Hollywood studios have a right to hack into computer systems and crash the hard drive of anyone with the temerity to download an unauthorised media file.
These are but two of the many bizarre pronouncements lately issued by U.S. entertainment executives desperately trying to protect an outdated analogue business model in a digital world of exponential change. And, as sure as Australia followed up on U.S. enactment of its Digital Millennium Copyright Act (DMCA) with its Digital Agenda Act (DAA), we can expect that Parliament will soon be asked to ape the latest protectionist proposals being hawked by the content industries in Washington. But this time around Hollywood's initiatives are arousing staunch U.S. opposition from a broad information technology, consumer electronics, and public interest coalition.
Australia would be well advised to reject them as well. Before any nation even considers acquiescence to the latest wish list of multinational multimedia conglomerates, it would be wise to review their well-documented history of crying wolf and breaking commitments. We've all seen this movie before, dating back to Motion Picture Association of America (MPAA) CEO Jack Valenti's dire 1984 pronouncement that the VCR would be a technological Boston Strangler, contrasted to the reality that movie sales and rentals now provide the studios with more revenue than box office receipts.
The deal that Hollywood interests made to get the DMCA and DAA enacted was to commit that its "crown jewels" would be available on the Internet once it had laws making it illegal to circumvent technological protections of copyrighted materials. Those laws are now on the books, but the crown jewels are still locked in the tower.
Looking at Hollywood's actions in the U.S. since the DMCA's enactment gives us a taste of what we can expect down under:
- Litigation was brought seeking to bar the manufacture and importation of digital music players. The media interests lost, and the MP3 music revolution was on. But now they're suing to ban digital video recorders that skip commercials.
- Innovative new Internet entrants have been sued into insolvency, then acquired by major media players and neutered of their most compelling features.
- Independent competitors have found it impossible to get content licenses that meet consumer expectations, and the record labels' and movie studios' own online ventures have been half-hearted, widely criticized market failures.
- The record industry succeeded in getting the Library of Congress to set a statutory royalty rate that is bankrupting most independent webcasting services.
- Security researchers have been intimidated with threats of criminal prosecution, and Internet service providers (ISPs) have been deluged with innumerable demands that they police their customers' electronic conduct.
The Hollings bill would require computers, CD and DVD players, cell phones, digital assistants, and every other hardware device capable of reproducing audio and video, plus all associated software, to be saddled with government-mandated security standards.
These would cripple technology's evolution and force consumers to pay more for devices that do less. And the Berman bill would exempt Hollywood from all the security and privacy laws governing others, leaving them free to hack their way through the Internet and to impair the computer files of anyone they suspected of harboring unauthorised content - activities that are criminal offenses under the Victorian Summary Offenses and Privacy Acts.
Has Hollywood demonstrated any real world harm to justify these outrageous new demands?
No. The movie industry's box office receipts are at an all-time high, and every independent study of Internet music sharing has found that it promotes CD sales.
Has it developed effective technological security of the kind protected against circumvention by the DMCA and DAA?
No.
And has it promoted competition and innovation by broadly licensing its content to compelling online services that meet consumer needs and expectations?
No.
Given this sorry record, Australian legislators who will engage in the first mandatory review of the DAA in 2003-4 should say no as well to Hollywood's latest wish list - and consider instead the enactment of an affirmative delineation of consumer rights in digital media.
Control, not piracy, is the real issue. SONY recently tried, unsuccessfully, to sue an Australian who modified PlayStation machines to play legally acquired video games. Hollywood wants laws that require technology and consumer electronics firms to pay the cost of over-protecting its content, and that subjugate consumers to a restricted pay-per-view world.
They don't want to make the undeniably painful transition from an analogue world in which they exercise vertical control over the distribution of scarce physical goods to a digital world of infinite cultural abundance distributed at zero marginal cost, where a whole host of new competitors would have a chance to offer media services to the vast online global audience.
Sharman Networks is the proud distributor of the KaZaA peer-to-peer (P2P) file-sharing software, which just passed 100 million downloads worldwide. We are confident that our distribution of this software is legal under Australian, U.S., and EU copyright laws. And we are certain that P2P software, like every new reproduction and distribution technology before it, will provide copyright owners and, more importantly, artists and creators with major new revenues, through a combination of statutory licenses and piggyback high-value subscription offerings.
This can happen as soon as we all focus on meeting consumer needs, rather than pursue a futile and undesirable quest to transfer integrated market control to the virtual world. And the best way to get that message to Hollywood is to just say no to its latest demands for protection of an obsolete business plan and legal insulation from the forces of change.
Nikki Hemming is the CEO of Sharman Networks, Vanuatu-based owners and distributors of the popular Kazaa P2P software.
The movie industry, like the music industry, is greedy. It is also overloaded with OLD exec's or managers who do not understand the public or the digital media/technology.
DVD's/VCR tapes/CDROM and movie theatres are overpriced because the industries which control pricing, are fleecing/milking the public, without regard for a consumers ability to continue to pay the excessive charges.
The net result is lower purchase/hire of tapes, disks and less attendance at theatres.
People will only buy when they can afford to buy. 100% of NOTHING is NOTHING. A fairly simple sum I would have thought.
I don't rent or buy or go to theatre more than about once in 3 months, because I cannot afford the prices charged.
Other necessities are much higher on my priority list.
If I down load a movie or music, from a legal source, I have already paid a very high premium for the Internet (ISP) access in Australia. The information on my disk belongs to me. Not some arrogant movie mogel located in the USA.