Sony Pictures CEO: The Internet Is Still Bad
from the digging-a-deeper-hole dept
A week and a half ago, Sony Pictures CEO Michael Lynton made some news for saying that nothing good had come from the internet, period. Plenty of online sites (including ours) took him to task for that, wondering how one gets to be the CEO of a major content company without understanding the internet. Today, Lynton hit back at critics — not by saying he was quoted out of context or misunderstood, but by standing behind the statement and adding some gems to it as well. Let’s take a look…
In March, an unfinished copy of 20th Century Fox’s film X-Men Origins: Wolverine was stolen from a film lab and uploaded to the Internet, more than a month before its theatrical release. The studio investigated the crime, and efforts were made to limit its availability online. Still, it was illegally downloaded more than four million times.
And, as was widely noted, the movie still opened to a massive box office take, despite pretty dreadful reviews all over. In fact, the movie had a lot more buzz leading up to it because of all the talk about the leak. Funny that Lynton seems to ignore that part. Could it really be that the CEO of a major motion picture studio doesn’t understand that people go to the movies for the experience, and not just the content?
I actually welcome the Sturm und Drang I’ve stirred, because it gives me an opportunity to make a larger point (one which I also made during that panel discussion, though it was not nearly as viral as the sentence above). And my point is this: the major content businesses of the world and the most talented creators of that content — music, newspapers, movies and books — have all been seriously harmed by the Internet.
This is like saying “the major transportation companies and the most talented creators of transportation devices — horse carriages, buggy whips, blacksmiths — have all been seriously harmed by the automobile.” Markets change. They may cause trouble for dinosaurs unable or unwilling to adapt, but they have not harmed content creation or the content business. And it’s not “the internet” that has harmed the “most talented creators of that content.” It’s folks like Michael Lynton who seem to be funnelling them towards bad business models.
Some of that damage has been caused by changing business models (the FTC just announced an inquiry into the impact of new media on the newspaper industry). But the primary culprit is piracy. The Internet has brought people with no regard for the intellectual property of others together with a technology that allows them to easily steal that property and sell or give it away to everyone, with little fear of being caught or prosecuted.
Wow! At least he’s able to admit that business models play a role, but he’s flat out wrong about blaming piracy. He claims that it’s “people with no regard for the intellectual property of others,” which is hilarious coming from Hollywood — a town built on showing no regard for the intellectual property of Thomas Edison. You know what comes out of showing no regard for artificial scarcity? Amazing new industries. Lynton is a product of piracy… and yet now that he’s in charge, it’s evil? Funny stuff…
To be clear, my concern about piracy does not obscure my understanding that the Internet has had a transformative impact on our culture and holds enormous potential to improve the prospects of humanity, and in many instances already has. I am no Luddite. I am not an analogue guy living in a digital world. I ran an Internet company and my studio actively uses the web to market and sell our movies and television shows. We create original content for new media.
If you think that “using the web to sell and market our movies and television” or “creating original content for new media” represents what the internet has to offer, you really need to educate yourself on the internet. It’s not about selling and marketing. It’s about interactivity. Hire someone who doesn’t hate the internet, please.
And yes, new talents have emerged thanks to the democratic and viral impact of the web. Yes, the rise of new distribution platforms for existing content is exciting and rich with promise.
But at the same time, I cannot subscribe to the views of those online critics who insist that I “just don’t get it,” and claim the world has so fundamentally changed because of the web that conventional practices concerning property rights no longer apply; that the Internet should be left to develop entirely unfettered and unregulated.
It’s not that “conventional practices concerning property rights no longer apply,” it’s that content isn’t property. You’ve been blinded by the phrase “intellectual property” into believing it’s something that it is not. The internet is neither unfettered nor unregulated. What you’re really complaining about is that technology has put a crimp on your old business model, and rather than adjust, you want new laws to force things back to the way they were before — back before we had the rise of new distribution platforms and the ability to share content that we like with one another.
Back when automobiles were first introduced, laws were passed requiring people to walk in front of every automobile waving red flags. Officially this was for safety, but it was really an attempt to limit the automobile and keep things the way they used to be for carriage makers. You’re not asking for reasonable rules and regulations. You’re asking for red flags and a speed limit of 5 mph when cars can easily go 120mph.
In no other realm of our society have we encountered so widespread and consequential a failure to put in place guidelines over the use and growth of such a major industry.
There are guidelines. You don’t like the ones that are there, and the market has decided that many of them don’t make sense. Let history be a lesson to you: when the majority of people think that “guidelines” don’t make sense, making them even more stringent isn’t going to fix things. Instead, it’s time to look for opportunities within what people are doing.
I’m not talking here about censorship, taxation or burdensome government restrictions.
Yes, you are. You’ll just call them something different.
I’m talking about reasonable boundaries, “rules of the road,” that can help promote the many positive attributes of Internet technology while curtailing its hugely damaging effects.
Right, just as reasonable as the guys waving flags in front of cars. Those were designed to promote the many positive attributes of the automobile while curtailing its hugely damaging effects. The problem then, as now, is that people looked at the automobile through the prism of the horse carriage (that’s why they were originally called horseless carriages). So the idea that they could travel much faster was seen as a bad thing (ooh, dangerous!) rather than a good thing. The same thing is true today. The fact that people can share content and help promote and distribute it for you is seen by you as a bad thing (oooh, dangerous!), but once things shake out, those who don’t hate the internet will realize it’s actually a huge opportunity for new businesses to grow and thrive. It’s 1904. Do you want to be the CEO of the Durant-Dort Carriage Company or do you want to run Buick? William Durant made the right choice. You’re making the wrong one.
And this becomes even more critical as governments around the world are subsidizing and promoting the ubiquity of high speed broadband to make their economies more efficient and competitive. With this increase in speed, content will travel that much more easily on the Internet. But without restraints, much of that content will be contraband.
Yes, as nations around the world are subsidizing national highways, this becomes ever more important. With this increase in speed, automobiles will be able to travel that much more easily. Without restraints, much of that travel will break the speed limit.
I’ve already seen it happen in South Korea, which has one of the most highly developed broadband networks in the world. But piracy has also become so highly developed there that we and virtually every other studio has recently had to curtail or close down our home entertainment businesses. It’s hard to sell a legal DVD when it can be stolen without any repercussions.
And yet, there are new businesses springing up every day to take advantage of this wonderful abundance. JY Park is building a massive entertainment empire in South Korea by embracing the fact that everything he does will be “pirated” in some manner. But he’s still bringing in a ton of money. That’s because he’s not focused on how to sell horse drawn carriages any more, but how to make automobiles go faster and faster.
Contrast the expansion of the Internet with what happened a half century ago. In the 1950’s, the Eisenhower Administration undertook one of the most massive infrastructure projects in our nation’s history — the creation of the Interstate Highway System. It completely transformed how we did business, traveled, and conducted our daily lives. But unlike the Internet, the highways were built and operated with a set of rational guidelines. Guard rails went along dangerous sections of the road. Speed and weight limits saved lives and maintenance costs. And officers of the law made sure that these rules were obeyed. As a result, as interstates flourished, so did the economy. According to one study, over the course of its first four decades of existence, the Interstate Highway System was responsible for fully one-quarter of America’s productivity growth.
But that highway is already built. You’re not asking for reasonable guidelines. You’re asking people to walk in front of automobiles waving red flags, while everyone else is already zipping around in their automobiles.
We can replicate that kind of success with the Internet more easily if we do more to encourage the productivity of the creative engines of our society — the artists, actors, writers, directors, singers and other holders of intellectual property rights — yes, including the movie studios, which help produce and distribute entertainment to billions of people worldwide.
We’re already replicating that kind of success. Your problem is that it’s happening without you.
But, without standards of commerce and more action against piracy, the intellectual property of humankind will be subject to infinite exploitation on the Internet.
Imagine a resource that is infinitely exploitable? Imagine that wonderful abundance? Who could possibly complain about that? Oh right, those who benefited from the previous scarcity. Still, it’s quite amazing to see someone actually complain about abundance.
How many people will be as motivated to write a book or a song, or make a movie if they know it is going to be immediately stolen from them and offered to the world with no compensation whatsoever?
Well, considering how many people create content today already, I’d say plenty. And, of course, this statement has an implicit fallacy embedded in it: that because content can be shared (not “stolen”) that it means there’s “no compensation whatsoever.” Need we remind you that despite Wolverine being “stolen,” compensation came in at about $90 million in its first weekend? If that’s the kind of “no compensation whatsoever” we can expect when content gets “stolen,” sign me up.
And how many people whose work is connected with those creative industries — the carpenters, drivers, food service workers, and thousands of others — will lose their jobs as piracy robs their business of resources?
Oh, right. The poor carpenters, drivers and food service workers. Well, since we’ve already pointed out that there’s still plenty of compensation, they’ll continue to be just fine. They don’t get paid based on some obsolete business model. They get paid by the hour. That continues.
Internet users have become used to getting things when they want it and how they want it, and those of us in the entertainment business want to meet that kind of demand as efficiently and effectively as possible.
You say that as if you mean it, while the entire rest of your article is about how you don’t want to meet that demand, and how you want that efficiency walled off and blocked via gov’t fiat.
But what has happened online is that if it is ‘beyond store hours’ and the shop is closed, a lot of people just smash the window and steal what they want.
No one is “stealing” anything. What are you missing? No windows are broken. And, part of your problem is the fact that you think the shop “closes.” If you can’t recognize that the shop doesn’t close anymore, you shouldn’t be running a major content company.
Freedom without restraint is chaos, and if we don’t figure out some way to prevent online chaos, the quantity, quality and availability of the kinds of entertainment, literature, art and scholarship we need to have a healthy, vibrant culture will suffer.
I don’t know which culture you’re looking at, but it seems to be me that entertainment, literature, art and scholarship are all thriving like they never have before. Where’s the problem, other than your own inability to adapt?
In my own household I know it is my responsibility, along with my wife, to monitor how my family uses the Internet for school work and enjoyment. And I know the web can play a big role in our daughters’ future. But I also want their future to be filled with the kind of music and books and films and other creative sparks that have enlivened my life and our culture through the years.
And, thankfully, she’ll be able to experience a lot more of such culture thanks to the internet and the efficiency it allows. Many authors, musicians and filmmakers today are purposely putting their works of art online for free. Would you like some pointers to help with your daughters’ cultural education? We’re more than willing to help.
Because actually I’m a guy who wants to see lots of good things come from the Internet. But it’s not going to happen the way it should if we do not act now to safeguard the fruit of our world’s most imaginative and talented minds. Period.
