted that people wanted to watch movies at home they established what is now a huge part of their business. Then digital downloads come around, and instead of embracing the new market, they are trying to limit what people can do with it. How successful do you think home videos would have been if they had been released on a non-vhs (or beta) format that would only work on a device made by them that was unable to record, only worked with a few tvs, and was a lower quality than the pirated version. People would have pirated, not because they are cheap and want everything for free, but because the pirated version was higher quality, easier to use, and worked with the devices they already have. I don't pirate mother beatse i'm cheap, I do it because the movie industry doesn't sell a comparable product. I have a media server and 4 tvs. GAbo download a 1080p blue ray rip and watch that movie on any tv in my house without having to get up, find the disc i want, put it in the player, hope the kids didn't scratch it... If I could legally rip my own blue rays I would buy them and do so, but the DMCA makes that criminal. With a downloaded copy I can also transfer any movies or shows to my smart phone or laptop and enjoy it while away from the house. Yes, the process has changed since back then, as has the difficulty involved. but the premise is the same. A legacy industry that is ignoring its customers and instead of embracing the new technology and selling what its customers what they want, its trying to legislate its way into keeping things the way they are.

     

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  13.  
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    Josef Anvil (profile), May 12th, 2011 @ 7:08am

    Will someone please inform them... Please

    Will someone please let Hollywood know that the first two "WWs" in "www" stand for world wide. They want the US government to "help", but the US government doesn't control the web. As we see everyday, the internet bypasses or works around government censors in nations that try to control it.

    I guess complaining and spending money on lawyers just feels better than actually figuring out how to profit from new technologies. Well they say you have to spend money to make money. I just didn't know it had to go to lawyers and Congress.

     

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  14.  
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    Rabbit80, May 12th, 2011 @ 7:09am

    Re: Really? VCRs?

    Then again, neither could I get on demand legit copies of any movie I wanted almost instantaneously with near zero distribution costs dramatically reducing the price...

    Oh wait...

     

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  15.  
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    Anonymous Coward, May 12th, 2011 @ 7:21am

    Mr. Rogers

    Well, once I commented I realized that somewhere out there was a great quote from Mr. Rogers on horrible piracy machines of the past. The supreme court used a quote of his in a footnote of the Sony Corp vs Universal Studios case

    Some public stations, as well as commercial stations, program the "Neighborhood" at hours when some children cannot use it ... I have always felt that with the advent of all of this new technology that allows people to tape the "Neighborhood" off-the-air, and I'm speaking for the "Neighborhood" because that's what I produce, that they then become much more active in the programming of their family's television life. Very frankly, I am opposed to people being programmed by others. My whole approach in broadcasting has always been "You are an important person just the way you are. You can make healthy decisions." Maybe I'm going on too long, but I just feel that anything that allows a person to be more active in the control of his or her life, in a healthy way, is important.

    Where are all of the Fred Rogers these days? We could sure use a guy like him.

     

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  16.  
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    Anonymous Coward, May 12th, 2011 @ 7:23am

    Re: Response to: Anonymous Coward on May 12th, 2011 @ 6:40am

    Oh, I know. I just think it's funny that they have newer format than DVD but they say that their business is still DVDs.

     

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  17.  
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    Greg G (profile), May 12th, 2011 @ 7:24am

    Re: Really? VCRs?

    Yea, the movie industry is right. Those damn VCR's ruined everything.

    I mean, I had to go buy blank VHS tapes, program my VCR to start recording a specific channel at a specific time and hope the movie started on time.

    Damn good thing I knew what I was doing, or I would never have seen such classics as Hollywood Chainsaw Hookers or The Beast of Yucca Flats, other than on MST3K, that is.

     

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  18.  
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    Grimby, May 12th, 2011 @ 7:30am

    Re:

    You would think the business of the movie business would be movies, not the medium.

     

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  19.  
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    Jay (profile), May 12th, 2011 @ 7:39am

    They're both wrong...

    Video

    Looking at Barry Diller, I can now understand why he believes that DVDs are the product of Hollywood, but he's missing out. This entire problem has NEVER been about the final product. It's been about allowing customers to use technology in a way that benefits the consumer.

