The late Steve Jobs’ negotiations with the recording industry are now the stuff of legend. He famously told clueless music executives who refused to offer their product digitally that they had their “heads up their asses” and needed to start selling their content in the least restrictive way to save their industry.
It took the music industry nearly a decade to even offer digital downloads, and another five years to finally understand that customers will gladly pay for their music if it is sold without copy restrictions and made available through high quality subscription streaming services. Along the way, however, the record companies sued children for millions of dollars in damages, vilified their fans and alienated the very people who helped to build and support their industry.
With broadband speeds now allowing for the rapid distribution of movies, The Motion Picture Association of America (MPAA) is taking a similar approach by threatening to turn the Internet into a corporate police state. MPAA Chairman and Former Senator Chris Dodd, whom I have tremendous respect for, is actively working to convince Congress that the only way to solve the piracy problem is to impose a layer of private regulation on the Internet that will employ the same censorship practices the Chinese government uses on its citizens. The MPAA’s proposals will change the very fabric of how the Internet operates and threatens free speech by placing a tremendous amount of power into the hands of private corporations.
Two bills, one called the “Stop Online Piracy Act” (SOPA) and the other the “Protect IP Act” (PIPA), give copyright holders the ability to block foreign and domestic websites from public view by forcing Internet service providers to “de-list” sites with the Internet’s Domain Name System (DNS). The bills also give corporations the ability to go after publishers who link to the alleged infringers in any fashion, and force payment processing and advertising networks to immediately cut ties with alleged violators under threat of federal charges.
The bills also will destroy protections in current law that have given rise to some of the most influential 21st century media companies. The proposed law will put small, independent publishers and ad networks who can’t afford to fight frivolous claims at a competitive disadvantage.
All of this would take place without any due process and puts the entire burden on the accused to prove their innocence through an expensive legal process.
Undue Process
What would constitute copyright violation under these proposed new laws? If a recent story about Torrington security researcher Trevor Eckhart is any indication, the interpretations could extend broadly.
Eckhart published research on his blog highlighting a piece of software installed on 140 million cellular phones worldwide that had the potential to record keystrokes and other personal information without a user’s permission. The company that sells the software to handset makers, Carrier IQ, claimed Eckhart’s findings constituted a copyright violation and threatened him with legal action.
Under current law (the Digital Millennium Copyright Act – DMCA), a copyright holder needs to first notify the owner of the site (and/or its host) that the content is potentially infringing before taking any other action. The DMCA specifically shields hosting companies from the conduct of their users, so services like wordpress.org and Google’s blogger platform don’t run the risk of being held responsible for their users’ content. That same protection is extended to smaller sites like this one that allow visitors to interact via commenting, and larger social media sites like Facebook. In most cases the infringement is clear cut and the content is taken down.
Eckhart was within his rights to publish his discovery about the Carrier IQ software, given that he used publicly available information to conduct his research. Congress, ironically enough, is now investigating Carrier IQ and its partners to ensure the software doesn’t violate federal wiretap laws.
If Hollywood gets its way, Eckhart and all of the sites linking to him could be silenced effectively overnight. Any ad revenue he might be earning on his site could be turned off with nothing more than an email to his ad network. If he’s selling software to clients through his site, his payment processor could be forced off so he can no longer earn a living. Small and large publishers alike who would rather not deal with the legal implications of linking to an alleged infringer will almost certainly remove their links, and his ISP likely would do the same. Google and other search engines would be required to de-list his site from all search listings.
Even if his web host didn’t respond, those who maintain top level Domain Name Service (DNS) servers would be forced to remove him from the Internet’s directory of websites in the United States. Typing in his website address would result with a “not found” error or a government message alleging Eckhart’s infringement. Anyone providing a workaround or running a DNS server that doesn’t allow site blocking could face federal charges.
All of this can happen without a court order and absolutely no due process that’s afforded to content creators now. We’d be left with an Internet that only large organizations with the legal might to defend against frivolous claims of infringement could compete. Any major corporation could put a small competitor out of business by simply filing infringement letters to its payment processing vendors, ad networks, and websites that provide inbound links.
The DMCA holds individuals accountable for their actions, rather than the services they are using. This wise public policy helped transform the media industry and provide unprecedented distribution of free speech across the Internet. There’s no way a company like YouTube or Facebook could ever have survived past infancy if the MPAA’s proposed restrictions were the law of the land.
“The Net interprets censorship as damage and routes around it.”
That quote, from Internet pioneer John Gilmore in 1993, has proven itself true time and again. Activists in the United States and elsewhere regularly game government censors in China and other nations by using proxy servers to transmit western news to citizens behind repressive government firewalls. Content thieves can easily accomplish this same feat to continue sharing illegal content. In fact, most already do.
Contrary to the industry’s statements, most piracy doesn’t take place through Google search results or even a plain old website — it happens on “darknets,” which are private enclaves that are not indexed by Google, but rather serve as “Internets within the Internet.” These networks utilize anonymized, encrypted proxy servers set up throughout the globe to mask not only the content transmitted, but the identity of those transmitting the data.
Other strategies involve the use of software protocols like BitTorrent to set up ad-hoc peer-to-peer networks that do not rely on the DNS system. Many content pirates use some of the Internet’s oldest protocols, like IRC chat and the UseNet bulletin board network to share infringing content.