The only “safeguarding” you’ve suggested is your own obsolete business model. It’s got nothing to do with culture and content creation. It has nothing to do with the internet. It has everything to do with the fact that you’re viewing all content creation through the distorted prism of the movie making industry, where content creation comes from a big corporation and is then mass marketed and sold to the people. You need to step out from behind that prism, put down the red flags you’re waving in front of automobiles, jump onto a passing car, and look at all the wonderful things the internet allows in terms of creativity and new business models. Don’t let Sony Pictures be the Durant-Dort Carriage Company, clinging to the past.
Filed Under: copyright, intellectual property, internet, michael lynton, movies, piracy
Companies: sony
Comments on “Sony Pictures CEO: The Internet Is Still Bad”
just a point, comparing the internet to cars is a flawed analogy on so many levels. But, there is some validity, to thinking things through before acting. The safety measures introduced for automobiles made sense to people at the time. Zipping around in a model T wouldnt have made much sense before there was any form of restraint and no safety measures. And allowing people to drive 100 miles an hour in a car without airbags on a road that was bumpy and full of holes would have been asking for a backlash of lawsuits.
The point he wishes he could make, is that he wants a proven business model for all the industries that he represents before he can jump into the mess. As has constantly been noted on this blog, there are a number of successful ventures out there, but it has not been shown on the scale that a multi billion dollar company is operating on. Nor have models been used broadly enough shown to work for all types of media or all levels of fame.
It would be less responsible to throw all your artists down one path that has not been proven than to stick to a tested method especially when you are in a lobbying position where you can bully the government into making concessions for you.
I think you are giving the guy too little credit. He got to be CEO because he is an intelligent thought out man. He may lack some of the vision that will help his company in the near future. But it is also possible that he recognizes some of the fallacies in his own argument but needs to write a position paper for himself and his company to keep away critics from the other side from whom he draws his support.
Re: Re:
“just a point, comparing the internet to cars is a flawed analogy on so many levels.”
That’s the problem with the Internet and computers. There is nothing like them. There is no good example. You just kinda have to be able to learn what it is without an example.
“Zipping around in a model T wouldnt have made much sense before there was any form of restraint and no safety measures.”
But five miles per hour with red flags? That’s a little extreme.
“Nor have models been used broadly enough shown to work for all types of media or all levels of fame.”
And they never will. There are far too many different kinds of people on the Internet to be able to pick one model to work from. The model used for Marilyn Manson isn’t going to work for Britney Spears, their fans are just too different.
“It would be less responsible to throw all your artists down one path that has not been proven than to stick to a tested method especially when you are in a lobbying position where you can bully the government into making concessions for you.”
This will not work forever. The world will move on without him. Is it more responsible to be known as the business that sees the change coming and takes advantage of that change, or be known as the business that would rather stand still while the future eats them alive? Witch one looks better for that business from an artist perspective? Witch one looks better from a listeners perspective?
“He may lack some of the vision that will help his company in the near future”
Isn’t that the definition of CEO? Should he not have the vision to point the company in the proper direction in the short term as well as the long term? Plus, if he can’t see the short term, and we know he isn’t seeing the long term, than what’s left?
Re: Re:
Yeah, but the point is that this isn’t 1904 when a change in the industry was in the air and cars only had the untapped potential to run faster. Nor is it the 1950s when freeways were being built and a fast network would make new business models possible.
The network is here, the demand is here and people are already using it at the best speed they can afford. This guy’s talking about putting guys with red flags back in front of the cars because they haven’t worked out how to make money off the speeders yet.
“The point he wishes he could make, is that he wants a proven business model for all the industries that he represents before he can jump into the mess.”
…and that’s exactly the problem. This situation has been over 10 years in the making. If the bosses at Sony couldn’t see potential problems when broadband and P2P were on the horizon, they damn well should have done once their music industry brethren started panicking.
Yet, instead of looking at giving people what they would clearly want (high quality streams and downloads, access to large back catalogues, better theatrical experience to justify the rising cost of cinema-going, *good movies*), they insisted on trying to force through what was best for *them * – HD disc formats, regionally restricting their foreign markets, crappy lowest-common-denominator movies (anecdotally, it was Sony’s execs who caused the massive drop in quality with Spiderman 3 by forcing Sam Raimi to do things creatively (Venom) that he’d said he never wanted to do).
The thing is, they’ve had the last 10 years to “prove” the digital market but they missed their chance. Now, the “pirates” are meeting the demand that they have refused to supply, and now they want to block the “pirates” rather that meeting their own customers’ demands.
Also, interestingly, Wolverine is a Fox property, not Sony. The only Sony product currently in the top 5 US box office is Angels & Demons, which has performed very badly compared to both The Da Vinci Code and to Star Trek, Wolverine and Night At The Museum 2 (also a Fox property).
Sony apparently have more to worry about than piracy if a heavily downloaded leak has done better than their not-leaked (as far as I know) high-profile release.
Re: Re:
The safety measures introduced for automobiles made sense to people at the time.
No, not really. It was just an attempt to discourage the adoption of a new technology and protect an old type of business. Note that these “safety” rules didn’t apply to horse drawn carriages even though horses were faster than the earliest autos and horses are far more difficult to control safely.
Zipping around in a model T wouldnt have made much sense…
OK, you’ve lost all credibility now. Even model T’s were capable of safely exceeding walking speed (although their top speed was still no more than that of horses). Anyone who seriously tries to justify having someone walk in front of all cars carrying a red flag on the basis of “safety” is just a laughing stock and the rest of your comment is just more of the same.
Oh, you and Lynton make a nice couple. Congratulations.
Re: Re:
I think you are giving the guy too little credit. He got to be CEO because he is an intelligent thought out man.
Why do people assume this?
Have you folks ever sat down and TALKED with a CEO? CEOs are basically as smart and as dumb as everyone else. I’ve never seen a correlation between how smart they are, how successful they are, OR how well they’re paid. Assuming that a CEO is smart because he or she is a CEO is kinda . . . naive.
Re: Sony CEO and biz model
You have mentioned the CEO of Sony making a decision to take “his artists” into a proven business model. I wanted to let you know that slavery has been outlawed. As an artist, I do not want others making the decision as to which new business model is valid or not. If I did that, my “massa” would likely not make a proper decision…besides, I get the impression from this fellow, that he does not understand fundamental details of IP, and of how packet switched networking is changing things…despite his protestations to the contrary
Re: Sony CEO
You say:
“He got to be CEO because he is an intelligent thought out man.”
My guess is, this is not true. He got to be CEO by his ability to put his nose up the right asses.
Excellent rebuttal, but have you considered posting this directly to HuffPost?
Re: Re:
it wasnt really a rebuttle, I agree with mike mostly, I just think there are points to be made for the guy, and even if he deserves to have a new one torn open for him he does deserve a modicum of credit.
Re: Re: Re:
Like what? About the only credit he can get is for defending the interests of the company that he works for. However, as we’ve seen in the past, this is very problematic. The problem is only magnified with the fact being that Sony is the one being defended.
It’s problematic because Sony insists on doing things their way and controlling the entire industry, attempting pull the wool over the public’s eyes and claim their position as top dog. It didn’t work for them with betamax, isn’t working for them with blu-ray, and they’ve nearly killed the PS3’s potential by positioning it as the blu-ray player rather than their next killer game system (which is sad, because it’s hands down the most powerful console on the market, but they’ve insisted on forcing the developers to do all the work rather than give them comprehensive, easy to implement tools like MS and Nintendo for their own platforms).
Why should this guy’s points be taken seriously? It’s really difficult for me to swallow an argument that’s wholly bent to support the interest of a company who repeatedly makes the same types of mistakes and then points the finger at others as the problem rather than fessing up to those mistakes and creating a better product as a result. I believe Sony and many others had every chance to realize the potential business opportunities but have entirely ruined their chances of ever catching up at this point.
If Sony doesn’t like it, well, they only have themselves to blame. Again.
Re: Re: Re:
I’m not sure he meant you, when he said rebuttal. I’m sure he was speaking to Masnick.
Re: Re:
who reads the huffington post besides radical leftist weirdos?
Re: Re: Re:
who reads the huffington post besides radical leftist weirdos?
Good Question. So last week, I was going to tear Lessig a new one for his post on the “Huffington Roast” but then I saw he commented here before me, saying he liked TechDirt and had to cut most of my commentary down a bit.
He should comment here more often, I thinks he wants to, but…
Re: Re: Re:
Probably someone who can think for himself, so definitely not your average inbred redneck idiot.
What Property Rights?
To expand a bit on Mike’s comments. Mr. Lynton makes the statement: “The Internet has brought people with no regard for the intellectual property of others together with a technology that allows them to easily steal that property and sell or give it away to everyone, with little fear of being caught or prosecuted.”
My response to Mr. Lynton, what property rights. It seems to me that the content industry is actually stealing property rights from the public.
If I buy a music CD, I should be able to use it on my MP3 payer or on my computer anyway that I wish. The content industry seems to want to claim that you owe them $$ every time you “transform” the product (Sony rootkit fiasco). Not only that they are even attempting in some cases to claim that they can turn off your access to content for any reason that they wish. Seems to defeat the purpose of “sale”.
The content industry has increased the time period that content remains under the protection of copyright before it falls into the public domain. This is theft from the public!
They have changed the law to diminish your rights.
Its time to point out to the content industry that they cannot claim property rights that they do no possess and that they should not steal from the public.
Don't try to save them...
Sony, number three on the Top Ten Most Evil Companies Ever, will never learn. Their demise is certain. And I can’t wait to dance around the funeral pyre! DIE you evil scum Sony!
(Um, it was the rootkit that did this to me…)
Re: Don't try to save them...
“Sony, number three on the Top Ten Most Evil Companies Ever”
Not even close. I would start with Monsanto and move on to pharmaceutical corporations?
Re: Re: Don't try to save them...
No, debt buying/bill collecting firms populate the entire top ten if we’re talking “evil”.
Re: Re: Re: Don't try to save them...
Bayer knowingly sold Aids Tainted Blood overseas, Merck hid information on Viox and that scandal was responsible for killing many people, IG Farben was responsible for war crimes ( Only in the case of Auschwitz, where IG Farben had constructed a plant next to the concentration camp with the clear intent to utilize inmates as slave workers, did the tribunal consider the evidence sufficient to prove that IG Farben acted on their own initiative. ).
http://en.wikipedia.org/wiki/IG_Farben_Trial
I don’t think you really get worse than that. Nice try though.
Re: Don't try to save them...
Way ahead of you. I haven’t bought a Sony product since the rootkit fiasco, and I won’t buy another until they’ve done something to change my opinion. My personal boycott hasn’t impacted my life negatively in any way. I don’t miss sony products at all.
NFL Analogy
a town built on showing no regard for the intellectual property of Thomas Edison
Could you explain this point further? I don’t know what you are referring too.
Officially this was for safety, but it was really an attempt to limit the automobile and keep things the way they used to be for carriage makers.
Is this really true? Has our government always been this bought and sold?
