Techdirt. Stories filed under "dvd"

Japan Criminalizes Unauthorized Downloads, Making DVD Backups -- And Maybe Watching YouTube

Glyn Moody — Mon, 25 Jun 2012 10:06:00 PDT

There's a fairly constant pattern in the world of copyright enforcement. The media companies claim that piracy is "destroying" their industries, although they never offer any independent evidence to back this up. They "demand" that governments "do something" -- by which they mean introduce harsher penalties for unauthorized downloads. Because of the hypnotic effect that musicians and artists seem to have on politicians, governments happily oblige, even though there is no evidence that such laws will help artists. After the laws come in to force, online sharing may dip for a while, but soon returns to previous levels, so the media companies start whining again, and demand yet tougher penalties.

Of course, if any of those participants in this never-ending cycle stood back and looked at what was happening, they would see that the very fact the copyright companies keep coming back for more and harsher copyright laws offers clear proof the current approach just isn't working. Instead, they seem to believe that even though it has failed to work every time in the past, if the penalties could just be made sufficiently cruel and painful, suddenly everything would be OK.

Unfortunately, it looks like it's Japan's turn to undertake this exercise in futility:

Japan’s legislature has approved a bill revising the nation’s Copyright Law to add criminal penalties for downloading copyrighted material or backing up content from a DVD. The penalties will come into effect in October.

The Upper House of the Japanese Diet approved the bill by a vote of 221-12, less than a week after the measure cleared the lower house with almost no opposition. Violators risk up to two years in prison or fines up to two million yen (about $25,000).

An earlier article by the same author, Daniel Feit, on Wired, spelt out some of the insanely restrictive rules that will soon apply: it would be illegal in Japan to make any copies of any movies or games, illegal to upload the data, illegal to download the data, illegal to sell copies of the data and well as illegal to sell a device that enables playback of the copied data. All of these actions would carry stiff penalties.
The new law's effects might be even more ridiculous: Japanese attorney Toshimitsu Dan told IT Media that even watching a YouTube video could be grounds for arrest "if the viewer is aware that downloading [such material] is illegal."
Since people will inevitably carry on doing all these things, Japan's legislation will simply crimininalize an entire generation. That means that some of them will probably end up in prison for completely trivial infractions; it will also lead millions more people to question their respect for laws that are so at odds with what they regard as normal and fair.

Perhaps dimly aware that tough sanctions won't work – or maybe just greedy – some music groups want Japanese ISPs to install a system that they claim can spot unauthorized uploads even before they reach the Internet. As TorrentFreak explains:

Once a match is found, rightholders want ISPs to automatically block the allegedly infringing content. But according to one report, there may even be requests to send out warning letters to uploaders. If implemented this would amount to the most invasive "3 strikes" style regime anywhere in the world.

To add insult to injury, ISPs are expected to pay for allowing the music industry to spy on their users 24 hours a day. Since that cost will inevitably be passed on, that means that customers will be forced to pay for the pleasure of undermining their own privacy, having their ability to upload legitimate material curtailed, and receiving unwarranted threatening letters. Sounds like the Japanese recording industry has been watching Terry Gilliam's "Brazil" too much.

This latest call for total surveillance on top of probably the harshest laws passed yet against unauthorized downloads raises an important question: when the current measures fail -- as they surely will -- what will the copyright industries demand next in a further forlorn attempt to deter file sharing? Life imprisonment? Amputation of the mousing fingers?

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You're Only Making Things Worse For Yourself (And Us Too), Media Industries (Part II)

Larry Downes — Wed, 23 May 2012 13:15:00 PDT

Summary of Part One: Consumers, trained by content providers to think most entertainment can be enjoyed freely, no longer take copyright seriously as a legal or moral imperative. It's like a parking meter that's rarely checked. When we do get a (large) ticket, we're outraged. After all, no one else got one for doing exactly the same thing. Our cognitive dissonance has left copyright a law in name only.

Media industries have made things worse for themselves by training customers to think of ads and other indirect sources of revenue-generation as an inconvenience, a feature of programming best not talked about. Ads are woven into the flow of the programming, and increasingly hidden in product placements and other inline forms of sponsorship. My favorite brand of frozen pizza is now co-marketed with the new "Avengers" movie. The psychology of advertising is subtle and complex—or maybe not.

In either case, the result is that at the most basic level—at the reptilian cortex of the brain—consumers are encouraged to ignore the reality that advertisers pay for or highly subsidize most forms of content. Because the economics of content are kept mysterious, we have no reason to believe that if we enjoy movies, music, books or television shows at the wrong time, or with the wrong people, or without the ads, we're undermining the basic rules of the industry. How can we be expected to understand that doing so is not only dangerous to the continuation of that longstanding model but also a crime, punishable by enormous fines and even possible jail time?

What consumers do see, however, is that as content has been translated, often kicking and screaming, into digital form, the unit cost of production, distribution, and marketing has plummeted. Yet for most media, the price has not decreased proportionally, largely because rightsholders want to protect increasingly uneconomical physical media formats such as hardcover books, newspapers, and movie DVDs.

Worse, even as the unit cost of media declines, the rules against unauthorized copying have become stricter. It's as if there were suddenly millions of new parking spaces available across Manhattan, but parking lots keep charging more than $10 an hour. And all the meters are suspiciously broken.

How did this happen? Since well before the invention of the photocopier, media industries have pursued a consistent if counter-productive legal strategy of responding to disruptive technologies that decrease costs and open new markets by lobbying for extensions to copyright terms, increased penalties, and criminalizing more behaviors.

