The MPAA needs business people not lawyers

There have been suspiciously few (none recorded) notices from the MPAA (or NZFACT) to alleged copyright infringers in New Zealand since the law came into effect this week. Perhaps the tsunami is to come, or maybe they are waiting to pick the perfect case.

However no notices issued to ISPs is despite their long-time rhetoric around the incredible damage that downloading (often otherwise unobtainable) content does to their industry, and the allegedly high incidence of such in New Zealand.

I strongly suspect that some in the MPAA have done the numbers, and realise that the  $25 fee that ISPs are able charge the MPAA for each infringement notice is well in excess of the value of the download itself. While in the USA the lawyers are able to bully infringers and make them settle for thousands of dollars, under New Zealand’s new regime I suspect that a more balanced result will apply, except to the worst offenders who were already covered under previous law. Perhaps the MPAA, instead of paying $25 to ISPs, can get $25 from us directly by renting or selling us a few movies? There is plenty of untapped scope to do so, as the rise of Netflix in the USA demonstrated by pushing down the relative incidence of unpaid  downloading.

I’m going to wildly guess that a huge percentage of the ‘illegal’ video downloads to New Zealand is of material that is already legally and cheaply available online elsewhere, but not legally available online here. For example, the Boardwalk Empire show, which the SST mentions in an article on this topic today, is not planned to be here anytime soon (November, as @dubdotdash point out), and the Daily Show is not showing, as far as I can tell, on any NZ channel at all now.

All this is going to make the first cases that make it through the three strikes process interesting. If the infringing content were  movie available on, say, the USA iTunes store for US$15, then how could the MPAA/NZFACT claim that the content is worth anything more?

It’s the same for TV content, which is available for free in the USA on TV, for a small monthly fee on Netflix also in the USA, for a few dollars on iTunes USA and sometimes even online for free. However US and UK TV content is often released very late, if at all, in New Zealand. As the article in the SST points out, some people here really want to watch US content, and are willing to fight, or pay or download torrents to do so.

So to make it very clear to the MPAA. There is a decent sized market of people in New Zealand who would like to buy your content. You don’t even have to put it on to shiny disks, or even do much beyond ensuring there is a local cache. If you let us buy the content for a reasonable price as you release it in the USA then we will do so. It’s all incremental money for you, and at virtually no cost. Yes you may lose revenue from TV stations that may want to buy the content, but they should be buying and playing that content at the same time you do.

But it’s not looking good, despite the lack of notices. The evidence is that the lawyers are in charge at the MPAA, and the business people, those who would seek to maximise their client’s returns, are AWOL.

The MPAA here is fronted by NZFACT, but the T&C’s for respectyourrights.co.nz make it clear who is in charge:

Let’s look at the site. First impressions were not good.

It’s sad to see their rhetoric in the site, and clearly absent are any hard numbers on what downloading costs their industry. Instead we hear that “It’s fundamentally an issue about New Zealanders’ livelihoods”, referring to the ‘tens of thousands’ in the creative industries here. Of course it’s impossible to link downloading to loss of income for someone working here, simply because you can’t. The global movie industry is doing very well thank-you, and NZ’s backward consumer facing version of it means little lost revenue in the scheme of things. The MPAA keeps raising the torrenting of the movie Boy as an example for dropped sales, while failing to mention that said torrents were only because of their poor release strategy, while the torrents were also great publicity for the movie.

Next up – the useful links page (remember those from the 90s?)

Conspicuously missing is 3strikes.net.nz, the impartial site put up by InternetNZ on the issue. Why is that?

Their list of legitimate sources highlight the lack of alternatives problem. There is no Netflix, nor Hulu and the iTunes store in NZ is bereft of content.

Music is no longer an issue, which is why the site is owned by the MPAA, and not with the RIAA. The RIAA should really have little interest in downloaders these days as their content is on YouTube for free and iTunes for $1.29. Their members are busy making money.

