Hollywood Baffles Me

by on January 12, 2007 · 24 comments

Via Techdirt, BusinessWeek reports that Hollywood (aside from Disney) is holding steadfast in its determination to make movie download services unappealing to consumers. This is just baffling:

What does Hollywood want from Steve Jobs? For starters, more protection for their films. “His user rules just scare the heck out of us,” one studio executive told me. Indeed, under Apple’s video iPod digital-rights-management scheme, folks can share their flicks with as many as three other iPod users.

That’s good for the guys who get free flicks, but it’s bad for Hollywood, which goes bat crazy over the notion of pirated freebies on the Internet. To them, losing a customer courtesy of the video iPod is just as bad. Add into the equation the new Apple TV, which would allow folks to put that movie on their TVs, and Hollywood sees more and more of its DVD bucks headed out the door.

I don’t know if this is the exec misunderstanding Apple’s DRM scheme, the reporter misunderstanding the exec, or me misunderstanding the whole passage, but that doesn’t make any sense to me. It’s true that you can have your iTunes content on more than one iPod, but each iPod can only be linked to one copy of iTunes. So yes, you can have the same movie on three iPods. But it can’t be any three iPods–it has to be three iPods that have all of your content–and only your content–on them. Which means that, at most, this will allow family members to share movie downloads.

Now, the goofy thing about this is that even with the ability to watch movies on three iPods, Apple’s DRM scheme is still way more restrictive than what you can do with a traditional DVD. I can play a DVD on any DVD player in the world, and I can potentially share it with dozens of different people. If their goal is to make sure no one gets to watch a movie without paying Hollywood for the privilege, DVD-sharing is a much bigger threat than anything people can do with their iPods.

So I don’t understand who’s supposed to be “getting free flicks” or how Hollywood would be “losing a customer” by signing up with iTunes. Can anyone explain what the problem is supposed to be?

  • http://bennett.com/blog Richard Bennett

    Tim, you say: “I can play a DVD on any DVD player in the world and I can potentially share it with dozens of different people.”

    That’s true. And if you make a dozen copies and set them free in the world, they can be shared with dozens of people each, and then copied, shared some more, etc. So there’s no need to ever buy a DVD if they can be freely copied, just wait until your name comes up in the chain letter.

    I think that’s what Hollywood is afraid of, and Apple’s track record with security on iTunes suggests it’s not a *completely* unreasonable fear, although I agree it’s *mainly* unreasonable.

  • http://bennett.com/blog Richard Bennett

    Tim, you say: “I can play a DVD on any DVD player in the world and I can potentially share it with dozens of different people.”

    That’s true. And if you make a dozen copies and set them free in the world, they can be shared with dozens of people each, and then copied, shared some more, etc. So there’s no need to ever buy a DVD if they can be freely copied, just wait until your name comes up in the chain letter.

    I think that’s what Hollywood is afraid of, and Apple’s track record with security on iTunes suggests it’s not a *completely* unreasonable fear, although I agree it’s *mainly* unreasonable.

  • Jonathan Dingel

    You slightly overstate your case. Remember region codes?

  • Jonathan Dingel

    You slightly overstate your case. Remember region codes?

  • http://techdirt.com/ Mike Masnick

    Richard Bennett writes:

    “That’s true. And if you make a dozen copies and set them free in the world, they can be shared with dozens of people each, and then copied, shared some more, etc. So there’s no need to ever buy a DVD if they can be freely copied, just wait until your name comes up in the chain letter.”

    Um. No.

    The fact is that you don’t need to wait for your name to come up in the chain letter. Once it’s been copied and is made available it’s just available to everyone. And it already is. But, Hollywood shouldn’t be afraid of that, because it’s already happened, and yet people still buy DVDs and they still go to movies, because the experience is better or because they get additional value out of doing it legitimately.

    There are many other ways that the industry can compete with free.

    However, to say that they’re worried about the content being copied is ridiculous, because it already is being copied. There’s no benefit to focusing on more stringent copy protection, because it doesn’t change the fact that once the content is out there, it’s out there.