Their theory—if there is one—is that technologies that make it cheaper to create and distribute content also make it cheaper to violate copyright (see Napster, et. al.). Cheaper production is ignored, while increased potential for violations requires enhanced penalties that can't, in any case, be enforced. It's a lose-lose-lose strategy for producers, creators, and consumers. And it's a loop we've been stuck in for decades.

One result of that fatal loop is that under current law the concept of fair use—long understood as a safety valve to an otherwise economically-dangerous copyright monopoly—exists in name only. And with copyright terms continually and retroactively extended, almost nothing enters the unrestricted "public domain" anymore, even though the continued expansion of the public domain was the whole point of granting the "limited" copyright monopoly in the first place.

Copyright was designed as a low-cost and largely self-enforcing mechanism for achieving two important goals: incentivizing creators to build the intellectual capital of a new nation and making sure that their efforts could be used and built upon as quickly and as freely as possible. Copyright gives authors a monopoly, which necessarily reduces potential social value. (Economists call it "dead weight loss.")

But there's an essential caveat. Once the limited period of the monopoly expires, all rights are unreserved. The public can do as it pleases with the work—copy it, adapt it, reframe it, anthologize it, mock it. (Some amount of mocking is allowed even before the term expires.) As the Constitution puts it, Congress shall have the power—and not the obligation—"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."

But copyright law no longer promotes the progress of anything. It just secures more rights. And patent law, in its own state of disarray, is even worse. It's actually counter-productive, as if to make it a crime just to think about parking.

This dangerous imbalance in the system is the result of misguided efforts to preemptively rescue American content industries from wave after wave of disruptive copying technologies, each seen as the certain destroyer of the content enterprise. Jack Valenti's infamous testimony that the VCR was "to the American film producer and the American public as the Boston strangler is to the woman home alone" is still chilling in both its rhetorical excess and its misreading of the future. (And how was the "American public" threatened at all?)

The imbalance of copyright today is the result of Hollywood's irrational fear of the unknown. As Prof. Tom Bell made visually clear with his 2009 "Mickey Mouse Curve," the regular extension of copyright terms and penalties, especially in the last hundred years, has not been based on the reasoned deliberation of Congress so much as the unrelenting lobbying of the Disney Corporation, determined to spend whatever it must to keep every iota of its creative work out of the public domain. Worse, Disney's obsession is about control, not maximizing profits.

As Bell's curve demonstrates, whenever the earliest works of Disney are about to lose copyright protection, Congress steps in to extend it retroactively. This is no coincidence. But it is ironic coming from a company whose oeuvre includes so many films based on content (the Hunchback, Hercules, Mulan, Tarzan) that had only recently entered the public domain. Or maybe not ironic at all.
Source: Tom W. Bell
(It is a persistent myth, by the way, that allowing "Steamboat Willie"—itself a parody of a Buster Keaton film—to enter the public domain would mean the end of protection for Mickey Mouse. While freely copying those early cartoons would no longer violate Disney's rights, all the later works would still enjoy their full run of exclusive rights. And Disney's trademarks in its characters and character designs would greatly limit what others could do with Mickey beyond copying the public domain cartoons themselves. Trademarks are valid so long as consumers continue to associate them with a particular source—potentially forever.)

Irrational policy decisions produce unintended consequences. The successful campaign to continually and dramatically extend copyright is increasingly a pyrrhic victory for the content industry. By removing all of the safety valves against abuse of the "limited" monopoly, copyright, as Supreme Court Justice Breyer has argued in dissent, has effectively become permanent. The law is now rewritten solely to protect the interests of a few large rightsholders.

Yet traditional forms of legal enforcement have become nearly impossible. Consumers use a constant supply of disruptive technologies (the cloud, P2P protocols, encryption) to rebel against a dictatorial copyright regime. And the speed of innovation has long-since outstripped the speed of Congress and the courts. Most consumers now see themselves and each other not as lawbreakers but as freedom fighters. Copyright, in its current mutant form, is now firmly on the wrong side of history.

Next: How to Reset the Balance and Save Copyright from Itself

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Indie Film Maker Is Creating A DRM-Free Open HD Video Format

Zachary Knight — Thu, 10 May 2012 16:27:00 PDT

In most areas of entertainment, DRM is an option. If you want to publish an ebook, you don't have to use DRM. Same for video games and music. While these others areas of entertainment are moving away from DRM, there is one prominent holdout on the DRM front: movies. Every official distribution and streaming service for the movie industry has some form of required DRM. This includes streaming services such as Hulu and Netflix, download services like Amazon and iTunes, and even the physical media such as DVD and Blu-ray. According to the larger studios, DRM is a necessity, even though its effectiveness is questionable at best and customers hate it. But what about those studios that want to deliver a High Definition experience without the burden of DRM? What choices do they have? If all they want to do is allow people to stream or download the movie, they have plenty of options, but what if they want to include the full feature list available via Blu-ray?

This is one quandary that Terry Hancock of Free Software Magazine found himself facing a little over a year ago. He had been working on two films and wanted a High Definition feature rich experience without the hassle of Blu-ray DRM. He had looked at multiple options, many of which fell a little flat in the end. However, one stood out as the most reasonable option for what he wanted to do. He had to write his own open, DRM-free, HD video standard.