TV, as mentioned above, lacks the latest international programmes. It’s sad as we are well past the era of staged releases for big media across countries. Imagine if the Harry Potter books or movies were released later in the USA than the UK – millions of ‘illegal downloaders’  would have been created.

The MPAA’s lawyers and their retained firms do very well out of the scandalous chasing down of alleged downloaders in the USA, but the MPAA’s member firms would do a lot better here if they worked on, as they did in the USA, on giving us the ability to legally obtain their content at reasonable prices. That means taking a pricing cue from Apple’s app store and the success of Amazon’s Kindle. Both companies make it trivial to buy, and both price at a level where you don’t have to think. I’ve bought hundreds of books from Amazon for Kindles, and buy songs and apps from iTunes without thinking. Movies and TV programmes in NZ need to be so easy to get and priced so that we just buy them without thinking.

However it seems all is lost. I have not linked to the respectyourrights.co.nz website because, well, it’s forbidden. The disclaimer on the MPAA website, and I have @NZBen to thank for this, reads as follows:

The T&Cs also state that the T&Cs should be read before accessing the site.

For those not already laughing, the reason this is sad is such language is, like the MPAAs approach to date, completely driven by lawyers rather than business people that face up to reality. Lawyers want to, it seems, cover the downsides, while business people would recognise that inbound links are a good thing and more traffic is better.

It’s the internet. Sites link to each other, and this sort of lawyering is backward beyond belief. It’s time for the business focused adults and technologists to step in, and it’s beyond time for the MPAA members to make money by delighting their customers, rather than taking them to court.

The end game is clear – all content is released globally simultaneously across multiple formats with multiple price points, quality, ad supported or not and delivery mechanisms. Make it happen.

<Update: Jonathan points out that Boy is hard to find – so I tried to find it myself.>

About Lance Wiggs

@lancewiggs
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22 Responses to The MPAA needs business people not lawyers

  1. I checked the “legitimate sources” with an open mind and an open credit card. There’s nothing of interest to me. Nothing at all.

    Until this changes I’m just going to have to carry on visiting Civic Video once a week – which doesn’t bother me, it’s good to get away from the computer for 30 minute walk. But that’s a lot of money the MPAA members are NOT getting from me.

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  2. You’re absolutely right here Lance, but in television the situation is very complex. Much more so than film or music. The entire way that the international television sales market is structured fights against this.

    Programme makers can’t make the shows available to us directly as they would undermine their sales to TVNZ, TV3, Sky and others. Those broadcasters often can’t even get access to the shows in a suitable timeframe to avoid the internet spoiler situation – TVNZ tried with the last season of Lost, and the best they could do was still a week or so after the US.

    The only hope, really, is for the internet-based distributors to actually become the primary market. Broadcast isn’t going away anytime soon, but it could become a secondary market.

    See my post on the issue: http://dylanreeve.posterous.com/better-than-free

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  3. “The MPAA here is fronted by NZFACT”

    Is fronted the right word? “My hand is fronted by this puppet.” Not quite.

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  4. This situation is beyond a joke, despite NZFACT treating it as such (http://www.stuff.co.nz/technology/digital-living/5549718/Skynet-law-debuts-quietly ). We now have potentially increased costs for all ISP customers, while some holiday homes and cafés remove WIFI to avoid fines. All because the MPAA (as demonstrated by their Respect Copyrights website) are stuck in the 1990’s. The respect that’s missing is MPAA’s failure to respect audiences: the Respect Copyrights site is replete with broken links, US spellings, typos and biased content.

    Meanwhile, there is a utter failure of content provision to the NZ market. For example, Paula Browning of the Copyright Council claimed on Nine-to-Noon (http://www.radionz.co.nz/national/programmes/ninetonoon/audio/2496211/new-law-likely-to-prompt-copyright-infringement-notices) that “Boy” was a movie infringed online; try finding a copy of Boy on iTunes. I couldn’t find it, and it is now 18 months after it was released.

