In bid to halt digital piracy, anything goes
From lawsuits to old-fashioned guilt trips, the entertainment industry is continuing to unsheath more weapons in its fight to stamp out digital piracy.
This week has seen a flurry of court actions and tentative new tactics by media conglomerates determined to stop what they call the wholesale looting of movies, music, and TV shows - sometimes months before they're available for sale.
For an industry facing billions in losses, the transition from the analogue to the digital era has not been easy. But all this activity reveals that a vast network of companies is determined to figure out how to make people pay for what is easily, if illegally, available free of charge. There are also signs that the industry is coming to recognize that total eradication of piracy is likely not possible, nor perhaps even reasonable.
Ultimately, says Rob Atkinson of the Progressive Policy Institute in Washington, the industry will devise a workable new business model, "because most Americans realize you have to pay in some way for things you consume."
How entertainment consumers will buy music, movies, and TV shows in the future is what is being worked out now. Some of the court actions and industry initiatives that emerged over the past several days provide clues to what the entertainment marketplace of the future might look like:
• Last Friday, courts handed down two decisions, one for and one against the entertainment industry. A federal court ruled that Grokster and Morpheus, two of the biggest file-sharing sites, cannot be shut down because they cannot be expected to control what moves through their system, even if the material is copyrighted. In another federal court, a judge ruled against Verizon Communications, forcing it to divulge the name of a customer accused of illegally circulating copyrighted music. And in a still-pending lawsuit, a California court will decide if a company can sell software that allows users to copy DVDs.
• On Tuesday, the Recording Industry Association of America (RIAA) began a week-long campaign sending instant messages to anyone downloading copyrighted music from file-sharing Internet sites. The messages are part of what the RIAA calls its "educational outreach" to tell the file sharers that they are not anonymous, that they "risk legal penalties," and that their actions hurt songwriters, musicians, and all music industry employees.
• On Monday, Apple Computer launched what reviewers are already calling the first "really useful and enjoyable, legal" online music service, iTunes Music Store (www.applemusic.com). For 99 cents a song and no monthly fees, users can create their own CDs.
The industry has been fighting the battle wherever it can: in the courts and college dean's offices, with computer manufacturers, and even in people's personal instant messages. Arrayed against it are not only the pirates, but a wide variety of voices in support of keeping the Internet free. For these companies, the stakes are simply too high to shrug off: The music industry estimates it loses some $3 billion annually to piracy.
Even consumers who don't know a Gnutella from a Kazaa and have never downloaded anything are not safe from the industry's counterattacks. Throughout this month, high-profile actors such as Ben Affleck and Cameron Diaz will headline public service announcements shown in local movie theaters, pleading with moviegoers not to steal from movie industry employees by downloading movies for free.
Given the public's keen awareness of movie stars' multimillion-dollar salaries, this last tactic might backfire, says Drew Borst, an industry analyst with Bernstein & Co in New York. Public attitudes toward the entertainment industry as a whole are crucial in winning support for curbs on digital piracy. For example, when Madonna scolded downloaders on her just-released album, a hacker promptly attacked her website, creating free, downloadable copies of every song.
"People are offended that music companies don't really seem to add a lot of value, they just get in the way of consumer interaction with the artist," says Mr. Borst. "It also doesn't help the industry that relationships between the artists themselves and the labels have been strained."
As a result, people don't feel any guilt in stealing from the labels, who the artists themselves have cast in the role of the bad guy.
Borst says the music industry, at least, has begun to find a new direction, especially with the more comprehensive, legal music sites coming online. "It's been one thing to just scold people and say, 'You're stealing our music,' and not offer an alternative. But now [the music industry] is doing the right thing by keeping up with what people want and figuring out how to get what they [themselves] need at the same time."
This is not to say that music companies have abandoned hard-line tactics. Last month, the recording industry filed lawsuits against students at Princeton University, Michigan Technological University, and Renssalaer Polytechnic in New York, seeking damages to the tune of $150,000 per downloaded song.
Striking a balance is a tricky thing for media companies. Many are still resisting entering the digital age, as can be seen by quotes from industry leaders such as Jack Valenti, president of the Motion Picture Association of America, who calls digital piracy "the menace which broods over our future."
But balance is what's needed, says Mr. Atkinson. If it's not found, there will be a "significant backlash both at the consumer and the congressional level," he predicts. "The industry cannot be overzealous, or it will come back to bite them." He cites measures to control content that consumers have legally purchased - such as making CDs that won't play on a computer drive or forcing home viewers to sit through movie trailers on a DVD.
"The restrictions have to be reasonable. Not being able to skip forward [on a DVD] is not reasonable on the face of it." Complete eradication of piracy is not possible, nor is it even a reasonable goal, he adds. "There will always be a small number of people who do things illegally."
Quality of service may be the ultimate refuge for the beleaguered entertainment industry. Take movies, says Jonathan Zittrain, cofounder of the Berkman Center for Internet and Society at Harvard University. "Video-streaming is in its infancy," he says. Now, there's no way for a file-sharing service to guarantee the file will run smoothly across the Internet. People would probably pay a fee to industry-approved websites that guaranteed quality videos. Without adapting and providing digital content on demand at reasonable prices, the industry is going to die, he adds. "If you'd asked me even a year ago, could the genie be put back in the bottle, I'd have said yes. Now, my sense is that may not be so."
That statement is perhaps even more true for a key offending group - the under-21 generation that was weaned on free stuff from the Internet.
"I understand that it costs a lot of money to produce music," says 20-year-old Ohio native Andy Sisinger, who regularly downloads songs from the Internet. But the legalities of sharing copyrighted material don't faze him. "I think I have the right to decide what's right and wrong when it comes to giving my money to someone else. I'll give it right to the bands, if I like them. It shouldn't have to go through someone else."
• Staff writer Daniel B. Wood contributed to this report.