Thanks to Nina Paley, we learn that Terry has started a Kickstarter Campaign to help fund the creation of this open HD video standard called, Lib-ray. Terry describes the motivation behind this campaign as follows:

This may sound like a quixotic goal for a lone individual without corporate backing to develop, but most of the money spent on developing Blu-Ray was spent on the DRM technology -- meaning the technology to make it not play under certain circumstances. The actual business of getting menus and video to work is much simpler, and a lot of the work has already been done. So a format without DRM, based on open standards is intrinsically more attainable.

Think about that. Designing DRM is designing ways in which your movie will not play. Why would anyone want to waste time and money on such an idiotic goal? You would think that movie producers would want people to watch their movies. This idea is what pushed Terry to this point. Why waste time and money on using a DRM'ed media like Blu-ray to release what he wants to be a free culture movie? Even if he tried to work around the DRM of Blu-ray, there is no guarantee that the movies would play in standard Blu-ray players and he would still have to deal with licensing issues.

Terry has not set himself up for disappointment with this standard. He recognizes that it will not unseat Blu-ray as the mass market standard but rather is looking at this for use as a promotional format for those who want to distribute physical media. His examples include using the standard for films as Kickstarter rewards or to distribute films at conventions. There are a lot of opportunities for this to be successful in the indie scene.

On top of this, Terry plans to make the standard completely open and open source. While he does not have an open source web destination yet, he plans to have one ready soon. This choice is probably the key to gaining a more wide spread adoption. If he had tried to keep it locked up in the same way as Blu-ray or DVD, it would never take off.

I applaud the effort Terry is putting into this project. However, it is frustrating that such a project needs to exist. The insistence of the movie studios that all distribution of their films be burdened with DRM is not only ineffective, but it is also harming indie artists who would love to access the features without the restrictions and massive licensing fees. Hopefully, this project will succeed and give those artists the control (or lack of control) they want over their work.

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ICE & FBI Hatch Ingenious Plan To Make DVD Piracy Warnings Longer

Leigh Beadon — Thu, 10 May 2012 06:59:00 PDT

Immigrations & Customs Enforcement, still beset on all sides by unflagging movie piracy, has decided to join forces with the FBI in their proven strategy of targeting every pirate's one true weakness: legitimate customers who bought the DVD. Though the Bureau's lengthy anti-piracy lectures preceding every movie have had limited impact to date, this exciting new partnership promises to inject them with new life by making them last way longer. It will also reinforce the weight of the warning by reminding viewers that ICE's Homeland Security Investigations is also watching, not just those sissies in the FBI. In case that doesn't get the message across, the joint FBI/ICE warning will be followed by a second warning from the National Intellectual Property Rights Coordination Center, which has a less ominous acronym but a much scarier logo:

Ars Technica has answers to all your questions, except for "what's that torrent site called again?"

Will the two screens be shown back to back? Will each screen last for 10 seconds each? Will each screen be unskippable? Yes, yes, and yes.

If you're thinking "why the hell would they subject the only people who aren't pirating films to this treatment?" then congratulations, you're not ICE Director John Morton. The only thing more insane would be starting every movie with instructions on how to invent the DVD player. Apparently Morton sees method in his madness, though, much like how shamans see method in their rain dances:

The idea isn't to deter current pirates, apparently (the new scheme requires all legal purchasers to sit through 20 seconds of warnings each time they pop in a film, but will be totally absent from pirated downloads and bootlegs). It's to educate everyone else. As ICE Director John Morton announced in a statement yesterday, "Law enforcement must continue to expand how it combats criminal activity; public awareness and education are a critical part of that effort."

Well, I guess it is good to see them experimenting with new ways of doing their job. And if it doesn't work, I'm betting they've got some more tricks up their sleeve, like 30-second warnings, 45-second warnings, and possibly even 60-second warnings if they can work out the complex logistics. With law enforcement this innovative, those pirates don't stand a chance.

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Prolific DVD Bootlegger Is 92 Year-Old WWII Veteran

Mike Masnick — Fri, 27 Apr 2012 13:21:00 PDT

The MPAA often loves to talk about just how evil DVD bootleggers are. They're the ones that the MPAA most frequently uses to draw a "connection" between "piracy" and "organized crime." Because of DVD bootleggers, we even got a ridiculous, 4th Amendment-ignoring law in California that lets police search DVD printing plants at random with no warrant, just to make sure they're not making copies of movies without authorization. Of course, law enforcement also has a history of seizing authorized DVDs and insisting they were pirated.

So, you have to imagine that the MPAA's PR team is not particularly pleased with the NY Times' profile of one of the most prolific DVD bootleggers out there: a 92-year old World War II veteran named Hyman Strachman, who bootlegs a ton of DVDs every month and ships them off to US soldiers abroad:

One of the world’s most prolific bootleggers of Hollywood DVDs loves his morning farina. He has spent eight years churning out hundreds of thousands of copies of “The Hangover,” “Gran Torino” and other first-run movies from his small Long Island apartment to ship overseas.

“Big Hy” — his handle among many loyal customers — would almost certainly be cast as Hollywood Enemy No. 1 but for a few details. He is actually Hyman Strachman, a 92-year-old, 5-foot-5 World War II veteran trying to stay busy after the death of his wife. And he has sent every one of his copied DVDs, almost 4,000 boxes of them to date, free to American soldiers in Iraq and Afghanistan.