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  5. Pingback: Hey MPAA – so where can we buy Boy online? | Lance Wiggs

  6. Peter says:

    While I’ll grant that comments about the ease an ubiquity of iTunes are partially correct as far as using them as an example how they are a player in the market providing the type of service people want, there aren’t other options if A) you hate Apple, B) you don’t have an iOS device or run iTunes (Linux, Android, etc.). Until people have an open format, unencumbered of DRM which they can start watching on a (Platform agnostic) cell phone, watch the middle of on a laptop and finish on a TV, then they are doing it wrong. Their objective though is to sell it to you on TV (Via ads + your time), then VHS (Perhaps not so much anymore), then DVD, then Blue-ray, then 3D Blue-ray, then this DRM locked format, then that DRM locked format, over and over and over. Content publishers and distributors ≠ creators.

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  7. Sean says:

    The MPAA and it’s buddies are trying to rescue a terminally-ill industry. The sooner they get on board with the new technology and delivery methods the better. Lets hope they do. People don’t mind paying a fair amount for entertainment. Reciprocity is a powerful instinct in human beings. If they get value they want to give it back.

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  8. What I find particularly interesting is the fact that all legitimate solutions depend on owning some bit of hardware or system, e.g. Xbox, PS3, Apple TV, SkyBox, etc. I personally use a Mac, but I also use Linux a fair bit which wouldn’t be compatible with any of the legitimate services, and T.B.H. why would I want to stream content through an Xbox or PS3? I’d prefer to get a copy of the data and then use it on whatever hardware device that was convenient at the time. So often I travel and want to watch video, then obviously using a SkyBox is not going to work well for me…

    All these approaches seem completely broken and ultimately frustrating for the end user. I don’t want to be tied to a specific hardware or software platform: its obnoxious and limiting.

    In contrast, what does work for me is this: Pay for media (reasonable price is fine), Download and retain locally a video data file in a standard codec, Watch video at any time or place that I want to with or without internet connection or specific hardware device. This might include copying to a USB memory stick and watching on another computer with family, friends, etc.

    It all seems perfectly reasonable to me, yet no one is doing it? Especially with my interested in original Japanese Anime, which on DVD isn’t the right region code for NZ and often requires specific hardware hacks to playback correctly.

    Honestly, the whole system seems completely broken. I think at some level, when you make the legitimate process so complicated and useless, it is natural for people who love to enjoy that media to do their best to help other people to enjoy it too in the easiest possible way i.e. file sharing of unencrypted standard media files with no limitations or restrictions. I mean, at what point did DVD region codes seem like a good idea to improve the enjoyment and usage of DVDs?

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  9. Peter says:

    “…at what point did DVD region codes seem like a good idea to improve the enjoyment and usage of DVDs…” Samuel Williams
    …That was never the objective of region coding DVDs:
    “…Region coding has several purposes, but the primary one is price discrimination, i.e., allowing the manufacturer to charge different prices in different regions…” – https://secure.wikimedia.org/wikipedia/en/wiki/DVD_region_code

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    • Hi, Peter, yes I understand that, but what benefit does it have for me as the end user? At what point should I feel compelled to purchase products that are deliberately defective by design and hamper my legal and desired usage?

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      • Peter says:

        I guess the point of inflection there is based around, how often does one decide to obey a law ‘because it’s the law’, or to chose to ignore a law ‘because it’s a stupid/bad law’.

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        • Hi Peter, DVD region coding isn’t part of any law, its simply a “feature” added by the production companies. There are laws which make it illegal to circumvent copy-protection schemes such as the DMCA in the USA, regardless of any fair-use rights the end user might expect (e.g. format shifting, backup).

          I’m not really talking about an issue of law at all. I’m suggesting that as a customer, who has limited money, I have two main options currently:
          1) DVD that won’t work correctly because it is defective by design, is shipped 6 months late, more expensive than other countries, unavailable in NZ, etc, etc, etc: Cost: $30NZD, Legal? (If the region code isn’t the same, possibly illegal, despite being bought legally).
          2) Download media that works on all devices with no restrictions: Cost: $2NZD, Illegal?
          In the end, when you apply this set of choices to the society at large, what you end up with is a lot of people choosing option (2). For users to choose option (1), you need to make it more appealing than option (2) in some way.

