Techdirt. Stories filed under "movies"

There Is No Logic To The Argument That Zach Braff Shouldn't Use Kickstarter

Mike Masnick — Fri, 10 May 2013 11:16:51 PDT

Not this again. Back in 2011, we first discussed why it was silly that some people got upset that someone rich and famous would use Kickstarter, as if the platform was only allowed for unknown artists. That was about Colin Hanks, the son of Tom Hanks, financing a documentary via the site. Since that time, the argument has popped up a few more times, including when Amanda Palmer used the site, when Bjork tried to use the site and when the Veronica Mars movie was funded via the site. Most recently, it's been aimed at quirky actor/filmmaker Zach Braff for his Kickstarter project, called Wish I Was Here. Braff set a goal of $2 million, which was raised very quickly.

And that's when some people got angry. Just as before. But it's a small group of people. There are at least 36,000 people (i.e., those who have funded the project so far) who did not get angry. Why? Because they like Braff and want to support him. I'm curious if the people who are attacking Braff for using Kickstarter ever have watched one of his TV shows or seen a movie he was in. Because, in that case, they'd be paying the same sort of thing... but most of that money would be going to a giant corporation, rather than to the actor himself. So what are they complaining about?

In a (slightly over-defensive) interview video, Braff points out that he's always been about connecting and engaging with his fans, and this is just one more way to do that. Frankly, he's more defensive in that video than he needs to be. He's got nothing to be defensive about. He notes, accurately, that he's long been known as someone who engages deeply via social media, especially Twitter and Reddit where Braff has been active for years. He also talks about his own obsession with Kickstarter, and how great it was to get the various updates on projects he'd funded, and how he hoped his fans would enjoy getting updates about the movie making process. And, yes, he's backed a bunch of projects himself, including the Aaron Swartz documentary.

For the life of me, I can't see a single logical argument for why people are upset about this, other than (a) they don't like Braff or (b) they're jealous of him. Neither seems like a particularly compelling reason for why Braff, or any famous person, shouldn't use the platform. The two most common arguments seem to be "he's rich and should fund it himself." But that's stupid. First off, he's probably not quite as rich as you think, and second he's made it clear over and over again that the budget is much higher than the amount he's raising and he's putting in an "ass-ton" (his quote) of his own money as well. Also, if you think that, don't fund him. No sweat off your back. For his fans who like him and want to support him, so what? The second argument is that this means he gets the money instead of some struggling filmmaker. However, as he himself has pointed out, the data suggests something entirely different:

I have something every detractor doesn’t have: the analytics. Most of the backers of my film aren’t people on Kickstarter who had $10 and were deciding where to give it, and then gave it to me instead of someone else. They came to Kickstarter because of me, because of this project. They wouldn’t have been there otherwise. In fact, a lot of people who didn't know about Kickstarter came and wound up giving money to a lot of other projects too. So for people to say, 'That’s ... up; you’re stealing money from documentaries' is just not a sensible argument.

All he's doing is the same thing we've been arguing for years is the business model of the future: connecting with fans and giving them a reason to buy. Braff has done exactly that, and has built up a huge and loyal following who are really excited about this project. As we pointed out when Amanda Palmer raised $1.2 million on Kickstarter or when Louis CK made over $1 million by selling direct off his site, the fans who are buying in aren't disturbed by how much money is being made. For the most part, they seem thrilled to be a part of something amazing.

I think that's the key thing that the detractors simply don't understand. This is about two key things: being part of an experience and a community. It's not about "a movie," but about much more than that. And, even specifically around "the movie," people should be supporting what Braff is doing, because funding it this way means that it's going to be Braff's vision for the movie, rather than a giant Hollywood studio. A few months back, Jonathan Taplin, a filmmaker and defender of the old system, told me during a debate that no real filmmaker would ever use Kickstarter. At the 40 minute mark, he goes on a condescending rant saying sarcastically that "major filmmakers" could never possibly use Kickstarter because "the average" film only raised $10,000. But the average is meaningless for something like this. Furthermore, he goes on and on about (his friend) Martin Scorcese getting to do a movie he wants, and how that would never work via Kickstarter. But we're seeing over and over again the exact opposite. When a star with a big following uses something like Kickstarter, it gives them more ability to make the movie they want without outside interference.

Now we're seeing, quite clearly, that "major filmmakers" can use Kickstarter to do interesting things, and somehow, I get the feeling that it's the same sort of people who insisted they couldn't possibly make it in the first place who are now complaining that they are...

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Oh Look, The Number Of People Employed In The Movie And Music Recording Business Just Hit An All Time High

Mike Masnick — Thu, 11 Apr 2013 12:47:46 PDT

The common refrain coming out of the MPAA and RIAA over the past few years has really focused on "jobs, jobs, jobs!" This is a message that often works with Congress. If you can convince Congress that "jobs" are at risk, they go scrambling to protect those jobs, even if the economy would be much better off with obsolete jobs going away, and better jobs taking their place. That said, the MPAA and RIAA have a long history of making up ridiculous claims about the number of people employed in their industries, as well as the number of supposed "lost jobs." So it's rather noteworthy to see that the good folks over at ZeroHedge have pointed out that, according to the Bureau of Labor Statistics (BLS), jobs in the motion picture and sound recording industries hit an all time high in December. Funny that. I thought that they were losing jobs like crazy, and that without SOPA those jobs would just keep disappearing. Hmm...

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Warner Brothers Thinks What People REALLY Want In A Streaming Service Is Something That Costs More But Offers Less

Tim Cushing — Thu, 4 Apr 2013 08:55:54 PDT

Warner Brothers, one of the many studios to sign on to the rightfully-maligned Ultraviolet "service," and tireless proponent of lengthy arbitrary blackout periods, has decided to leap ungracefully into the streaming business with Warner Archive Instant.

Now, Warner Archive Instant isn't necessarily meant to be a Netflix killer. (Or even to take out the severely wounded Hulu.) It's way too niche for that. But it's unclear exactly what perceived gap in the market Warner is hoping to fill (other than a gap of its own creation). Here's a few of the underwhelming details.

Warner Archive Instant [is] a service that streams vintage films and shows from the vast Warner Bros. catalog. It's an offshoot of the existing Warner Archive DVD and Blu-ray site, but the digital selection is unfortunately rather limited — there are only 123 distinct titles available as of now. While most of these aren't typically found through other outlets, it's still a pretty small selection, particularly for the $9.99 monthly fee associated with the service. Warner says that it'll be constantly adding and rotating new content in and out, but for now it's not the most robust offering around.

This certainly sounds like a studio-directed effort. More expensive with less selection! That's what people are looking for in a streaming service! Warner, despite dipping a toe into the Stream, seems to be relying on artificial scarcity to drive subscriptions. Many of the movies and shows it offers on Archive Instant aren't available through other streaming services or retailers. So, if you're absolutely dying to watch selected episodes from seasons 2 & 3 (but not the entire seasons, mind you) of 77 Sunset Strip (or late-80s insta-classic Disorderlies) and have nothing better to do with a ten-spot, Warner Archive is tailored precisely for you.

Of course, this being a studio effort, there are a whole lot of caveats to the severely limited, expensive, streaming service -- many that you won't find hampering cheaper services with more titles.

For instance, if you want true HD, you have a single option: Roku box to TV. That's it. Hi-def streaming for PC and Mac is not supported "at this time." Also not supported: smart TVs, networked Blu-Ray players, Wii/Xbox/PS3 or mobile devices. Here's more good news: the service can only be utilized on one device at a time.

This service is far too limited and far too expensive to appeal to about 99% of everybody. Perhaps several months down the road when Warner adds more (and it will need to add a lot) content, it might be tempting. But even with additional content, it will still be nothing more than yet another streaming service competing for market share in an overcrowded field.

Warner is making a couple of mistakes here (at least). The first is arbitrarily locking up certain content solely to "create" a market for the shackled products. The second mistake is assuming people are clamoring for a fragmented streaming market. Most people are satisfied with one or two services and very occasionally use others to fill in the gap. What they're not interested in is creating yet another account, setting up yet another device and adding yet another line item to the debit side of their bank accounts in order to access limited niche content. (And even the "niche" part can be argued. The titles available are hit-and-miss -- a collection of true classics mixed with below average films, accompanied by a bizarre selection of TV shows, some of which are represented as "best of" sets, rather than the entire season[s]. Archive Instant seems to have been set up by a faulty database query, rather than curated with the classic movie fan in mind.)

At the end of the day, though, Warner will still be able to say it tried. When the MPAA presents its anti-piracy legislation suggestions, it will point to this (and Ultraviolet) as evidence of the studios' willingness to meet ~~pirates~~ potential customers halfway. What it fails to understand is that meeting customers halfway rarely results in a sale. And when nobody's buying the crap the studios are shoveling, to them, it just looks like pirates all the way down.

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Lawyer Suggests That Prenda Law May Have Only 'Released' Movies It Sued Over As A Honeypot For Lawsuits

Mike Masnick — Fri, 22 Mar 2013 13:15:25 PDT

Another day, another story having to with Prenda Law (the hits just keep on coming). Found via FightCopyrightTrolls, we discover some research done by lawyer Graham Syfert, who has taken on Prenda/John Steele in a number of cases, including the infamous Florida case that was tossed out for fraud on the court following an Abbott & Costello-worthy transcript involving John Steele, Mark Lutz, and a variety of guest appearances from others on Team Prenda (despite Prenda claiming to both have nothing to do with the case... and with hiring the lawyers for the case, who were all trying to get off the case).

