60 Minutes Puts Forth Laughable, Factually Incorrect MPAA Propaganda On Movie Piracy

from the no-sense-of-history dept

31 years ago, in 1978, the television program 60 Minutes put on an episode about the awful threat of "video piracy" to the movie industry. Featuring the MPAA's Jack Valenti, the episode focused on how the VCR was going to destroy the movie business because anyone could copy and watch a movie in the privacy of their own home. Of course, in retrospect, that episode is hilariously wrong. You would think that, given how wrong they got it thirty years ago on this particular subject, 60 Minutes would be a bit more careful taking on the same subject again.

No such luck.

CBS's 60 Minutes has made itself out to be more of a laughingstock than usual when it comes to "investigative reporting," putting on an episode about "video piracy" that is basically 100% MPAA propaganda, without any fact checking or any attempt to challenge the (all MPAA connected) speakers, or to include anyone (anyone!) who would present a counterpoint. The episode is funny in that it contradicts itself at times (with no one noticing it) and gets important (and easily checked) facts wrong. And, of course, it basically mimics that old episode that history has shown to have been totally (laughably) false.

The report opens with the claim that counterfeit movies is where organized crime is making its money these days. Fascinating. Except they don't show any proof whatsoever that organized crime has anything to do with movie piracy at all. They just claim it, talk about Mexican gangs, and then assume it must be true. But, of course, most of the report actually focuses on the internet and file sharing of movies -- which completely goes against the claim that organized crime is "making its money" off of video piracy. After all, reports have shown that online file sharing has actually been putting DVD counterfeiters out of business. You would think that the "journalists" at 60 Minutes might have noticed this contradiction.

A big chunk of the episode is taken up by director Steven Soderbergh, who has come out in the past touting the MPAA's line before, so it's no surprise that he does so again. He claims that "piracy is costing Hollywood $6 billion a year at the box office." Does he mention that Hollywood has been making more and more and more at the box office every year the past few years? Oops. No. Did the reporters at 60 Minutes look into this fact and bring it up? Of course not. The entire story appears to be an MPAA press release, so you don't want to cloud it with pesky facts that prove they don't know what they're talking about.

Next up, Soderbergh claims that fewer movies are getting made thanks to movie piracy. Uh huh. Another checkable fact. Another one wrong. It was recently summarized, according to the movie industry's own numbers:

2004 Total Movies Released: 567 Total Combined Gross: $9,327,315,935
2005 Total Movies Released: 594 Total Combined Gross: $8,825,324,278
2006 Total Movies Released: 808 Total Combined Gross: $9,225,689,414
2007 Total Movies Released: 1022 Total Combined Gross: $9,665,661,126
2008 Total Movies Released: 1037 Total Combined Gross: $9,705,677,862
2009 Total Movies Released: 1177 Total Combined Gross: $7,596,626,766
(2009 figures incomplete, total movies scheduled to be released, gross to date)

So, actually, more than double the number of movies are being made today than just five years ago. Hmm. That's the sort of thing that a real journalist at a show like 60 Minutes might bring up to a biased director like Steven Soderberg, right? Nope.

The article mentions how to go to the movies these days, some people have to go through "airport-like security. Their bags are searched for cameras and they have to check their cell phones." Does it point out that this might be a pretty serious reason why people might not want to go to the movies? A reason why people might actually give less money to the industry? Nope. Why bother with details like that?

And then, 60 Minutes brings on our favorite industry spokesperson: Rick Cotton, NBC Universal's general counsel, the guy who warned that movie piracy put corn farmers at risk because people watching pirated movies eat less popcorn (never mind the fact that the corn industry is thriving, that people watching pirated movies still eat popcorn, and "popcorn" represents an infinitesimal part of the market...). Cotton was also the guy who thought it was a good idea to push people who wanted to watch the Olympics to pirate it rather than watch the crappy official online channel. Cotton is asked how many movies are released in the US:

"Ballpark, 400 to 500 movies are released in the United States."

