Friday, January 27, 2012

Changing Markets

On Wednesday, January 18th, Google, Wikipedia, and a number of other websites “went black” to stand in protest against the Stop Online Piracy Act and the Protect Intellectual Property Act. On the following day, the FBI moved in an international effort to bring down the file locker website Megaupload on charges of racketeering, “conspiracy to commit copyright infringement,” criminal copyright infringement and money laundering. Once more these actions have got me thinking about copyright and piracy. More specifically it got me thinking about the actions that organizations like the Motion Picture Associate of America (MPAA) and the Recording Industry Association of America (RIAA) have taken to try to protect themselves against piracy.


For the sake of this discussion I will define piracy as the obtaining of digital media without payment to the copyright holder. While the problem of persons burning DVDs or CDs and selling them as legitimate is an issue, it is really not the same in my mind as online piracy. I will also try to stay away from any actual discussion of copyright law itself. I do not entirely agree with the laws as they stand but my opinions shouldn’t affect this discussion. Lastly, I’m going to try to avoid rehashing the news. What I hope to end up with is a path toward a solution not more griping about legal injustices.

In order to move against Megaupload as a company, the way the law stands now, it rested on the shoulders of the FBI, the Department of Justice, and the rights holders to find reasonable proof that Megaupload was knowingly committing a crime. They had to deal with international law and work with the government of New Zealand (where the president of Megaupload was currently located) to get the right to extradite the persons of interest. Once back under the jurisdiction of the United States, the people in charge of Megaupload will have to be taken to court and tried where they will no doubt be able to provide themselves with a legal team and potentially get out of any real sentence. They will then be set free and potentially allowed to go back to continue what they were doing. For the rights holders that seems like a lot of time consuming work. Especially considering they can see their potential profits draining away every minute piracy is allowed to continue. While I may be misunderstanding the exact letter of what SOPA or PIPA would actually allow, the spirit of both laws is this: the RIAA and the MPAA would like to have the right to point to a website, declare that it is being used for piracy, and have that website disappear.

I am not a lawyer so I cannot speak to specific legal reasons why PIPA and SOPA were flawed but there has always been one part of the thought process that struck me as inherently misguided. To the RIAA and MPAA, piracy is a problem that can be solved. You just need to sue one more person or see one more website struck down and the problem could potentially just go away. I think this comes from an inherently flawed understanding of the Internet. To those rights holders, piracy is the problem and their loss of money is the result of that problem. If this were true we would see a reduction in piracy anytime a major piracy website like Napster was shutdown. Rather it seems that every time they make a move on a hub of piracy, the pirates shuffle around, change their strategy, and come back in new, unimagined ways. To me that says that piracy is not itself the cause but rather it is the result of a different problem. That problem is that the consumers are no longer pleased with the business model provided by the rights holder organizations. The Internet provides a tool that people can use to share music and movies with a level of freedom that means that the established distribution system of media is no longer the sole distribution method. If people aren’t pleased with paying sums of money they find unreasonable for media, they can now go elsewhere.

With that in mind we have to ask ourselves one important question. Is there anything that rights holders, or anyone for that mater, can do to stop piracy? Will pirates always be able to shift strategy and bounce back no matter what we do to stop them? In my opinion the answer is simple. I have enough familiarity with the Internet and its capabilities to know that the answer is “No” or so close to it that there is no functional difference. This is something that the RIAA and MPAA cannot accept. It does not fit within their business model to work around the concept that piracy might be an issue they have to live with and work around for the foreseeable future. Until they acknowledge that, they will inevitably keep beating their head against the wall of the Internet and any loss of revenue will be their own fault. If the RIAA and MPAA can instead shift strategy and stop asking themselves “What can I do to stop piracy?” and instead ask “What can I do to make consumers happy enough to come back from piracy?” they will start making progress.

After the whole Napster incident in 2000 it must have seemed like chaos was ruling the music industry. People could just go online and download music. Sure Napster was gone but the RIAA had to watch as people heard about the lawsuit and realized that online piracy of music was possible and turn to that instead of paying twenty dollars for a CD. In 2003, Steve Jobs was able to convince a desperate music industry to turn away from selling music by the CD and instead work with Apple to start the iTunes Music Store and sell tracks individually at a price that was so low it would have been laughed at only 5 years earlier. What Apple understood was that people weren’t turning to piracy because they didn’t want to pay money. They understood that people wanted to consume music in a specific way that wasn’t allowed for by the current business model of the music industry. By setting up a store that could allow consumers to consume the way they wanted to people did turn away from piracy.

That is the heart of the issue. With the ability to go online and google “free download” and an album or TV show title and within minutes be able to listen or watch that content the consumer has the ability to chose how they can consume media. Before the Internet control of distribution was strictly limited and flowed in only one direction. With the Internet it is the consumer who can decide how they want to consume media. If they don’t want to buy music from the RIAA, they don’t have to. So in order to keep people buying from them, rights holders need to put the consumer first.

As a consumer, I can shed some light on that. Ask anyone at ScreenFix and they will tell you that the core of the issue is that people want to watch movies or listen to music when they want it, how they want it, and for a reasonable price. If that means setting up streaming sites like Netflix or Hulu that are not forced to wait 8 days or a month to get releases, then that is what needs to be done. By pushing that content back by 8 days you are not pushing people to change their schedule to make sure they catch that TV show, you are pushing people to pirate that show to watch it whenever they want. The RIAA and MPAA need to think first about the consumer and second about themselves.

I am an avid consumer of media of all kinds. While I disagree with the way the RIAA and MPAA do business and act politically, I do think that piracy is wrong. People who create content deserve to get money for their work. I don’t think that anyone really disagrees with that, perhaps not even the people who ran Megaupload. The way to get content creators the money they have earned is to allow consumers to consume that content the way they want to. That means offering consumers the media in the way that they want it and making sure they don’t feel ripped off. It helps if they feel like the money they are paying might actually get back to the person whose content they want to support.

What I would like to see is a digital location where consumers could go to find the content they want. Similar to the iTunes music store, consumers would be able to buy content with a variety of options. You might be able to buy one episode or half a season of a TV show. You might buy the last thirty minutes of a movie that you missed because you ran out of popcorn. That digital information would flawlessly transfer to any device on which you wanted to consume it, similar to the way that the Steam video game store allows you to download the games that you’ve purchased on any machine (provided you install and authorize Steam). You would be able to start listening to a song or watching a movie on one device and continue on a different device where you left off. With iTunes now selling TV episodes and Amazon selling their music and movies along with cloud storage space, perhaps my ideal consumer-driven content portal is not so far off.

1 comment:

Kat said...

James, I really liked this article. It was really well written and did not turn the entertainment industry into a big bad monster. I feel the say way, that if the producers worked to make the product more appealing (content and price-wise) to the consumers, the consumers would not jilt the producers by stealing what they want. We live in a tough economy and the entertainment industry needs to try and adapt (retail and food industries both adapted and have steady business).