Digitalwerks

Expert on piracy?

Late last month, Frederick Huntsberry, the COO of Paramount Pictures, gave a talk at an FCC workshop on the future of broadband policy in the U.S.  He gave a ten minute Powerpoint presentation about the problem of piracy of media content, particularly the unauthorized distribution of Hollywood produced films.  Huntsberry’s contribution to the workshop received a good deal of coverage, some focusing on the odd sight of a studio executive giving an almost “how-to” guide to downloading unauthorized copies, but also from Paramount’s attempt to prevent Huntsberry’s talk from being distributed itself, for fear it would teach some would-be pirates how it’s done.

Commentators knowledgeable about the P2P world pointed out the numerous technical inaccuracies contained in Huntsberry’s presentation, particularly in his list of piracy assisting offenders that included such Internet giants as Google, Yahoo, but also promising technology start-ups like Drop.io and Boxee, not mention electronics makers like Apple and Sony. The heavy-handed nature and basic cluelessness of the talk, now widely distributed by YouTube, has received a great deal of mocking, yet the comedy has obscured the larger issues that the workshop discussed and Hollywood’s stated analysis of piracy.  Now that the entire transcript of the workshop is available, I thought it would be worthwhile to dig a bit deeper, and look at not only what Huntsberry’s presentation reveals, but also examine what the other Big Media representatives had to say.  (although, if anybody has a copy of the Powerpoint deck Huntsberry showed, I would love to get a copy)  What we see is both more damaging to Hollywood’s credibility when speaking about piracy, but also raises disturbing questions about their vision of the Internet more broadly.  In part 1 of this post I’m going to look at the scenario Hollywood paints of current piracy, while in Part 2 I will show how far off the mark they are and why their prescriptions should be dismissed as both inaccurate and likely to cause more harm than good.

The speakers from Hollywood included not just Huntsberry from Paramount, but also Dan Glickman, CEO of the MPAA,  along with representatives from the Director’s Guild, the Copyright Alliance and the Writer’s Guild (Gigi Sohn from Public Knowledge presented a more civil liberties-oriented perspective).  Not surprisingly, the Hollywood consensus was that any future government involvement in broadband policy must address what Glickman termed “the tidal wave of piracy” online.  The Hollywood speakers however went beyond the mere fact of copyright violations to emphasize how the problem is actually growing worse.  The emphasis of what Huntsberry in particular demonstrated was what he called the shift from “Geek to Sleek” in video piracy, or how technological and business developments online have made it markedly easier to both distribute and receive unauthorized content.  As he put it, “What we’ve seen now that there’s been a huge development shift in piracy — if you go back a few years it was strictly — you know, you have to be computer-literate as a user. Today, anyone can pirate a movie.” (emphasis mine)  According to Huntsberry and Glickman there has been a crucial move away from downloading to the streaming oftpirated movies, a fundamental change in their view.  No more confusing software to install, no more waiting for lengthy downloads to complete.  In Hollywood’s nightmare, it is no longer only tech-savvy geeks sealing content, but potentially everybody with a computer, a fast Internet connection, and a desire to see the latest blockbuster film for free.   New gadgets can even get that illegitimate content off the computer and into the living room.

Even more disturbing to Glickman and Huntsberry are the multitude of ways legitimate companies are seemingly supporting the pirate infrastructure, making it easier for users to participate by lending a kind of legitimacy to the outlaw operations.  Pirate websites often make money from advertising, including from respectable companies, or can employ Paypal to generate revenue from their “customers.”  Internet connected devices from Apple and Sony, innovative software from Boxee and Yahoo, even seemingly innocuous services like Facebook and Drop.io all contribute to what Glickman called a “lawless environment” with “no rules of the road” or clearly defined distinctions between what is allowed and what is not.