Except, as we noted above, he's off by about 600 or 700 movies. Again, this is the sort of "fact" that a reporter, such as those employed by CBS and working on a television program like 60 Minutes might be expected to check, right? I would guess that most viewers of 60 Minutes expect the show's reporters and legions of other employees to do such basic fact checking. So, given that 1177 movies are going to be released in 2009, doesn't it make sense to, say, push back on Cotton's bogus number? Apparently not.

Random aside: I wonder how much money CBS makes from the big studios buying movie ads? That can't be important here, can it?

Most of the rest of the program is Soderbergh making a bunch of totally unsubstantiated statements, such as saying that no one would make The Matrix today. Why? No explanation. It's just that Sodergbergh says.

And, of course, beyond failing to fact check the most basic facts, no one at 60 Minutes thought to talk to anyone outside of the studio system to see if it made sense. It didn't talk to any one of the growing number of people who are making movies and embracing file sharing to help get those movies seen. It didn't talk to moviemakers who are embracing new business models. It didn't talk to copyright experts and consumer advocates who have shown how ridiculous the MPAA's claims are. In other words, it presented an MPAA press release as if it were news. Thirty years after it did the same exact thing and got the entire story wrong. It didn't even go back and note that earlier episode. It just repeated it with modern stand-ins.

148 Comments | Leave a Comment..

France Agrees To Kick File Sharers Off The Internet Again; Lobbyists Call It 'Consumer Relief'

from the up-is-down,-black-is-white,-you-said-what-now? dept

There isn't a huge surprise in the news that France has once again passed a law to force ISPs to kick accused (not convicted) file sharers off the internet under a draconian "three strikes" system. We all knew this was coming. After the original French three strikes law was gutted as being totally unconstitutional, French President Nicolas Sarkozy (who apparently doesn't believe any such law should apply to him, given his history of mass piracy) insisted that such a law was necessary to defend freedom. Yes, really. And, even as France's cultural minister was planning to get multiple internet connections just in case he got cut off -- while also wishing that his own creative content were "pirated" more often, the French gov't went back to work on putting in place such a law. The big "change" this time was to give judges 5 whole minutes to rule on file sharers, so that they could say a judge oversaw the case, rather than it just being a random accusation. I'm not sure how due process works with a 5 minute limit... but what can you do.

What's much more entertaining is seeing how entertainment industry lobbyists are cheering this on. I'm beginning to think that they actually believe that kicking people off the internet will make people buy more of their content. Incredible. First up, the MPAA's Dan Glickman (who's being pushed out of his job for being woefully ineffective):

"Today's decision is an enormous victory for creators everywhere. It is our hope that ISPs will fully honor their promise to cooperate and that the French government will take the necessary measures to dedicate resources to handle the enormous task ahead."

A victory for creators? Really? By kicking fans off the internet for promoting their works? Yikes. Someone's out of touch. Then we have Rick Cotton, of NBC Universal, the man who insisted that movie piracy was really harming the poor American corn farmer since people ate less popcorn with pirated movies:

"The French action recognizes that jobs and economic growth in creative industries are under assault by digital theft. We need a safe and secure Internet that enables consumers to access content easily but does not facilitate illegal file sharing that kills jobs in creative sectors."

Yes, and the corn farmers, too, right? So, if it's really all about jobs, what about the people kicked offline who rely on the internet for their job? Apparently those jobs don't matter? In the meantime, it's already pretty clear from multiple studies that it's not file sharing that's "killing jobs in creative sectors" but the inability of executives like Cotton to understand basic economics and business models.

But, honestly, the most guffaw-inducing response to this comes from Tom Sydnor at the Progress & Freedom Foundation. Sydnor, who as you may know, has a long history of making claims that don't pass the laugh test, has really outdone himself this time (it's even better than when he accused a college that couldn't identify accused file sharers of harboring "terrorists, pedophiles, phishing-scheme operators, hackers [and] identity thieves" by giving them a "get out of jail free" card). So what's his take on kicking people off the internet based on accusations? Well, it's really about consumer relief. No, seriously:

"As a consumer, I would far prefer the successive warnings that French law would now provide to the sudden financial devastation of the John-Doe lawsuit that American law would now require. I thus urge American internet-service providers and copyright owners to work together to provide American consumers with similar relief."