    Why do people pirate? They pirate because they want a movie on their smartphone. They pirate because they don't want DRM. They pirate to create content that would otherwise be unauthorized. And people pirate because the copyright holder doesn't understand what the market wants.

    When reading "Media Piracy" by Joe and his researchers, they understand exactly what people are looking for. A decent price on a good, not just "to get free products".

    We have an amazing amount of content that's free to view on the Youtubes, Ustreams, and Veohs. Content that you don't have to pay for to enjoy.

    Anyway, my point.

    Ari is wrong in believing the government has to get involved because that's not the issue here. If you want to compete against another country's content, it's not through law that will change their minds about how good or bad your content is, it's through letting down filters such as regionalization, windowed broadcasting, etc.

    Diller, however, is wrong on DVDs being the future. That's not the business. If you look, streaming is more popular because it's the "right now" for most people. I'm sure we'll have more competitors for broadband, and the price will come down. We'll also have more people clamoring for unlimited 3G for smartphones. It's inevitable that people WILL want to watch their favorite shows on the go.

    All you can do is provide it and create more value. Judging from the law's response, that won't do anything more than piss people off.

     

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  20.  
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    Hephaestus (profile), May 12th, 2011 @ 7:46am

    Re:

    "It is not our fault that your industry has not figured out a way to monetize the collecting of digital files yet."

    A little history, just a couple years back the movie studios only made money in the theaters, and then on TV. The TV studios only made money on advertising on TV. When the Video tape and the DVD came out they had a physical product to sell and they could charge monopoly prices for it.

    Now that the physical product they were selling is obsolete they are going to end up with the revenue streams they had before. Plus for a short while Cable and netflix.

    In the end though, the trend is clear, content will become free to the consumer.

    "Most would argue that the industry has already missed the boat on what should have been their next cash cow."

    Agreed, they should have jumped on this when they had the chance.

     

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  21.  
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    The Groove Tiger (profile), May 12th, 2011 @ 8:39am

    Re: They're both wrong...

    It was also Ari Emanuel who said the thing about the DVDs, not Diller (unless I'm reading it wrong).

     

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  22.  
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    Zangetsu (profile), May 12th, 2011 @ 8:47am

    Wait a minute ...

    “You can’t say piracy is not an issue,” he said. “I don’t believe it’s going away, it’s a big issue. The government has to get involved.”
    OK, let's change the topic.
    “You can’t say criminal stupidity is not an issue,” he said. “I don’t believe it’s going away, it’s a big issue. The government has to get involved.”
    Oh, wait a minute, that's what getting us deeper into this mess in the first place.

     

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  23.  
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    CommonSense (profile), May 12th, 2011 @ 8:52am

    Re: Really? VCRs?

    You also couldn't get a legitimate copy of the movie within an hour any time you wanted with no inconvenience except a click of a button....in fact, it was rare that you could even click a button back then.

    If you want to compare apples to apples, clown, you look like a real ignoramus. Back then, you could a pirate copy for a fair trade of less price and more inconvenience (cheaper, but you had to find one). The industry actually gave you an even more convenient option, for a little higher price. Piracy didn't kill the industry.

    Today, the industry doesn't want to give you convenience, because it will cut into their ability to rob you, I mean, their business model of overcharging for stuff. People pirate for the convenience at least the average person...some will always pirate, just like there will always be someone out there using Heroin, some things simply can't be eradicated, learn that. But, and I'm one of these people, if I could get the convenience of piracy through a legitimate means, you'd better believe I'd pay for it. I love that I pay $16 a month for my Netflix and HuluPlus accounts, they're better than my old DVR which cost about the same, ON TOP of my cable bill (which I've cancelled) because I don't have to miss the third decent show that's on Thursday at 8PM when my DVR only records 2 shows, and I don't risk missing an episode when the DVR drive fills up.

    Hollywood needs to learn that the Mob can't be controlled beyond a certain point. But, if they try hard enough, the mob can be corralled. People will break through any walls they try to put up, but if it's a fence that they barely notice...well, they'll barely notice it's there.