Apparently getting curious about the whole shell within a shell within a shell setup of Livewire/AF Holdings/Ingenuity 13, Syfert began wondering about just what copyrighted works were actually at the center of those lawsuits. As you may recall, Prenda, used to represent actual porn studios, but at some point shifted to a variety of shell corporations, which it's now accused of running itself (a big no no). But then what copyright was it using? Well, Syfert looked at the details of the lawsuits, and then looked around, and basically found that the "movies" in question never appear to be distributed in any way, except via BitTorrent, all seeded by the same user. Hmmmm....

So, four out of the Five Fan Favorites that Ingenuity 13 wishes to protect are shared by sharkmp4. (Other hash values referenced in complaints do not result in any valid torrent). One wonders if the "Five Fan Favorites" copy registered with the copyright office includes all of these sharkmp4 videos. Would that be proof that Prenda Law is seeding its own works and then suing? The honeypot. The venus fly trap. The pitcher plant? Or is sharkmp4 just another pirate?

Syfert digs a bit deeper and digs up a bit more info on this "sharkmp4" character:

Now of course, this all begs the question: Who is sharkmp4? Well, the IP address associated with this user can be determined by a technically skilled individual who could load up all the torrents, join the torrent swarms and then find the common seed. However, there is no reason to do this, because it will come back with a Mullvad VPN on an IP in Germany owned by Leaseweb and get you nowhere.

Well, almost nowhere. Because back at FightCopyrightTrolls, they add a little piece to the puzzle.

I want to point out to one coincidence that Graham did not mention (probably he did not know): a person who we strongly believe was John Steele had been commenting on this blog via Mullvad VPN (links at the bottom). Although it does not prove anything per se — a single exit IP address is shared by many VPN users — the fact that Mullvad VPN was allegedly used to seed certain pornographic movies is interesting.

Obviously, not conclusive proof of anything, but enough to leave you scratching your head and wondering. It's not like Mullvad is one of the more popular VPNs either. And, of course if John Steele, or a representative of the copyright holder themselves is uploading and distributing the file in the first place (and that's the only place where it's released), there's a reasonable argument to be made that any downloads are not infringing, since it's clearly an authorized copy. At this point, Steele and Team Prenda are likely in enough hot water, but it seems like a court that wants to dig even deeper into the whole thing might uncover some more... interesting things during discovery.

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A Tale Of Two Studies: Can File Sharing Both Harm And Help Sales?

Mike Masnick — Fri, 22 Mar 2013 08:01:48 PDT

In part one of this series, we looked at a study that suggested that file sharing (mainly via Megaupload) likely harmed the sale and rental of digital movies. In part two, we looked at a study that suggested that file sharing of music (across many sites) likely helped the sale of digital music. So is one right and the other one wrong? Not necessarily. It's possible both are correct. Unlike some other studies we've seen, the methodologies used by both studies appear to be fundamentally sound, without any obvious problems. As with just about any study, both studies correctly note that there is the possibility of unknown or unexplained variables impacting the data. However, both run through a series of tests to try to eliminate a number of possible outside variables, and both come out with results that suggest their initial arguments are robust.

So, let's try to look at why the two studies might both be right -- and what that might actually mean. First off, there's the obvious difference: the first study was about movies, and the second study was about music. While there are obvious similarities between the two, there are also significant differences, which may also lead to differences in consumption. Movies, for example, tend to involve more initial commitment, since it takes a lot more time to watch a movie. Music can be consumed much more easily. But, for music that people like, they're much more likely to listen to it over and over again, whereas most people will view a movie only once. Even for movies that people absolutely love, they're likely to consume it many fewer times than corresponding music that people love. And, on top of that, movies come together as a whole package. Music, for the past few decades, was packaged as a bundle of songs, in the form of an album. However, the rise of digital distribution for music has often broken apart that bundle, such that people focus on the single unit of the song, rather than the album.

In those differences are the seeds of why these two studies could both make sense. The recording industry, obviously, points to the massive decline in overall revenue from recorded music sales. That is indisputable. But, much of that can be explained by the breakup of the album into single song sales. When you're no longer forced to purchase 10 songs you don't care about just to get to the 2 you do, it shouldn't be any surprise that overall sales revenue may decrease. At the same time, because people can then spread their interest across more artists, something like file sharing can still increase digital distribution sales, because they sample via unauthorized sites, and then purchase a few songs from those they like best. The file sharing acts as a way to figure out where they want to spend their money, but because they can spend less to get more, overall sales dropped off. The market is much more efficient.

Movies, on the other hand, are somewhat different. There isn't a great unbundling happening there. And, often, consuming movies is done for a different reason and in a different manner than consuming music. Watching a movie is a way to "kill" an evening. Need something to do? "Let's watch a movie." As such, you'd expect movie watching behavior to remain more consistent, as people have the same "void" to fill at a regular interval. And, while alternatives (such as surfing the internet or playing video games) may fill that void, some percentage of the people will prefer movies -- and if one source of movies goes away, they will look for others, and some percentage of those are likely to switch to a pay service.

There's one other factor that may impact all of this as well, as hinted at in the post about the first study: the level of development of legal services. For years, we've seen one thing that is almost certainly true: when there are no legal services available, the amount of unauthorized use increases. Unauthorized use is almost always an indicator of an under-served audience. And, if you look the development of online music and movie offerings, authorized music services tend to be a lot further along in creating compelling, user-friendly offerings that people find to be "better than piracy." There are some movie services that are getting there, but movie services are more likely to be encumbered with DRM and annoying restrictions (e.g. "watch the whole thing in 24 hours or you lose it!").

If anything, this final point is the most compelling explanation to me for the different results in the two studies -- and why I'm less confident that the results of the first study will hold up in the long term, unless Hollywood finally allows the creation of more user-friendly online movie services (i.e., lower prices and less restrictions, which is where the music services have all gone). In the music world, more and more people are making the gradual shift to authorized services, because they really do provide a good overall experience. The file sharing that goes on tends to be complementary to all of this because it is one way that people can further sample and figure out what they like, which they can then support within an authorized context (especially since music people like is played repeatedly).

With movies, on the other hand, you have less of a need to "sample," since the product is often watched just once. And there, convenience becomes king. People will flock to the most convenient offering (convenience being a combination of a variety of factors, which may differ per each individual, but generally include elements of ease of use, pricing, overall selection of movies, ability to view in multiple places, ability to watch at different times, etc.) For many, Megaupload represented the most convenient offering, and after that went away, other services, sometimes pay services, represented the "next best option." But, those other services are still at risk of newer more convenient services re-emerging and taking back those movie-watchers.

In those cases, both studies "make sense," but the lessons they suggest may be somewhat different than the lessons put forth by the supporters of the studies. The authors and supporters of the MPAA study suggest that this proves that shutting down unauthorized sites is a reasonable goal. I think that may be looking too narrowly at the results, and discounting how much people are focused on the "most convenient" solution. An even better solution is to provide more convenient offerings, which would win over customers from unauthorized sites even if they aren't taken down.

Finally, I wanted to respond to the IFPI, which appeared to completely freak out about the European Commission study, claiming it was flawed:

IFPI believes the JRC study is flawed and misleading. The findings seem disconnected from commercial reality, are based on a limited view of the market and are contradicted by a large volume of alternative third party research that confirms the negative impact of piracy on the legitimate music business.

The IFPI seems to be responding based on emotion, rather than fact, and possibly a misunderstanding of the data. The data directly supports the commercial reality, which is that digital music sales have been regularly increasing, which the IFPI itself records quite clearly. The decrease in overall recording industry revenue (the IFPI is misleading in talking about "the legitimate music business" because they really only mean the portion that is recorded music sales), comes from the decline in the sale of physical music: CDs. And the study only looked directly at digital distribution, not the impact on CD sales. The other studies that the IFPI refer to look at the connection between file sharing and CD sales, showing a general decline there, but much of that may just be from people shifting from physical (inefficient and wasteful) distribution to digital (efficient) distribution, in which case you'd expect a decline in overall sales, not because of "piracy" but because of less inefficient bundling and physical manufacturing and distribution costs.

The IFPI also repeats the BPI's misreading of the "Kantar Worldpanel" data. That is, they highlight that many people who fileshare don't buy anything, but then leave out the people who neither fileshare nor buy any music, thus setting up an apples and oranges comparison. They also cite the debunked HADOPI study, despite the fact that reports have already explained how the impact observed in that study likely had more to do with the introduction of new iPhones rather than HADOPI's three strikes policies.

But, really, the most ridiculous argument in the IFPI response is at the end:

The fundamental problem of the music market place remains as true as ever: why pay for music when you can get it illegally free?

The fact that they still believe this to be true is the real problem with the legacy industry in one simple sentence. They still think the only way to compete is on price. That's clearly not true, as seen by the IFPI's own data, which consistently shows that massive numbers of people buy all the time, even when they can get it quite easily for free from unauthorized sources. As noted above, it's really about convenience -- which is a result of a combination of factors, of which price is merely one. Creating more authorized services that provide greater convenience than unauthorized sites is the most effective way to fight back. If the IFPI actually focused on providing more value, rather than freaking out every time piracy was detected, we'd be talking about what an amazing time it was for music today, rather than having this same silly debate all over again.

