Why the ICC Report Makes Me Ick

I have restrained myself from writing much about the ICC's "Building a Digital Economy" report, because I knew it would make me too cross. Fortunately, someone who is rather calmer me than me has done a better job than I would with some careful, rigorous analysis.

I urge you to read the whole thing, since it points out really well the huge holes in the report's logic and methodology. But there's one paragraph I'd like to pull out:

Most telling is the fact that the ICC report states that cinema ticket sales are also dropping, and seems to blame piracy for that. However, the MPAA has recently reported that global ticket sales are at an all-time high, with a global increase of 30% since 2005! More importantly, there is a lot of investment going into the industry, which indicates that it is very healthy. The MPAA reports that the number of digital 3D screens in Europe has grown from 0 in 2005, to 3,495 in 2009. That is hardly an industry affected by piracy.

I really think this is key: people are re-discovering both cinema and live music (something I've written about extensively on this blog). The fact that these are ignored is why the latest report is not just wrong, but completely wrong-headed. It perversely ignores the fundamental shifts in people's taste that the industry needs to understand and build upon.

And that's what really makes me sick: the fact that the media companies doesn't even want to acknowledge that it actually has a huge opportunity, but prefers instead to try to blame ordinary users for sharing and thus promoting their content.

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Hollywood's Post-theatrical Problem, Isn't

There's a great piece in the Washington Post with the headline "The MPAA says the movie business is great. Unless it's lousy." This rightly points out that there is something funny going on in the film industry's view of itself.

On the one hand:

global box office receipts reached an all time high of $29.9 billion, an increase of 7.6% over 2008 and almost 30% from 2005. The U.S./Canada market reached $10.6 billion, an increase of more than 10%, and International receipts increased 6.3% to $19.3 billion in 2009 .... Ticket sales in the U.S. and Canada rose more than 5.5% from 2008, the first admissions increase in two years. Per capita ticket purchases in the U.S. and Canada also increased 4.6% to 4.3 tickets per person, the first significant increase since 2002.

On the other:

you wouldn't know that the movie business was doing so well from other MPAA announcements. Take, for instance, the December press release (PDF) in which MPAA chairman Dan Glickman suggested that unauthorized copies of movies were running the industry into the ground:

"Yet our industry faces the relentless challenge of the theft of its creative content, a challenge extracting an increasingly unbearable cost."

The writer then has the following key explanation:

Asked to clarify, MPAA spokesman Howard Gantman said the industry suffers the greatest damage from fraudulent copies (he said "piracy," but I disagree with that usage) in the post-theatrical markets -- video-on-demand, downloads, DVD and Blu-ray.

I love that "post-theatrical markets" phrase, but what I like even more is this amazingly clear illustration of what is happening in the film industry.

That is, the analogue side - ticket sales in the cinemas - is soaring, while the digital part - those "post-theatrical markets" - are on the way down. And that's absolutely inevitable, of course, because the scarcity is all on the analogue side, while the digital artefacts - downloads, DVDs and Blu-ray - have close to zero marginal cost (not so true for DVDs and Blu-ray, but close enough), so you'd expect their prices and profits to diminish.

In other words, the industry's own figures are a perfect confirmation that it needs to concentrate on the analogue side, and to regard the digital side as an incredibly efficient way to boost it. But somehow I don't think that's the message it's going to be taking home in the near future, more's the pity. (Via @rlancefield.)

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Hypocrisy, Thy Name is MPAA

I do love it when copyright maximalist organisations like the MPAA put out statements, because they invariably put their foot in it too. This "Testimony of Dan Glickman Chairman and CEO Motion Picture Association of America" is no exception. Here's a plum [.pdf]:

While not a Free Trade Agreement, the US motion picture industry – producers, studios and guilds -- has a keen interest in the Anti-Counterfeiting Trade Agreement (ACTA), in particular the provisions to address Internet piracy. We firmly believe that for the ACTA to address the enforcement challenges our industry confronts today, it MUST include robust protections for intellectual property online. Practical secondary liability regimes for online infringement are essential to motivate stakeholders to cooperate in implementing the reasonable practices that promote legitimate consumer options and make the online marketplace less hospitable for infringers. ACTA parties should refine their secondary liability regimes to reflect current realities and adopt modern, flexible systems where they do not exist.

What the MPAA wants is for ISPs, for example, to change their businesses "to reflect current realities and adopt modern, flexible systems where they do not exist": how strange, then, that the MPAA is not prepared to do the same by working according to the new digital rules instead of clinging to the old analogue ones...