Ah, yes, because the only options are to sue everyone or to kick people off the internet? Apparently Tom has such incredibly little faith in the innovation ability of content providers that he assumes that they cannot craft unique and innovative business models that don't involve suing everyone or kicking people off the internet. How insulting of him towards content creators. Every time Sydnor makes a statement like this and PFF promotes it, it just weakens the work that PFF does in other areas. It's tough to take an organization seriously that has someone claiming that kicking people off the internet based on accusations of private companies is "consumer relief."

56 Comments | Leave a Comment..

Wait, Now NBC Claims Video Piracy Is Under Control?

from the wasn't-it-just-last-week? dept

It may seem like it was just a week or so ago that NBC Universal's Chief Counsel Rick Cotton was freaking out about video piracy online. That might be because it was just over a week ago when he was feeding the NY Times quotes for a story about how "pirates" were "winning the battle." But, apparently he's had a change of heart. He's now said in a speech that video sharing, "from a rights perspective, it's under control." He used NBC's online coverage of the Olympics as an example -- though, that's actually a terrible example. Plenty of people were quite annoyed by the unnecessary hoops they had to go through, and others were pissed off that it was nearly impossible to see what they wanted to see unless they went to other sites where people had uploaded the unauthorized video. Either way, we're thrilled to hear that NBC Universal now thinks video "piracy" is under control. I assume that means that they'll stop their DC lobbyists from lobbying for more draconian copyright laws now? Because, last we heard they were still pushing for changes to the law...

7 Comments | Leave a Comment..

NY Times Buys Bogus Movie Industry Complaints About Piracy

from the let's-get-real... dept

The NY Times is running an article entitled "Digital Pirates Winning Battle With Studios." From the title, it's pretty obvious what it's about -- but the article seems to take a lot of talking points from the movie studios. It's not hard to figure out the main source of the article: NBC Universal's Rick Cotton is quoted throughout. Cotton is a lawyer who has proven time and time again that he's a bit clueless when it comes to business. It's unclear why NBC keeps having him comment publicly about business issues. Every time he does, it just gives people more reason to realize how poorly NBC Universal is managed. Cotton was the guy who proudly talked about how NBC made it more difficult for people to watch the Olympics. He's also the guy who (with a straight face, we believe) claimed that the US gov't should shift Justice Department money from stopping real crimes to focus on copyright infringement because (no, really) doing so would help poor corn farmers who went out of business because people weren't buying movie theater popcorn anymore. Apparently people who watch movies at home don't eat popcorn (and apparently, he forgot to check and discover that corn farmers have been doing quite well lately).

How he has any credibility on these issues is beyond me.

But, the NY Times reports, without a hint of skepticism, about the fact that The Dark Knight was so widely available online, representing a huge failure for the industry. You know which important part the reporters left out? That it was also the highest earning movie of the year. In other words, piracy is not the problem. People are plenty willing to pay to go to the movie theater if you give them a good reason to do so. In fact, The Dark Knight did a good job of that, offering special IMAX showings that you absolutely couldn't recreate on your computer screen or big screen TV.

Did the NY Times point this out? Nope, it said that the downloads were "a visible symbol of Hollywood's helplessness against the growing problem of online video piracy." No. That's not true at all. It was actually a visible symbol of the fact that the existence of free downloads is not the problem so long as the industry actually makes an effort to give people a good reason to pay.