As far as his article, he’s correct. He doesn’t see anything good from the internet. Based on his response, he hasn’t spent any time looking at alternatives to the way Sony does business.
And really, why would he? He collects a huge check no matter what. If he opposes piracy and loses, so did everyone else. If he embraces a free economy and loses, it’s all his fault. My guess is he’s in the position of an NFL coach when a star player is past his prime. You continue to start that old star instead of the young unknown. The old star still fills the seats. He still has good games.
If you sit Tomlinson for Sproles and miss the playoffs, it’s your head. You’re out of a job. Stick with the old star a little longer and you may still suck, but you collect checks next season.
If Sony goes free, and revenues plummet, this guy’s personal check disappears. In other words, the dinosaur has to die. It can’t evolve until it’s too late.
Re: NFL Analogy
edison invented moving pictures.
Re: NFL Analogy
a town built on showing no regard for the intellectual property of Thomas Edison
Could you explain this point further? I don’t know what you are referring too.
Thomas Edison invented a lot of the early technologies for filming movies and projecting them in theaters. Instead of paying Edison, the studios ran to California. I’m not sure why they avoided paying Edison by operating there (different laws perhaps?), but that’s the story.
Re: Re: NFL Analogy
Though Edison was no saint, either. I guess one could say that Edison got his “just desserts”. I find it pretty fantastic that with the advent of the internet age, a man who many people living nowadays have been taught to be this great, almost infallible inventor, has been historically outed as a man of greed and corruption (still genius, no doubt). Yet a man whom many thought history would eventually forget, had been repeatedly taken advantage of, in direct opposition of Edison, said to be the greatest inventor of our time if not all time, Nikola Tesla, is now more popular than ever. How is the internet bad again?
Re: NFL Analogy
a town built on showing no regard for the intellectual property of Thomas Edison
Could you explain this point further? I don’t know what you are referring too.
hollywood was built by pirates, and copyright is based on government censorship. there are tons of examples, read here:
http://craphound.com/content/Cory_Doctorow_-_Content.txt
and here:
http://questioncopyright.org/faq
and here:
http://www.dklevine.com/general/intellectual/against.htm
the way that piracy works is thus: first you come up with a revolutionary way of doing something (the player piano), then the established industry opposes it (Tivo, VHS tapes), then a blanket licensing deal is agreed upon (radio) and then new industries grow into large established ones (hollywood), and they shift focus from innovation (the sony walkman) to protectionism (sony rootkits).
Excellent critique Mike Masnick. Excellent, I could not have done better. The sentences were so nicely set up that I could predict what you were going to say next based on the previous sentence (ie: the next sentence is obvious and it’s going to HURT). Perhaps people should boycott Sony until this guy gets fired (with NO compensation or retirement or any of that nonsense).
“In my own household I know it is my responsibility, along with my wife, to monitor how my family uses the Internet for school work and enjoyment.”
So you do have the Internet at your house yet you still claim that it causes more harm than good? The hypocrisy. Why would your purposefully introduce something into your household that you believe causes more harm than good? It’s OK for you to benefit from it but not for others?
It's a shame, Sony was a visionary company once
I’m afraid Sony has become a “carriage company”. They don’t see the value of “automobiles” until others show it to them. Sony made the Walkman, while some people where still saying “home taping will kill the music industry”. Sony didn’t care. It made a valuable product that people wanted, and to hell with the labels if they couldn’t adapt and live with it. But when the MP3 came along… Sony ignored it. MP3 was just for piracy, and Sony had a music label now. They couldn’t imagine selling MP3s, so they never made a player. It took someone else, Apple, to show them the way. Only then did they try to follow, but still with proprietary formats and DRM… another big mistake. Incredibly Sony has only made real MP3 players for a couple of years!
Same thing with VCRs and DVRs. Sony invented the VCR, and yet refrained from digital versions. TiVo and others innovated where Sony no longer dared too.
This is a company very much afraid of digital stuff that will break the content division’s business models. And they keep forgetting that if they don’t do it, someone else will. It has missed huge opportunities because of this, and despite some execs recognizing this and wanting to be more forward thinking, clearly some still don’t. They deserve every bit of red ink on their financial reports!
Re: It's a shame, Sony was a visionary company once
True.
You may recall that Sir Howard Stringer ultimately replaced Akio Morita at his death in 1997. And with this change of arms it also replaced the Eastern Japanese Style of Business with Old, Tired Ideas from The West. It should have been well known that the company was going to be pulled apart at the seams and fail to produce a profit.
This cycle will continue until another Japanese Native returns to the helm. It’s really that simple.
Re: It's a shame, Sony was a visionary company once
Lamentably it seems that most visionary companies once they become successful abandon innovation for the status-quo and use the legal process and/or dishonorable business practices to lock-out competition. Microsoft is a prime example.
We seem to lose sight that this is an unfortunate “natural” social progression. To misquote Hegel the “cause of failure is success”.
Edison vs Hollywood
In answer to AC’s question about this… Hollywood started as a (then) remote camp of outlaw moviemakers — outlaw in the sense that they were unlicensed, refused to join up with the film monopoly run by Edison, and thus was founded specifically to engage in IP “theft” in the form of violating Edison’s patents. See here: http://www.cobbles.com/simpp_archive/edison_trust.htm
Hollywood exists in the ocation it does because, back then, it was very remote and s reasonably close to the Mexican border. This made it logistically hard to meaningdully prosecute them.
Re: Edison vs Hollywood
True. There’s a good book worth reading called AC-DC Wars that describes how Nicola Tesla developed AC Current, and had a patent on it. Nicola eventually aligned himself with George Westinghouse and together, they overtook the electrical system as it is today.
Tesla was a very interesting person who at one time did work for Edison at his Menlow Park Laboratory, and also held many patents on varying subjects and inventions key to the radio, the Laser, telephone.
Eventually, Tesla left Menlow Park and was quoted saying:
If Edison had a needle to find in a haystack, he would proceed at once with the diligence of the bee to examine straw after straw until he found the object of his search… I was a sorry witness of such doings, knowing that a little theory and calculation would have saved him ninety per cent of his labor.
– Nikola Tesla, New York Times, October 19, 1931
I believe, that Lynton’s reference to Edison is an oversight at best, absolutely wrong at worst. Perhaps Tesla was really talking about Edison and the ideology that continues to live today in Sony Management, when he penned his famous article in “Modern Mechanics and Inventions”, back in July 1934.
The Japanese Kanji Character for Threat is also Opportunity
The internet is not good for physical distribution. If you view your business thru the rose-colored glasses of being fully reliant around the Distribution of plastic discs, it’s possible that you will see it as not being good, hence the tirade of Mr. Lynton. It’s based around that simple axiom, and amplified by derivative works and their time-based inability to quickly respond similarly.
But today, you don’t need to distribute a physical product.
I wonder what the guys at NBC and FOX have to say about Hulu. I bet they see opportunity where Sony, who once again is behind the eight ball in everything they do, sees threat.
Re: The Japanese Kanji Character for Threat is also Opportunity
The internet works very well for physical distribution, actually. Ebay, Amazon, the website for every physical store you’ve ever been to. Where the internet cuts into sales of physical goods is in information. (..which I do not think is a bad thing.)
..
Re: Re: The Japanese Kanji Character for Threat is also Opportunity
The internet works very well for physical distribution, actually. Ebay, Amazon, the website for every physical store you’ve ever been to. Where the internet cuts into sales of physical goods is in information. (..which I do not think is a bad thing.)
True. However, that means realigning your supply chain management strategy, a business activity, and something Sony’s Business Management Team probably hasn’t allocated resources to accomplish.
Re: The Japanese Kanji Character for Threat is also Opportunity
Digressing for a moment, it’s not really true that the Chinese or Kanji characters for “threat” and “opportunity” are the same.
http://www.pinyin.info/chinese/crisis.html
http://en.wikipedia.org/wiki/Chinese_word_for_%22crisis%22
Using the car analogy maybe wasn’t a good ideia because most people will forget that cars didn’t go at 100mph at the time.
Personally I think it was brilliant.
Great article. Of the best in the last few months.
his big check...
well sony lost big last year(400mil i think)and this suit is still drawing his big bucks… so much for the management and board… still drawing their big bucks too…
“There’s no cure for stupid”
Enlivened?
“But I also want their future to be filled with the kind of music and books and films and other creative sparks that have enlivened my life and our culture through the years.”
Because Wolverine was such a ‘creative spark’ and ‘enlivened my life’?
I felt like suing to get my hour and a half of live back. It’s the first movie I’ve ever seen where I actually counted down the minutes until it was over.
The worst part is I saw the leak and thought the final release would be better. But the special effects that weren’t finished in the leak were almost better than the final product. At least it was interesting.
My eyes and my soul were raped not once but twice!!
Re: Enlivened?
Watching tht leak was way more interesting than the movie itself. It was like viewing How it’s Done from the discovery channel.
Re: Re: Enlivened?
They need a Pop-up Video for movies. Leaked ahead of time.
I know, I’m amazing. 😛
Re: Enlivened?
How can you say such mean things about a movie that actually used “magic bullets” – and not metaphorically! – into a meaningful plot twist?
Internet bad?
Saying the internet is bad is OK as long as everyone understands its still a stupid statement.
I had never heard that hollywood was built on piracy. interesting point. http://www.wired.com/wired/archive/12.03/lessig.html
Re: Re:
In response to all the ‘Hollywood was built on piracy’ comments:
It would be awesome if the lawyers defending RealNetworks would use this fact. Maybe it would, at the very least, cancel out the complaint that RealNetworks was making a fair-use claim in opposition to their previous viewpoint in an earlier lawsuit. Hell, it might even make the lawyers for the MPAA blush; too bad the trial isn’t broadcast.
The internet IS bad if...
You’re part of the power elite that wants to continue the top-down flow of information, money, etc. that has existed in this country and elsewhere for so long.
Although not in every way, but in many ways, the internet has become the great equalizer. Before, if you wanted your news, you had to go to a relatively limited, predetermined set of options in print and television, and those options largely got their info from the same sources. That made it easy to control information. With the internet there are more options, less restriction/oversight on what information/misinformation makes it to the public, and virutally no borders.
Translated to the entertainment industry, they can see their death, and the sounds they make will only serve as warning to the rest.
If I were them, I’d be scared too.
Re: The internet IS bad if...
I have the feeling the unregulated flow of info isn’t going to last much longer.
Guys like this have a way of coming together to change laws that will ultimately benefit only them.
Re: Re: The internet IS bad if...
I agree, if we allow them to they will. There was already a blog here about how one needs to register with the government to blog in Italy. It’s ridiculous.
Re: Re: The internet IS bad if...
Sure, and he was probably personally appointed by Howard Stringer to maintain the current state of business.