  • http://techdirt.com/ Mike Masnick

    Richard Bennett writes:

    “That’s true. And if you make a dozen copies and set them free in the world, they can be shared with dozens of people each, and then copied, shared some more, etc. So there’s no need to ever buy a DVD if they can be freely copied, just wait until your name comes up in the chain letter.”

    Um. No.

    The fact is that you don’t need to wait for your name to come up in the chain letter. Once it’s been copied and is made available it’s just available to everyone. And it already is. But, Hollywood shouldn’t be afraid of that, because it’s already happened, and yet people still buy DVDs and they still go to movies, because the experience is better or because they get additional value out of doing it legitimately.

    There are many other ways that the industry can compete with free.

    However, to say that they’re worried about the content being copied is ridiculous, because it already is being copied. There’s no benefit to focusing on more stringent copy protection, because it doesn’t change the fact that once the content is out there, it’s out there.

  • http://www.techliberation.com/ Tim Lee

    Richard, I mean I can lend the disk to dozens of people. That’s perfectly legal with a DVD, whereas it’s impossible to do legally with iTunes. So it’s not clear why Hollywood considers iTunes to be the greater threat of unauthorized sharing.

  • http://www.techliberation.com/ Tim Lee

    Richard, I mean I can lend the disk to dozens of people. That’s perfectly legal with a DVD, whereas it’s impossible to do legally with iTunes. So it’s not clear why Hollywood considers iTunes to be the greater threat of unauthorized sharing.

  • http://bennett.com/blog Richard Bennett

    OK Tim, I thought you were asking about perception, not about reality. The studios are afraid of piracy in general, right? And they fear that digital content is easy to copy after it’s been liberated from the plastic on which it’s sold, right? And they know Apple doesn’t care one way or another if they get ripped off, right?

    So the real issues, whatever they are, don’t really matter.

  • http://bennett.com/blog Richard Bennett

    OK Tim, I thought you were asking about perception, not about reality. The studios are afraid of piracy in general, right? And they fear that digital content is easy to copy after it’s been liberated from the plastic on which it’s sold, right? And they know Apple doesn’t care one way or another if they get ripped off, right?

    So the real issues, whatever they are, don’t really matter.

  • http://www.maclawstudents.com Erik Schmidt

    As Mike mentions, they’ve already lost the DVD battle. But when your business model is under attack and you’re unwilling to adopt a new approach, every new distribution technology looks like yet another threat. Based on what the music and movie industries have been doing over the past several years, it seems they’ve been very good at recruiting risk-oriented lawyers, and very bad at recruiting opportunity-oriented entrepreneurs. All they see is threats, even when there are new opportunities staring them in the face.

    Regarding Richard’s comment about them knowing that Apple doesn’t care if they get ripped off or not, I’m not sure that’s correct. Perhaps in the “Rip, Mix, Burn” days Apple was unconcerned, but now that they’re the 5th largest music retailer in the US, they may be a lot more wedded to DRM. Something tells me if any company is going to sound the death knell on DRM, it isn’t going to be Apple. I would think the content owners would recognize this, but maybe I’m missing the big picture.

  • http://www.maclawstudents.com Erik Schmidt

    As Mike mentions, they’ve already lost the DVD battle. But when your business model is under attack and you’re unwilling to adopt a new approach, every new distribution technology looks like yet another threat. Based on what the music and movie industries have been doing over the past several years, it seems they’ve been very good at recruiting risk-oriented lawyers, and very bad at recruiting opportunity-oriented entrepreneurs. All they see is threats, even when there are new opportunities staring them in the face.

    Regarding Richard’s comment about them knowing that Apple doesn’t care if they get ripped off or not, I’m not sure that’s correct. Perhaps in the “Rip, Mix, Burn” days Apple was unconcerned, but now that they’re the 5th largest music retailer in the US, they may be a lot more wedded to DRM. Something tells me if any company is going to sound the death knell on DRM, it isn’t going to be Apple. I would think the content owners would recognize this, but maybe I’m missing the big picture.

  • http://weblog.ipcentral.info/ Noel Le

    Tim, Hollywood baffles you because you may be looking at the wrong problem. Its not DRM, its licensing.

    The main issue here may be the licensing agreement between Hollywood and Apple. I doubt Hollywood cares so much about a movie being copied to other iPods as much as Apple has multiple revenue streams while Hollywood only gets one, and its not paid for those copies.