There are some great pictures in the article, which show that he's actually using some sophisticated equipment, including a professional DVD duplicator that lets him make seven copies at once. He estimates that he spends about 60 hours a week bootlegging movies. By his own estimates, he sends about 80,000 DVDs per year, and has probably sent over 300,000 total since he started. And soldiers in the field love him for it.

An MPAA spokesperson admits that he "did not believe [the MPAA] studios were aware of Mr. Strachman's operation" and then delicately stated, "We are grateful that the entertainment we produce can bring some enjoyment to [soldiers] while they are away from home." However, you have to imagine that they're seething about the NY Times highlighting how much good a bootlegging operation can do.

Of course, the real shame in all of this is that the MPAA could -- and probably should -- be doing this directly themselves. They should be providing DVDs or streams free of charge to the military. Instead, in their insane fear of piracy, they make it complicated to impossible for soldiers to view films, even when they decide to send them over: "studios do send military bases reel-to-reel films, which are much harder to copy, and projectors for the troops overseas." Because that's exactly what you want for soldiers in the field: having to carry around and mess with heavy and annoying equipment that's likely to break.

As for Strachman, he seems to hope that his age and the fact that he's not doing this for money will protect him:

"If I were younger, maybe I’d be spending time in the hoosegow."

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Is Selling Your Ultraviolet Code Copyright Infringement?

Zachary Knight — Mon, 23 Apr 2012 05:05:00 PDT

We have written many times about one of Hollywood's latest attempts at adapting to the modern digital age, Ultraviolet. Unfortunately for Hollywood studios, this service is not well received by people who have tried to use it. So what is someone to do with those unwanted free Ultraviolet codes that come in movie combo packs? You know, the Bluray, DVD and digital box sets that most movies come in. According to the Consumerist, one creative customer took to selling his unwanted digital copies on eBay. Unfortunately for him, eBay flagged his auction as copyright infringement and threatened his account if he listed it again.

This rightly confused him. After all, he was the legal owner of that unwanted, unused Ultraviolet redemption code. How could it be copyright infringement to sell that code to someone else, if you aren't using it? Selling or handing off that code is no different than selling or giving away the DVD copy that you would not use. Additionally, he pointed out many more eBay auctions doing the exact same thing, selling unwanted Ultraviolet codes.

What may make his case unique over the others is that he is selling a code for the recently released Mission: Impossible - Ghost Protocol. Since the movie has only been out for a few days now, Paramount may be working overtime to make sure that people are only buying the retail packages rather than just the digital version. Even if Paramount's end goal is to promote retail sales of the movie, flagging these sales as copyright infringement is tantamount to copyfraud.

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As Expected, MPAA Sues Movie Streaming Site That Uses Connected DVD Players

Mike Masnick — Tue, 5 Apr 2011 01:39:59 PDT

When Zediva launched, we already knew it was going to face a legal fight from the MPAA and the movie studios. The company lets people stream movies they want to see, but tries to get around the legal licensing issues by only streaming directly from internet connected DVD players, playing legitimately acquired DVDs. Their argument is that it's really no different than renting a movie and bringing it to your own DVD player. And, perhaps, the Cablevision ruling in the US on remote DVRs gives them some support for their position. But, there was no way the industry was going to just let this go by without any sort of fight. And, so, the MPAA has now sued the company claiming that it's a "sham," and that Zediva is running an illegal video-on-demand service without the proper licenses. In some ways, this case could also impact the attempts by cloud music players to stream legitimate content without a license as well.

All of these situations -- the remote DVR, the remote DVD and cloud music players -- all involve the entertainment industry demanding extra payments for how you use legitimately purchased content. It's really quite amazing what a stunning sense of entitlement the entertainment industry has here. Even if you've legitimately purchased their content, they want to limit what you can actually do with it unless you pay another licensing fee. It's really quite ridiculous and shows the level of desperation these firms are reaching.

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Avatar Sees Theater Attendance Bump After DVD Release

Mike Masnick — Mon, 26 Apr 2010 11:20:00 PDT

Earlier this year, we noted that with Avatar still being popular in theaters, it looked as though the DVD release would occur while the movie was still available in a bunch of theaters, and wondered what if it would actually boost sales at the box office. For years, of course, movie theaters owners have whined that they can't possibly compete against home theaters, and have boycotted movies that tried to do a "day and date" release, where they offer the DVDs at the same time the movie is in the theater. This seems to ignore the fact that the theatrical experience is about the social experience of going out -- which is not the same as staying in to watch a movie at home (no matter how good your home theater system is). But most theater owners don't seem to believe this, and insist that if DVDs are out at the same time as the movie is in the theater, it will harm box office sales.

Avatar seems to suggest that's not true.

btrussell points us to the news of the record-breaking sales of Avatar DVDs this weekend. His point, in submitting it, is noting that the sales were so strong even though the movie has been widely downloadable and widely downloaded for months. So, despite the claims that file sharing is destroying the DVD market, it looks like people are still quite willing to buy.

But a more interesting point is the impact on the box office. Last weekend, April 16 - 18th, Avatar averaged $2,006 at the box office per theater. On April 22nd, the DVD was released. This past weekend (April 23 - 25th)? Avatar averaged $2,257 at the box office per theater. That's an increase of 12.5% over the week. That doesn't seem to fit with the theater owners' claims, now, does it?