The underlying, though generally un-stated, argument that Huntsberry, Glickman and the other media lobbyists put forth was that the neither the FCC nor any other government agencies should prevent ISP’s from taking on a monitoring role to prevent the trafficking of pirated content through their pipes.  In fact, what the copyright owners would love to see are laws that mandated ISP’s become copyright enforcers with the ability kick offenders off the Internet entirely, as has been promoted in a handful of countries recently.  Any expansive notion of “network neutrality,” that might actually limit the ability of ISP’s or other proposed monitors from examining or manipulating Internet traffic is anathema to organizations like the MPAA and is a constant target of their lobbying efforts.  Huntsberry’s presentation, that also included a giant banner depicting the massive flow of unauthorized copies of the most recent Star Trek film, was purely to alarm government regulators of the apocalyptic scale of the piracy problem and overwhelm any lingering reservations about possible negative effects of monitoring.

Yet neither Huntsberry, nor Glickman, or any of the other speakers, were able to present any hard evidence that piracy has in fact grown recently, or has indeed shifted to a new more dangerous form, or even that it fundamentally threatens their current business models in a profound way.  We’ll examine the veracity of their claims next week in part 2.

Ernesto at Torrentfreak recently reported that membership in the Swedish Pirate Party is skyrocketing after the recent Pirate Bay trial that resulted in a guilty verdict for the Bay, but also uncovered a number of disturbing facts about the prosecution and the trial judge’s impartiality. In previous life, I used to study European party politics, so I had to comment, as this strikes me as somewhat silly but also not without some possible real ramifications. Despite the membership gains, the Swedish Pirate Party is unlikely to actually disrupt the party landscape in as mature a political system as Sweden, but the particular timing of the trial does really work in the Pirates’ favor. The next notable election for Sweden is for the EU parliament, something that many, many Europeans do not consider of much importance, at least in relation to local and national elections. Not surprisingly, EU voting has been used for protests in the past, to focus on specific interests rather than traditional party differences. If the Pirate Party can translate their current momentum into enough actual votes to get representatives into the EU parliament, it would do a lot to get the word out on precisely the kind of copy-left, filesharing, network neutrality that the Pirate Bay has promoted for years, and it would do so via far more mainstream avenues than in the past. Obviously the Pirate Party would not wield any tangible power, but it would be quite a propaganda coup, and would, just as with the trial, create another strong platform for the proponents of a vastly different copyright landscape than than supported by the MPA’s, BREIN’s and IFPI’s of the world.

Being many, many timezones away from Stockholm (and having been woefully behind in blogging in general) makes anything I have to say about the guilty verdict for the Piratebay admins rather old news, but I will just reiterate my previous prediction that nothing substantive will change in the P2P or filesharing world.  Most likely appeals will prevent any change from affecting Piratebay itself for quite some time, but even if that proves mistaken, there is roughly zero chance that if the Piratebay disappears it would reduce the amount of Bittorrent traffic worldwide, much less decrease the amount of copyright infringement that occurs on the Internet.  Just as with previous rightsholder victories (Napster, Suprnova, Isotorrent, etc.) there will likely be evolution in the way people share files, making whatever the next mainstream avenue of piracy (usenet, directdownload, etc.) that much harder for enforcement to have any real impact.

For some other interesting analyses of the verdict, go here and here.

Both the New York Times and The Economist published articles in the last couple of days examining what is happening with online video.  Brian Stelter and Brad Stone in the NYTimes talked to the MPAA, Eric Garland of Big Champagne and the owner of the streaming site SuperNova Tube; the authors conclude that the pirates are “winning” the battle against the studios.  The Economist instead looked at Hulu and declares it the winner over YouTube and Joost, and feel that Hulu proves the superiority of the advertiser-supported in-browser streaming over download or separate application playback.

Janko at P2P-Blog has already pointed out that the NYTimes mistakenly placed TorrentFreak in Germany, not the correct Netherlands (hi Ernesto!) but applauds Stelter and Stone for high-lighting the MPAA’s admission that lawsuits are not going to be a long term answer.  And the reader comments to the article very rightly point out that the figures cited by the studios are utterly meaningless, and that TV and films should probably be analyzed separately because of the very different geographic and financial models of their distribution.  The Economist instead looks beyond piracy for the most part, but does lump it into its criticism of Y0uTube as a visually confusing and unsavory place for professional content (read ad dollars) because of all the user-generated content.

