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Technology and IP Law: A Balancing Act

The debate on intellectual property rights has been at the forefront of both national and international discussion for some time now. As the transition into the digital era redefines what it means to communicate and share information, it is also becoming increasingly difficult to create policies that protect content creators, foster innovation, and benefit consumers all at the same time. The movie industry, not surprisingly, is now caught in an interesting position, trying to balance the new frontier in delivering their films to the masses while attempting to limit the piracy that is running rampant, both in the US and abroad.

Is Hollywood Finally Embracing Online Streaming?

Last week, The Verge reported on a story from the WSJ that outlined Disney and Sony’s plans to begin streaming select films (which were still in theaters) to viewers for a fee. This on-demand rental option is currently only being planned for South Korea, but depending on how it goes, it seems likely that the experiment could make it’s way West. However, as the article notes, “Should they test the model outside of Asia, both companies will likely be met with greater opposition in countries like the US and UK.”

To many, the move will seem belated, but it does at least indicate a willingness to try alternative methods to combat illegal downloading and streaming of copyrighted films. In the past, governing bodies and regulatory officials have struggled to reign-in the copyright infringers, partially due to the sheer volume, but also due to advances in the technology. Anonymizing P2P networks like Bittorrent make it extremely difficult to track individual violators, and in 2012, Forbes reported each “Game of Thrones” episode was illegally downloaded an estimated 3 million times.

An Extremely Brief History of Copyright Legal Cases

So how have regulators responded to the issue? Well, there have been quite a few individual suits filed, with the largest case involving around 23,000 defendants, and perhaps the strangest being aimed at a 12 year old. But clearly, the risks still don’t seem to be deterring the hordes from getting their content for free, despite the highly visible and aggressive tactics by associations like the MPAA and RIAA and their government counterparts. Illegal downloading and streaming is still occurring all across the globe.

So why haven’t these tactics worked? For one, the public sentiment is largely at odds with the industry. The following chart illustrates this difference, showing consumer reasoning behind downloading films in the US. (source). The source of the data in the linked article comes from the American Assembly study done on “Copy Culture”, a project from Columbia University.

Other notable findings from the study: About half of Americans (and a similar ratio of German respondents) think copyright infringement should be punishable in some regard, but an overwhelming majority feel that it should be limited to fines and/or warnings, not jail time, and feel that due process through a court system should be taken in all cases. The following chart also gives some insight into the source of movie files of those who own them. (source)

Getting Aggressive with Enforcement

Targeting individual violators is evidently not a complete strategy in the battle for copyright protection. So, in 2012, the US government took it to another level by raiding the headquarters of Megaupload, which at the time was one of the most prominent file hosting sites on the planet. The owner of the company, Kim Dotcom, has been a very outspoken critic of the raid and following legal proceedings. He even recently released footage of the raid on his private mansion by New Zealand authorities and backed by FBI (and MPAA) interests, which you can see here: 

Dotcom has reason to believe the entire ordeal was part of a deal made between Warner Brothers and NZ Prime Minister John Key in order to facilitate the filming of The Hobbit, the latest release in the Lord of the Rings saga.

Obviously, filming a movie of such scale would bring a lot of business to the smaller nation, and he feels he was offered up “on a silver platter” in light of the tight coordination between MPAA officials and the US government, specifically as part of an agreement made between the two parties coinciding with Obama’s start to his second term. The chairman and CEO of the MPAA, Chris Dodd, is a former US Senator.

Conspiracy or Just “Business as Usual”?

The MPAA, RIAA, and other industry associations who are being deeply hurt by piracy in the digital age have been at the forefront of pushing anti-piracy legislation such as SOPA and PIPA, the Stop Online Piracy and Protect Intellectual Property Acts, respectively, which were both shot down in process (and also widely unpopular). After Obama rejected the measures, Dodd responded to Obama by saying, “Don’t ask me to write a check for you when you think your job is at risk and then don’t pay any attention to me when my job is at stake.” Judging by this statement, it seems those in positions of power have abandoned trying to hide the fact that large sums of money are routinely being exchanged between interested parties.

Whether everything Kim Dotcom claims is true or not, there is a clear level of corruption in the regulatory bodies in the US. Intellectual property rights are supposed to both foster innovation and end up making  the producers and consumers better off. In the interpretation by the power players in the private as well as the public sector, it seems they are only concerned about protecting the profits of the big corporations and major studios.

In light of the continued piracy, Dotcom has this to say about it:

“It’s the old business model of Hollywood that is responsible for it, and they want to keep that model alive at any cost.”

If nothing more, perhaps this latest effort by Disney and Sony is a sign that they are recognizing the need to adopt new technologies, respond to the trends, and give the consumers what they want, or suffer the consequences in the long run.

What are your thoughts on this continuing issue? We’d love to hear from you in the comments.

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