I have to admit I don't usually like scary movies, and I didn't like the Blair Witch Project at all. But I can't help but be impressed that the Blair Witch movie cost just $60,000 and pulled in a cool $140 million back in 1999. That kind of return makes me wonder why more movies aren't filmed on really small budgets. So it's somewhat surprising to see that it took about a decade for another Blair Witch-like film to get promoted by a major studio... and that a perfect candidate was almost missed. The movie Paranormal Activity was apparently filmed for just $11,000 over 7 days, and it was bought by DreamWorks/Paramount -- which originally planned to shelve the low-budget flick and re-make it with bigger stars and a much higher budget.

Goodman also admitted that DreamWorks, formerly a leg of Paramount co-headed by Steven Spielberg, had swooped in and pocketed 'Paranormal Activity' with every intention of leaving it on the shelf and remaking it with a big budget and marquee stars. Then they wised up. 

They wised up indeed, and they also started promoting this movie in an interesting way, too -- by getting potential fans to demand it be shown in their neighborhoods and nationwide. Paramount promised to distribute the movie nationwide if a million requests for the movie were logged via Eventful. And it looks like they've already reached that goal.

As I said, I didn't like Blair Witch very much, and I'm not exactly looking forward to this movie, either. But from a pure business angle, it seems a bit shocking that movie studios wouldn't be trying to find/create more low-budget films that would appeal to moviegoers. Promoting the distribution of films in a way that actually target fans is a smart move, too. So with this example, there are about a million customers (or at least thousands, if you don't believe the Eventful numbers) willing to pay to see this movie that was made for (much) less than a $1 per fan -- and the movie studio's first gut-instinct was to try to re-make the film and drive their own costs up? It's a strange industry where insiders are always asking "how can we make a $200 million movie?" rather than how can they make good, but profitable movies, no matter what the cost. The industry seems so focused on what movies cost, that it so rarely seems to consider spending money more intelligently. Creating quality works for less, and targeting your best customers is a plan that's foreign to Hollywood, but perhaps it's about time they start exploring that plotline.

Last week, the FCC held what was ostensibly a panel discussion about the National Broadband Plan, but which was actually focused on copyright issues. How, exactly, is copyright an issue for broadband? Well, mainly because the entertainment industry has been trying for years to get ISPs to act as copyright cops... and apparently the FCC felt the need to hear them out. While the deck was mostly stacked in favor of the entertainment industry in terms of speakers, thankfully the FCC allowed Gigi Sohn of Public Knowledge to take part as well -- and she questioned whether the FCC even had any mandate over such issues and wondered why the hearing was even being held. However, beyond stacking the deck of speakers, it appears the FCC gave significant other beneficial treatment to entertainment industry speakers.

Paramount's COO, Frederick Huntsberry, not only was given twice the amount of time to speak as the rest of the speakers had (10 minutes, instead of five, as Gigi was told), but also was able to convince the FCC that his talk was "owned" by Paramount, and should not be placed online -- as the FCC has done with all its other hearings. Wow. Yes, this was a public government hearing. Thankfully, the folks at Public Knowledge went through a low quality video of the whole proceeding and pulled out Huntsberry's part, where he not only demonstrates how file sharing works for the FCC, but goes on to implicate plenty of companies as aiding in the process, including Google, Yahoo, eBay, Boxee and others: In the video, he demonstrates using Mininova and Drop.io (which is an amazingly useful site for many things that have absolutely nothing to do with unauthorized file sharing -- and is now being unfairly tarred by Paramount). There isn't really anything surprising in the video. He basically shows what everyone knows: it's easy to share files these days. But he seems to miss the point of that. That is, he wants the gov't to come in and try to stop this (an impossibility), rather than recognizing that it's time for him to shift his business model. Yes, distribution is cheap and easy these days. In most businesses when distribution becomes cheaper and easier, that's a good thing. Why is it that Hollywood top execs still can't figure out how to take advantage of it?