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Another Reason Why "Three Strikes" Won't Work

The idea that a Draconian "three strikes and you're out" approach will actually stop people from downloading copyrighted material betrays a vast ignorance of how the Internet works, and of the fact that some people thrive on a challenge. Here's one way of spiking the "three strikes" approach:

BTGuard is an easy to use proxy service that adds an extra layer of privacy to your BitTorrent transfers. The service is designed for BitTorrent users who don’t want their ISPs or any third party to log or throttle their IPs or traffic.

btguardBTGuard reroutes all your BitTorrent traffic through their servers in Canada. This means that anyone who connects to you via BitTorrent, even the MPAA or RIAA, will see BTGuard’s IP, and not yours.

BTGuard does not have any bandwidth or volume restrictions, and while we briefly tested the service (from Europe), the speeds were almost equal to an unsecured connection. Setting it up is fairly easy, the only thing you need to do is enter the username and password provided by BTGuard, and you’re ready to go.

TorrentFreak asked one of the founders of the project why they launched the service, he told us: “More and more, people find their privacy being invaded on the Internet and we find it to be a very disturbing, unethical trend. There are some countries that still actively protect privacy, one of which is Canada.”

So the RIAA will end up in Canada, where the trail goes cold. Then what?

Ninch Inch Nails in the Music Industry's Coffin

How many more of these will it take before the music business realises that it's over?

Fair Use Worth More Than Copyright

Fair use (fair dealing in the UK) is the Cinderella in the world of intellectual monopolies. Some brazen monopolists have even gone so far as to claim that fair use is not a right.

Against this background, it's good to see some US research that not only recognises the vital contribution fair use makes to society, but puts a value on it:

This report has sought to measure the footprint of fair use on the U.S. economy. It has considered not only the core fair use industries, but also the suppliers of goods and services to the fair use core and major users.

The research indicates that the industries benefiting from fair use and other limitations and exceptions make a large and growing contribution to the U.S. economy. The fair use economy in 2006 accounted for $4.5 trillion in revenues and $2.2 billion in value added, roughly 16.2 percent of U.S. GDP. It employed more than 17 million people and supported a payroll of $1.2 trillion. It generated $194 billion in exports and rapid productivity growth.

These figures are particularly important in the context of the inflated claims of various content organisations like the RIAA and MPAA with respect to losses caused by unauthorised copying. In fact those losses - and the combined contribution of copyright-based industries - are dwarfed by the scale of the fair use world.

Time for Cinderella to marry the prince. (Via Slashdot.)

MPAA Jets in To Spread Some Cinematic Fantasy

When are these people going to get a clue?

Motion Picture Association of America (MPAA) president Dan Glickman is today lobbying UK film minister Margaret Hodge, advisers to prime minister Gordon Brown and the UK Film Council to make camcorder recording in cinemas a criminal offence, FT.com reports.

I have no time for idiots who try to record films in cinemas - but they aren't the problem. As Michael Geist noted, when he was rebutting a similar attempt to force stupid laws on Canada, earlier research has shown it's mostly the film industry itself that is to blame:

77% of these samples appear to have been leaked by industry insiders. Most of our samples appeared on file sharing networks prior to their official consumer DVD release date. Indeed, of the movies that had been released on DVD as of the time of our study, only 5% first appeared after their DVD release date on a web site that indexes file sharing networks, indicating that consumer DVD copying currently represents a relatively minor factor compared with insider leaks.

Criminalising the use of camcorders will simply be one more stupid piece of legislation, one more thing the police and legal system don't need, and one more paranoid response to a non-problem.

So MPAA, do us all a favour: save your fantasy world-views for the silver screen.

A Lot of Copyright Whatnot

A superb example of how cavalier proponents of intellectual monopolies can be with figures:

Leaving aside the rhetoric, what is particularly remarkable about these comments is the claim that Canadian copyright law is costing the economy between $10 to $30 billion per year. Obviously any estimate that varies by up to $20 billion is not particularly credible. Further, even the low end figure looks ridiculous as it is four times the losses claimed by the MPAA in China and is more than three times the total amount of cultural goods that Canada imports from the U.S. every year. Or considered another way, the $10 billion figure is more than the Finance Minister committed yesterday to new health care initiatives, the environment, education, and special services for armed forces veterans combined. And that is the low end - the $30 billion figure represents nearly 13 percent of total government revenues and nearly equals the total amount of provincial transfers and subsidies. All of this from "a lot of counterfeiting of movies and songs and whatnot?"