Then, the reporters note that "each episode of "Heroes," a series on NBC, is downloaded five million times, representing a substantial loss for the network." Substantial loss? Really? Can they actually back up that statement? The people who are watching this show are fans of the show who want to consume the product from NBC. Downloading the show is a way for them to stay engaged -- making them more likely to later watch the show on TV (with commercials) or on sites like Hulu. It makes them more likely to go out and buy a DVD later. Or to engage in any of probably 1000 business models that could create compelling tie-ins with the show. Those business models aren't difficult to come up with, and we'd be more than willing to help, if NBC Universal just gives us a call. Nor does the NY Times mention that one of the big reasons why Heroes is downloaded so frequently is because NBC's braindead decision to not let Hulu be watched outside the US. Only an entertainment industry lawyer could think that having more people want to watch your show represents a "loss."

It's an opportunity.

It's really sad that the entertainment industry keeps trusting execs who view such opportunities as threats, and that the media takes their word for it.

36 Comments | Leave a Comment..

NBC's Rick Cotton Apparently Unable To Properly Monetize Value

from the why-does-he-keep-his-job? dept

I'm beginning to wonder if NBC Universal simply sends General Counsel Rick Cotton out to the press to make the most ridiculous, unsupportable statements for their PR value. Otherwise, you have to wonder how the man keeps his job, as pretty much any of his well-publicized statements should make shareholders question his business acumen. This is the guy who claimed that the government should force ISPs to filter unauthorized content because piracy was causing poor corn farmers to lose money (despite the fact that corn farmers are doing better than ever, and there's no evidence that they're impacted by piracy either way -- people can eat popcorn during pirated movies, too). He also suggested that police would be better off spending less on stopping bank robberies and more on piracy. Seriously. Then he was happy that NBC made it difficult for people to watch the Olympics online.

His latest claim doesn't quite reach the level of some of his earlier statements, but again it has you scratching your head over how he can have the confidence of his bosses. Over the weekend, he was apparently complaining that the only reason YouTube was worth $1.5 billion to Google was because the video of SNL's Andy Samberg "Lazy Sunday." He claims that YouTube received all of the benefit of this piracy, which catapulted it to stardom.

First of all, this simply isn't true. As a YouTube representative who follows Cotton noted, the Lazy Sunday video is pretty much impossible to pick out of YouTube's log files, since it had such little impact on traffic. But, more importantly, this is yet another case of a content provider overvaluing the content and undervaluing the delivery platform. Cotton seems to ignore the fact that the Lazy Sunday video on YouTube almost single-handedly brought a ton of people back to SNL after having given the show up. It made people pay more attention to SNL, in particular other Samberg videos.

Furthermore, if it's actually true that NBC got no value out of Lazy Sunday being on YouTube, then the entire NBC management team deserves to be fired. It was such a fantastic opportunity to rebuild SNL's brand, and here's one of the company's top executives flat-out admitting that he blew it. He really wants people to believe that he's so inept that a tiny startup with barely any revenue could capitalize on something that he could not? It's either amazing what poor vision NBC's management has, or it's just stunning that Cotton keeps his job.

9 Comments | Leave a Comment..

NBC Proud That It Made It More Difficult For People To Watch The Olympics

from the really-didn't-think-this-through dept

We've already explained how screwed up NBC's Olympic coverage policy on the web turned out to be. Its use of proprietary technology and annoying restriction severely limited its online audience -- even though the company admitted that its own research found that the more people watched online, the more they watched it on TV as well. So, given all that, you have to wonder why NBC Universal's Rick Cotton is somehow claiming a "victory" in preventing other sites from showing Olympics coverage. After all, his own company admitted that online viewing didn't cannibalize TV viewing, but only encouraged more of it. By that measure, Cotton's efforts to prevent clips of the Olympics being shared elsewhere on the web actually shrunk NBC's audience. Yet, according to Cotton: "It was a great, great success." Then again, this is the same Rick Cotton who once tried to convince Congress that it had to stop movie piracy to help poor corn farmers and claimed that no one at NBC Universal could come up with a working business model for TV content without government help, so logic might not be a strong point.