Mehan Jayasuriya points out the many problems with the way the FCC handled this whole event:

• Any presentation delivered at a public government hearing should be made available to the general public in a convenient format. Not everyone is able to travel to Washington D.C. for hearings and those who cannot should not be excluded--rather, they should be encouraged to participate in the debate. The mission statement on the Commission's new Broadband.gov site seems to agree: "A great way to create a connected America is to involve all Americans in the development of a National Broadband Plan. The FCC welcomes civic participation, and we look forward to more interaction through this website." If Paramount was concerned that its video would encourage "piracy," then the company should not have presented it at a public hearing. It's as simple as that.
• All of the other presentation materials for all of the other workshops are available on the FCC's website, so that citizens can download, read, comment on, reference and critique them. Why should Paramount's statement be treated any differently?
• During the presentation, Huntsberry seems to suggest that a number of legitimate technology companies, including Drop.io, Twitter, Google, Facebook, Apple, Boxee, Sony, LG, Yahoo!, PayPal and Rapidshare, are arguably acting to enable or encourage unlawful filesharing. These companies and the users of their products should have an opportunity to respond to this allegation.
• In the beginning of the clip, Huntsberry walks us through a timeline of when various camcorded copies of Star Trek were leaked to the Internet. This timeline provides a great example of how widespread the problem of camcording is, though it's worth noting that camcording is already illegal in most U.S. States and has little relevance in the context of this workshop (it's also worth noting that Star Trek made over $200 million at the box office regardless of the fact that camcorded copies were available within hours of its theatrical release). This evidence that films are commonly pirated while still in theaters undermines many of the arguments made by the studios in the FCC's Selectable Output Control proceeding (i.e. "We need to be granted the power to shut off outputs on the back of your A/V gear, otherwise you will unlawfully copy the films that we broadcast via cable").

Not only did the FCC treat Paramount's presentation with kid gloves, the agency also treated the Hollywood execs preferentially throughout the course of the workshop. Upon entering the room where the workshop was held, attendees were greeted by a massive vinyl banner--presumably belonging to Paramount--on which the aforementioned Star Trek timeline was printed. While I appreciate the fact that a visual aid can be helpful, I can't help but feel like a PDF file submitted to the record would have sufficed.

But that's not all. Though these workshops were technically less procedural in nature than a formal hearing would be, MPAA Chairman and CEO Dan Glickman was repeatedly allowed to call his technical expert, MovieLabs CEO Steve Weinstein, up to the stand to chime in with additional comments--even though nothing he said was actually technical in nature. The Commission allowed Glickman to do this so many times that Weinstein also started calling others from the audience up to the stand, including Disney Executive Vice President Preston Padden and Disney Vice President Troy D. Dow. Perhaps I'm being overly cynical but I doubt that the Commission would have allowed any of the other panelists to engage in this kind of behavior.

And, again, uh.... what does copyright have to do with broadband policy in the first place? And where is it in the FCC's mandate that it has any say in copyright policy?

Harlan Ellison may be a well-respected writer, but he's got something of a history of threatening and/or suing anyone who he believes is unfairly profiting off of "his" works. You may recall a while back that he mistakenly sued AOL when he discovered that fans of his (not that he'd call them fans) had posted some of his writings to Usenet. Yes, to Usenet. Not to any AOL property, but to Usenet. However, since he'd discovered it via AOL, somehow they were to blame... so he sued. And a court quickly explained to Mr. Ellison the DMCA's safe harbors and the fact that Usenet isn't AOL. Ellison appealed... and, amazingly, AOL eventually settled just to make him go away, knowing that even though the courts would reject such cases under DMCA safe harbors (and common sense), it was cheaper to just pay up.

This wasn't just a one-off misunderstanding. Ellison has a long history of being economically and technologically illiterate about these sorts of things, as was made clear in this video that made the rounds a few years back: In the video, he talks about how he doesn't take a piss without getting paid, and screams about Warner Bros. Studios asking if they can use a video interview he did in the DVD for Babylon 5, which he worked on -- and he demanded payment for it. When the woman pointed out that everyone else was doing it for free, he called them all assholes and then went on a rant about people doing stuff for free, talking about how he doesn't do anything for free. Apparently, he missed the fact that the video was already recorded, so it wouldn't be about any "work for free" because he wouldn't be doing any work. The work was already done. Also, depending on who shot the video, it's unlikely that WB actually needed to get his permission (or to pay him) to use the video, because he probably doesn't own the rights to it, but that's a separate point.

Either way, that's all prologue to the news that Ellison is suing yet again. This time, he's suing Paramount Pictures and the Writers Guild because he wrote an episode of Star Trek that aired in 1967, and Paramount hasn't paid him for certain Star Trek books that include elements from that show or other merchandise like a (not making this up) talking Christmas tree ornament. He's suing the Writers Guild because it apparently told him that he was nuts and they weren't going to take on Paramount over this issue (he's accusing the Guild of too narrowly interpreting its contract).