A few points occur to me in reading both these articles back-to-back.  First, the MPAA, I believe, quite deliberately elides any notion of quality in their statements about pirated content.  Yes, as the article says, The Dark Knight was available for download within a few hours of its release to theaters this summer.  However, as previously shown here, the only copies that existed for the first seven weeks of the film’s release were extremely low quality camcorder recordings (a decent copy didn’t show up on P2P networks until September 9, HD not before November 21st).  And considering that The Dark Knight is now the 2nd highest grossing film of all time, those cam copies did little to nothing to impact the film’s financial success, at least at the domestic box office.  Piracy likely does impact DVD sales and box office outside of the US, but certainly not in the widely exaggerated claims of the MPAA that considers every single download to be a loss of a sale.

As The Economist rightly points out, streaming is an entirely different beast from download, and combined with a genuinely interesting catalogue of content, Hulu has attracted a sizable audience and in a form that advertisers are relatively comfortable supporting.  The other YouTube competitors, including Veoh, Joost, Revver, Metacafe, and Stage6 all followed what they saw as the YouTube model, i.e., grow an audience through liberal upload policies for user generated content and then use that audience to attract premium content and advertising revenue.  As even the leviathan YouTube has shown, advertisers are just not interested in UGC, so it was going to take something far more managed like Hulu to achieve any kind of critical mass.  As a veteran of the Stage6 experience, I can personally attest to the difficulty in  allowing uploaded content while keeping a site free of porn and illegitimate content, not to mention while burdened by the bizarre strictures of the DMCA ruling.  Sadly, Stage6 ultimately had to close down precisely because it could not find an acceptable balance between attracting eyeballs and paying for the bandwidth those eyeballs were using, not to mention the ever present threat (and eventual reality) of lawsuits.

Of course Hulu has its problems too, particularly around the geographic limitations that rights-holders force it to respect.  And it’s not really sure that the current model for Hulu is self-sustaining, depending as it does on rather fluid advertising dollars and the continued cooperation of the participating networks, something that is far from assured as the re-launch of cbs.com may demonstrate.

Based on my experience, I believe the key dynamic that brings the two stories together to give us a deeper understanding of what is “working” on line is the geographic element.  Wide-scale video sharing took off in the wake of DVD and broadband, but it took off far more strongly in Europe than it did in North America (just look at the market penetration of DivX enabled DVD players to track that phenomenon).  The key driver was the desire to see movies and tv shows that had high consumer awareness but no distribution, that is, high profile, highly marketed films or shows that had been released in the US but were delayed in Europe, so the only avenues available were illegitimate channels.  As communications and marketing become more global, instantaneous, and community driven, they rapidly move beyond any effective notion of geographic boundaries, especially among tech-savvy online participants.  If Hulu can be said to work, it is only in the US context, just as the BBC iPlayer does in the UK, but neither really work outside of it, and in fact likely drive viewers to precisely the kinds of illegal distribution channels mentioned in the NYTimes piece.  Until the geographic restriction/opening window issues get resolved, it will be hard to say that online video “works” as well as it should, or as well as users demand.  And piracy will continue to provide an experience that meets those demands, regardless of the wishes of the content creators.

Public Knowledge, via Clay Shirky, via BoingBoing, is reporting that the Capitol Hill lobbyists for the MPAA are rushing to get “network monitoring provisions” into the broadband stimulus package before Congress right now. Apparently they believe that if they get to look at every bit of data that passes through US ISP’s, then Hollywood will be able to stop the illegal sharing of video content.

According to the rules of Internet memes, I will quote from Star Wars to describe the likely result of this, “The more you tighten you grip Tarken, the more star systems will slip through your fingers.”  In other words, the people who create, develop and maintain file-sharing networks and P2P technology are not going to hear this news, shrug their shoulders and give up.  They will innovate around it, and come up with something that is even harder for the MPAA, the RIAA, BREIN, etc. to combat.  An easy solution would simply be to encrypt the traffic. All the major Usenet providers already offer an encrypted solution and I’m sure something could be figured out for large-scale Bittorrent and direct download sites.

Of course a better solution would be to just have the ISP’s themselves stand up for themselves and their customers and rightly point out that this idea is ridiculous.  Or to have Congress do the same.  But I’m not counting on that, and nor will the P2P community I suspect.