Op-Ed: ISP/Content Providers – By Bob Lefsetz

Beware of the copyright bullies.

Mickey Mouse was about to go into the public domain. So what did Michael Eisner, head of Disney, do? Pay his lobbyists to get an extension of copyright. Yup, it was just that simple. That's how America works. Is it good for the public? Don't ask that question, otherwise you'll be questioning our entire government.

Not that this agreement is law. But it was brokered by the government. Obama wanting to pay off the lefties he can count on to support his reelection campaign. Hell, Rahm Emanuel's brother runs WME, need I say more?

This policy is so wrongheaded it makes me wonder if the copyright holders have lived through the last ten years.

Let's see. You kill Napster and it's replaced by KaZaA. You kill KaZaA and it's replaced by Limewire. You kill Limewire and it's replaced by BitTorrent. You attack the Pirate Bay and now infringers use lockers…RapidShare, Megaupload, they're multiplying like rabbits.

In other words, why don't we go back to Vietnam. Spend a bunch of money to push back an indeterminate enemy whilst putting out press releases stating that we're on our way to victory!

Huh?

Ten percent of the people will always steal. I'm quoting the aforementioned Mr. Eisner here. Forget 'em, write 'em off, they're never going to pay, they're the same people who wanted to borrow your vinyl records to make cassettes but never bought an album themselves.

The rest of the public? People are interested in convenience, a better offer. Apple products are more expensive than the competition's, why does the company keep winning? Because the perception is their wares are superior and you've got less downtime due to viruses/worms/complications…

Hell, if the content industries really wanted to triumph they'd offer help lines, genius bars, both physical and phone, hell, allow people to IM, helping them with the use of new content delivery systems.

That's how you win the war. By going where the people are, by leading them into something better.

Stop focusing on today's margins. Will you make as much money tomorrow? I don't know, but if you keep holding back the future you certainly won't. Our nation's business history is an endless river of innovation, throwing off revenue streams inconceivable previously. There's no YouTube without broadband. Where is our national broadband policy? Where are the lightning speeds of South Korea? Content industries don't want them, because you can deliver a movie in minutes. But did you ever think as a result you'd end up with new revenue streams, like Hulu, which is about to pass half a billion dollars a year in revenue!

And this newfangled policy is essentially toothless. And it assumes that what the content providers say is true, that traders are infringers. But even though this is frequently the case, it's not always true. Do you like a country where you're guilty until proven innocent? What happened to the American way? What about holding that terrorist suspect on a ship for months without charging him? What happened to habeas corpus? Is America so afraid that it's willing to throw out the rule of law? Don't you want to be able to depend on the system if you're charged unnecessarily?

If one guilty person goes free that's better than killing an innocent man. But not in the content world, where there's a scorched earth policy trying to jet an entire nation into the past, an entire world.

The issue isn't piracy, it's content providers' inability to deliver their product in a way the public wants to use it.

Release those movies online for a low price day and date. If it impacts exhibitors, so what. Isn't this what got the music industry in trouble, delaying digital sales to placate Wal-Mart? And what does Wal-Mart do, shrink floor space, order fewer SKUs, huh?

Lower the price of music. Yup, music's overpriced, hate to tell you that. What's better, to get a few people to pay a lot and have the rest steal or getting everybody to pay a little. Don't fight on principle, be practical.

The RIAA has been wrong time and again. The RIAA should not be fighting digital piracy, it should be bopping copyright holders over the head to license innovative startups. Furthermore, what's hip today is passe tomorrow. Yesterday it was Pandora, today it's Turntable.fm. Charge now, ride into the future with innovators, don't try to maintain your old business model.

And too many of the artists are on the wrong side. So busy making their music, they're clueless as to digital realities. Filmmakers are the worst, especially the successful ones. I'm gonna let you in on a secret, digital allows everybody to play, from the wankers to the iconoclastic geniuses. The major labels have hemorrhaged market share to indies as a result of digital home recording and digital distribution. The movie business wants to maintain its monopoly. They're not fighting for the people coming up, but trying to keep them down.

The truth hurts.

If you think the major label or the big studio is on your side you've never had a success with either. If they pay at all, it's a fraction of what you're owed.

And streaming is the future anyway. Focusing on downloads is like focusing on pirate CDs. Wait, they're doing that! They want to circumvent the law to prevent it! What next, a campaign against illegal 78s? Wax cylinders?

If the music business were smart, and it's not, it would lower digital track prices by two-thirds, have a going out of business sale. And that's what's happening, streaming is here to replace it. Digital tracks are like ringtones, a momentary business. And if we had that aforementioned national broadband policy we could deliver hi-res files, getting people to buy what they've already purchased all over again, like we did with CDs!

Do you want to give up your e-mail? Do you want to be limited to a BlackBerry in an iPhone world? How about killing on demand TV and the Slingbox and every other innovation that makes consumption of copyrighted material easier. That's what the content providers want, the old model.

But the people do not. The people are pissed at the copyright bullies. These corporations would do better to make peace instead of war. Spotify is a piracy killer. But what does Warner do? Refuse to license it! As if anemic initial streaming royalties should be forgone to keep the CD alive. This is like refusing to license 8-track duplication because you don't want to kill vinyl records. Yes, the labels outsourced 8-track production, until they realized tape was the future and built their own duplication facilities which are now accumulating dust if not completely plowed over.

Let's save TDK. And Maxell. And Nakamichi. Why not? They were profitable, they had employees, don't they deserve to live?

No corporation deserves to live. You've got to earn your longevity. And today's media behemoths are doing their best to eviscerate their futures. Tech is both the problem and the solution. You don't succeed by resting on your laurels, but killing your young and replacing them with newborns. The iPhone is killing the iPod. If Apple were run by Doug Morris the iPhone would be shelved and the iPod would rule until it fell of a cliff and so did the company. Isn't this EXACTLY what happened to Sony? Sony's no longer my first choice in ANYTHING!

The future will come despite the antics of these despots. And it will benefit those not wedded to the past, willing to take risks.

Hopefully, that's you.

New York Times

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