In the end, despite the IFPI's whining, these two studies do add valuable data to the debate. And while they may appear to conflict, I don't think they really do. The results both make sense in context, and viewed from a wider angle they suggest, still, that the best way to respond to unauthorized file sharing is to make authorized service more convenient.

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Indian Studio Uploads Pirated Version Of Its Film To Its Official Youtube Account

Tim Cushing — Wed, 27 Feb 2013 09:11:38 PST

I can't imagine what went wrong here. You'd think an official Youtube account for a movie studio wouldn't be lacking in non-infringing content to upload. Nonetheless, India's Saregama Movies somehow ended up with a pirated movie as an official upload. Not only that, but the pirated version had gathered nearly 166,000 views before being taken 'round back and privatized by the studio. Twitter user Last Avenger screencapped the miscue in all its glory.

A search for Kamal DDR will bring up hundreds of listing, all pointing to various torrent links. Kamal DDR apparently "supplied" this copy to Saregama, although exactly how that ended up on the official channel rather than the studio's own un-pirated version remains a mystery.

Returning to the scene of the self-inflicted crime (as it were), viewers are now greeted with the familiar skewed-emoticon-o'-public-embarrassment.

No explanation for this switch-up has been provided by Saregama, so we're left with speculation. Could it be that torrenting the file was easier than finding it on the server? Was this preserved on a Saregama hard drive as evidence and labelled unclearly? Was this a disgruntled employee's last act? Rogue administrator? Are the phone calls truly coming from inside the house, torrentially-speaking? It also appears that this issue may not be limited to this film. Roughly a third of the links on Saregama's Upload list dead end with a "page not found" message.

Maybe original and pirated copies mingled freely within Saregama's local storage, much as they do on the open market. India's struggle with truly rampant piracy (as compared to the non-rampant piracy that is fretted about constantly by lobbyists and ICE heads) has been well documented and yet the country still cranks out roughly 80 million films (estimated) every year.

At the end of the day, Saregama's house is (mostly) back in order. Only the quizzical private-video-face remains, along with a selection of full-length films from the Saregama catalog (many with English subtitles) and a few unanswered questions.

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Bollywood No Longer Worrying About Piracy As Studios Keep Setting New Records At The Box Office

Mike Masnick — Mon, 18 Feb 2013 10:08:21 PST

For years, India was held up as a country that just didn't respect copyright law at all. We'd heard the stories about how widespread piracy was for all kinds of content. However, as we'd seen elsewhere, the claims that piracy was somehow "killing" the industry didn't really hold up under scrutiny. In fact, the Indian movie market (Bollywood) continued to grow massively and to thrive, even as piracy was rampant. That certainly seemed to contradict the old claim that infringement kills the incentives for content creation. And now, according to the Economic Times, many Indian studios have more or less stopped even talking about "piracy" because the box office is booming. The secret? It shouldn't be a surprise, since it's exactly what people have been talking about for years: making the authorized versions of the content more widely available more quickly in a variety of formats, thereby cutting off one of the main reasons why people seek out infringing copies:

A few years ago, theatre releases were limited to tier-I and tier-II cities due to high costs of prints. It took between three months and a year for a film to be released elsewhere. Consequently, films reached television and home video only after six months of a theatrical release. Pirates gleefully filled that vacuum by bombarding consumers with cheap optical discs....

Not anymore. The brightest stars of the Rs 100-crore constellation are theatres and prints.... Digital prints, which cost one-fifth of analog prints, have facilitated the swift reach of movies across the country.

There's an infographic that shows most movie releases in 2011 were shown on about double the number of movies screens as similar movies just the year before. That's a massive increase in availability for theater showings. As for the home market, while it still competes with pirated copies, quality seems to be winning:

According to Dwyer, the better-off who earlier paid to have high-quality cinema systems at home are no longer interested in poor quality (pirated) copies. "The quality of DVDs and Blu-ray discs is excellent with extra features and at a reasonable price."

While the article still says that there's a lot of infringement going on, it's just fading into the background for the most part, especially given the record-setting revenue numbers.

For one, producers are happy with the current box-office fortunes. There is also no evidence to show big hits suffering from online piracy. On the contrary, data crawls suggest that the most downloaded films are nearly always the biggest hits, according to Lawrence Liang of Bangalore's Alternative Law Forum, one of the authors of the India chapter of the Media Piracy report.

And, thus, the studios have finally realized that paying more attention to improving the authorized market is probably more important than "stomping out piracy."

What has really changed is the focus on piracy. As the case of AACT shows, the struggles against pirates are few and far between to make even news, leave alone act as a deterrent. "The tendency has been to focus always on the numbers we are capturing rather than looking at leaked markets," says Uday Singh, managing director, MPDA.

Of course, the article is still full of dire warnings about how the studios need to stay vigilant or everything might fall apart, but that seems based on random hyperbole, rather than any actual evidence.

None of this should be even remotely surprising. For years we've been pointing out that if you make works available, make them convenient and reasonably priced, and stop treating your customers like criminals, people will pay. Sure, there will always be some piracy, but those people are unlikely to pay no matter what, for the most part, and you just need to stop worrying about them and focus on giving more fans more reasons to actually pay. It appears that India is an example of a place where that's actually happening.

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Chris Dodd Sounding Like A Broken Recording Industry

Mike Masnick — Fri, 15 Feb 2013 19:39:00 PST

Ever since the failure of SOPA, MPAA boss Chris Dodd has been making the rounds, giving the same damn stump speech over and over again. We've reported on it before, but he's done it again, this time at the National Press Club. As the transcript shows, it's the same old story.

Play up just how amazing the movie industry is because it "tells stories." Then, transition into just how many "jobs" the industry creates -- and focus on how those jobs aren't the glamorous ones, but those everyday people (the "little people" if you will) -- and always claim that there are over 2 million of them, even if that's massively exaggerated. At least this time he put in the caveat that he was including people who are both "directly and indirectly" in the industry (plus he admits that he's including TV people, as opposed to just movies) -- such as the people who "prepared our lunch today." Of course, I would imagine those people would likely be preparing lunch for someone else even if the movie industry disappeared. He also highlights that the industry creates jobs across the country, naming New Mexico, Georgia and North Carolina. Don't think those are by accident. Those are three states that have provided significant subsidies to the Hollywood studios, and are some of the very few such programs not rated as a dismal failure for the local economy. He claims that "You can go down a list of states all across the nation and find one economic impact success story after another." He conveniently leaves out that the evidence actually shows that most of these are actually not economic success stories at all, but dismal failures that funnel taxpayer money from states to Hollywood studios which bring in their favorite crews, and hire few locals.

But, then, of course, there's the key section on "technology" and innovation. At first he tries to play up all of the "innovation," but again, leaves out how many of these "innovations" wouldn't actually exist if the MPAA had its way in the past:

Because movies matter—to more people, in more places, who want to watch them at more times, across multiple platforms—the film and television industry is continuously innovating to meet that demand.

Today movies and TV shows can be viewed in theaters, on the big screen, or at home on TV screens, laptops, iPads, Kindles and smart phones.

There are more than 375 unique licensed online distribution services around the world that provide high-quality, on demand film and television shows, offering the easiest, fastest, safest, highest quality product and viewing experience possible.

That the industry was dragged, kicking and screaming, to support many of these things is sort of left out. Also, the fact that the industry has worked ridiculously hard at crippling many of these services, making them way too expensive and annoying (how many services require you to watch a video within 24 hours, because, apparently, no one in the MPAA has kids and recognizes you might want to start a film one night and finish it the next?) seems kind of important, but not mentioned.

There is one thing we agree on:

These innovations are great for consumers. I'm not exaggerating when I say a new golden age in television and film is being ushered in. You can watch more content than ever, through more channels, and the quality of the movies and TV shows is outstanding.

So why did the MPAA fight nearly every one of these changes all along? And why is it still trying to do so? Well, then we get to the usual talk about how the next wave of "innovation" isn't about providing more value to those consumers. It's not about extending the golden age. It's about how can Silicon Valley help the MPAA stop piracy:

This is why it's so crucial that we protect this content from theft. Because consumers deserve to enjoy first-generation versions of their favorite films—not secondhand, pirated films-of-films shot and recorded inside a movie theatre on a mobile phone.

First off, it's not theft. Stop saying it is when it's not. It just makes you look totally out of touch. Second, you know what helps consumers get good works? Making them available in convenient ways at reasonable prices -- something the big studios frequently work against, despite his list of services. Finally, you know how to beat the "secondhand, pirated films-of-films shot and recorded inside a movie theater on a mobile phone"? You offer more convenient ways to view the actual product. I don't know why Dodd and the MPAA think that anyone really wants to watch a crappy cammed version of a film shot from a mobile phone. They don't. Give them legitimate reasonable options and they prefer that.