Admittedly, a bunch of theaters stopped showing the movie this past week, probably falsely believing that with the DVD out, it would harm sales. But... the week before, a bunch of theaters added Avatar back into their lineup. If we go back two weeks, we have a much more apples to apples comparison. The weekend of April 9 - 11, Avatar showed in 454 theaters, with an average take of $1,860 per theater for a grand total of $844,651. Yet, again, this past weekend, when the movie was showing in fewer theaters, 421, it brought in both a higher average take per theater at $2,257 and a higher grand total at $950,000. So if we compare those two weeks, with fewer theaters, there was a bump of 21.3% in box office sales after the DVD was released

As we predicted, it sure looks like the DVD release while the movie was still in the theaters actually may have driven more people to the theater, rather than taken them away from the theater.

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Werewolf TV Show Blocked From DVD Release Due To Music Licensing

Mike Masnick — Tue, 15 Sep 2009 12:38:00 PDT

We were just talking about how DVDs of various TV shows, like The State and WKRP in Cincinnati were being crippled by music licensing rights that forced them to remove the original, classic music, and replace it with bland copies. However, in some cases, it's much, much worse. Michael Scott lets us know that some TV shows are being totally prevented from coming to DVD. The latest is the TV show Werewolf, which was apparently working on a DVD release, but the project has now been shut down, due to music licensing problems:

The Shout Factory had to cancel the release because of two artists (which will remain unnamed) that would not play ball. Sony does not have the individual audio tracks, so they were unable to replace the songs, as the audio was mixed together. The two songs were featured over dialogue scenes that could not be cut. The Shout Factory's only option, even after spending a lot of time and money on it, was to cancel it and give the title back to Sony. If Sony had the audio tracks, it would have been easy to replace the two songs.

It's still difficult to see how this makes any sense at all. It shouldn't require relicensing, and even if it does, it's plainly ridiculous for the musicians to refuse. It's difficult to see how this benefits them in any way.

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Why Does Lego Get To Stop Spinal Tap From Using Lego Video?

Mike Masnick — Thu, 20 Aug 2009 07:48:00 PDT

We recently wrote about the ridiculous job for lawyers making sure no unauthorized brands appear in a movie -- which doesn't have much of a legal basis. But, for some reason, companies back down on that sort of stuff all the time. The latest example involves the classic mockumentary band Spinal Tap, who is putting out a new DVD, where they thought (correctly) that it would be cool to include a fan-made video of one of their "hits," "Tonight I'm Gonna Rock You Tonight." The video was made by a then 14-year-old and was a stop-action video involving a lego version of the band and its fans: Now, from Spinal Tap's point of view, this is a very cool way of connecting with fans: making use of a cool video in their DVD. In fact, they even played it up, and during a live performance where the video was shown, got real-life fans to mimic the lego fans, by holding their hands in the infamous "C" position of the plastic lego figures. But, of course, the lawyers got in the way. Lego objected to some of the words in the song and denied the use of the video on the DVD (oddly, the DVD still shows the fans with their hands, though it no longer makes any sense). But the real question is why Lego was even consulted. As Kimberley Isbell notes, Lego doesn't seem to have a legal leg to stand on here:

Lego justified its stance by citing the "commercial" nature of the Spinal Tap video. But can Lego really prohibit the use of their products in commercial videos? If you ask the federal courts, the answer is likely "no." It's a lesson that Mattel has repeatedly had to learn the hard way.

But that hasn't stopped trademark and copyright owners from trying. The court summarily rejected Wham-O's claims against Paramount Pictures for the unflattering use of its Slip 'N Slide toy in the movie "Dickie Roberts: Former Child Star." Caterpillar likewise had its claims against Walt Disney (relating to the portrayal of the brand in the oh-so-popular movie "George of the Jungle 2") shot down. Similar claims by Emerson Electric Co. (makers of the In-Sink-Erator garbage disposal) and the Canadian folk band the Wyrd Sisters also failed to go anywhere.

But, unfortunately, the people putting together the Spinal Tap DVD did, in fact, cave in, and the video has not been included.

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Hollywood Kills More Innovation; Judge Overturns DVD Jukebox Ruling

Mike Masnick — Wed, 12 Aug 2009 15:53:20 PDT

Well, there goes that one. Just a few hours ago, we were writing about how Judge Patel's district court ruling barring Real Networks RealDVD system seemed to conflict with a California state court ruling for Kaleidescape. It's true that there were some differences in the details behind the ruling, but it might not matter either way, as a state appeals court has reversed the lower court ruling and has basically said that Kaleidescape's DVD backup system likely violates the DRM found on DVDs.

Once again, we're seeing a fearful Hollywood, unwilling to innovate itself, using the courts and the law to stomp out anyone who innovates. The Kaleidescape product is clearly not for "piracy" purposes. It's a server that costs around $10,000, and is designed for high-end movie fans, who want to store all of their legally purchased movies on a server so they can watch it. It didn't serve any sort of "piracy" purpose whatsoever. But, thanks to Hollywood freaking out over the fact that anyone might make a copy of a movie, even for perfectly legal backup purposes, that device may now be dead.

Time and time again, we hear folks in the entertainment industry insist that they want to support technological innovation, but their actions show otherwise. They tried (and failed) to outlaw the VCR. They tried (and failed) to outlaw the MP3 player. But lately they've been succeeding in outlawing products just because they don't like them. Doesn't that seem like a massive problem?

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Selling A Different Kind Of Plastic Disc Will Save The Video Industry?