So why not just shut off Bit Torrent, IRC, and UseNet? Because all of those systems are used for legitimate purposes as well. Internet television networks and hundreds of open source software projects use Bit Torrent to inexpensively distribute legal, high definition videos and software. Everyone from retro computing hobbyists to technical support teams rely on IRC servers to chat across various computing platforms, and many still use UseNet to communicate in public forums like they have for the last 30 years.
There’s a better way to address this problem, and it involves following the record industry’s lead by actually giving customers what the want. Here’s what I think they should do:
1. Provide unrestricted digital downloads
Both the MPAA and Recording Industry Association of America (RIAA) should know by now that for every copy protection barrier put in place, somebody quickly figures out a way around it. The MPAA and hardware manufacturers invested billions in efforts to stop unauthorized reproductions of movies over the years, and every single one of those efforts has failed.
DVD encryption was broken only two years after its release to the market. Thinking they learned from the DVD failure, an enormous effort was made to lock down the BluRay format, only to have its copy protection fall to enterprising hackers over a similar period of time. Why do they think locking down the Internet is going to work?
The RIAA learned its lesson and now provides its music for sale at Apple, Amazon, and other services free of copy protection in a format that works on every device imaginable. Contrary to industry fears, sales of digital music actually increased once copy protection was removed.
2. Recognize that plastic discs are not the future – encourage streaming services
Consumers are beginning to like streaming their entertainment and are willing to pay for it. Yes, many will choose to own content on DVD or Blu-Ray, but if the success of Netflix is any indication, customer expectations are changing rapidly and the MPAA needs to ensure that its current titles are available to stream.
Right now, Netflix is the only service that actually works across a majority of televisions and television connected devices like Roku, AppleTV, and game consoles. It is estimated that the company’s streaming service accounts for more than half of all prime-time U.S. broadband traffic.
Rather than embrace a potential partner that is encouraging people to pay to watch movies, the studios are jeopardizing a business model that has the potential give paying customers what they want. Studios fearful of Netflix growing too powerful as a distributor have imposed onerous and expensive licensing fees that led to a doubling of Netflix subscription charges and the departure of more than 800,000 customers in protest.
3. Give customers what they want how they want it
It’s no wonder illegal off-shore sites are making money – they’re actually providing people movies the way they want them. Is it wrong? Of course. But the industry should be looking at this problem as one of not meeting market demand as well as a threat to revenue. The fragmented and boneheaded distribution practices currently in use by movie studios are driving people to free software like Handbrake that decouples copy protection from DVDs, or to offshore pirates in order to get the movie to play on a device of choice.
The MPAA does offer their products digitally, but they’ve purposely fragmented the market to encourage the sale of plastic discs. When the films do make it to digital, device specific copy protection means that movies purchased on Apple devices play only on Apple hardware. Amazon streams only to Amazon compatible devices. Movies purchased on Microsoft’s Xbox won’t even play on computers running Microsoft Windows.
Making matters more confusing is that digital and physical rental services do not get many new releases until a month after they are released for sale on disc. Some films are offered in a digital download format first on some platforms, with others following later. We’ve been trained since the early days of VHS that the tape plays in everything. Every single television connected device has the capability to play the same video file, but the device-specific copy protection prevents this form happening.
An entire generation went to Napster in the early months of the new millennium because the recording industry simply refused to give customers the opportunity to purchase music online. Now that those same tracks are available legally from trusted sources, customers are happily (and legally) paying subscription and download fees.
4. Support legislation that will cut off money to foreign movie pirates
A competing bi-partisan bill called the OPEN Act takes a more focused, targeted approach to the piracy problem by stopping the money trail while preserving due process and protecting smaller publishers. Rather than creating a layer of private corporate regulation with no due process, OPEN empowers the government’s International Trade Commission (ITC) to enforce copyright law on infringing websites by severing their ties to US-based payment processors.
Those alleging infringement would petition the ITC to launch an investigation. If infringement is found to be taking place, the ITC would then issue a cease and desist action to ad networks and payment processors that support the foreign website. The accused will have an opportunity to a formal hearing before any action is taken. The bill’s language also more clearly defines what “willful” infringement is, and will protect smaller sites and ad networks from frivolous claims by directing them through the existing process outlined in the DMCA.
The ITC already does this for physical goods, and has been doing it effectively for the last 80 years. Most importantly the ITC commission the bill proposes to create will be one that focuses solely on this issue. The commission will have knowledge of how the Internet actually works and will not have the power to threaten the integrity of the global network as SOPA and PIPA will do through DNS redirection. Rightsholders can use the DMCA as they do now to request that search engines de-list infringing sites.
5. Listen to the late Steve Jobs
The MPAA’s customers have a very simple desire: to purchase, rent, or stream a movie when they want to watch it and have it play on their television or mobile device. That’s it.
The industry needs to stop forcing people into old silos and just make content available to people when and how they want it. That should even include an option of streaming first-run films at a premium price to further limit the enticement of pirated material.
The MPAA would do well to learn from the music industry’s bad decisions in the past decade, as well as the good decisions they’ve made so far in this one.
In other words, just put the product out there. We’ll gladly buy it.