We must strike a balance between the desire for a free and open internet and the protection of intellectual property. The future cannot be about choosing one over the other—between protecting free speech OR protecting intellectual property—it must be about protecting both

There is no "balance" needed here. What we need is a free and open internet, period. Protecting IP is a fool's errand. Focus on providing more legitimate services with better service, more convenience and reasonable pricing and there's no need to protect things. People pay for Netflix, Spotify and others because they're simply more convenient. Do more of that and stop worrying about piracy.

We can and must have an Internet that works for everyone, and we can and must have protection for the creative industry’s genius that intellectual property represents.

This assumes that protection is a reasonable goal. It's not. It will always be costly to protect and will always have collateral damage. Considering you can solve the problems merely by providing better services, stop worrying about piracy, and just start helping more companies innovate cool additional value. There should be no confusion. For the more than two million Americans whose jobs depend on the motion picture and television industry “free and open” cannot be synonymous with “working for free.”
I'm sure whichever staffer wrote this line thought it was really clever, but what does it even mean? No one is asking anyone to work for free. Just moments before in the speech, Dodd was talking about how the industry was doing great and growing. More movies than ever before are being made and there are all sorts of new opportunities. Focus on those.

To protect IP, and the openness and freedom of the Internet, we must together innovate our way through these challenges. Fortunately, Silicon Valley and Hollywood are making some progress on this front.

No, the challenge is not how to "protect content." The challenge is "how can we make money" and the tech industry has been providing answers to that over and over and over again, creating new and useful tools and services that help the creation, promotion, distribution and monetization of movies. And the industry has either fought to block or simply looked down upon nearly all of them, until suddenly they're "big enough" to matter, and then they take credit for those innovations. Don't "work together" on the useless goal of "protecting content." Focus on innovating in a way that makes consumers better off.

It's a simple thing: are you adding value to the consumers, or are you trying to stop them from doing something? If you're doing the first thing, you're moving in the right direction. If you're doing the latter, you're throwing money away on the impossible. While Chris Dodd represents the movie industry, the joke around here for a while has been that industries fighting the future "sound like a broken recording industry." Dodd's been telling this same tall tale for a year now, and it's time he got some new material. Stop focusing on ways to stop people from doing stuff, and start looking for ways to help them get more value.

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Florida Lawmakers Try To Stop Subsidizing Videogames; Send That Money To Hollywood Instead

Tim Cushing — Wed, 13 Feb 2013 07:39:13 PST

Florida legislators are looking to dial back the tax credits they've been handing out to Electronic Arts over the past couple of years, citing concerns that "people sitting at computer terminals" just aren't bringing in enough taxable revenue.

"Can you tell me why video games need a tax incentive?" Sen. Eleanor Sobel, D-Hollywood, asked Department of Economic Opportunity Executive Director Jesse Panuccio at one point.

"I just don't see video games as an issue that's going to bring a lot of people to Florida and [bring] big expenditures," added state Sen. Gwen Margolis, D-Coconut Grove.

They may be right -- these tax incentives aren't paying off. After all, EA received $9.1 million during the 2011-12 fiscal year and is looking to score another $14.5 million to underwrite (full retail price!) roster updates for Madden NFL, NCAA Football and the latest iteration of Tiger Woods PGA Tour. EA, which has been in Central Florida since long before the subsidy train started rolling, defended its grab of state incentives by saying the money has "motivated the company to expand its Central Florida workforce during the last three years." That may be true about the last three years, but as is pointed out elsewhere in the article, EA employs fewer people today than it did in 2007.

Don't get me wrong. I don't think EA should be given tax breaks and other incentives in order to continue operating in Florida. In fact, I'm of the opinion that if a business needs subsidies to get by, it's probably not much of a business. However, they are a fact of life at this point, and giving businesses a tax break to move to your state is a powerful persuader. Many locales compete for the affections (and taxable revenue) of large companies, throwing larger and larger amounts money at them in hopes of a decent return on their investment.

If these legislators want to drop the subsidies, more power to them. Unfortunately, they don't want to get rid of subsidies. They just want to throw the money in another direction.

"To have such a concentration of it going to games — I mean, people sitting at computer terminals — I'm not sure most of us really think that's film," said state Sen. Jack Latvala, R-Clearwater. "Film is movies. … People have to hire a lot of folks and they have meals and have to stay in a hotel room."

"I think we ought to be focused on those kinds of things [rather] than games," he added.

"Do you consider any difference if a company is already situated in Florida and has a stable workforce, compared to a company that comes into the state and hires people that might not be hired otherwise, purchases food for the people they've hired, provides lodging for them?" [Sen. Geraldine] Thompson asked.

Oh, I see. You just want to take these extraneous fiscal crutches and offer them to a different member of the entertainment industry. This doesn't really change anything. Sure, legislators want to believe that a big Hollywood production will boost the local economy for the duration of the shooting, but prior experience shows that Hollywood-aimed subsidies rarely improve the financial situation of anyone other than the studio receiving them.

As was previously covered here, a study showed that nearly every subsidy program developed to attract motion picture studios to various locations has turned out to be a losing proposition. Most of the states studied recovered less than $0.25 on every tax dollar invested. Why? Because when a studio rolls into town to shoot a movie, it brings in a lot of its own talent. Sure, there are some temporary bumps to food and housing income, but when it's all said and done, the studios roll out of town slightly richer, leaving their hosts stuck with the bill.

Despite these losses, states continue to wave ever-increasing amounts of money in the air while shouting "Pick me!" at every passing entertainment concern, gambling away their constituents' tax dollars. Florida's legislators seem to be no different. They've mistaken movie studios for good-natured philanthropists and written off "people sitting at computer terminals" as a drain on the economy. It's a "spend money to make money" plan that has failed to pay off time and time again. All these legislators are arguing over is on which losing horse they should put their money.

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Netflix Releases All 13 Episodes Of Its Own TV Show House Of Cards At Once

Mike Masnick — Fri, 1 Feb 2013 15:25:00 PST

We've been reasonably concerned about the growing fragmentation of online video, especially as Netflix is trying to directly take on HBO, Showtime and others, while still offering them an online outlet for their content. There's been plenty of buzz about Netflix's new series, House of Cards, starring Kevin Spacey and directed by David Fincher. Most people are talking about how Netflix spent a supposed $100 million on the series, and how it's trying to be for Netflix what The Sopranos was for HBO. However, what's probably more interesting is the fact that Netflix is releasing the entire first season -- all 13 episodes -- at once today. It's something of a recognition of how many people view TV series today.

Netflix, of course, understands this quite well, as its streaming service has become quite popular with people as a way to "catch up" on the hot TV shows from last year that people missed when they were first aired. A growing number of people really really like just being able to "binge" on a TV show and watch them all over a short period of time. However, some purists worry that releasing all of the episodes at once takes away from some of the suspense and enjoyment. At the very least, it limits the "watercooler" moments the day after something airs, but with so many people just recording stuff and watching it later, that social moment was under attack already anyway.

It will be interesting to see how well the show does, and how people react to all 13 episodes being available at once. Perhaps my brain is still stuck in the "old way" of television, but this strikes me as quite different than something like movie windows, which feel really stupid. A "series" that dribbles out content once a week (but lets anyone catch up with full episodes later), seems perfectly reasonable. I almost wonder if releasing all the episodes at once takes away from long term buzz for the show as a story arc grows across a season. Also, it may make for a different kind of commitment from viewers. People who might jump in knowing that they're really only committing an hour, may be more fearful about recognizing they may be about to get sucked in to something much longer.

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Hollywood Accounting Strikes Again: Investors In 29 Paramount Films That Earned $7 Billion Dollars Get No Return

Mike Masnick — Tue, 15 Jan 2013 08:03:44 PST

Ah, Hollywood copyright math. In the past, we've discussed a few instances of how massively profitable films use funny accounting tricks in order to avoid ever having to show an official profit, even as the studios themselves make out nicely. The key trick: the studios set up special subsidiaries just for each film, and then charge those subsidiaries huge sums of money for effectively doing very little. Thus, the studio gets all the money, but the actual "film" is shown as remaining in the red.

The latest example of this in action involves a group of investors who gave $375 million to Paramount Pictures expecting to see some return on blockbusters like Mission: Impossible III, Blades of Glory and the Transformers series. All in all, those $375 million dollars found their way into 29 movies, many of which were massively successful. In total, the collection of films brought in $7 billion dollars worldwide. And... Paramount didn't pay a single dime out to those investors, until they were finally taken to court.

The financiers charged Paramount with understating gross receipts, delaying payments, overstating production and distribution costs and hindering audit rights to verify revenue and costs with the films that Melrose II had funded. The plaintiff also had a bone to pick with how revenue from Melrose II-funded films was being received through Paramount parent Viacom, not Paramount, and how money was flowing. For instance, Paramount allegedly paid sister company MTV as a third-party participant for Nacho Libre and Charlotte's Web.

In reaction to the claims, Paramount initially described the lawsuit as "filled with hyperbole" and claimed that it "ignores the true facts."

Later, Paramount characterized the investors as being impatient. "Based on the performance of the films in which it invested, Melrose II is expected to make a double-digit return on its investment," the studio alleged.

Perhaps hoping to keep the mysteries of Hollywood accounting secret, Paramount has now worked out a "settlement" with the investors, just as hearings were about to begin. It seems likely that Paramount coughed up some money to keep the investors happy... and to keep from having to provide to the court information on how the money flowed, where all of us would have seen some more details of the infamous Hollywood accounting practices.