Carlo Longino — Thu, 26 Mar 2009 02:07:00 PDT

An industry analyst says that Blu-ray disc sales could help save the home-video business, which is hurting as sales of traditional DVDs drop off. This seems to be at odds with earlier stories, which said that Blu-ray sales were particularly bleak, and weren't prompting consumers to upgrade their libraries of standard DVDs. Blu-ray continually gets portrayed as some sort of quantum leap in DVD technology, but in reality, it doesn't look like it offers enough advantages over standard DVDs to tempt large numbers of consumers to buy in at its higher price. Innovative online services -- if the movie studios will allow them to emerge -- would seem to offer the industry a better chance at salvation, rather than yet another form of locked-down plastic disc at a higher price.

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Today's Ridiculous Lawsuit: Wal-Mart, Netflix Sued Over Conspiracy To Create A Monopoly

Mike Masnick — Wed, 7 Jan 2009 09:34:33 PST

Way back in 2002, Wal-Mart decided to enter the online DVD rental business, launching an almost exact replica of Netflix. Of course, Wal-Mart quickly discovered what almost every other player in that marker discovered: just offering a competing service to Netflix isn't enough to get anyone to use it. Wal-Mart had a lot of difficulty signing up customers (and keeping them once they signed up). The whole project was going nowhere fast, and eventually, Wal-Mart decided that it was a waste of time to throw more money into a project that was pretty far removed from its main business, and decided to simply let Netflix take over its online DVD rental service. This was a reasonable business move.

However, nearly four years later, a lawsuit has been filed claiming that Netflix and Wal-Mart "conspired to create a monopoly" in the online video rental market, and as a result of that monopoly, Blockbuster raised its prices. Read that sentence again. Netflix and Wal-Mart are being accused of creating a monopoly -- and because of that monopoly another major player in the space raised its prices.

If there's another major player in the space, there is no monopoly.

Besides, the folks bringing the lawsuit are going to have to convince a judge that the relevant market is online DVD subscription services, rather than any kind of home movie viewing service (which includes store rentals, purchases, internet downloads, subscription services and more). This seems like a random bogus lawsuit targeted at a company with deep, deep pockets (Wal-Mart), rather than anything serious.

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Dr. Horrible Gives People A Reason To Buy The DVD

Mike Masnick — Mon, 22 Dec 2008 15:05:53 PST

One of the issues we regularly discuss around here when it comes to business models is the fact that anyone producing content needs to give consumers a real reason to actually buy something scarce. If it's just the same thing they can get elsewhere for free, there's not much incentive. It looks like Joss Whedon has taken at least some of that to heart. Earlier this year, Whedon got a lot of attention for the release of Dr. Horrible's Sing-Along Blog, an online three-part video musical. While it seemed like some of the attention paid to it was overblown (oh my! TV people can make videos on the internet just like regular people!), that shouldn't take away from the fact that the video, itself was really, really good.

From the beginning, the plan was always to then sell a DVD of the video, but some questioned if that would make sense, since the video was available for free online. Originally, the announced plan had been to only show the video online for free for a few short weeks, and then make people pay to see it -- but it looks like Whedon changed his mind on that one, as the video has stayed available. However, as Tom writes in to point out, it looks like Whedon and the others involved in the production have realized how to give people a reason to buy the DVD: by providing a ton of useful extras that even those who watched the original obsessively will find worthwhile to pay for. It includes behind the scenes stuff, and apparently a commentary track that is as amusing as the original video itself (and, apparently, includes new musical numbers). It's good to see folks realizing that to get people to buy stuff it helps to add value, not try to diminish it.

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Universal's War On Redbox Continues

Carlo Longino — Fri, 12 Dec 2008 16:19:00 PST

You'd think that movie companies would like it when people want to rent and watch their movies -- but surprise, surprise, only if it's on their terms. Universal has been fighting, for some time, with Redbox, the company whose kiosks rent DVDs for $1 per night, trying to get the company to sign a contract that would hamper its business model, while working on rental kiosks of its own. The WSJ is reporting that Universal asked a court to toss out Redbox's lawsuit over the contract last week, and that Redbox had to resort to "new acquisition strategies" in order to get a hold of the recent Universal release Wanted. Redbox wouldn't elaborate on those strategies, but it sounds as if Universal and its distributors cut the company off, as the studio had threatened. So once again, we're left with a company that's innovated in the movie space and delivered a product to consumers in a way they like, at a price they love. But since it didn't come from a movie studio, Universal wants to cut the company off. Once again, it's puzzling exactly how Universal can think that keeping people from seeing its movies can be good for its business.

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Why Does The MPAA Get To Approve DVD Players?

Mike Masnick — Mon, 3 Nov 2008 13:52:00 PST

In discussing a recent ruling against a Chinese manufacturer of DVD players who wasn't implementing approved DVD DRM technologies, News.com notes in passing that the ruling allows the MPAA to review and test any new or re-engineered products that use CSS technology before going to market. It's difficult to see what sort of rationale there is for this. Once again, we see a situation where the MPAA seems to think that it gets to decide what innovations are allowed, and which are not. And, unfortunately, we have a court which has agreed, basically giving the MPAA full control over what kinds of DVD players can be sold in the US.

