IP: Jack Valenti replies to Lessig, other "professors"

[David Farber <dave () farber net>]

There is a lot in this I would question and will djf


> http://www.washingtonpost.com/wp-dyn/articles/A62085-2002Feb24.html

The movie industry is under siege from a small community of professors who 
argue (1) that broadband access to the Internet will never gain consumer 
acceptance without movies legitimately being made available on the Net and 
(2) that producers deliberately are holding back the exhibition of movies 
on the Net because of -- in the words of Lawrence Lessig ["Who's Holding 
Back Broadband," op-ed, Jan. 8] -- "the threat the Net presents to their 
relatively comfortable way of doing business." Add to this (3) the 
accusation that copyright owners are stifling innovation in the digital world.

The first claim is true: The great omission in digital downloads is the 
lack of legitimate movie availability. Text is mainly what the Net offers. 
A recent survey revealed that 68 percent of all home computer users say 
they're satisfied with their normal 56K computer modem. It can download 
pretty much all that's on the Net, as not much (legal) material is out 
there that's chock full of graphics and in a consumer-friendly format to 
create the need for a cable modem or a digital subscriber line (DSL).

The second professorial indictment is palpable nonsense. It is a charge 
issued only by those who have a blurred knowledge of the financial 
fragility of the film industry. Because making movies is so expensive, only 
two in 10 films ever retrieve their production and marketing investment 
from domestic theatrical exhibition. Distributors have to use other venues 
-- delivery systems such as cable, satellite, TV stations, videocassettes, 
DVDs, international markets. Every producer yearns to use the Internet as a 
new delivery system to speed movies to consumers' homes for rent or sale, 
at fair, reasonable prices. Any producer who chooses to reject Internet 
exhibition is a fiscal lunatic.

According to the Boston-based consulting firm Viant, some 350,000-plus 
films are being downloaded illegally every day. Some are still in 
theatrical exhibition when they are illegitimately recorded, mostly by 
those who use state-of-the-art university broadband systems. Those who 
don't have broadband but find it beguiling to download movies free simply 
start their computers whirring at bedtime, and when they wake in the 
morning they have a movie. Free -- and illegally.

The reason pitifully few films are legitimately available on the Internet 
is not producer hoarding. It is that those valuable creative works can't be 
adequately protected from theft. The analog format (videocassettes) and the 
digital format (DVDs) are different. Videocassette piracy costs the movie 
industry worldwide more than $3.5 billion, even though the sixth or seventh 
copy of analog becomes unwatchable. But the thousandth copy of digital is 
as pure as the original. Moreover, digital movies on the Internet can be 
pilfered and hurled at the speed of light to any spot on the planet. This 
is what gives movie producers so many Maalox moments.

What's keeping the movie industry from making its creativity theft-proof? 
Simply put, in order to transport movies as agreed to by the consumer on a 
rent, buy or pay-per-view basis with heightened security, computers and 
video devices must be prepared to react to instructions embedded in the 
film. Other ingredients are necessary to protect digital content, but it 
gets too complex to explain in a few sentences. At this moment, that kind 
of interaction is nowhere to be found in any computer or set-top box. Some 
security is available, but it is porous. The movie industry is, however, 
consulting with the finest brains in the digital world to try to find the 
answer.

As for the third charge -- that copyrighted movies are destroying digital 
innovation -- what the critics mean by "innovation" is legalizing the 
breaking of protection codes, without which there is no protection.

Movie producers are eager to populate the Net with movies in a 
consumer-friendly format. There is a way to achieve adequate security for 
high-value movies on the Net. Computer and video-device companies need to 
sit at the table with the movie industry. Together, in good-faith talks, 
they must agree on the ingredients for creating strong protection for 
copyrighted films and then swiftly implement that agreement to make it an 
Internet reality. Without concord, one option is left: Congress must step 
in to protect valuable creative works on the Net and thereby benefit 
consumers by giving them another choice for movie viewing.

The writer is chairman and CEO of the Motion Picture Association.

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