          This kind of brain-dead split is pervasive across the entire media industry. It is hard to imagine the kind of bone-headed discussions that lead to this business model – How can we make more money and frustrate our customers?

          What really concerns me is that with digital distribution you loose a huge number of rights: the right to sell what you’ve purchased second hand, the right to give away what you have purchased, the right to use your content without an internet connection, the ability to move content from one account to another, etc. I’ve had a number of experiences – such as having multiple iTunes accounts and having purchases on both accounts, purchasing several games that require continuous online connections to work correctly, etc.

          With physical CDs, I can do all of the above – with downloads and online distribution, not so much. So, at the end of the day I simply don’t buy into it, and I’ve basically switched off – I don’t have a TV, I don’t watch mainstream video or listen to mainstream audio – I still buy CDs directly from artists where possible, and I enjoy a wide range of creative-commons licensed media – along with that I produce my own music released under the creative commons. I’ve also started buying indie games rather than those developed by big game studios that abuse their customer’s rights.

          At the end of the day, you have to ask yourself can you really enjoy being part of a media monopoly that doesn’t care about your rights and your desires as an end user? I know I can’t – actually I get so frustrated when I want to watch a DVD and it doesn’t work because of region code, or I want to play a game and I have to do this that and the other thing to make it work: its very sad actually.

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  10. Peter says:

    @Sam – It doesn’t look like I can reply directly to a comment nested as deep as your last one.

    So. Big post to reply to…
    My point about complying or not with a law didn’t have to do with region codes, but whether or not ‘not’ accepting the restrictions placed on you by the rights holders was sufficient reason to acquire content via alternate sources.
    And the end of the day, I don’t necessarily hold this issue against rights holders. The issue there is, corporations (Particularly publicly listed ones) have a fiduciary responsibility to maximise their owners/investors investment. They don’t exist for the public good. So when we talk about the steps they take to try and make money, they are simply saying:
    By doing X (Our costs) can well sell something at Y (Gross), is Y > X? If so, Y-X=Z (Net). Is Z > than last year’s Z? Yes. Then ‘everyone’s’ happy. If any of those are ‘No’, then there is a problem (For them at least). Profits are completely disconnected from costs (Other than the former needing to be larger than the latter). The only thing that is important is, is this year’s/quarter’s profit greater than last year’s/quarter’s profit.
    The risk calculation they are making is, it is better to keep propping up a business model that is very old, vs. the risk of trying something new which is unproven. They are on the wrong side of history, but I understand why they do it. The failure is on the part of our politicians, but they have also made a calculation (WB doing movies in NZ. Chasing FTAs with the US). So ultimately the problem is people who vote once every three years (Particularly when all they do is tick the box with the letter of the party they like), and then go back to sleep for three years.

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    • Hi Peter, while I appreciate that business makes a decisions that they think is in their best interest, clearly there are some problems with the decisions that have been made since from my (informal) research of big music corporations is that they aren’t doing very well.

      Managing a business is not easy and they clearly have a lot of concerns to balance, but at the end of the day the customer is always right – if you treat your customer well the business will grow – the converse is probably true too.

      Even so, I really wasn’t talking about companies and how they operate, but really, as a customer, what kind of decision am I going to make given the two options I mentioned above? Why, as a customer, would I care about the companies internal politics and finances? I just care about the product, and this also includes how I can use it, how it is advertised and a whole host of other issues.

      At some point, this problem needs to be addressed. Until that point, a growing number of savvy consumers are going to avoid purchasing the defective products, and look to alternatives.

      I look at some of the lawsuits in the US and think to myself – in what reality is suing your customers ever the best option? You have someone who has obviously gone to some length to access your media (illegally?) – obviously you have a huge captive audience – there must be better ways to make money out of this rather than suing them all! And the bad will that must generate, unbelievable! … – In many cases one could argue with good numbers that wide spread distribution whether legal or not, has made huge amounts of money for companies who know and understand how to leverage that support from their fans. It makes it less clear copy-protection schemes actually make more money in the long run.