This is a Senior Management Problem for not performing necessary due diligence and allocating proper resources and creating top-level strategy on how to leverage the Internet as a legitimate distribution channel.
Someone else mentioned Amazon and eBay as a properly-executed internet-enabled business in a previous post. But because Sony failed to allocate the necessary capital to build an in-house Amazon or eBay, they’ll ultimately be left in the dust while some one else who better understands the current and future digital distribution landscape will take their place.
Eventually, I see Sony being marginalized to a holding company, focused on repackaging other’s products, and silkscreening their name on them. To some extent, this has already started.
You can only have so many quarters of falling profits before the entire board needs to be replaced.
Yeah, because if [Insert random actor / actress / producer etc] doesn’t earn 15 million dollars for a couple month of work, this worlds going down hill. Lets not even mention that the other 98% of the world live on 100k a year or less income, but NO! Actors are going to be in trouble and can’t make their 500,000 a month house payment, or buy that new 2 million dollar Lamborghini.
/sarcasm off
Blah!!
All your Sony shares, are belong to us.
Dear Mr. Lynton,
But I also want their future to be filled with the kind of music and books and films and other creative sparks that have enlivened my life and our culture through the years.
Do you tell your daughter the company you oversee picks and chooses who it wants to distribute? Of course you don’t.
Do you tell your daughter the company you oversee treats paying customers like criminals? I don’t see it happening.
In fact, I bet your daughter has shared content herself amongst her friends. But do you bring her up on charges for doing such? Again, I highly doubt it.
You’re an ignorant CEO. Your words did little to change my position to hold your company (and others) with respect. I will never buy another plastic disk. I will never purchase online music. The inflated prices and DRM technology (which coincidentally turned one of Sony’s DVD players into a worthless landfill item) is enough to make me sick of your entire industry.
I don’t download movies, music, or books. I simply do without. With so much the internet has to offer me, companies like yours are now obsolete.
I’m glad you mentioned Wolverine. Explain to me why it’s necessary to force cinemas around the world to pay to show Sony Pictures’ content. It’s SP’s damn content. Shouldn’t this studio be paying them to play it?
It’s absolutely hypocritical of you to say the internet is evil and then turn around and demand money from everyone to play the movie or song your company wants to distribute.
Your company uses legal action to stop innovation, both virtually and physically. It wastes millions doing this, passing unnecessary costs to consumers.
That is true piracy.
So stop whining like a baby, you ignorant fool, and start giving people what they want instead of telling them what they want.
Re: Dear Mr. Lynton,
Good arrow, son.
Next time, leave the references to Mr. Linton’s daughter and friends out because that may get you into trouble.
Just curious, do you have proof or a general idea these things occur…? Not that it matters, I’m just mildly curious.
Re: Re: Dear Mr. Lynton,
Next time, leave the references to Mr. Linton’s daughter and friends out because that may get you into trouble.
Sorry, but not going to happen. He used the references first. I simply asked questions.
Of course, I probably should have not “answered”. Bad habit of mine.
In all honesty, the line regarding his daughter’s future really pissed me off for the fact he brought her into the conversation to begin with. I merely projected this anger back toward him, though he’ll probably never even see it.
Pathetic, royally. On both of us, truthfully.
It's all about the Benjamins
Big content is losing. Small music labels are going digital distro and making money hand over fist. Would you rather sell 100,000 CDs at 12 bucks each or 3 million mp3 singles at a buck each on the first week of release? Would you rather pack 50 million people into theatres on opening weekend for $20 each or have your movie downloaded 200 million times for $3.50? High availability and low cost are the advantages of the internet. You don’t need to make plastic covers and ship them out on trucks. You don’t need to print runs of discs. You just put up a digital storefront and watch the money roll in. As far as piracy goes… if I could pay $3.50 to download a new movie at raging high speeds on an akamai feed, I would. And I bet millions of other people would too.
It’s the middlemen complaining about the loss of revenue. Artists in general are fine with the Internet and digital distro. But the guys who make their money by packaging distribution on margin aren’t happy… and they never will be again. Who the hell even needs a studio these days? You can make a movie with a half-decent PC, some reasonably-priced software and a $200 DV cam, if you’ve got the talent and the vision. You want to be a movie house? Help people finance and digitally distribute their movies. Charge a reasonable fee, like maybe 5%. You’ll be rolling in cash in no time. But the days of the studio taking the lion’s share of the cut are definitely over. Think smaller budget, more frequent releases, higher turnover, cheap content. That’s the future.
So the coles notes version of all of this is “Sony boss says file sharing is bad”.
Send a freaking film crew to cover the story. Did we really need a huge post to get it?
Mike, it’s clear the Sony guy isn’t going to agree with you, so why do you bother going on and on about it? Just as you think you are right in your little world, he is right in his.
Sell
With people like Michael Lynton running the show, if I had any stock in the company I think I’d be trying to get rid of it as fast as possible.
Sony Music Takes Vote; Determines Internet May Be Important
Sony Music Takes Vote; Determines Internet May Be Important http://tinyurl.com/qyy5cn
I suppose you could accomplish Supply Chain problems thru the legal process, but you’d be insane if you did so.
The scientists of today think deeply instead of clearly. One must be sane to think clearly, but one can think deeply and be quite insane.
– Nikola Tesla, “Radio Power Will Revolutionize the World” Modern Mechanics and Inventions (July 1934)
“Where the internet cuts into sales of physical goods is in information. (..which I do not think is a bad thing.)”
How is it a bad thing? We should worry more about how being able to distribute information (and I don’t mean piracy) affects the well being of society as a whole, not how it cuts into the profits of specific entities. Yeah, Wikipedia maybe bad for the profits of people who sold physical encyclopedias but it’s good for society as a whole, which is more important than the profit margins of some encyclopedia vendor.
Re: Re:
But it cuts down the ability for new information to be properly collected, indexed, and shared.
Wikipedia is nice, but often wrong, misleading, or incomplete. While it is a great quick reference, it is often not the whole story.
Mostly the whole story takes time, and time takes money. When nobody is writing the news anymore, where will history be recorded?
Re: Re: Re:
“When nobody is writing the news anymore, where will history be recorded?”
The Internet exists and the news still gets written. The Internet doesn’t interfere with that, and neither does Wikipedia. It has only helped news to get written and distributed.
Re: Re: Re: Re:
Not really – when you take the ability to generate a living by doing a job, people stop doing the job. Newspapers are dropping like rocks, magazines are disappearing, TV news is turning into infomercials.
When there is no money in it, we are left with the news and history being written only by people who have a financial or moral interest in the outcome, not an impartial third party.
Re: Re: Re:2 Re:
“Newspapers are dropping like rocks, magazines are disappearing”
Markets change. Horse carriages are less frequently usedused as a means of transportation, airplanes partly replaced boats, etc… This doesn’t mean that news doesn’t get written/typed and distributed.
“When there is no money in it, we are left with the news and history being written only by people who have a financial or moral interest in the outcome, not an impartial third party.”
This assumes that the previous sources (before the Internet) have no interest in the outcome. No party is impartial. The Internet allows a larger diversity of parties to introduce news and their views on the news which reduces partiality by allowing people to see all sides of an issue before deciding what to believe. Perhaps this is why legacy sources of information are upset at the Internet, they want to be able to control who’s opinion gets communicated to others and they don’t want opposing opinions being distributed to the world. Even you yourself are allowed to give your opinion, you are doing so here, so in part history (and the news) is being written by you. Anyone is free to give their opinion, there is no such thing as an impartial third party (everyone is partial).
Re: Re: Re:2 Re:
“Newspapers are dropping like rocks, magazines are disappearing”
These methods of communication are becoming obsolete. Just like tape players got replaced by CD’s, Lan lines get replaced by cell phones, etc… Technology advances. We have a more efficient, cheaper method of distributing news that doesn’t cost us paper (and trees). It’s good for us and good for the environment (cutting down trees is bad for the environment and it requires more energy than sending info through the Internet). Sure, it’s bad for legacy companies but we shouldn’t hold back progress just because they don’t want to adapt to the new environment.
Re: Re: Re:2 Re:
When there is money in it, we are left with the news and history being written only by people who have a financial or moral interest in the outcome.
I stopped “consuming” corporate news sources before the internet started “threatening” corporate news, about when people who were interested in news were said to be “consuming” it. I’d stopped because the standard news sources had become worse than useless — they had become antinews, leaving you less informed than you were before you were exposed to it, but with the mistaken impression that you were more informed.
The sea change began around the time CNN came about and demonstrated that news could be a profit center. Before that, news was (more or less) considered a public service and was not expected to make money. The introduction of the profit motive destroyed journalism among the mainstream sources. If newspaper, TV, and radio news sources die, I say good riddance. They have been corrosive to a healthy and well-informed society for a long time.
It certainly isn’t the death of journalism, though, and I have high hopes that the internet may provide a venue that it can be reintroduced. It’s unlikely to ever return to newspapers, TV, or radio for reasons that have nothing to do with the internet.
This is what the industry fails to understand. The internet isn’t killing them, the death of actual journalism is.
Re: Re: Re:3 Re:
You aren’t thinking full circle here.
Why is journalism dying? Because it is expensive. Pap news is cheap, journalism is expensive, and the public (particularly the American public) has shown little interest in anything smarter than American Idol. Americans like the news, they just don’t want challenging news. They like gotcha stories, they like naughty, sexy scandals, and they like their newscasters young, female, with big hair.
That is where the money is, and that is where it has gone.
The internet didn’t kill journalism, but the internet is doing a good job at killing off the last few survivors. Those print media dinosaurs that have been turning out important stories now find themselves working for magazines and newspapers that are going broke, and there are few alternatives. Their jobs aren’t suddenly re-appearing on the internet. They are being lost forever, the journalists down to writing angry old men blogs that few people read.
So what we are left with mostly is the Wiki army, millions of poorly informed people contributing material that equally uninformed people edit, rollback, refuse, and delete. We are left with diminished news wire services,and more and more of the news coming from PR people, directly from the press releases, one sided tales that don’t inform people, but certainly do shape their opinions.
In the end, journalism costs money, and we the public are apparently no longer willing to pay. We want it all, we want it for free, and we want to be able to download it right now. The piper isn’t going to keep showing up if nobody is paying. We are close to that magic tipping point, and there may be no going back.
Re: Re: Re:4 Re:
“Why is journalism dying? Because it is expensive. Pap news is cheap, journalism is expensive, and the public (particularly the American public) has shown little interest in anything smarter than American Idol”
You’re right, but I think perhaps incomplete. If you want to REALLY take it full circle, you can keep going to the fact that journalism is expensive because celebrity “journalists” demand such high salaries, nevermind the fact that this is a blowing smoke up our collective asses anyways since the paper media firms are ACTUALLY in trouble for the way the spent, lent, and borrowed money, NOT because journalism is expensive.