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$100 Million Pledged To Indie Film On Kickstarter... And 8,000 Films Made

Mike Masnick — Mon, 7 Jan 2013 08:45:43 PST

Less than a year after being declared the darling of Sundance -- especially for not having "the arrogance of a studio" -- Kickstarter has announced that over $100 million has been pledged to indie film via its platform (which, of course, is hardly the only crowdfunding platform that filmmakers use, though it is the most popular). There are some caveats, of course. This is over Kickstarter's lifetime (since April 2009), but the numbers have been growing rapidly. $60 million of those pledges came in 2012. Also, that's pledges, not actual money given, since only projects that hit their target get the money. The actual total collected is $85.7 million -- which means that'll get over $100 million pretty quickly.

And, yes, the "but what about my $100 million movie" crowd will scoff and argue that this number is so "small." But, two points there: first, this number is growing very, very, very fast. And if you can't understand how trends explode, then you're going to be in trouble soon. Second -- and this is the more important point -- those funds helped create 8,000 films. For those who have been arguing about culture and how we're going to lose the ability to make movies... this suggests something amazing and important is happening which goes against all those gloom and doom predictions. By way of comparison, the UN, which keeps track of stats on film production, claimed that in 2009, 7,233 films were made. Worldwide.

Also, some will inevitably suggest that these aren't "real" films and don't "count" or aren't important. But, of course, the data shows that it's creating a nice long tail of film production, and that includes some very "real" films no matter how you measure. According to the Kickstarter post:

At least 86 Kickstarter-funded films have been released theatrically, screening in more than 1,500 North American theaters according to Rentrak. Another 14 films have theatrical premieres slated for 2013.
According to Rotten Tomatoes, three of the 20 best-reviewed films of 2012 are Kickstarter-funded (The Waiting Room, Brooklyn Castle, and Ai Weiwei: Never Sorry). Another Kickstarter-funded film, Pariah, was among the best-reviewed of 2011.
Two films have been nominated for Oscars in the past two years: Sun Come Up and Incident in New Baghdad. A third, Barber of Birmingham, launched a project after being Oscar-nominated. Three documentary features and two documentary shorts are currently shortlisted for Oscar nominations in 2013: The Waiting Room, Detropia, Ai Weiwei: Never Sorry, Inocente, and Kings Point.
Kickstarter-funded films comprised 10% of Sundance’s slate in 2012 and 2013. In total, 49 Kickstarter-funded films have been official selections at the prestigious festival.
Kickstarter-funded films comprised 10% of the 2012 slates at the SXSW Film Festival and Tribeca Film Festival. In total, 57 Kickstarter-funded films have premiered at SXSW and 21 at Tribeca.
At least 16 Kickstarter-funded films have been picked up for national broadcast through HBO, PBS, Showtime, and other networks.
Kickstarter-funded films have won at least 21 awards at the Sundance, SXSW, Tribeca, Cannes, and Berlinale festivals.
Eight Kickstarter-funded films are nominated for Independent Spirit Awards this year.

That seems like a pretty good track record that any movie studio would be proud of... And, to think: this trend is just beginning.

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Disney Freaks Out Over Patents That May Mean It Can't Keep 3Ding Old Movies

Mike Masnick — Fri, 4 Jan 2013 19:39:00 PST

While lots of folks have been declaring the 3D movie obsession dead for a while now, the studios still love 3D movies. In this age where they're looking for ways to create formulaic premium experiences that get people to go out to the theaters, they seem to have jumped on the 3D bandwagon full force. Of course, as with all things Hollywood embraces too strongly, that's now leading to backlash, mainly because rather than do it well and where it makes sense, the big studios are basically just looking to add 3D to whatever they can and hope people will pay the premium. It's a short term strategy, but Hollywood execs aren't exactly known for their long term outlooks.

That said, Disney -- the poster company for supporting extreme copyright monopolies -- has apparently discovered a form of intellectual monopoly that it doesn't like so much: patents. Last week it filed an emergency motion to try to insert itself into the sale of some patents that cover the 3Difying of old films, from a company, Digital Domain Media Group (DDMG), that went bankrupt. The patents were sold to a company called RealID, and that seems to scare Disney. The link above to The Hollywood Reporter has the details of the back and forth over the dispute, in which it appears that Disney had an option to get a full license to the patents, but for reasons that suggest someone was asleep at the wheel, the company did not officially exercise that option. Now it wants to block the sale unless it can get a guarantee that it won't get sued.

There's got to be some amount of irony to see copyright maximalist Disney suddenly running into issues over the possibility that patents might block it from doing something it wants to do.

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Embedded In The Fiscal Cliff Deal: Hollywood Gets A Big Tax Break

Mike Masnick — Wed, 2 Jan 2013 08:35:39 PST

Last month, we wrote about some of the more ridiculous subsidies that Hollywood studios get these days, in which approximately $1.5 billion in taxpayer money goes straight to Hollywood studios in the US (and even more internationally). While the reasoning given for most of these programs is that they create jobs, a thorough study of the various programs showed that almost never happens. Of course, most of those programs have been state subsidies. The federal government also has its own subsidies for Hollywood -- and they just got renewed in the fiscal cliff deal, despite being scheduled to expire.

It's one of the head scratchers that some noted would take people by surprise given all of the talk about the "fiscal cliff." Here's what it looks like: Like many such things, this started out with good intentions, with the idea being to help small, independent films stay in the US. But that changed:

The original tax incentive applied to productions costing less than $15 million to make ($20 million in low-income areas). The 2008 extension applies to all films, up to a deduction of $15 million (or $20 million in low-income areas). The incentive is especially generous to television series; it applies to each TV episode.

Apparently, this sucker costs the American taxpayer about $150 million per year. As that link notes, "Disney's Gotta Eat." Yes, this was just one of many such "pork" efforts slipped into the fiscal cliff deal -- along with things like providing Goldman Sachs subsidies for its headquarters, special breaks for NASCAR, tax benefits for Puerto Rican Rum, and more -- so perhaps it's not that surprising. But, it's stories like this that explain why so few people trust Congress, and why they're fed up with "crony capitalism."

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NRA: To Protect The 2nd Amendment, We Must Trample The 1st & 4th Amendments

Mike Masnick — Fri, 21 Dec 2012 10:54:15 PST

As predicted, one element of the NRA's "big announcement" today was to lash out and blame media, music and movies for violence. Most news stories are focusing on the wacky idea of putting armed guards in every school (and to do so in the next few weeks as well) and creating a database of the mentally ill, but the lashing out at video games and movies, despite no evidence that they actually lead to violence, seems equally ridiculous.

In some manner, it appears that the NRA's response is that the 2nd Amendment is more important than other amendments in the Constitution. Blaming music and movies is an attack on the 1st Amendment, which allows for freedom of expression, while turning our schools into police states, patrolled by armed guards, at least toes the line on the 4th Amendment. The database of mentally ill patients also raises significant privacy issues. No matter what you think of various gun control proposals, it seems rather ridiculous to take a strong Constitutional stand as the basis for your argument... only to make a complete mockery of other amendments.

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Rather Than Punishing Moviegoing Texters, Why Not Provide Incentives For Them To Put Down Their Phones?

Mike Masnick — Fri, 21 Dec 2012 00:13:00 PST

One of the areas of economics I'm most interested in is focused on incentives. While it's a simplification of things, there are so many areas where people seem to naturally gravitate towards negative reinforcement as an incentive system -- that is, punishing people for things they believe are wrong. While that does work in some cases, it's amazing just how frequently positive reinforcement to nudge behavior in a better direction works much, much, much more effectively. Aaron DeOliveira points us to an interesting example of a company focusing on positive reinforcement in an area where most people have long-assumed that punishment was the only possible option: dealing with the annoyance of people texting during a movie. The first response that many theaters (and theater goers!) have, is to "punish" this behavior by outlawing it. They set up rules and put up signs. They have silly commercials before the show about how annoying it is. But it's all based on the idea of negative reinforcement: punishing or shaming those who engage in the behavior. But, quite frequently, that does little to actually get people to stop.

So, it appears that the Cinemark chain of theaters is trying a system of positive reinforcement. Within its normal movie app for iOS and Android is a separate "mini-app" allowing users to put their phones into "CineMode." It automatically makes the screens on the phones dim, and puts them into vibrate mode -- sort of like an equivalent to airplane mode. But here's the kicker: since the app knows what you're doing, it can keep track of whether or not you actually follow through and leave CineMode enabled throughout the entire flick. For the users who do that, they get rewarded:

When the movie ends and the guest exits CineMode, Cinemark will automatically send a reward (digital coupon) through the app and store it in the Rewards section.

Who knows how well it will work in practice, but it's great to see people realizing that technology can help enable this kind of positive reinforcement, rather than always doubling down on the negative reinforcement/punishment.