      As an example, I purchased a DVD in Japan. That DVD had very odd copy protection and it wouldn’t play in a variety of DVD players, even in Japan. I tried to take it back to the shop but they wouldn’t accept it. Since then, I’ve purchased ZERO DVDs from Japan. That one terrible experience basically damaged me for life unfortunately – especially in this case because the one DVD cost me $120NZD. I was really angry and frustrated.

      I still prefer CDs because I access the full quality music with no artifical restrictions. I don’t see why I’d give this up for digital music with DRM: its essentially the same price for me and the experience itself is not as good (IMHO). I see the same problem with DVDs but with no clearly superior option at this point in time.

      I clearly see that there is a benefit to digital distribution, but until it is as good as the existing physical distribution mechanisms, I can’t be bothered with it. If big business can’t factor that into their equation,

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  11. Ben Ruffell says:

    Region Codes are up to the DVD Producer. As a DVD Producer I chose not to put any region coding on my disc… because as a consumer region coding really annoys me. I also made the choice not to put any annoying copyright warnings at the front of the disc, and I also chose not to try to put copy protection (that does not work very well) on the disc.

    We still make good sales, and I hope that the customers appreciate not being treated like criminals.

    As for my experience of iTunes… I have tried to sell my film through the iTunes store, but they have an exclusive arrangement with just a handful of US based distribution companies, and for a small niche NZ focused product http://www.brittendvd.co.nz they have not even replied to my emails.

    We even give away an earlier version of the film at http://www.nzonscreen.com/ with a link back to our website where you can buy the newer and better DVD… I may loose out on a few sales, but I am sure that by giving away a sampler, I am creating a larger client base.

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    • Awesome! It is seriously good to hear about producers who understand the desires of their customers.

      Yes, what is funny about region codes is that as a DVD producer, if you have a stock of DVDs produced with a given region code, you can’t easily sell it in another country – the region code is not only damaging for the customer but also the distributor who then has to have stock for each region. If you can’t sell DVDs designed for one region, you can’t easily use that stock for another country. Its complete madness, and I’ve seen several producers who have had this problem because they didn’t really understand the issues.

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    • Just bought it – looks great! I’m giving it to my father as a present for his birthday =)

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  12. Tim says:

    Just wanted to leave a rant about trying to legally watch a movie.
    My kid wanted to watch Madagascar this weekend … and since this is a Steve Jobs owned Disney/Pixar production it’s actually available in the slim iTunes catalogue in New Zealand.
    I didn’t have a problem with coughing up $25 for an easy download and nice HD quality, so I went ahead and bought it.
    I thought Apple had gotten rid of DRM since they stripped it out of their music catalogue, but sadly I find that their movies still only play on ‘Up to 5 computers / devices’. So I can’t play the file I just bought on my PS3 or WD media player.
    So what the heck, no option but to torrent it. I await my infringement notice with baited breath. I’ll be replying with my iTunes receipt I guess.

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  13. Keith browning says:

    If one was to restrict downloads to movies that had been played over free tv, available to record via VCR etc, surely it would legal then pick one off the internet.

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  14. Well Written Lance, However, Everyday I See Schoolmates Bringing Their Laptops To The College, And Download Movies/Other Content. The Situation Got So Bad That One Of The Teachers Actually Had To Come To Our Student Rooms To Tell Us That. We Had Used Up 22GB Of Data In A Day.

    So Even As No One Is Really Paying Any Heed To This Law At The Moment, It Is Only Because, Tracking/Positioning Illegal Downloads Seperately Is Like A Needle In A Haystack. When All Of New Zealand Is Online. There Is No Way, That Anybody Can Be Tracked [Or So I’ve Been Told]

    So The Best Way Will Only Be To Step Up The Industry And Get Series And Movies In Time, So That Impatient Users Do Not Go The Wrong Way.

    Oh And Yea, That Funny Picture Is Not Mine :P

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