“Americans like the news, they just don’t want challenging news. They like gotcha stories, they like naughty, sexy scandals, and they like their newscasters young, female, with big hair.”
Again, I agree, but look at it from the consumer’s point of view. If your “serious” news is going to be a bunch of spit back talking points of whatever administration happens to be in power (http://en.wikipedia.org/wiki/Bush_administration_payment_of_columnists -just one example, not an attack on GOP-), well then hell, I’ll take the pap news with the big breasted reporter over that fake shit. I would argue that that’s where the money is because “serious news” hasn’t been attempted in years.
“The internet didn’t kill journalism, but the internet is doing a good job at killing off the last few survivors. Those print media dinosaurs that have been turning out important stories now find themselves working for magazines and newspapers that are going broke, and there are few alternatives.”
That’s kind of like saying the lifeboat is killing off the Titanic, no? The print media had their shot, and they fucked it up. And if the last of the print greats are working for papers and mags going broke…well dammit, that just seems like a really bad career choice. I would suggest starting their own investigative journalism blog.
“So what we are left with mostly is the Wiki army, millions of poorly informed people contributing material that equally uninformed people edit, rollback, refuse, and delete.”
Yes, because nothing says a lack of checks and balances like a bunch of people…er…checking and balancing. Here’s a question: why do all of these supposedly super intelligent people that we are all supposed to get our information from as the “approved” and “informed” source seem completely incapable of USING wikipedia? If they’re so smart, THEY can fix/edit entries to correct them. Or are these the same people that wrote my high school history books, so full of misinformation and slant it made me slightly ill.
“The piper isn’t going to keep showing up if nobody is paying”
Interesting analogy. Like the fable, if we don’t pay the piper, i.e the newspapers, are they ALSO going to come steal our children?
Re: Re: Re:5 Re:
I agree with most of your post, but I don’t think it is true that print media failed. They had a very successful run. However, their technology is now antiquated. If any failure, it was that print media didn’t stop being print media. The companies using print media have failed to shift to the more efficient media…or at least, their shift has been out of necessity and resisted greatly rather than recognizing the massive efficiencies of new media and shifting whole heartedly.
Irony
Pretty ironic him posting his nothing-good-has-come-from-the-internet diatribe on the internet. At least in that one case I agree with him, having a pompous poncy whitehead spew his fascist corporatist monologue in readable format is not something good to have come from the internet.
Re: Irony
Yup, and if the news was replaced by PR people, this is what would pass as the truth.
He wants to put the genie back in the bottle
The lesson I get from this is that if you want to be the head of a giant company, first have a lobotomy.
Maybe he should try politics now.
Mark Kemode
The BBC’s Mark Kemode recently hit out against people complaining about movie piracy (and those trying to get him to ware 3D glasses), blaming the industry for dragging its heals and refusing to catch up with the pace of technology.
http://www.youtube.com/watch?v=CVBHApQcknQ&feature=channel
Its stuff thats been said before round here, but its curious to see such an industry heavyweight chipping in.
The only point that stupid phuck has is on the top of his head.
Actually, I find it ironic that Lynton is saying nothing bad comes out of the Internet when he was CEO of AOL Europe in 2000. Seriosly, check out his biography in the Sony website. It even goes as far as to claim he lead one of the biggest Internet providers worldwide, and Lynton lead that growth.
So Lynton is complaining about the Internet, which he in fact helped expand and create? His statements are simply hypocrisy.
Re: Re:
Nothing good has come out of the Internet yet he and his family have the Internet. That’s hypocrisy as well. It’s good for him and his family but not good for everyone else.
Surfing the internet is fun and exciting.
haha. a couple of hours into the membership thing, and Mike already has his first spammer member. Congrats, locking the door has really helped to filter out the bad.
We Have A Choice Now
“But the primary culprit is piracy.”
The primary culprit for the decrease in sales isn’t piracy, although piracy does play a role. The reason for the drop in sales in the record industry is choice. I checked my mp3 collection 2 months back and found that about 60%+ of what I have isn’t from the big three record labels. The music that is from the record labels I downloaded free off of various web sites running the “join and get 100 mp3’s free” promotions. Or googles gadget ….
Google music gadget
excuse me if I did that link wrong
Re: We Have A Choice Now
…and how many of those 100 mp3 free do you actually listen to actively? collecting music is one thing, but actually actively listening to it is something else.
Piracy is the primary culprit. Widespread piracy of music has lowered the public willingness to pay. It isn’t to say directly that what is in your collection is pirated, but that overall, piracy has a significant effect on how people look at the market price of things they get on the internet.
Re: Re: We Have A Choice Now
Piracy is overrated.
New content has to compete with 90 or so years of legacy
recorded media. Now most of that would be free and public
domain if not for the abuse of copyright law. Even with
abusive retroactive copyright extensions all of that content
is readily available for free or really cheap.
This includes conventional commercial Television and Radio,
conventional video rentals, netflix and bargain priced media.
Hollywood has to compete with itself. Nevermind the pirates,
they have to deal with AMC and TMC. Why bother with a lame
remake when I can just Tivo the real thing off of AMC?
Hollywood has to compete with 60″ TVs and 500 channels
while bean counters are strangling creativity and the
cinema experience continues to seem more rude and more
inconvenient.
SONY is bad, m’kay
Boycotting SONY 5 years and counting
Films need to be available online 1 day after premiere
The scarcity argument was the best. Hollywood has to put films online within hours or days of their premieres now. The bad model above mentioned was and is one of foolishly making the world beg and pant to see the latest.
Human nature says that the people in countries who don’t get immediate access to new movies will watch on the Internet – many on the day after the premiere at the latest.
Many of these millions of people say they have no intention of being purposely left out of major new cultural happenings. If you let the people of New York see a major new film first, you better let the people of Mumbai immediately thereafter (within hours, not days).
The way it is as compared to how it “should” be: Translations in local languages appear within 4 days of a premiere (on camrips).
So Hollywood needs to know they have a 1 business week time window to provide online paid copies of new films translated in major languages (Scandinavian languages not necessary because of the high English speaking population there).
Example: Hollywood came out with a movie recently about the attempt by a German officer on Hitler’s life. Obviously at least 5 Million Germans wanted to see this at the first opportunity. But Hollywood decided to premiere it in NYC instead of Berlin where the story happened! Worse, the German release and Berlin opening was scheduled for 30 days later. The most interested audience was dissed while a relatively uninterested audience (Americans) was pandered to.
Guess what happened?
You guess it. At least 1 Million Germans saw the film on the Internet somehow…despite the fact that the Germans are probably the most anti-piracy population of all.
Moral of the story: Its certainly not that there are 1 Million Germans who need to be found and prosecuted for watching a pirate copy of Valkyrie online.
It is that Germans needed to have been offered $10 access online immediately with no more than 1 day between the exclusive premiere and the world-wide online offering.
This is the business model change that needs to happen now.
Another business model change needed is the following:
If a piece of content is garbage, a human needs to be able to stop watching and ask for their money back.
At least we need to be able to fast forward even a film that is brand new and released yesterday. Even with a boring film, we might want to skip quickly to the climax and the end so we can talk about it intelligently and/or get at least something out of the experience.
People should be able to make clips of the scenes they like one day after the premiere. Like minded people would then be more likely to want to see the film themselves (trailers aren’t enough to convince all the potential viewers of a film to go see it).
In countries where even the latest Hollywood movies (including those that haven’t officially premiered yet) cost 10 cents at the local market, the viewer might watch for 5 minutes and get bored and toss the pirate DVD.
If Americans could do this, they wouldn’t be wasting their time sitting through the entire length of bad films because they are embarrassed about the $8 they spent and want to pretend they are getting their money’s worth.
Then there is the fact that Americans are often ignorant of their own nation’s film content because they simply cannot afford to see all the latest films, while people in the so-called “developing world” have often seen everything produced in Hollywood minus the junk they and their families stopped watching because it was garbage.
The Sony CEO might want to see stats on how many foreign viewers of pirate copies of Terminator 4 stop watching after 20 minutes.
At least in his calculations, when he says studios lost a specific amount of money from a specific amount of illegal downloads…he should factor in the aborted downloads that occur when people get bored and switch the streaming off and go read a book or watch other content.
Then he should factor in the amount of money his studio gets from Americans who would have preferred to leave the theater half way through a film but knew they weren’t going to get half their money back.
I think that his problem shouldn’t be with the Internet, he is really more upset that once you digitize content, then it is just data, indistinguishable from any other piece of information, and easily consumed and shared. That’s not the Internet’s fault. It’s been slowly happening for years.
He seems to mourn the fact that the content creators cannot control and monetize every single use of their content. That is a totally unrealistic and greedy goal. I know Cory Doctorow is fond of pointing out that we really don’t want Hollywood having the final word over the design and working of every consumer electronics device.
There is also the fallacy that each unauthorized copy of anything means a lost sale. So you can’t equate unauthorized copying with theft, especially if you are talking about bits!
Wikipedia is a bad example
About Wikipedia…this is a bad example because special interest groups hire people to delete (revert) what others try to write on certain subjects that matter.
The history section (where others can see what you wrote before others deleted it) of each article is not enough – people are directed to the final article as washed clean by the “guards” assigned to it by those who can afford to pay guards. Nobody checks to see what input was refused by the vigilant citizen guardkeepers. It was a travesty of Google’s hegemony that they tended to put the Wikipedia article for each keyword at the top of the search list.
Wikipedia needs to allow articles to appear in versions that then get voted up or down…but not where people “collaborated” because I’ve seen often enough that there is no sense of collaboration among many editors there. Many say that it is ideological to believe that people will collaborate.
Twitter’s real time search is a better example of democratic input on various topics.
Sony has Become a Spectacularly Incompetent Company
This is a little bit off topic, but I would like to call your attention to this item. Sony is _finally_ cloning the Nintendo Wii, or rather, Sony is rumored to be doing so. The rumor may turn out to be false, wishful thinking on the part of enthusiasts.
http://games.slashdot.org/article.pl?sid=09/05/27/0511211
The Nintendo Wii has been out for nearly three years, and has sold fifty million units. The Wii-Mote was built around a commercially available chip, and datagloves have been around for years. Nintendo really had very little in the way of protectable technology.
http://en.wikipedia.org/wiki/Wii
Yet only now is Sony (presumably) taking the obvious countermeasures which could reasonably have been taken in a couple of months, even assuming the public announcement of the Wii had caught Sony flat-footed. Sony purely does not want to produce inexpensive goods, and their resistance is total and obstinate.
Amazing
This is by far the best article I’ve read in the last year.
Sony Pictures CEO: The Internet Is Still Bad
Sorry if someone else already made this statement but…
why all the arguing about piracy and government rules and yadda-yadda-yadda? People seem to be making points about what should or should not be legal when it comes to “property” blah!
in regards to X:men being stolen and put up online, the only thing that should happen is the one who specifically “stole” the movie should be charged with a crime – NOT THE ENTIRE INTERNET OR ITS USERS! d’uh!