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NRA's Plan: If We Blame Video Games & Movies For Sandy Hook Massacre, Perhaps People Will Stop Blaming Guns

Mike Masnick — Wed, 19 Dec 2012 09:40:00 PST

There's been a fair amount of discussion about "gun control" in the wake of the Sandy Hook massacre -- and whether or not you believe that gun control is important or that it wouldn't have made a difference one way or the other (and I've seen both arguments over and over again in the past few days), one thing that a number of people have talked about is the gun lobby's silence in response to the tragedy. The NRA, one of the most powerful lobbying groups out there, has remained mostly quiet on the subject, even to the point of shutting down its Facebook feed (which was getting bombarded) and staying silent on Twitter. However, the organization started to speak up yesterday, putting out a message about how it, too, was horrified by the tragedy, and announcing an important press conference for Friday. According to Fox News, the point of the conference is to "push back" and apparently that means blaming videos games and movies:

Sources close to the issue had earlier alerted Fox News that the National Rifle Association -- which has remained silent since Newtown, chiefly to allow for a proper period for mourning -- would soon start to "push back" against the gun-control lobby.

"If we're going to have a conversation, then let's have a comprehensive conversation," said one industry source. "If we're going to talk about the Second Amendment, then let's also talk about the First Amendment, and Hollywood, and the video games that teach young kids how to shoot heads.

Of course, as we've been noting the past few days, this kind of thing may actually go over well with grandstanding politicians who have used the tragedy to push this line of action, despite the fact that there is no evidence whatsoever that such things have had any impact at all.

This is basically the NRA's "hey, look over there!" strategy.

And, whatever you think of the gun control issue, I can't see that working out well for the NRA in the long run. It might get the attention of a few grandstanding politicians, but these days, a very large percentage of the population plays video games. It's not an issue that's confined to a small group of teenaged boys any more. And pissing off the large and growing group of gamers with bogus claims about how they're being brainwashed to murder people isn't going to win many fans.

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Another Politician Boards The Bandwagon: Sen. Rockefeller Blames Violent Games And Television For Newtown Tragedy

Tim Cushing — Tue, 18 Dec 2012 10:48:00 PST

As Mike covered earlier, politicians are particularly opportunistic beasts, willing to turn any tragedy into a soapbox and a chance to push through pet legislation. Even if the politicians aren't particularly wed to gun control or censorship, they're more than willing to get on the bandwagon if it will net them a little facetime with the press or the appearance of "doing something."

The latest addition to the list of opportunists is Sen. Jay Rockefeller, who states that something needs to be done about violent video games and movies, whether or not they had anything to do with last week's tragedy.

“We also need to look at the violence our kids see every day starting at a young age. By the time children reach 18 years old, they have seen tens of thousands of violent images – on television, the internet, or video games. As parents, research confirms what we already know – these violent images have a negative impact on our children’s wellbeing. While we don’t know if such images impacted the killer in Newtown, the issue of violent content is serious and must be addressed.

Rockefeller doesn't specify any particular research, but then, this is a press release, not an editorial. And despite admitting that everything he's worried about may not have affected the Newtown killer, something must still be done because... well, because this is Rockefeller's pet issue.

Back in 2007, Rockefeller led a push to grant the FCC "explicit authority" over violent and indecent programming, including the assessment of heftier fines for violators. Back then, he used his "tens of thousands of violent images" scare quote as well, and mentioned a wealth of research that backed up his assertions... but failed to name a single study in his press release.

Having failed with this initial push, Rockefeller saddled up the hobby horse again in 2009, revisiting the Children's Television Act. He claimed this was just a fact-finding mission and not another attempt to push the FCC to clean up television to his exacting specifications. One is almost tempted to believe him, right up until he details his frustration with the reactions of his fellow senators to his FCC-related effort.

He said he had not been deterred by the reactions of his fellow Senators to a hearing last year at which he featured a clip reel of violent programming. He said he was shot down, mostly by members of his own party, because of concerns over the First Amendment. "There was an automatic mindset that because the First Amendment exists, you cannot even be talking about this so don't waste my time. I was furious, and I was undeterred."

As everyone knows, the First Amendment only protects speech you 100% approve of.* How dare these so-called Senators express concerns about turning the FCC into a tool of censorship! It's refreshing that Rockefeller remains "undeterred" in his efforts to sacrifice the First Amendment on the altar of "protecting the children."

*100% not a fact.

He's a few years behind his biannual schedule, but Rockefeller is riding high in the hobby horse saddle yet again, thanks to America's rather more frequent delivery of exploitable tragedies. He may have made a few points on gun control and mental health in this release, but he undoes any forward momentum by opportunistically exhuming his "violent media" platform.

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Creators: Kill The Hobbit To Save Regular Earth, And Win!

Leigh Beadon — Mon, 17 Dec 2012 15:59:21 PST

Last week, we wrote about an article by Joe Karaganis discussing the huge tax subsidies and political concessions wrested from the New Zealand government by Warner Bros. in order to film The Hobbit in the country. The editorial was entitled Kill The Hobbit Subsidies To Save Regular Earth, which inspired an editorial cartoon that Bloomberg View attached to it, which in turn has inspired Joe to launch a contest for creative interpretations of The Hobbit as an allegory for the situation.

First, I confess I hadn't fully thought through how to map the various heroes and villains of ‘Kill the Hobbit’ back onto ‘The Hobbit.’ But on reflection, this drawing seems a bit off. In my version of the story, the hobbit is the villain, stealing gold from the people of New Zealand (I guess to take back to Hollywoodshire?) This would make Smaug the dragon the public, and Smaug’s giant pile of gold the commonwealth (that’s why it’s so large). Smaug should be casting the Expecto Patronum (EP) spell to banish the Hobbit, not the other way around.

But hey, people may see it differently, and their right to publish those perspectives on our common culture is part of what’s at stake in ‘Kill the Hobbit to Save Regular Earth’ (pivoting here to New Zealand’s support for the IP-enforcement-on-steroids Trans-Pacific Partnership Agreement).

So with that in mind, I am happy to announce the ‘Kill the Hobbit to Save Regular Earth’ Initiative– KH2SREI for short (pronounced Kisstory, after the ancient Elven admonition to beware Hobbits bringing gifts).

I invite you to flesh out the Kisstory allegory in whatever direction makes most sense to you. If you send me pictures, I will publish them here (as long as they are not obscene or gratuitously nasty). I will even try to talk the good people at Bloomberg View into running them. And if we get enough submissions we will have a public vote to award copies of the “semi-epic” Media Piracy in Emerging Economies to the two most worthy entries (plus whatever other awards we can accumulate in the meantime.)

As for those "other awards", we're throwing a Techdirt t-shirt into the mix. So if you're a creator, whatever your medium, we hope you'll submit something! Head on over to the contest page for more details and some "extra points" guidelines, including a "Special award for the best pro-Hobbit, pro TPPA, pro Warner Bros art, if we get any" because hey, political cartoons can cut both ways.

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Pundits And Politicans Very Quick To Blame Video Game & Movie Violence For Newtown

Mike Masnick — Mon, 17 Dec 2012 12:53:21 PST

The tragedy last week in Connecticut is still horrifying to think about on many different levels -- but the constant search for blame, and using it to support pet political ideas is troubling. This isn't to say that we don't necessarily need to have a "conversation" on various hot potato political issues, but basing it around an event like this isn't likely to be a productive and informed conversation, but one driven purely by emotions. I understand the desire, and the idea that making use of such a tragedy to create political will to do something, is all too tempting. But I fear what happens when we legislate around emotions, rather than reality. And, no I'm not even going to touch the question of gun control or mental health treatment. Both obviously evoke strong opinions from people on all sides of the issue (and, contrary to popular opinion, there are more than two sides to those issues). Instead, let's talk about the rush to blame video games and TV shows, as seems to happen every single time there's a mass shooting -- and almost always done with no evidence.

We already talked about people rushing to blame a video game, after the incorrectly named "original" suspect in the shootings had, possibly, at some point "liked" the game on Facebook. But, of course, now the politicians are stepping in, and retiring Senator Joe Lieberman is using the tragedy to push forth one of his pet ideas that he's brought up in the past: violent video games and TV must have something to do with it. He's trying to set up a commission to "scrutinize" "the role that violent video games and movies might play in shootings" among other things (yes, including gun control and mental health care).

Lieberman, not surprisingly, was not the only one. A large group of politicians and pundits immediately jumped to the conclusion that video games and movies must have something to do with all of this:

A disturbing number of public figures have lashed out at video games since the atrocity committed at Sandy Hook Elementary on Friday. A bipartisan group of legislators embraced this scapegoating on the Sunday news programs; from Democrats like Sen. Joe Lieberman and Gov. John Hickenlooper to Rep. Jason Chaffetz and former Pennsylvania Gov. Tom Ridge.

They were joined by members of the media – sadly, too many to count.

On MSNBC on Monday, Chris Jansing asked her guests what connection Adam Lanza’s interest in video games had to his murderous shooting spree. She quoted senior White House advisor David Axelrod who tweeted “shouldn’t we also quit marketing murder as a game?” Liberal contributor Goldie Taylor revealed that she refused to let her child play games until he was 14-years-old.

[....]
On Fox & Friends on Monday, legal analyst Peter Johnson Jr. delivered an offensively sermonizing renunciation of entertainment producers and videogame makers who are “clinging to guns economically.”

“They are glamorizing guns in this country. They are the scourge in terms of these guns,” Johnson Jr. said of game and filmmakers

Of course, time and time again when these shootings happen, the reports later show... that video games and movies played little to no role. Yes, sometimes the killers played these games, but it's difficult to find teenagers these days who have not played a violent video game or watched a violent movie. It's like saying that we should explore "the role that breakfast plays" in such shootings. How many of the killers ate breakfast that day? In fact, studies seem to suggest that, if anything, violent movies may actually decrease incidents of violence.