37 Comments | Leave a Comment..

NBC Universal Explains Why ISPs Should Filter Copyrighted Works

from the because-they're-BIG dept

The NY Times "debate" between law professor Tim Wu and NBC Universal General Counsel Rick Cotton that began Monday now continues. It's actually not much of a "debate" because each are simply answering the questions posed by the moderator, Saul Hansell. However, the latest concerns whether it makes sense to require third party companies, such as ISPs or consumer electronics firms to filter or block content in an effort to protect copyright holders from unauthorized use of their content. Wu's answer focuses on a slightly different question: whether it makes sense for the government to step in and mandate such solutions, and provides a reasonable answer questioning why the government should be protecting one industry's business model at the expense of others'. Cotton's response is quite similar to the one he gave last week at CES. Effectively, it's "there's so much piracy going on, that we need to have others step in and protect our business model."

I'm curious if Cotton believes that automobiles should have been forced to go 3 mph with people walking in front of them waving red flags, for the sake of protecting the market for horse-drawn carriage makers? Or, should consumer electronics companies been forced not to allow VCRs to record TV? Both examples involved "big" problems that were seen as "threats" to an existing business model. Yet, rather than being actual threats (after some bogus lobbying/court cases), companies realized that these were actually huge opportunities to expand markets and make even more money. So why is it this time it's suddenly a big threat and not an opportunity? And even if it is a threat, why should it be seen as something that a third party needs to handle? What happens when the required filtering in the US means that foreign consumer electronics makers come up with the next great innovation that isn't possible in the US and we fall behind in terms of the next important innovation? None of that seems to be of concern to Cotton, whose sole focus is on preserving a business model that is certainly not the most efficient nor effective for the industry. I recognize that it is Cotton's job at NBC Universal to make these kinds of statements, but it should be his fiduciary responsibility to the company to suggest that there are better paths to adapting to the changing market place, rather than clinging to an obsolete business model and dragging down other industries with it.

23 Comments | Leave a Comment..

NBC Universal Argues That Copy Protection Is Necessary

from the good-luck-with-that-plan dept

The NY Times is running an ongoing "debate" all week concerning issues having to do with copyright. Defending the entertainment industry's strategy is Rick Cotton, General Counsel of NBC Universal, and well known around here for various questionable comments made to support NBC's position of demanding that the government act to enforce NBC's obsolete business model (our favorite remains his argument that corn farmers are hurt by piracy, since fewer people will go to movies, meaning fewer people will buy popcorn). On the flip side is law professor Tim Wu, who we believe has an excellent grasp on copyright issues (though, we don't always agree with him on telecom regulation).

The first part of the debate discusses whether or not copy protection is necessary. Not surprisingly, Cotton takes the "yes" position. While he comes up with a list of 7 reasons, none are close to convincing. He gets off on the wrong foot (and suggests either that he's willfully misleading or simply ignorant) by suggesting that infringement is no different than theft. It's tough to have a serious discussion on copyright and business models when you stake out that obviously incorrect position (theft involves something going missing, infringement does not -- even if both are illegal). The rest of his argument seems to revolve around two key points: that technology can be effective in stopping unauthorized file sharing and that the industry needs to stop unauthorized file sharing. Both points are wrong. He seems to be confusing two points on that first one. It may be true that copy protection can make it more difficult for an individual or some people to upload an infringing file, but it will never be possible to stop everyone -- and the second a single file is available for others, it no longer matters, because that one file is universally available to be copied. As for the argument that the industry needs to stop unauthorized file sharing, that's only true if the industry cannot come up with business models that embrace unauthorized file sharing and use it to its advantage. As we've already discussed, not only is this possible, it's already happening, and it's helping content creators to recognize business models where they can make more money than before.

Wu's response focuses in on some of that, by noting that it really is a business model issue, and that Cotton seems to ignore that. As Wu says: "digital locks are no substitute for a good business model." However, where Wu could be even stronger is in pointing to evidence, both historical and current, that other business models can actually be much better for content creators. Overall, though, it's a good response, and most of the commenters seem to side with Wu rather than Cotton. It will be interesting to see if Cotton actually responds to Wu's points (hopefully without just falling back on the talking points from his original answer), or if the debate just moves on to the next topic.

27 Comments | Leave a Comment..