Nonsense
“…Need we remind you that despite Wolverine being “stolen,” compensation came in at about $90 million in its first weekend? If that’s the kind of “no compensation whatsoever” we can expect when content gets “stolen,” sign me up.”
Ah, I see. So if the local Mercedes dealer is pulling down a few million a year, it’s perfectly okay for me to steal one of the cars from his lot if I decide his price is more than I’m willing to pay.
I can hear you now – and, yes, it IS the same thing. Forget about the middlemen, I don’t care what happens to distribution models that disappear because of the efficiency of the web. BUT: If I make something, I should get to decide how and for how much it sells. Don’t like my price? Don’t like the rules I put on how you can use it? No problem, buy something else.
Fortunately for those who are on the “it’s okay to steal when it’s easy and I’m not likely to get caught” side of things, the cat is miles away from the bag by now. The truth is that this has less to do with the Internet than it does with a general lack of respect for the rights of others.
Re: Nonsense
Ah, I see. So if the local Mercedes dealer is pulling down a few million a year, it’s perfectly okay for me to steal one of the cars from his lot if I decide his price is more than I’m willing to pay.
No, not at all. But he stated, quite clearly, that harm was done. If you steal a Mercedes, the dealer can no longer sell it. That’s clear harm. However if you copy a movie, the movie can still be sold. There’s no *loss*.
BUT: If I make something, I should get to decide how and for how much it sells.
No, the market decides how much. Price is the intersection of supply and demand. If supply is infinite, you can bet that the price is going to trend towards zero.
Fortunately for those who are on the “it’s okay to steal when it’s easy and I’m not likely to get caught” side of things, the cat is miles away from the bag by now. The truth is that this has less to do with the Internet than it does with a general lack of respect for the rights of others.
It has nothing to do with a “lack of respect” and everything to do with basic fundamental economics.
Re: Re: Nonsense
There’s no loss? Are you serious? By copying said Mercedes and selling it, you’ve reduced market demand for that Mercedes by 1. Multiply this times thousands or millions, and you see the affect that theft can have on a product market.
Re: Re: Re: Nonsense
There’s no loss? Are you serious? By copying said Mercedes and selling it, you’ve reduced market demand for that Mercedes by 1. Multiply this times thousands or millions, and you see the affect that theft can have on a product market.
Yes, there is no “loss.” If someone steals a Mercedes it’s marked down as a loss on the income statement. If someone infringes on a song there is no such loss marked down.
And you are wrong about the demand issue. The price of an infinite good will settle at zero (that’s the cross point of infinite supply and demand). So at that point, you focus on using that as a resource.
So the demand for an infinite good is rather constant. There is no change in demand because supply remains infinite.
Now, you may be saying that someone is less likely to PAY for the product, but that’s different. That’s not a loss, that’s a market function. That’s the same as saying that if I choose to buy a pizza rather than a sandwich I’ve caused the deli to “lose” $5. But it’s not a loss. It’s revenue that the deli failed to capture. But the impetus is on the deli to give me a REASON to buy. With an infinite good, that’s difficult, so you focus on giving OTHER reasons to buy.
So, no, there is no loss. Only a marketing opportunity or failure.
Re: Re: Re:2 Nonsense
If the Mercedes is stolen, yes, it is written off. If it is “copied,” he has one Mercedes he’s unable to sell because a customer went with the copy. There is no write-off for that.
The deli failed to capture that revenue because someone decided they’d rather have a slice of pizza that night. They may come back tomorrow when they’ve got a jones for salami. However, if someone opened a deli across the street from me, selling sandwiches made with my recipe for salami that my grandfather brought from Italy 70 years ago, and which was stolen from my safe during a burglary, then there is most certainly loss there.
Re: Re: Re:3 Nonsense
The deli failed to capture that revenue because someone decided they’d rather have a slice of pizza that night. They may come back tomorrow when they’ve got a jones for salami. However, if someone opened a deli across the street from me, selling sandwiches made with my recipe for salami that my grandfather brought from Italy 70 years ago, and which was stolen from my safe during a burglary, then there is most certainly loss there.
What if they just bought a salami sandwich from you and reverse engineered it? Is that “theft”?
Re: Re: Re:4 Nonsense
Well, we’re not talking about someone filming their own version of “Wolverine,” now are we?
Re: Nonsense? No. The word you're looking for is Renaissance.
Illegal copying of a movie isn’t “stealing” under the law so much as “copyright infringement”. If the actual master discs containing the movie itself disappeared and later popped up on eBay, then it would be stealing. To use your Mercedes metaphor, it’d be like someone making a copy of the blueprints and using spare parts they already have lying around to make their own, except that it doesn’t transfer properly since you’re talking about two completely different types of things which is missing the point entirely.
If a symphony orchestra is going to be playing Beethoven’s Fifth Symphony and one of their preview run-throughs is broadcast on the radio, but without all of the members there, people can listen to it for free and decide whether or not they want to attend the actual performances, just like people watched the workprint of Wolverine: Origins for free and MANY saw the finished product anyway.
People can watch Dr. Horrible’s Sing-Along Blog for free on Hulu as much as they want, but the DVD still sold exceptionally well when it came out. Look at Wilco’s “Yankee Hotel Foxtrot” and Radiohead’s “Hail to the Thief” which were both leaked and highly downloaded by people before they properly came out and BOTH have sold at least in the hundreds of thousands, if not millions of units. Especially amongst people who already had digital copies. Look at what Radiohead did in late 2007 with the release of “In Rainbows” and how they still made millions off people willing to buy it on CD, in limited edition discboxes and in the original digital form. Look at how Trent Reznor GAVE AWAY the NIN albume “The Slip” and it still SOLD tons of copies, look at how The Raconteurs did the same sort of thing with “Consolers of the Lonely”. Look at how TV series have sold tons of VHS and DVD collections over the years despite the ease of people being able to tape the broadcasts. Look at how books still sell in the millions even though public libraries have been around for centuries. Look at how Creative Commons let Jonathan Coulton make a career out of letting people download his music for free if they’d like and has netted him a huge fanbase worldwide!
In short: get your head out of your ass and realize that physical theft isn’t what’s going on, instead, if the companies would learn to adapt, people would see the internet as a new Renaissance.
Re: Nonsense
Dorcas,
First off, very poor analogy on your part. If you steal a car off the lot, you have depleted the number of cars on offer. If you find a way to completely duplicate said car, then you have left the original, taken an exact copy and thereby not depleted the number of cars on offer. When you find a way to duplicate automobiles exactly without damaging the original and by utilizing very little resources paid for by yourself, then you might have a decent analogy.
The fact is that by copying a digital good, that digital good has not been damaged nor reduced in number. Let’s look at a small case study.
I produce some software and it costs me $1,000 for development (the price is low for easy calculations). This original is in reality worth $1,000. If I lose the original (and for some reason don’t have backups) I have essentially lost $1,000. Now, if I make 100 copies of the software and market them for $10 apiece, I can make my money back.
If someone has copied the above software and not payed me $10, what have I lost? Since it is a digital good and the copier supplied his/her own media, nothing! I still have my original and 100 copies on offer for $10. Now if the copier had taken the copy off the shelf in a store and walked out without paying, I have lost the cost to make a copy (including the medium).
Now, you may say, “But, what if everybody copied your software; then you could never make your money back.” To this, I would reply that either the price is prohibitive, or the development could have been financed through other means such as sponsorships, advertisements, enhanced content, etc. I could also make 10,000 copies at very little expense to myself and charge $1 each. Or if the software is showing interest I could increase the number of copies and even add some extra content to raise the price by a fraction and give previous customers the option to upgrade.
Now, what about that Mercedes dealer; can he make 10,000 extra cars at little expense to drive prices down? Did he lose something when you drove off the lot without paying?
When looking at supply and demand, this is the difference between real (cars) and artificial (copies) scarcity. The cost of making a copy (and sometimes the medium) is the limit to which the price is driven down by the potentially infinite supply. The reason the price of a car is so high is because the cost to make a copy is quite high; only a small fraction of the price goes to pay for development.
If you could supply your own car and copy all the control software over without damaging the Mercedes, then I don’t see a problem.
I mostly agree with your rebuttle with one small exception.
What, exactly, do you call illegal downloading? It’s not really any different than shoplifting a DVD from Target with the small exception of it being easier and having a significantly reduced chance of being caught.
Is the studio’s business model outdated? Hell yes. Does that mean people should get stuff for free? Hell no. Someone, sometime has to pay or the product stops getting produced. Whether you pay by forking over some cash or watching a few ads, the folks producing the content would like to both make their money back and make a tidy profit. Money makes the world go ’round and I don’t see that changing.
Re: Re:
Christine, new here?
“What, exactly, do you call illegal downloading?”
I call it what the law calls it: infringing. The law defines stealing/theft and infringing differently. Pretending their the same is an emotional argument and legally incorrect.
“It’s not really any different than shoplifting a DVD from Target”
For starters, it is VERY different from shoplifting from Target. If Target has 3 copies of ABBA on their shelves and I shoplift one, they now have 2 remaining. If I fileshare a copy of ABBA, I have not deprived any copies from anybody at any time. How can you not see the difference?
“with the small exception of it being easier and having a significantly reduced chance of being caught”
I would like to see a comparison of two things. 1 – How many people know how to and are capable of shoplifting something from Target and how many of them know how to and are capable of downloading and successfully using a torrent, and 2 – How difficult it is for someone in law enforcement to successfully identify someone who is infringing via download compared with someone who is shoplifting. I think you might be surprised by both.
“Is the studio’s business model outdated? Hell yes. Does that mean people should get stuff for free? Hell no.”
Actually, that’s EXACTLY what it means. Supply and demand have spoken, and the price for RECORDINGS is free…sorry.
“Someone, sometime has to pay or the product stops getting produced.”
Agreed, but that has nothing to do with downloading. The product encompasses a lot more than the recordings being dl’d.
“Whether you pay by forking over some cash or watching a few ads, the folks producing the content would like to both make their money back and make a tidy profit.”
They can want anything they like, but it’s on THEM to figure out how to make money on their product, not us.
Re: Re:
What, exactly, do you call illegal downloading?
As others have pointed out, it’s infringing. Not stealing. Stealing involves something being taken away. Infringing is about an unauthorized copy.
As the Supreme Court has noted:
“interference with copyright does not easily equate with theft, conversion, or fraud. The Copyright Act even employs a separate term of art to define one who misappropriates a copyright: … ‘an infringer of the copyright.’ …
The infringer invades a statutorily defined province guaranteed to the copyright holder alone. But he does not assume physical control over the copyright; nor does he wholly deprive its owner of its use. While one may colloquially link infringement with some general notion of wrongful appropriation, infringement plainly implicates a more complex set of property interests than does run-of-the-mill theft, conversion, or fraud.”