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Why Universal Wants To Kill Redbox: It's Launching Its Own DVD Kiosks

Mike Masnick — Fri, 31 Oct 2008 16:22:00 PDT

It did seem a little odd that Universal Studios was trying to bully Redbox into an agreement that would kill off the DVD vending machine company. After all, having Redbox out there renting some movies (which it paid for) certainly seems better than it not even being an option. Initially, we just chalked it up to Universal trying to make sure it had more control over the rental market -- but a bunch of readers this morning are pointing out that there may be a much more direct reason. It turns out that Universal Studios is launching its own DVD kiosk system. Initially, it's in the UK, but it's likely there are plans to offer them in the US as well. So now the ridiculous "take it or leave it" bullying threat from Universal Studios to Redbox makes a lot more sense: it was designed to force a competitor out of business so Universal could have the market to itself.

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DRM Company Releases One-Sided Study On DVD Copying

Mike Masnick — Fri, 11 Jul 2008 06:42:00 PDT

The MPAA has probably been the worst of the various Big Copyright industries in terms of the level to which their studies exaggerate the negative impact of unauthorized copying, while totally ignoring any positive impact. For example, it likes to widely cite a study (which it paid for) that triple- and quadruple-counts "losses" by noting the ripple effects. At the same time, it totally ignores the same positive ripple effects (the ones that cancel out the negative ones, and may even outweigh them). Of course, a big part of this is the claim that an unauthorized copy is a "lost sale."

Now it appears that Macrovision, the big DRM company that supplies DRM to movie studios has cooked up its own study trying to support the MPAA in this argument, claiming that lots of people are copying DVDs and that most of them would buy the DVDs they copy otherwise. However, the LA Times' Jon Healey does an excellent job pointing out the many significant weaknesses in the study, starting, of course, with the fact that it was paid for by Macrovision, with a clear intent in the results. And while Macrovision hypes of the fact that many people in the survey said they would have bought the DVDs they copied, it ignores the fact that the majority of folks they spoke to said the DVDs they made copies of were ones they already legitimately owned.

Even then, the results really aren't as significant as Macrovision would like you (or, rather, Hollywood) to believe. As Healey notes, the study completely ignores the positive impacts of being able to make a copy of a DVD. In fact, the most common reason for making a copy was for perfectly legal time-shifting or back-up purposes from DVDs they legitimately own. In other words, being able able to make those copies is a valuable part of the DVD. Take that away and people will buy fewer DVDs because you've made them less valuable. But, of course, that doesn't show up anywhere in the results, because that's the last thing Macrovision wants people thinking about.

While the study also hypes up the fact that more TV shows are being copied via DVD, it ignores the fact that this is probably quite beneficial. Since TV shows are ongoing experiences, you want more viewers -- and if a copy of a DVD gets someone new hooked on the show, they're more likely to start watching it on TV or to buy a future DVD. But, again, that's not mentioned at all. Either way, props to Healey and the LA Times for digging into the numbers a bit and not just parroting the press release findings, like many other news sources.

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Yet Another HD DVD Format Steps Into The Ring?

Mike Masnick — Tue, 11 Mar 2008 05:45:00 PDT

Thought the format war over high definition DVD technologies was over and Blu-ray had won? Perhaps you should think again. The NY Times has a story about yet another attempt at a high definition DVD technology, this time called HD VMD. It's not hard to predict where this one is going: it's dead on arrival. While the company behind it insists it's not trying to start a standards battle, it's difficult to see how you can judge it any other way. After all, why would any studio want to go through the same mess from the past five years in arguing over which standard to release their movies on? The folks behind HD VMD seem to be banking their entire efforts on two very weak pegs: first, their system is cheaper than Blu-ray and second, their Chairman is a big shot Hollywood distributor. If that's the case, he hasn't been particularly effective as there are only 17 movies available in the format -- and you probably wouldn't recognize any of them. As for the cost issue, that's dead on arrival as well. HD DVD was cheaper than Blu-ray and that didn't help it survive. Besides, anyone who understands technology advancement curves knows that Blu-ray is going to start getting cheaper and cheaper pretty fast. The cost advantage will disappear before long. But, the single biggest factor is just that the studios know they've lost three or four good years of selling high def DVDs and don't want to bother with yet another format war.

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Blu-Ray Will Likely Catch On Despite Flaws

Timothy Lee — Mon, 10 Mar 2008 14:21:00 PDT

I've had my own share of criticisms of the Blu-Ray format in the past, but even I think the thesis that Blu-ray is doomed is over the top. Don Reisinger claims that having won the battle with HD-DVD, Sony's Blu-Ray format is still going to lose the war of consumer indifference. I think there's clearly something to this. Clearly, lots of people are still buying DVDs, and the reasons Reisinger identifies -- inflexible DRM, high prices, many consumers' inability to tell the difference between HD and regular definition content -- are certainly reasons to expect uptake of the Blu-Ray format to be relatively slow. But I think it's important to keep the longer-term perspective in mind. People were saying many of the same things about the DVD format a decade ago: complaining about the price and wondering if consumers would care about the quality difference. But the DVD format is indisputably successful. Prices came down. Consumers got used to the higher quality of DVD. It didn't happen in a year, but it took less than a decade.

The same thing will happen with Blu-Ray. Blu-Ray players today are no more expensive than DVDs were a decade ago, and the PS3 doubles as a video game console. As people upgrade their TVs, more and more of them will get used to high-def picture quality. We've pointed out before that faster bandwidth will ultimately render physical formats obsolete. But fortunately for Sony, as bad as Blu-Ray's DRM is, the download services' DRM is even worse. You can at least be reasonably sure you'll be able to play your Blu-Ray disc on most TVs, something that's often not true of video download services. So in the short run, Blu-Ray probably has time to reach critical mass among consumers before Hollywood figures out how to design a movie download service consumers will actually be interested in. Blu-Ray would catch on faster if it weren't for the issues Reisinger identifies, but I don't think there's much doubt Sony and its partners will sell tens of millions of the things.