Bizarrely, the person with the most thoughtful explanation on some of this might be movie critic Roger Ebert, in a review of Gus Van Sant's movie Elephant from nearly a decade ago. That movie portrayed a similar school shooting, and did so by making it clear that sometimes there are no answers and there is no "other thing" to blame. Sometimes (perhaps many times) these things don't make sense, no matter how many times we want them to make sense. But Ebert also points to another factor that rarely gets discussed:

Let me tell you a story. The day after Columbine, I was interviewed for the Tom Brokaw news program. The reporter had been assigned a theory and was seeking sound bites to support it. "Wouldn't you say," she asked, "that killings like this are influenced by violent movies?" No, I said, I wouldn't say that. "But what about 'Basketball Diaries'?" she asked. "Doesn't that have a scene of a boy walking into a school with a machine gun?" The obscure 1995 Leonardo Di Caprio movie did indeed have a brief fantasy scene of that nature, I said, but the movie failed at the box office (it grossed only $2.5 million), and it's unlikely the Columbine killers saw it.

The reporter looked disappointed, so I offered her my theory. "Events like this," I said, "if they are influenced by anything, are influenced by news programs like your own. When an unbalanced kid walks into a school and starts shooting, it becomes a major media event. Cable news drops ordinary programming and goes around the clock with it. The story is assigned a logo and a theme song; these two kids were packaged as the Trench Coat Mafia. The message is clear to other disturbed kids around the country: If I shoot up my school, I can be famous. The TV will talk about nothing else but me. Experts will try to figure out what I was thinking. The kids and teachers at school will see they shouldn't have messed with me. I'll go out in a blaze of glory."

In short, I said, events like Columbine are influenced far less by violent movies than by CNN, the NBC Nightly News and all the other news media, who glorify the killers in the guise of "explaining" them. I commended the policy at the Sun-Times, where our editor said the paper would no longer feature school killings on Page 1. The reporter thanked me and turned off the camera. Of course the interview was never used. They found plenty of talking heads to condemn violent movies, and everybody was happy.

Meanwhile, Danah Boyd has a related, but somewhat different perspective on the whole thing, noting how the media frenzy around these events also tends to mess with everyone else who are trying to cope with the situation, and makes sure their lives can never go back to any semblance of normalcy. She talks about running into some kids who had gone to Columbine high school, a few months after those attacks:

What I heard was heartbreaking. They had dropped out of school because the insanity from the press proved to be too much to deal with. They talked about not being able to answer the phone – which would ring all day and night – because the press always wanted to talk. They talked about being hounded by press wherever they went. All they wanted was to be let alone. So they dropped out of school which they said was fine because it was so close to the end of the year and everything was chaos and no one noticed.

As she notes, it's not the press's fault either. They're also giving the public what they want -- and, she agrees, that some of these topics are important and should be discussed. But the focus on the people in Newtown isn't helping.

But please, please, please… can we leave the poor people of Newtown alone? Can we not shove microphones into the faces of distraught children? Can we stop hovering like buzzards waiting for the fresh meat of gossipy details? Can we let the parents of the deceased choose when and where they want to engage with the public to tell their story? Can we let the community have some dignity in their grief rather than turning them and their lives into a spectacle of mourning?

Yes, the media are the ones engaging in these practices. But the reason that they’re doing so is because we – the public – are gawking at the public displays of pain. Our collective fascination with tragedy means that we encourage media practices that rub salt into people’s wounds, all for the most salacious story. And worse, our social media practices mean that the media creators are tracking the kinds of stories that are forwarded. And my hunch is that people are forwarding precisely those salacious stories, even if to critique the practices (such as the interviews of children).

What happened last week was senseless and tragic and painful to think about in all sorts of ways. And, yes, there are reasons to hope that such an event might lead to ideas that would prevent such things in the future, but the way we go about things on such discussions doesn't provide much hope that we're going to do anything valuable or thoughtful in response. Instead, it becomes a rush to do something purely out of an emotional response, and it's unclear how that helps.

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Disney Chooses Netflix As Its Exclusive Distributor Beginning In 2016

Timothy Geigner — Wed, 5 Dec 2012 14:51:51 PST

Shock generally isn't an emotion I feel when I come across a story to write for Techdirt. Anger? Sure. Sadness? Of course. Dismay? You know it. But not shock. I can't say that's true in this instance. Recall two recent stories we've had about Netflix. The first is a piece I wrote about Disney opting out of their Netflix streaming deal, resulting in so-called Disney knock-offs to spring up to fill the void. The second is a story Leigh Beadon covered in which one television analyst somehow looked at parents having the ability to provide their children with more entertainment choices via Netflix and decided that was a bad thing, urging companies like Disney to veer away from Netflix altogether.

It would appear that Disney is now reversing course and embracing the ever-living hell out of Netflix as the future of its distribution model.

If you’re a Netflix subscriber and you have kids, you’re about to make those kids happier. Netflix and Disney just inked a new deal, making the former the exclusive American subscription TV service for “first-run live-action and animated feature films from The Walt Disney Studios.”

This marks the first time that a major Hollywood studio decided to side with a digital distribution rather than a traditional TV provider. The deal is also a high-water mark for a company that some were speculating was ripe for takeover as recently as last month.

According to the press release by Netflix, Disney's releases, and those of its subsidiaries (including, presumably, LucasFilm), will be available on all platforms beginning in 2016. Ostensibly, this would include Netflix's streaming platform, which is a break from Disney's previous dropping of streaming through NetFlix. Perhaps even more impressive, Disney is releasing at least a portion of their back catalog through NetFlix as well, as early as this coming year.

The article goes on to note that if you think this is a dagger in the heart for pay-TV, there's still another massive hurdle to leap.

“The pay TV business as we know it is on really safe grounds until sports distribution changes,” Cryan added. “It’s technically difficult to distribute that stuff online at scale. In addition to that, the business is stacked up so you pay a lot for ESPN and other sports channels not available elsewhere. Until that changes, the core of the pay TV business is on relatively safe ground.”

Now, I happen to think that sports streaming isn't the challenge Dan Cryan makes it out to be, but he's right that the barrier is still there and it's massive. Still, keep in mind that ESPN, unfortunately the king of cable sports, is a Disney owned operation. If the house of mouse is beginning to shift the aim of its movie distribution towards a digital provider, it isn't a huge leap to bring sports streaming along with it.

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$1.5 Billion In Taxpayer Funds Go Directly To Movie Studios Each Year... And Very Few Jobs Created

Mike Masnick — Tue, 4 Dec 2012 08:55:49 PST

If you've been following MPAA boss Chris Dodd ever since the death of SOPA, you'll be aware of his stump speech. He seems to give it every chance he can: "the movie industry is all about jobs, jobs and more jobs." Of course, he lies about the number. He usually trots out his favorite 2.1 million figure, ignoring the fact that the Congressional Research Service showed it's really 374,000 people employed in the movie business.

What isn't mentioned so much (though, it depends on the audience) is the fact that various tax subsidies that different states pay to movie studios means that $1.5 billion in taxpayer money goes straight to Hollywood studios. Perhaps that would be justifiable if it created jobs. But the evidence there is actually lacking. That link involves the NY Times looking closely at Michigan, which not too long ago put in place massive subsidies for Hollywood to make movies in their state. The cost? Suffering Michigan citizens foot the bill. However, Michigan Governor Jennifer Granholm thought it was worth it because a local movie director wanted more work at home (and because, when she was younger, she had hoped to be a movie star). Lots of studios are looking to make movies in Michigan now, because the cash back from the state is way too lucrative to pass up.

Within two months, 24 movies had signed up to film in Michigan — up from two the entire year before. The productions estimated that they would spend $195 million filming there, and in return they would be refunded about $70 million in cash.

Before long, residents were rushing out on their lunch breaks to catch a glimpse of celebrities like Drew Barrymore, who was filming her movie “Whip It” in Ann Arbor, and Clint Eastwood, who was shooting “Gran Torino” in the Detroit area. Even Michael Moore, who was filming a movie about corporate welfare called “Capitalism: A Love Story,” sought and received incentives.

But does it create jobs? Not really. The story is horrifying. It involves Hollywood hotshots continually demanding more and more subsidies from the state and insisting that jobs would be plentiful as soon as they could get things up and running, but balking any time anyone asked them to put the job promises in a contract:

Ms. Granholm declared the city in a financial crisis in February 2009 and appointed an emergency manager, Fred Leeb. The city’s budget was $54 million a year, but it was overspending by an estimated $7 million to $12 million. Pontiac was also still weighted down by old incentives it had given to businesses like G.M.

The movie studio was an added challenge, since it was seeking financial incentives from the city — not to mention from other branches of the government. It won redevelopment tax credits from the federal government and separate aid from the state that included incentives for technology companies that hire residents.

Job creation became a point of contention with beleaguered Pontiac, which was being asked to waive virtually all property taxes for the studio. The investors claimed that thousands of people would be employed, but Mr. Leeb said that when he asked for job numbers to be written into the contract, the investors refused. “We started seeing some backpedaling,” said Mr. Leeb, who added that the negotiations featured “knock-down, drag-out fights.”