It’s not really any different than shoplifting a DVD from Target with the small exception of it being easier and having a significantly reduced chance of being caught.
No, there are significant differences. If you take a DVD from Target, Target can no longer sell that DVD.
Does that mean people should get stuff for free? Hell no.
Just to be clear, we’re not saying it’s legal to get stuff for free, we’re saying it’s a good business model for content creators to give content away for free and make money elsewhere.
Someone, sometime has to pay or the product stops getting produced. Whether you pay by forking over some cash or watching a few ads, the folks producing the content would like to both make their money back and make a tidy profit. Money makes the world go ’round and I don’t see that changing
And no one has said otherwise. You seem to be suggesting that if the content is free no one can make money, but that’s not true.
Just wanted to say bravo.
Finally someone level headed on the subject.
I watch online and then still go see films at the earliest chance for the experience and I still but the dvds for the quality and the features.
They could put things on the net and at the same time as the cinema and airing on tv and fund it with ads and or sponsorship and they wont lose anything.
Most of the reason people watch things online is due to waiting for release in their own country. They need to make changes.
It’s their unwillingness to embrace the new age not the new age itself that is the problem here.
Regarding Thomas Edison
Edison stole intellectual property from his researchers at Menlo Park by making them sign contracts (much like the ones at MANY companies today) wherein they sign over their rights to any ideas they have on the job. He then signed his own name to the patent applications. He only did this after Tesla left the Edison corporation to partner with Westinghouse about alternating current generators when Edison refused to a) get the picture and stuck to the broken technological model of DC, and b) refused to pay Tesla for his work developing better transformers for the power stations.
Aside from that, I agree completely with the article.
Re: Regarding Thomas Edison
Edison stole intellectual property from his researchers at Menlo Park by making them sign contracts (much like the ones at MANY companies today) wherein they sign over their rights to any ideas they have on the job. He then signed his own name to the patent applications. He only did this after Tesla left the Edison corporation to partner with Westinghouse about alternating current generators when Edison refused to a) get the picture and stuck to the broken technological model of DC, and b) refused to pay Tesla for his work developing better transformers for the power stations.
Yes, these are good points, which we’ve discussed here in the past. Edison didn’t invent any of the major inventions he was credited with inventing… but he did abuse the IP system to his advantage. Thanks for reminding everyone!
Piracy in the media
Two things:
He says “Contrast the expansion of the Internet with what happened a half century ago. In the 1950’s, the Eisenhower Administration undertook one of the most massive infrastructure projects in our nation’s history — the creation of the Interstate Highway System.” Substitute Roosevelt, dummy!
His strategy is working; by acting like an idiot, he is getting a ton of publicity, especially from TechDirt – and on that note, Michael! Why so much space for trivia?
Valid point but...
But it’s ok for Sony/Nintendo/Microsoft to keep making me buy the same movie/song/game over and over and over again when they see fit to discontinue their last UMD/cartridge/CD/Tape/record player?
And now it seams that I have no right to the content anymore either, and I can’t re-sell my online purchased content.
You want to compare it to cars? Ok, I can buy a brand new car, and sell it second hand, can I do that with my online content?
I can see where you’re coming from, but you’re only seeing it from one point of view.
Internet is bad
“…wondering how one gets to be the CEO of a major content company without understanding the internet”
– Anything can be used for the bad (even if the intention was good). The internet is no different. It can easily be abused for unethical things. But that doesn’t mean the internet per se is bad.
How out of touch can you be!
There's no such thing as a free lunch
Question – who pays for content? How do the newspaper, magazine, music and movie industries get paid? Yes, all of these content providers are moving to the internet, but the question remains, how do the firms and employees, the true creators, e.g., writers, composers, performers, artists, support personnel, etc. get paid? I don’t work for free, do you?
Intellectual property laws exist for reason. What would you think if someone invents a technology that prohibits piracy? Is that bad?
Re: There's no such thing as a free lunch
Question – who pays for content?
There are numerous different business models to get people paid for content.
How do the newspaper, magazine, music and movie industries get paid?
Each of them have different issues. Newspapers and magazines have almost never involved people paying for the content. Subscriber costs have only covered a fraction of printing and delivery costs. The real money is from advertising.
Music and movies we discuss all the time, showing how they can benefit greatly without relying on the copyright crutch. In fact, most already do.
Yes, all of these content providers are moving to the internet, but the question remains, how do the firms and employees, the true creators, e.g., writers, composers, performers, artists, support personnel, etc. get paid? I don’t work for free, do you?
No one has suggested that they work for free, so I’m not even sure why you bring that up.
A more pertinent question is “if you make something and no one wants to buy it, you don’t make money, do you?” The idea is that you need to put in place a business model that works.
Intellectual property laws exist for reason. What would you think if someone invents a technology that prohibits piracy? Is that bad?
You are obviously new here. We’ve spent well over a decade detailing *why* IP laws exist, and the reason is not nearly as good as you imply. They exist as protectionist policies to LIMIT competition. That’s not their intention, but it’s what they’ve become.
If there were a technology that prohibits piracy that would be interesting, but it’s simply not possible.
It would also be self-defeating. Why? Because smarter folks would recognize that you should stop calling it “piracy” and focus on how it can be used to your advantage as FREE promotion and FREE distribution. Then the fool who relies on the technology suddenly has to PAY for promotion and PAY for distribution and are way behind the curve on their business model.
Content IS Property
My only problem with this post is the comment that content isn’t property. I see that used as justification for downloading music and other electronic products without paying for them. I guess it’s a nice little philosophical thing to ease the conscience.
Now, I will go on record as saying that ideas certainly can’t be property. Ideas are unfinished and raw. However, finished content, as in a complete song or book, is the property of the creator, and the creator/owner has ultimate say over how the finished product is used.
I have heard they saying that it’s not physical, but it is; it takes up physical space on a hard drive, and when utilized, it has an effect on the surrounding environment (PDFs are light on a screen, MP3s vibrate the air and the eardrum). It might not be physical in the traditional sense, but it is real.
If they content producer says they want to receive payment for a copy, that should be respected and they should receive payment. That’s their choice. If you don’t like it, you don’t have to buy it.
There are people giving their content away. That’s also their choice. They own it, so they can give it away. More power to them.
However, I do agree that companies like Sony and her CEO need to take a good, hard look at their business model. They can choose what they do with their property, and right now, there’s proof that other models are workable and profitable. One need only take a look at the list of webcomic creators who make a comfortable living giving their content away for free, as well as video bloggers like Michael Buckley.
Personally, I haven’t listened to Sony music for years. Most of my music comes from Jamendo, and I listen for free on Rhapsody. Until I can pay for commercial music, I’m not going to DL it, if I ever even decide I want most of the crap that’s out there.
Re: Content IS Property
Mikelo, content can be fixed on a physical device, and requires physical interactions in order to be accessed (duhhh), but the content itself is not physical. You can make infinite copies of a piece of content, at zero cost, requiring no new effort from the creator, or taking away anything from him. That’s the difference.
You can say content belongs to it’s creator, and in the sense of authorship (what in Europe is called moral rights), I totally agree. If you take other people’s content and claim as your own, that’s plagiarism.
But copyright is different. It’s not legally a property right. It’s a temporary monopoly right on copies and uses of a work (with limitations like fair use, education, libraries, etc). It used to be a very short right, and limited to commercial activities, but has been greatly expanded. Moral rights however, are eternal.
The public interest is for content to be universally available (it’s a non-rivalrous good). That’s why we have public libraries. Copyright is just a way to allow the commercial exploitation of content, as an incentive to creation. It is not a “natural” right like property, it is market regulation to enforce a certain business model (content as product). Amazingly it even trumps real property rights (as you can’t do everything you want with the books, CDs, and DVDs you own and payed for). And as we have been seeing, there are other ways for creators to make money, so copyright today is probably just a unnecessary restriction of freedoms.
Internet bad?
Mike,
Basically what this rant demonstrates is that the leadership at Sony is living firmly in the past (just read some of CEO Howard Stringer’s comments about their competition with Apple). Their business models have been cash cows and they will defend them with their last breaths. That being said, your analogy has a lot of holes in it and Mr. Lynton does make some valid points.
Re: Internet bad?
Their business models have been cash cows and they will defend them with their last breaths. That being said, your analogy has a lot of holes in it and Mr. Lynton does make some valid points.
Can you point to any of the holes or the valid points made by Mr. Lynton. I’m willing to believe there are some of both, but so far I haven’t seen any.
Re: Re: Internet bad?
First of all, that the movie did well in spite of the theft does not justify the theft or in any reduce its magnitude. The fact that the movie was “successful” is a matter of degrees – who’s to say that the movie might not have made $100 million the first weekend instead of $90 million. It is very easy for someone who hasn’t put their butt on the line to sit back and determine that someone else who risked it all has made sufficient enough return on their investment.
The fact that unauthorized distribution of content may create more buzz for that content is a positive by-poduct a an activity which is still wrong. The fact that a company or industry has not come up with a business model to exploit that sort of buzz does not lend any legitimacy to the practice.
It looks as if you spent a lot of time crafting your transportation analogy – but it is flawed. The automobile vs. the horse & carriage is merely an evolutionary step with respect to human mobility. It also represents a centralization of the means of getting around – anybody could have a horse, but the relative number of automobile manufacturers was quite small. The internet is revolutionary in that it represents just the opposite: a complete decentralization of the means of distribution of content, along with a loss of the ability to directly collect funds to support its production. Is there similarity in the way those vested in the status quo reacted to these advances? Certainly. Should content providers and distrubutors expend more energy comming up with new business models than badmouthing the internet? Definitely. But to say that someone whose multi-million dollar project was stolen and tossed before the world prior to its official release doesn’t have a legitimate beef – that’s a major stretch.
BTW, yes, those employees do get paid by the hour – by others who count on receiving profit from their ventures. You sound as if you believe the money just materializes somehow. This from someone who appears to find joy in flaunting the fact that he took a few economics courses.
Re: Re: Re: Internet bad?
First of all, that the movie did well in spite of the theft does not justify the theft or in any reduce its magnitude.
First, you are confusing “theft” with infringement, but we’ll leave that aside for now.
I didn’t say it “justified” it. I’m not defending the practice of infringement. What I’m saying is that it’s NOT an issue of “theft” or “right or wrong.” It’s a reality of the marketplace AND (more importantly) it doesn’t mean you can’t make money. It just means you need to change your business model.
It is very easy for someone who hasn’t put their butt on the line to sit back and determine that someone else who risked it all has made sufficient enough return on their investment.
