As the music industry finally discovered, the only way to stop piracy is to make everything available.
February 22, 2008
Photo: Mauricio Alejo
IT’S EARLY DECEMBER, and you’ve been watching DVDs of The Wire, HBO’s addictive crime drama, for four hours. Now it’s past midnight, and you’ve just finished season three. You’re hooked and ready for more, but season four is nowhere to be found. The DVD set was recently released, but neither Barnes & Noble nor the local video store has it yet, and anyway, they’re closed. Netflix offers it, but that would mean a three-day wait for the DVDs to come by mail. Amazon Unbox? iTunes? Netflix Watch Instantly? Not available. Only one place will deliver The Wire right now: BitTorrent.
If this sounds familiar, it’s because we’ve already suffered through the same frustration with the music industry. Nine years ago, MP3s were opening up entirely new possibilities for sharing, discovering, and listening to music. But instead of capitalizing on the advantages of digital files, the major labels (fatter than ever from CD sales) started suing. When they grudgingly agreed to Apple’s plan for the iTunes music store, it was only under the condition that tracks come burdened with digital rights management software.
That’s right: Of all the possibilities the Net had to offer, music executives became obsessed only with online theft. That meant people couldn’t get the songs they wanted the way they wanted unless they turned to peer-to-peer services — which they did by the millions. And while DRM did not stop pirating, coupled with the incredible popularity of the iPod, it did give Apple a lock on legal downloads. Today, their industry in shambles, music execs are trying to turn back the clock, remove DRM, and finally give us what we should have had in 1999.
Now let’s take a look at the home-video industry. Apple has brought movie rentals to iTunes, Amazon is selling and renting movies online, Netflix has started digital downloads, and Comcast has promised almost everything-on-demand eventually. We have the bandwidth, the compression algorithms, and the Ethernet connections — not to mention TiVos, Apple TVs, and Vudus — for downloading movies directly to the TV. We should no longer have to drive to the video store or wait for the mail carrier. But that’s not the case. The entertainment industry is blowing it once again.
To succeed in the digital realm, Hollywood needs to offer total convenience, almost infinite choice, and the freedom to watch any way we want. Instead we have iTunes, which delivers video you can’t watch on any portable device that wasn’t made by Apple, and Amazon Unbox and Netflix’s Watch Instantly, which feature downloads you can’t watch on any device that was made by Apple. And with a mere 1,000 downloadable movies for rent on iTunes, fewer than 5,000 on Amazon, and around 6,000 on Netflix, none of them offers anything close to the 90,000 DVDs available by mail. They can’t, because Hollywood is determined to protect DVD sales at the expense of electronic downloads. That needs to be fixed — because if people don’t find what they want at online storefronts, pirate copies are just a click away.
The lessons from the music fiasco are clear: Trying to limit the inherent advantages of digital files is a losing strategy. The way to stop piracy is to make everything available — easily, legally, and at a fair price. But it’s a lot of work to secure Internet rights to old films and TV series from writers, directors, composers, and the like, and the studios show little inclination to monkey around with their lucrative sales to premium channels like HBO — deals that don’t affect DVD sales but are written in a way that can keep electronic distribution rights locked up for years. “There would be a lot fewer Mercedes pulling up to the Palm every day without those pay-TV deals,” one exec quips. Right — but how many music moguls have you seen pulling up to the Palm lately?
Entertainment executives tend to find what they expect to find. If they fear theft, they’ll see piracy; if they’re looking for opportunity, they’ll discover ways to profit. The music labels ignored the opportunity for so long that it has all but evaporated. The television and film industries still have a shot, but they need to move fast. Instead of hiring lawyers to lobby Congress and sue their customers, they need to set their legal minds to untangling messy rights issues and rethinking those profitable yet restrictive pay-TV deals. That way everyone would win: Customers would get what they want, the industry would make more money, and consumer electronics companies could innovate without fear of attack.
Instead we have Rick Cotton, general counsel of NBC Universal, railing in a recent online debate against the “tidal wave” of illegally duplicated content that “simply must be reduced in any kind of law-abiding society.” How to accomplish that? With digital locks, of course. Cotton is right on one point: A tidal wave is just what digital delivery brings — a tsunami of content, illegal and otherwise. But he needs to heed his own analogy. Locks can make you feel safer, but they won’t keep you from drowning in a tidal wave. ♦