  • http://weblog.ipcentral.info/ Noel Le

    Tim, Hollywood baffles you because you may be looking at the wrong problem. Its not DRM, its licensing.

    The main issue here may be the licensing agreement between Hollywood and Apple. I doubt Hollywood cares so much about a movie being copied to other iPods as much as Apple has multiple revenue streams while Hollywood only gets one, and its not paid for those copies.

  • eric

    Yes, for the DVD, the war has been lost. An L.A. Times poll last year found that 60% of younger respondents (the prime DVD demographic) thought there was nothing wrong with giving a copy of a DVD you owned to a friend. Like it or not, this is the mindset of Hollywood’s customer base.

    This mindset, I think, comes from music sharing that has occurred and become part of the culture ever since the advent of the cassette tape. As a teen and college-age adult my friends and I taped each others’ vinyl albums, and often this led to buying the vinyl albums we had taped. Nevertheless, because of the ubiquitous nature of home taping, the hidden tax on blank tape evolved.

    It makes much more sense for business to adapt to the attitudes and opinions and behavior of the majority than to be constantly fighting them with technology that can be easily circumvented or lawsuits that create public relations debacles. That tax on blank tapes was such an accommodation.

    Apple may have the clout to make Hollywood seriously consider some kind of accommodation on downloadable video. For example, how about allowing lossy copies (not as good as the original downloads) to be made for a small fee. The lossy copy is analogous to the average cassette copy of a vinyl album — good, but not great. The fee would be analogous to the blank tape tax.

    I’m not saying this is the best solution, but I haven’t even heard the home taping model discussed in this context. Why not??? With HD-DVD being cracked as we speak, it just seems logical to regulate the urge to copy, rather than always trying and failing to subvert it.

  • eric

    Yes, for the DVD, the war has been lost. An L.A. Times poll last year found that 60% of younger respondents (the prime DVD demographic) thought there was nothing wrong with giving a copy of a DVD you owned to a friend. Like it or not, this is the mindset of Hollywood’s customer base.

    This mindset, I think, comes from music sharing that has occurred and become part of the culture ever since the advent of the cassette tape. As a teen and college-age adult my friends and I taped each others’ vinyl albums, and often this led to buying the vinyl albums we had taped. Nevertheless, because of the ubiquitous nature of home taping, the hidden tax on blank tape evolved.

    It makes much more sense for business to adapt to the attitudes and opinions and behavior of the majority than to be constantly fighting them with technology that can be easily circumvented or lawsuits that create public relations debacles. That tax on blank tapes was such an accommodation.

    Apple may have the clout to make Hollywood seriously consider some kind of accommodation on downloadable video. For example, how about allowing lossy copies (not as good as the original downloads) to be made for a small fee. The lossy copy is analogous to the average cassette copy of a vinyl album — good, but not great. The fee would be analogous to the blank tape tax.

    I’m not saying this is the best solution, but I haven’t even heard the home taping model discussed in this context. Why not??? With HD-DVD being cracked as we speak, it just seems logical to regulate the urge to copy, rather than always trying and failing to subvert it.

  • http://enigmafoundry.wordpress.com/ enigma_foundry

    So the real issues, whatever they are, don’t really matter.

    Well, first, I might note that the execs have to understand the real issues. They have shown singilar stupidty in not wanting to understand issues of Science or Technology.

    From my (admittedly very limited) experience, only in the Pharma Industry do execs pride themselves on actually understanding what their companies actually do, and it is even more rare for them to have the imgination to see what their companies might do profitably…

  • http://enigmafoundry.wordpress.com eee_eff

    So the real issues, whatever they are, don’t really matter.

    Well, first, I might note that the execs have to understand the real issues. They have shown singilar stupidty in not wanting to understand issues of Science or Technology.

    From my (admittedly very limited) experience, only in the Pharma Industry do execs pride themselves on actually understanding what their companies actually do, and it is even more rare for them to have the imgination to see what their companies might do profitably…

  • http://bennett.com/blog Richard Bennett

    From the perspective of for-profit enterprises, giving the product away for free isn’t generally an option. And from the perspective of American consumers, hobbling the computer with all kinds of copy-protection schemes isn’t an option either.