But wanting to bring the big lights of Hollywood to Michigan, eventually the state agreed to it. Who paid for the subsidies? Former state workers basically were forced to bet their pensions on Hollywood:

Over the objections of some local officials, the state agreed to use the state workers’ pension funds to guarantee the bonds. If the investors failed to pay, the retirees would be on the hook.

And the promised jobs? Keep looking. Sure, some crews from LA flew in, but for locals? Almost none.

The studio had created only 200 positions by the summer of 2011, according to correspondence between the company and local officials. And when temporary construction workers were excluded from the tally, Pontiac’s records show, the studio reported only two employees in 2010 and 12 the next year.

Earlier, in the article, they note that this particular project was pushed through with the promise of 3,600 jobs. You don't do that by hiring two people one year and a dozen the next.

How about tax revenue from the local operations? Yeah, big Hollywood studios have ways of avoiding paying that sorta thing, even as they're collecting millions in local subsidies:

The city later had problems collecting some of the taxes because Disney operated through a separate business entity that was difficult to track down, he said.

“This is a glamorous industry if you want to talk about Hollywood, but it’s not very glamorous for the municipality that wants to collect something,” Mr. Schimmel said. Pontiac, he said, was outgunned.

Disney declined to comment.

And... soon after that, the studios moved on to other sexier states that suddenly offering up bigger incentives than Michigan. And who did it cost? Oh yeah: remember those state workers' pensions? Yup. Them.

When the bill for the studio’s bond interest came due in February this year, it paid only a portion, $210,000. The state pension fund had to pick up the remaining $420,000....

In August, the studio defaulted on the entire $630,000 payment on the bond, despite a decision by Mr. Snyder to temporarily allocate some film incentives.

All around, it's a horror story that's being repeated in other states and countries around the globe. Hollywood studios go around pitching "jobs!" and demanding special taxpayer-funded incentives, offering giving them millions to film in a certain location. The filmmakers take the subsidies, bring in crews from LA, hire a couple people here or there... and then move on, leaving a mess in their wake. And this is the industry that is demanding even more protection from the federal government via copyright law? When is enough enough?

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Kenyan Filmmaker Looking To Cuts Costs By Using 'Pirates' As His Distributors

Tim Cushing — Thu, 29 Nov 2012 07:35:53 PST

It's not often you'll see a filmmaker turn to pirates for help. Almost every American film takes great pains to inform paying viewers just how awful these people are and how much trouble they'll be in if they're ever caught. That's "our" culture, as delivered by the MPAA: the only good pirate is an arraigned pirate (or one that has a boat, died a couple hundred years ago and resides safely on the MPAA's side of the screen).

But that's the US. Other cultures have their own take. Notable Indian filmmaker Anurag Kashyap views piracy as just another way to get his message to the masses. Incredibly efficient pirates in Nigeria spread purloined films as far as they could reach, creating new markets for Nigerian filmmakers. China's film industry continues to thrive despite being held up constantly as an example of unchecked IP infringement.

Here's another filmmaker who recognizes what pirates can offer a filmmaker on a budget. Patrick Mureithi, a Kenyan filmmaker who currently lives in Springfield, Missouri, is hoping to show his documentary on post-election violence and rebuilding in his home country, and is raising travel funds via Indiegogo. Most of this $5,000 will go directly to travel expenses, as Mureithi is counting on some of his countrymen to handle the rest.

I need to raise at least $5,000 for airfare, meals and transportation. Airfare is $2,000, transportation and meals another $2,000, and $1,000 is for miscellaneous expenses. My hope is to show the film on national television, and also to distribute it at minimum cost via the DVD piracy industry. Anything extra that I raise will go towards venue and equipment rental so that I can host public awareness forums.

When money's tight, no one does better, cheaper distribution than those whose only "business" is cheap distribution. With this "industry" already well established in Kenya, Mureithi simply needs to get his finished film into their hands and let them do what they do best -- get his film into the hands of as many Kenyans as possible.

"Kenya: Until Hope is Found," tells the story of severely traumatized men and women who learn various ways of taking responsibility for their own healing. This is a message that will resonate in the hearts of many, and will help start conversations about the need to heal from trauma, without which there can be no lasting peace. This is a message that is relevant not just in Kenya but to EVERY human being on the planet.

Hopefully, Mureithi will get his film funded and spread throughout Kenya. Roger Ebert has tweeted his support, calling the filmmaker's project an "urgent documentary." With Kenya teetering on the edge of genocide (according to Genocide Watch), the upcoming 2013 election could prove to be the tipping point, one that Mureithi hopes to head off with widespread viewing of his film.

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New Study: Megaupload Shutdown May Have Hurt Box Office For Smaller Movies

Mike Masnick — Mon, 26 Nov 2012 12:20:00 PST

TorrentFreak points us to an interesting new study from Christian Peukert of the Munich School of Management, and Jorg Claussen from the Copenhagen Business School, that looks at the shutdown of Megaupload to see if they can determine what impact it had on the box office for various movies. The findings are probably not what Hollywood wanted to see: basically, the evidence shows that taking down Megaupload didn't suddenly send people running back to the theaters. In fact, for many, many movies there appeared to be a tiny decrease in box office take, though the results are not statistically significant. The one exception to this was for "blockbuster" films that appeared on more than 500 screens. There there was a similarly tiny increase in box office. Considering that the MPAA and studio heads keep insisting that they're really concerned about indie filmmakers when they try to stamp out piracy, this suggests they may be doing it wrong.

Of course, you shouldn't read too much into non-statistically significant findings, but at the very least the data does pretty clearly show that there wasn't a sudden rush by people to go back to the theaters once Megaupload went away. Furthermore, it's possible that at least some movies -- perhaps a lot of movies -- were slightly harmed by less word of mouth. As the researchers note:

Our counterintuitive finding may suggest support for the theoretical perspective of (social) network effects where file-sharing acts as a mechanism to spread information about a good from consumers with zero or low willingness to pay to users with high willingness to pay. The information-spreading effect of illegal downloads seems to be especially important for movies with smaller audiences.

At the very least, it seems like a good area of research that deserves more study going forward.

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Budweiser Asks Paramount To Remove Their Beer From The Movie Flight

Timothy Geigner — Thu, 8 Nov 2012 13:21:20 PST

As product placement in television and film becomes more prevalent, it was only a matter of time before intellectual property silliness had to follow. For example, we've seen such wonderful cases of egocentrism as a copyright claim over a painting shown in a movie. Couple that with product placement examples that are awkward for all involved and you've got a recipe for litigious fun not seen since a murder trial involving a former Buffalo Bills running back.

Reader Chris writes in about a story that appears to be a nice crossroads of these two aspects of product placement, in which several alcohol companies are apparently upset that their products are being shown in the movie Flight doing what those products do: get people drunk.

Anheuser-Busch said Monday that it has asked Paramount Pictures Corp. to obscure or remove the Budweiser logo from the film, which at one point shows Washington's character drinking the beer while behind the wheel.

Budweiser is hardly the only alcoholic beverage shown in "Flight," which earned $25 million in its debut weekend and is likely to remain popular with audiences. Washington's character frequently drinks vodka throughout the film, with several different brands represented. William Grant & Sons, which distributes Stolichnaya in the United States, also said it didn't license its brand for inclusion in the film and wouldn't have given permission if asked.

Now, you may be asking yourself, "Why didn't the film get permission to use the products in their film?" The answer is about as complicated as a straight line; they don't have to. Studios are not required to ask for permission to include every little brand in their movies -- even if some companies now think that's the case. True, Denzel Washington's character in the film is a drunk and Budweiser may not be pleased to be associated with that aspect of the story, but the law isn't concerned about Budweiser's pleasure. Trademark law isn't about making sure you're always happy about how your product is displayed.

Even going beyond trademark law, it's not like they were "misrepresenting" anything. I, for one, can assure you that the depiction of beer being able to get a person hammered is spot on accurate, and if you won't take my word for it, I'll give you the phone numbers of some of my neighbors who can relate their experiences living near me on NFL Sundays. The point is that there's a reason these companies didn't give their permission: nobody asked them for it.

Trademark laws "don't exist to give companies the right to control and censor movies and TV shows that might happen to include real-world items," said Daniel Nazer, a resident fellow at Stanford Law School's Fair Use Project. "It is the case that often filmmakers get paid by companies to include their products. I think that's sort of led to a culture where they expect they'll have control. That's not a right the trademark law gives them."

Jay Dougherty, a professor at Loyola Law School, said the use of brands in films has generally been protected by the courts, even when the companies aren't pleased with the portrayals. "It wouldn't have been as effective a film if they used a bunch of non-generic brands," said Dougherty, who is also the director of the school's Entertainment & Media Law Institute. "In a normal situation, if the alcohol were just there as a smaller part of the movie, they might have created an artificial brand for it."

Unfortunately, with the wonderful garden of permission culture that IP laws have fertilized so well for us, companies think they can control...and control...and control. But just because sometimes filmmakers seek out product placement, that doesn't mean that all brand appearances need to first receive approval. Thankfully, thus far, the courts have recognized that they cannot keep their products out of film this way. Now let's all go have a non-generic beer.

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