And, in classic Ellison fashion, his statement on the matter is all about the money:

It ain't about the 'principle,' friend, its (sic) about the MONEY! Pay Me! Am I doing this for other writers, for Mom (still dead), and apple pie? Hell no! I'm doing it for the 35-year-long disrespect and the money!

Given these antics and ridiculousness, you have to wonder just how many folks won't be hiring Ellison in the future, knowing he's likely to blow up and potentially sue them, as well. You also should wonder how much "money" he's missing out on from folks like me who will never buy any of his works. If it's "all about the money" perhaps someone who writes sci-fi like Ellison can think about the future a little bit, and how many opportunities he kills off by demanding every penny today at the expense of dollars tomorrow.

A few years ago, after realizing that blaming consumers wasn't a particularly effective strategy in covering up for the entertainment industry's own inability to adapt to a changing market, industry insiders chose a new strategy: blame ISPs. That sent them down a path of trying to force ISPs to do a variety of things, such as installing filters, policing their networks for copyright-infringing material and, of course, kicking users off their networks. In the mind of entertainment industry execs, a failure to do any of these things should be a crime. Note how the industry totally shifts responsibility here. Rather than admitting that they should change with the market, it's always someone else who needs to change to protect the entertainment industry's obsolete business model.

While the industry has been able to get some politicians and ISPs to agree (amazingly, often against their own best interests), it's now gone a step further. A bunch of the biggest movie studios (Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, and the Seven Network) have teamed up to sue Australia's largest ISP, iiNet, for failing to stop copyright infringement. iiNet, you may recall, is the same ISP that has been mocking the Australian government for requiring filters. So, naturally, it's response to this lawsuit is rather direct. While the studios complain that iiNet isn't doing anything, iiNet responds that this is not true at all. They pass each complaint on to the police, because if there's a crime, then the police should deal with it:

They send us a list of IP addresses and say 'this IP address was involved in a breach on this date'. We look at that say 'well what do you want us to do with this? We can't release the person's details to you on the basis of an allegation and we can't go and kick the customer off on the basis of an allegation from someone else'. So we say 'you are alleging the person has broken the law; we're passing it to the police. Let them deal with it'.

We are not traffic cops. We can't stand in the middle of it and stop the individual items that might be against the law. These guys are asking us to be judge, jury and executioner.

Even better, iiNet's CEO Michael Malone gets to the heart of the matter:

I think they genuinely believe that ISPs have a secret magic wand that we are hiding and if we bring it out we can make piracy disappear just by waving it. And it doesn't exist.

Indeed, but that might mean that the entertainment industry has to actually take responsibility for their own business model failings, and they can't do that. So they have to blame others.

It really is amazing how little entertainment industries recognize how clips of their content online promotes the rest of their content. When people talk about scenes in TV shows or movies, it's become quite natural to search for video of those clips to show. Such clips don't take away from the commercial value of the movie or television show, they enhance it -- giving people additional reasons to watch the full version. Yet, rather than recognizing that, you have entertainment firms like Viacom suing YouTube for $1 billion for facilitating such a free marketing tool. However, it appears that not everyone at Viacom is thinking so narrowly. Paramount Pictures, which is owned by Viacom, has now started releasing snippets from its various movies for fans to make use of within Facebook. It's a little silly that it's only on Facebook, but given the lawsuit against YouTube, Paramount execs probably recognized they had to stay away from YouTube. This definitely seems like a good idea, though it's a bit amusing to have a Paramount exec say that this project could become "ad supported" at some point. Does he not realize that the clips are ads themselves?

Also, the article points out that just getting permission to get these clips online is quite difficult, and other studios probably won't follow. A big part of the problem? All the different people who have to give their permission, thanks to ridiculous royalty policies, like the one the TV/movie writer's guild fought for. In other words, just as we predicted, the agreement cutting the writers in on online royalties is making it more difficult for the studios to adapt to the web. When everyone has to give approval and get a cut, you get innovation by committee -- and that rarely works. You almost always get someone who will veto the effort. In fact, it's rather impressive that Paramount was able to get any movie clips up at all.