We weren’t judging whether it made an acceptable ROI, but responding to his claim that it was evil and wrong. The movie did much better than expected based on similar movies. No, no one can determine the overall impact, but there’s an awful lot of evidence that it had next to no impact whatsoever.
The fact that unauthorized distribution of content may create more buzz for that content is a positive by-poduct a an activity which is still wrong.
Wrong? You’re focusing on the moral issue, when it’s not a moral question. Who cares if it’s “wrong” if you can make more money by embracing those trends? Driving without a guy waving red flags in front of your car was “wrong.” But it was dumb.
Wrong is a moral issue. 100 years from now people will think that not sharing content freely was just as silly as the red flags.
The fact that a company or industry has not come up with a business model to exploit that sort of buzz does not lend any legitimacy to the practice.
I don’t care if it “lends legitimacy.” It’s happening. Arguing over whether or not it’s legitimate is pointless. You can argue all you want, or you can focus on using it to your advantage. Those who have always make more money once they stop worrying about it being “wrong” and recognize they can use it to their advantage.
The automobile vs. the horse & carriage is merely an evolutionary step with respect to human mobility. It also represents a centralization of the means of getting around – anybody could have a horse, but the relative number of automobile manufacturers was quite small. The internet is revolutionary in that it represents just the opposite: a complete decentralization of the means of distribution of content, along with a loss of the ability to directly collect funds to support its production. Is there similarity in the way those vested in the status quo reacted to these advances? Certainly. Should content providers and distrubutors expend more energy comming up with new business models than badmouthing the internet? Definitely. But to say that someone whose multi-million dollar project was stolen and tossed before the world prior to its official release doesn’t have a legitimate beef – that’s a major stretch.
Not at all. The parallels are nearly identical — but people get confused because they think CONTENT is the product (and that it can be “stolen” which it can’t). The PRODUCT of the entertainment industry has always been the EXPERIENCE, and they still have many ways to control and sell the experience. And the analogy is dead on because the horse carriage makers thought they were in the carriage business, when they were really in the transportation business. Same thing. You and much of the entertainment industry thinks they’re in the business of “selling content.” They’re not. They sell experience, and the real product for those companies is the promotion and distribution of those experiences.
The problem is that (like the horse carriage makers) since they think they’re in a different business than they’re really in, they don’t recognize the opportunity and think it’s a threat, because it changes the fundamentals of the business they’re in.
But the end result is the same: consumer want something and if you’re not providing it, you’re dead. Like Sony Pictures apparently. Going against the will of consumers is death.
BTW, yes, those employees do get paid by the hour – by others who count on receiving profit from their ventures. You sound as if you believe the money just materializes somehow. This from someone who appears to find joy in flaunting the fact that he took a few economics courses.
No, I’ve never said money just appears. I’ve spent years demonstrating exactly how you create business models that allow you to make that money. And, again, every single time we’ve seen someone properly put in place such a business model they’ve MADE MORE MONEY.
To Steve
You need to leave behind the notion that intellectual property is some sort of universally morally superior principle. It is not. It is a system the purpose of which is encouraging content creation. Now, you are saying that the movie X-Men Wolverine something might have made 100 million dollars without piracy. That may be true, but that is not the point. The real question to ask is: Would the people who made the movie do it again if they knew they would only make 90 million dollars? Let me go out on a limb here and say that they most likely would. Yes, it is possible that content creators will make less money. But they will still make enough money to encourage them to continue producing content. That is what is socially important, and that is what the state should care about. In addition, people who depend upon the business of those content producers such as the deli shop where the movie technician has lunch will not actually loose money. If people have free content, they have more disposable income to spend on other things. (such as the deli shop) So the business of the deli shop will mutate, but they will be just as well off if not better since they also get free content. Whether you are a Keynesian who believes that people have a Marginal Propensity to Consume or a classical economist in love with calculus or you buy like I do into the evolutionary game theory approach, free content is going to help the economy. The only economic paradigm in which you might find an argument against free content is in Marxism and even then, it’s a toss-up.
I agree that the product is the experience, but there is no experience without the content.
I still do not agree that you or I get to decide how much money is enough. Where is the line drawn, and who gets to draw it? As “piracy” becomes more widespread and easier to accomplish technologically, that line continues to move down until we do actually begin to discourage content creation. As I said, I do believe that new business models are called for, because legally obtained content will be shared, and nothing can stop this. I do agree that the current content moguls are, indeed, dinosaurs. However, there is no economic argument which justifies the mass distribution of Illegally obtained content (even though you don’t believe that the notion of right and wrong enters into this). There is nothing wrong with free content, as long as the creator/producer/distributor gets to decide that it is to be free, not the consumer.
I guess we’ll have to agree to disagree on this one.
Lynton Is Right, this site is wrong.
You wewbheads don’t see what is wrtong with this statement do you?
“And, as was widely noted, the movie still opened to a massive box office take”
It does not matter that the movie was barely affected by the pre-release web exposure. It does notmatter that it is a crappy movie aimed at sad, billy-no-mates geeks, STEALING IS WRONG. The fact that the motive for this theft was some nerd wanted the technowank of being first to post Wolverine on the web, taking it was theft. When will webheads understand SAME RULES APPLY. Just because the web is involved that does not mean theft is legal.
WOW!
Mike,
I read some of your comments and I’m trying to understand the logic here. As an entertainment attorney, I think it might help to give you, what seems like, a much needed primer on IP rights.
Before you choose to read this article that I think would shed light on your views of IP, I would ask you to spend, oh, 1000 hours writing a screenplay. The effort involved is massive. I’ve re-written my scripts 100’s of times. Then let’s say I sell it and its made into a film, which is so hard, you have no idea. To have your fat face come over and steal it, boils the blood.
LET’S MAKE SOMETHING CLEAR HERE — ANY PRODUCT ON EARTH THAT’S OWNED BY SOMEONE, HAS THE RIGHT TO SELL IT AT THEIR PRICE AND ON THEIR TERMS… PERIOD. THE ONLY REASON WHY THE BUSINESS MODEL CHANGED IS BECAUSE OF THIEFS. IF TOMORROW, PEOPLE COULD STEAL CARS FROM A DEALERSHIP, THAT BUSINESS MOEDL WOULD CHANGE, NO?
YOUR DUMB ASS ANALOGY ABOUT CARRIAGES AND CARS IS DISPOSITIVE.
CARS WERE A BETTER FORM OF TRANSPORTATION THAN CARRIAGES SO PEOPLE, NOW HERE’S THE OPERATIVE WORD, PAID FOR CARS, THEY DIDN’T SAY, CARRIAGES SUCK, LET’S STEAL A CAR
FREELY COPYING CONTENT OVER AND OVER AGAIN WITHOUT PAYING FOR IT, IS NOT A BETTER FORM OF DISTRIBUTION. IT COULD CREATE A CHILLING EFFECT.
Read my friend, read:
This article from the Independenc Institute might help you a bit.
Music companies who sell to teens are now suing them. Since when do businesses sue their best customers? It boggles the mind.
We have to ask: How did copyright violation become so common that companies will sue their best customers to stamp it out?
You’ll hear all sorts of answers to this question. “Kids are immoral.” “Technology has run amok.” “The internet has made intellectual property rights obsolete.” These answers all reinforce pre-existing views of the people who believe them. That’s why they’re wrong.
We have a problem because intellectual property rights are hard to understand and even harder to enforce.
Intellectual property is hard to understand because it’s so different from physical property. If I steal your car, you no longer have it. But if you loan me a CD and I rip it to MP3s, I’m quite happy to give it back. Now we can both listen to U2.
In that situation, it’s much harder to see where the harm is. Any parent who has tried to explain to their teenager’s blank stare why downloading copyrighted music is wrong, knows just what we’re talking about.
Things get worse on the Internet, which makes intellectual property rights difficult to protect. The Internet’s job is to make information available to people. It neither knows nor cares who owns bits, only about whipping them around the world at lightning speed. Copyright is a law of man, not a law of physics.
But all is not lost. Entrepreneurs are creating new ways to trade intellectual property on the Internet. Apple’s iTunes platform, for example, lets you download individual songs for less than a dollar, with the complete consent of copyright owners.
Future technological innovations may support micropayments, where you pay a few cents (or even less) every time you enjoy a digital work of art. Since that price is below the value of the time that most people would take to copy something, this seems very promising.
But we also have to do a better job of explaining to our children the importance of wealth creation in American life. Wealth is not lying around waiting to be found. It is created by human beings.
That’s why copyright protections were included in our Constitution. Eager to “secure the blessings of liberty,”” the Founders sought to encourage citizens to create wealth by assuring that they would be rewarded if they created what others liked.
When someone creates a work of art, it is theirs until they choose to share it. One of the most effective ways to encourage sharing is to let them choose freely how to do so. Most owners of intellectual property are very eager to share their work with the world, but on their own terms. Most of the time, they ask that you give them something in return.
So when you copy a CD, you aren’t stealing music. You are stealing the right to listen to that music, a right that you deserve only if the owner grants it to you. That is a much harder concept to understand, for both children and adults.
That’s why it’s a mistake to say that teenagers copy music because they’re immoral. Teenagers copy music because they’ve been brought up in a culture that doesn’t know much about intellectual property rights. Because they don’t yet have the skills to create wealth, they don’t know how to value intellectual property. Combine youthful ignorance with an omnipresent technology that can slice through IP protections like tissue paper, and you’ve got a societal problem.
It’s our job as parents to fix that. Talk to your kids about how important property rights are. Explain to them that living in a free country means that we can’t make people give us something for nothing, even if it’s something we really want.
Young people don’t want to just be told that something is wrong. They want to know why it’s wrong Property rights are ultimately human rights, and thus offer the most satisfying explanation a parent can provide. But until that concept takes root in the minds of tomorrow’s wealth creators, they’ll continue to be sued by companies that once called them customers.
WOW!
Oh and by the way… I did get permission to post the article.
Wow!
Mike,
You notice how the article is geared to children… when I feel you have moved on to higher eduction, I’ll send you “big boy” articles about IP rights.
Comments like, content isn’t property make me realize that you are not a content provider. Make content and then have it stolen when you want to make back your investment. Do it, nerd! Do it.
Then come back to me and say, that felt great getting raped in the bum. All because you can do it, DOES NOT MAKE IT RIGHT. To say, it’s too expensive in your own arbitrary view, is you playing God.
You are a bad person. Plain and simple! You disregard for law, whether or not you agree with it, is amazing. To freely admit you steal content is also amazingly stupid. So now you’re both stupid as an admitted criminal and stupid becasue you haven’t the slightest clue what you’re saying.
I want to steal whatever the hell you make or sell and put you out of business like the carriage industry… please just give me the chance STUPID!
I once asked a friend. “Would you download a car?”
He said, “FUCK YOU! I WOULD IF I COULD!”
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Thank for information.