     

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  24.  
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    brad tittle, May 12th, 2011 @ 9:35am

    Pricing

    PayPerView pricing has always been intriguing. They have always made it expensive enough that I debate about purchasing. At $0.99, I won't even think about recording the show. At $3.99, I slide a tape into the VCR and record just in case I want to watch it again. I have chosen not even to have that option because I got tired of the content. Netflix is my path to entertainment these days.

     

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  25.  
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    Anonymous Coward, May 12th, 2011 @ 9:35am

    Re: Re: Really? VCRs?

    You needed a double VCR setup and there was significant degradation with copying. Plus you needed an original to copy from. That meant you needed to know someone who owned it or needed to rent it yourself.

     

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  26.  
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    Chosen Reject (profile), May 12th, 2011 @ 10:19am

    Re: Mr. Rogers

    I believe the Fred Rogers of today would be Kevin Smith. Though I doubt he'd ever be able to win the Ultimate Showdown.

     

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  27.  
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    Jay (profile), May 12th, 2011 @ 10:24am

    Re: Re: They're both wrong...

    You're right, Ari did say that.
    I'll comment on all of the positions involved:

    Thomas Tull (Legendary Pictures)- Piracy is a big risk, no DVD market in China, find new ways to be efficient around the world

    Terry Semel (Windsor Media)- Didn't care about piracy too much but didn't see it as a big risk. Reduce piracy by going global (read: less windowing effect)

    Janice Min (Hollywood Reporter) - You aren't getting rid of piracy.

    Ari Emanuel - restrict piracy, technologists must be involved along with government to reduce piracy "shrinkage"

    Barry Diller - More systems will be developed, piracy risk is a small risk
    ------------------------

    Watching the entire thing, here's my view:

    Semel is the true "hero" of the panel that seems to be the best to "get it". He was the main one advocating that people not live on government subsistence. The government can't help any business, and he was one of the people in the music business. His comments seem to tailor around the fact that content is advertising. Which is quite interesting. In all of his comments, it seems the most reasonable by allowing people to have options and understanding that there are doorways that you can use. In the end, with him, content is king.

    Diller does get a few points in his corner. He says that you won't NEED as many middlemen, simply because of what the internet is doing. It's diversifying the marketplace and you have to work to keep up. He and Semel pair off with great points. Word of mouth advertising was an idea that came up through him. Yes, he chastises Emanuel a LOT in the course of an hour. His comments about creative destruction are something that Mike would be proud of though. Diller is the one that states that the market will be difficult to be predicted simply because of all of the disruptive technology coming out. And I don't think he's necessarily an enemy of Netflix, as mentioned, but he sees that their business will eventually come up to oppose the major studios. They have the net distribution. They're buying shows. Eventually, they'll come up as a competitor to the studios in regards to the internet. Although, they really can't do it forever.

    Emanuel's main points seem more focused on taking away access and solutions for people. This is where the main problem lies in his arguments. He's great, when it comes to TV shows and representing his own clients, but he believes that piracy can be stopped through technology. Personally, I think this is more a groupthink flaw. You have those in the TV business who are also distributing, but it's a very small pool of people. So the same idea runs around. I'm glad that Diller corrected him.

    He also had a very interesting idea that there will be more consolidation from the studios, within the next two years.

    We should really pay attention to this.

    Janice tells more about the foreign market. Her belief (with stats) tells how the foreign market has a high demand for US goods. I can't say she's wrong since most products do well outside the US.

    Tull isn't as talkative, so I couldn't get a good read on him. He basically answers the questions, but they're seemingly more non committal or tailored to just him and an answer. In the end, he goes on about the foreign market being interesting. Other than that, I can't say much to the effect of his argument, since it's almost drowned out by the other three.

    It's a great talk, but there were some points that I noticed.

    First, the idea that windowing will help, seems to have disappeared. I'm glad for this.

    Second, the independent market seems to have been either ignored or suspended. This is a major place for growth.

    Third, the new generation of film makers wasn't really discussed. Either they haven't heard about Kevin Smith's project or it's just not mentioned. But I'll make the prediction that a lot of artists, are going to get out of the film world to try their own thing. What's incredible is that the success of smalltime media was left out of this think tank entirely. They focused so much on the distribution channels and the "big boys" that I didn't get the opinion that they cared much for what consumers wanted (Temel comes close though).