Paramount is touting the release of "Jackass 2.5" as the first studio-backed film to be released online. In a lot of ways, Jackass seems like an ideal candidate for an experiment like this: it's a series of short vignettes that would likely get tiresome in a single sitting anyway, so it makes good sense to allow users to watch it in segments online. It was extremely cheap to produce, so there's little reason to worry about cannibalizing sales in other channels. And it's precisely the kind of gag humor that I can see being a good candidate for viral distribution. Unfortunately, the Times story suggests that Paramount's release strategy is rather confused. The video will apparently be released exclusively through Blockbuster's Movielink site for the first week, suggesting that Mac users like me won't be welcome. A week later, the movie will apparently be offered for purchase for $10-15 online or $30 on DVD. And then starting in January, it will once again be available for free on sites like Joost. It's rather confusing. The idea seems to be to experiment with different outlets to see which ones generate the most traffic, but it's hard to imagine why anyone would pay $10 for an iTunes download of a movie that had been available for free viewing (on Movielink) a week earlier and would be available for free viewing again (on Joost) a week later. It seems like all these format switches are just going to confuse and annoy viewers, who have to keep track of which sites will have the video on which weeks. Paramount apparently does know how to distribute video in an embeddable Flash-based format. It seems like it would have made more sense to simply distribute the whole movie that way from the outset. Or even better, given that Jackass isn't so much a coherent movie as a series of discrete segments, an even better idea might have been to release one segment per day over a period of weeks, increasing the chances of viral distribution and getting users in the habit of visiting the site regularly. That would generate a lot more buzz, and it would still leave them the option of selling a DVD of the whole thing once the final clip had been released. So Paramount deserves some credit for experimenting with new distribution strategies, but they still don't seem to quite get Internet distribution.

Well, this could get interesting. Following the leak of MediaDefender's emails, the folks behind The Pirate Bay now believe they have enough evidence to sue many major entertainment firms for "infrastructural sabotage, denial of service attacks, hacking and spamming." Basically, there's evidence in the emails that a bunch of firms, including Universal, EMI, Sony, Paramount and others were using MediaDefender to try to mess with The Pirate Bay's system. Whether or not the lawsuit actually goes anywhere may depend on a lot of factors (including Swedish laws, which I am totally unfamiliar with). There may be some questions about how the emails in question were obtained. And, of course, the entertainment companies will likely counter that they were just trying to protect their own materials -- which could find a sympathetic ear in a courtroom. Either way it would be quite a lawsuit.

In what must be the world's most pointless standards battle over next generation DVD technology, apparently all it takes to reignite the tiny fire of interest is $150 million. If you hadn't been paying attention (and, honestly, why would you?), two separate groups have been battling it out over which technology will represent the next generation of DVDs: Blu-ray or HD DVD. Like many standards battles these days, the players believe the pot is so lucrative that they refuse to come up with a single standard -- despite the fact that competing standards basically guarantee that both sides lose. Fewer people are willing to adopt one technology if there's still a half decent chance the other one might prevail. At the same time, fewer people are willing to adopt one technology if half the content they want to view is stuck on the other technology. It's a lose-lose situation. While the HD DVD crowd would deny this, over the last few months, it had finally seemed like Blu-ray was edging ahead (for example, with thieves). However, HD DVD's backers have fought back from oblivion by giving Paramount and Dreamworks $150 million to only release movies on HD DVD, effectively ensuring that this remains a standards battle that no one cares about. The good news is that the longer this battle goes on, the more likely most folks will simply jump to alternatives that don't involve plastic discs.

cannen writes "This is a yahoo! news story about a trailer to a new movie called "Cloverfield". This is one of those secretive movies. The interesting part isn't so much about the movie, as the fact that they put the trailer before Transformers to generate "buzz". Shortly after, the trailers from the movie were put on YouTube. The last paragraph in the article says: "Several copies of the trailer, seemingly shot in theaters with a camcorder, were posted on YouTube by Thursday morning. But by Thursday afternoon, some of those links had been taken down, replaced by an advisory saying, 'This video is no longer available due to a copyright claim by Paramount Pictures Corp.' Why is it that the studios wanna ruin their buzz?

Come on, cannen, it makes perfect sense -- when you let lawyers run your entertainment company. Perhaps we should just be thankful that Paramount hasn't tried to have the people who filmed the trailer arrested.