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Die Hard Packages Digital Copy With Its DVD

Dennis Yang — Tue, 16 Oct 2007 17:08:00 PDT

In a special edition of its upcoming release of the latest Die Hard DVD, 20th Century Fox has announced that it will include a DRM-free digital version of the movie on the DVD. In order to copy the WMV file to a local computer, movie watchers will need to input a 16 digit code that is found on the DVD box. It seems ironic to require people to enter some code to get at the supposedly DRM-free file. This is a step in the right direction, but it still seems like they're making people jump through unnecessary hoops. Still, this feature will finally allow consumers to legally watch the movie on their computer and portable devices without having to pay again for that right... or having to use a third party ripping tool. Perhaps this move is more evidence that the studios find the DMCA unreasonable. As we've seen before, by embracing these formats, consumers will begin to find more value from the media, and, as a result, their consumption should increase, which is ultimately good for the entire movie industry.

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NetFlix Hopes Good Customer Service Will Keep Mail Boxes Stuffed With Red Envelopes

Joseph Weisenthal — Thu, 16 Aug 2007 14:08:00 PDT

Although Blockbuster sat on its heels for a long time while NetFlix gobbled up market share, the company has aggressively fought back this year, prompting a lot of pain at NetFlix. NetFlix stock has been pummeled lately as its been drawn into a price war in order to stem customer churn. The problem is that its business model is easily replicated, which partly explains the company's attempt to assert a patent on it. However, the company does appear willing to actually compete, which is refreshing. The New York Times reports on the company's unorthodox decision to offer customer support services from friendly sounding Oregonions (as the company puts it), rather than rely on offshoring or email support. Although this is an expensive move, the company feels it will prove to be a key differentiator as it battles back Blockbuster. Obviously, good customer support means happier customers, while bad customer support can turn customers away. But the lesson isn't that companies should immediately stop all offshoring of these services. Rather, it's important for companies to think of customer support strategically and weigh the various costs and benefits, rather than just going on the lowest-price option.

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Who Cares How Many Discs Counterfeit Operation Could Have Made?

Mike Masnick — Thu, 9 Aug 2007 03:46:43 PDT

Information Week is reporting on two men who were sentenced to jail for what is being called the "largest CD and DVD pirating scheme to be prosecuted in the United States." From the evidence, it certainly sounds like these guys were counterfeiting all sorts of music, movies and software, so there's nothing wrong with them being caught, found guilty and punished. What I do find interesting, however, is how the various industry associations have been spinning this story (and how the press is accepting it without question). Since these guys were arrested, the story has been how they had equipment that could have made 300 million pirated CDs and DVDs. Note the "could have" part. Because, in reality, authorities only seized a bit less than half a million. It's still significant, but it's less than 0.2% (not 2%, but 0.2%) of what's going in the headlines. In theory, any DVD/CD burner could produce millions of counterfeit discs -- but that's not news. Why is it news in this case?

Of course, this is par for the course for the industry. Remember when the RIAA wanted to count high speed CD burners as multiple burners in trying to boost the size of a bust it made? Or when the MPAA claimed they seized $30 million worth of DVDs when in turned out to only be about $10,000? It seems they like to blow these things out of proportion with big, totally unsubstantiated numbers. Of course, that lets them make the laughable claim that each of these busts is "a significant blow" against piracy when nothing can be further from the truth. In fact, as we've seen, all these CD/DVD counterfeiting shops are facing a much more "significant blow" from the competition from free downloads. Yet, of course, the Information Week piece carries a quote saying that "It cannot be understated how significant it has been." Actually, I'd say it's been significantly overstated.

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74 Percent Of Nothing Is Still Nothing

Carlo Longino — Mon, 16 Jul 2007 06:10:00 PDT

The group behind the HD DVD format in Europe claims that it has 74 percent market share of the next-gen DVD market in a handful of western European countries. Of course, they're not including Sony PS3s, which have a Blu-ray drive, in their count, but the bigger point is that they're claiming 74 percent of a miniscule market. This contrived stat, like Toshiba's claim of 60 percent share of the US market, glosses over the problems that are holding it back: DRM that breaks legitimate customers' players, low perceived benefits and high prices. Apparently, though, the HD DVD folks would rather claim to have a big share of a tiny market than to have any share in a market that's actually meaningful. Update: Just in case anybody cares, the Blu-ray people say they're actually the market leaders.

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Duh: Report Says DVD Ripping Is A Lesser 'Threat' Than File-Sharing

Carlo Longino — Wed, 11 Jul 2007 03:46:00 PDT

A research firm has released a new report saying that people are much more likely to get pirated movies from file-sharing networks than ripping DVDs from rental services or friends. While an article about the report says this is "contrary to popular belief", it hardly seems surprising. While the number of tools to simplify and automate the task of ripping a DVD and turning it into a manageable file have proliferated over the last few years, they still pale in ease of use to the relative point-and-click simplicity of file-sharing networks, particularly for novice users. This is fairly obvious, but it's an important point, because it underlines the fact that it's really impracticality, not copy protection that stops people from ripping DVDs in the same way they do CDs. Despite the contention of the reports' authors, copy protection and DRM really don't stop anybody from ripping a DVD -- they just frustrate legitimate customers.

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