    The consumers want access to media of all sorts. They want to feel that they can use licensed music without the hassle of takedowns. They also want to create, not just observe. And that's the one thing that no one really looked at, which is a major problem.

    Again, just a few thoughts, it's a great video, but it leaves some questions lingering.

     

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  28.  
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    btr1701 (profile), May 12th, 2011 @ 10:38am

    Re: Really? VCRs?

    > I don't remember being able to get pirate VCR
    > copies of any movie I wanted within an hour any
    > time I wanted at no expense or inconvenience
    > except a click of the button

    So piracy is okay so long as you have to work for it?

     

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  29.  
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    Anonymous Coward, May 12th, 2011 @ 10:58am

    Re: Re: Really? VCRs?

    People are lazy. If they have to work for it, they will do it less.

     

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  30.  
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    Anonymous Coward, May 12th, 2011 @ 1:52pm

    Re:

    The government doesn't care about either case, collateral damage is part of the price the public must pay for file sharing, all 100+ million of you.

     

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

  31.  
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    Anonymous Coward, May 12th, 2011 @ 1:54pm

    Re: Pricing

    Netflix is still a middleman where there really shouldn't have to me one, and it has DRM, whether you find that acceptable DRM or not, it's still DRM.

    Hollywood had the option a decade ago to make a service that knocked everyone's socks off and they sat on their laurels. This is one area of technology that will bite them in the ass. (See the lackluster adoption of Blu-Ray.)

     

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  32.  
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    CommonSense (profile), May 13th, 2011 @ 7:26am

    Re: Re: Re: Really? VCRs?

    If they decide that the work they have to do for it is a greater cost than the price of the alternative, then they'll do it less.

    Fixed that for you.

     

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  33.  
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    PaulT (profile), May 13th, 2011 @ 9:07am

    Re: Really? VCRs?

    I remember being able to easily get pirated copies of a great many movies when I was a kid (80s), including uncut copies of movies that were banned or heavily censored in my country. It was slower and more expensive, but a popular pastime for us anti-censorship types. Back when they refused to release legal copies of movies, most of my friends had pirated copies of E.T...

    I also remember the major studios kicking and screaming like little children when they were eventually defeated in their attempts to ban VCRs, and I remember them making an assload of money when they finally embraced the format and then DVDs.

    I was living in the version of the 80s/90s known as reality, so your recollections may differ.

     

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  34.  
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    PaulT (profile), May 13th, 2011 @ 9:19am

    Re: Re: Re: Really? VCRs?

    None of which undermines the actual point of the article's mention of VCRs (the last time there was a major technological change, once the studios embraced it, none of the doom predicted came to pass and they actually made more money).

    The speed and scale of the current issues are greater, but not the basic idea of how they should actually combat it (address their customers' needs).

     

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  35.  
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    Anonymous Coward, May 13th, 2011 @ 12:40pm

    Re:

    DVDs, and by extension, Blu-Ray, is dead.

    I don't agree 100% with that. What about special features? Some people still care about those. As someone who is into CG, I really do enjoy seeing behind the scenes when it comes to movies of that type. And lets face it, the quality of the ripped content being shared isn't always as good as it could be, and I say that as a person that doesn't download anything that is SD. Those who don't watch on larger displays tend not to notice this fact. Your assessment does have some merit though as there is a lot of garbage being produced these days undeserving of a rental, little alone a DVD or Bluray purchase.

     

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  36.  
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    staff, May 14th, 2011 @ 8:10am

    fraud on America

    "more patents will quite frequently hinder, rather than help innovation"

    It is not innovation that patents hinder, but the theft of.

    Just because they call it “reform” doesn’t mean it is. Patent reform is a fraud on America. This bill will not do what they claim it will. What it will do is help large multinational corporations maintain their monopolies by robbing and killing their small entity and startup competitors (so it will do exactly what the large multinationals paid for) and with them the jobs they would have created. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale slaughter of US jobs. Those wishing to help in the fight to defeat this bill should contact us as below.

    Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors. Yet small entities create the lion's share of new jobs.

    Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.
    http://docs.piausa.org/

     

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


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