    Perhaps Hollywood should take a tip from Google and embed ads in their product. If they did, copying would be a virtue not a vice. The product would suffer, but who cares about such trivia?

    It’s not like we’ve learned from HBO that you can produce better programming on a subscription model than on an advertising-supported model.

    (that last sentence was sarcastic)

  • http://bennett.com/blog Richard Bennett

    From the perspective of for-profit enterprises, giving the product away for free isn’t generally an option. And from the perspective of American consumers, hobbling the computer with all kinds of copy-protection schemes isn’t an option either.

    Perhaps Hollywood should take a tip from Google and embed ads in their product. If they did, copying would be a virtue not a vice. The product would suffer, but who cares about such trivia?

    It’s not like we’ve learned from HBO that you can produce better programming on a subscription model than on an advertising-supported model.

    (that last sentence was sarcastic)

  • ramster

    “60% of younger respondents (the prime DVD demographic) thought there was nothing wrong with giving a copy of a DVD you owned to a friend. Like it or not, this is the mindset of Hollywood’s customer base.”

    Isn’t it perfectly legal to give (or lend) my DVDs to a friend? (i.e. the actual, physical disk, not a copied version or a file ripped from it). Your phrasing implies that these 60% are condoning something illegal, which they’re not.

  • ramster

    “60% of younger respondents (the prime DVD demographic) thought there was nothing wrong with giving a copy of a DVD you owned to a friend. Like it or not, this is the mindset of Hollywood’s customer base.”

    Isn’t it perfectly legal to give (or lend) my DVDs to a friend? (i.e. the actual, physical disk, not a copied version or a file ripped from it). Your phrasing implies that these 60% are condoning something illegal, which they’re not.

  • eric

    ramster, my data is from the LA Times, August 9, article by Charles Duhigg, “Is Copying a Crime? Well…Many young people say that duplicating CDs or DVDs they own is legal. The industries disagree.”

    Question was asked to children/adults age 12-24: “Is it stealing?Younger consumers see strong differences between copying and outright stealing.Proportion of young people who thought the following would be committing a crime: (Combined minor and serious crime)”

    “Copying a DVD/videotapefrom friend who paid for it” — the response was near 40% for these age groups who thought it was a minor or serious crime. That means 60% did not believe it was a minor or serious crime.

    For copying a CD owned by friend who paid for it, the percentage who thought it was minor or serious crime was even lower, around 30%.

    My phrasing implies exactly what I meant, exactly what was published in the LA Times.

    Now, with regard to CD copying, only a few years ago, industry representatives were saying it was not wrong to copy your CD for a friend. I would refer you to NPR’s Science Friday discussion on Digital Copyright, from May 18, 2001. The assumption in this discussion, unchallenged by anyone in the discussion, was that making a few personal copies of your own CD for friends was legal. (Now the RIAA reps are completely changing their tune.)

    Given the history, these are believable statistics on public opinion.

  • eric

    ramster, my data is from the LA Times, August 9, article by Charles Duhigg, “Is Copying a Crime? Well…Many young people say that duplicating CDs or DVDs they own is legal. The industries disagree.”

    Question was asked to children/adults age 12-24: “Is it stealing?Younger consumers see strong differences between copying and outright stealing.Proportion of young people who thought the following would be committing a crime: (Combined minor and serious crime)”

    “Copying a DVD/videotapefrom friend who paid for it” — the response was near 40% for these age groups who thought it was a minor or serious crime. That means 60% did not believe it was a minor or serious crime.

    For copying a CD owned by friend who paid for it, the percentage who thought it was minor or serious crime was even lower, around 30%.

    My phrasing implies exactly what I meant, exactly what was published in the LA Times.

    Now, with regard to CD copying, only a few years ago, industry representatives were saying it was not wrong to copy your CD for a friend. I would refer you to NPR’s Science Friday discussion on Digital Copyright, from May 18, 2001. The assumption in this discussion, unchallenged by anyone in the discussion, was that making a few personal copies of your own CD for friends was legal. (Now the RIAA reps are completely changing their tune.)

    Given the history, these are believable statistics on public opinion.

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