[Paleopsych] WP Outlook: The Battle Between Tinseltown and Techville
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Sun Apr 10 17:07:42 UTC 2005
The Battle Between Tinseltown and Techville
By Drew Clark
Sunday, April 10, 2005; Page B04
Creativity and innovation aren't qualities you'd ordinarily expect to
be at war with one another. Both involve a type of inventiveness, a
vision of something new, a stepping outside of mental boundaries. Yet
in America's courts, the companies that rely most on creativity and
innovation are at each other's throats.
It's a battle of culture as much as law. It's Tinseltown vs.
Techville, the glamour people vs. the geeks, those who admire their
finished products and those who never finish tinkering. And for each
one, an important principle is at stake.
The latest round of this fight features two small software firms,
Grokster and Streamcast, vs. the entertainment giants, led by MGM and
other studios, recording labels and artists' groups. In a case just
argued before the Supreme Court, the entertainment firms say that
Grokster and Streamcast, which help individuals copy movie as well as
music files, must be shut down. The future of creativity is in
jeopardy, they say. How will artists live if they don't receive
The technology industry, some of which holds its nose at Grokster and
Streamcast's failure to obtain licenses for copying recorded
materials, has united to defend their principal arguments in court.
The high-tech industry says the future of innovation is at stake. How
can engineers prosper if they're constantly looking over their
shoulders for approval from Hollywood?
Both sides in this clash have legitimate concerns. As with the
original Napster, the music file-sharing service that taught the world
to love free downloads, Grokster and its ilk don't pay licensing fees
on the vast majority of songs and movies traded by their users. The
musicians and recording labels are essentially being ripped off. But
by whom? That's the essence of the question currently before the
Supreme Court. And the overarching issue is: How far can the scope for
digital copyright expand without threatening innovation?
This isn't the first time that Hollywood and tech titans have duked it
out. Napster awakened the motion picture studios to the danger posed
by piracy on the Internet. The recording industry then vanquished
Napster in court -- and Napster now sells music under license
agreements with major recording labels. But Walt Disney and Fox
Entertainment strong-armed their fellow motion picture studios into
taking on even bigger adversaries: Apple, Microsoft, Intel, Dell and
These computer and software companies were just as guilty as Napster
because they refused to cooperate in the studios' efforts to lock down
personal computers, according to the argument made at the time by
motion picture lobbyist Jack Valenti. He and Disney CEO Michael Eisner
enlisted the support of the then-chairman of the Senate Commerce
Committee, Ernest "Fritz" Hollings (D-S.C.), who introduced
legislation in March 2002 to force Silicon Valley to cooperate.
If high-tech didn't come up with some anti-copying "policeware" within
one year, the draft bill said, federal government would require that
every digital device include technology to stop the copying of digital
movies and music. Such a mandate would be absurd and impractical, the
high-tech companies countered. They lined up congressional supporters
of their own, and the Hollings bill died without even a committee
The entertainment executives are no longer fingering Apple or
Microsoft. Instead, entertainment companies are suing Grokster for
releasing "peer-to-peer" software that enables someone on the Internet
to search millions of other computers for the digital songs and movies
"shared" by other users.
Grokster doesn't copy anything itself, but the entertainment lawyers
say it is guilty because its users abuse copyrights. By contrast,
legitimate online services, like Apple's iTunes and Real Network's
Rhapsody, negotiate royalties and licensing fees so that artists get
their cuts. Hollywood and the recording industry are essentially
saying to Grokster: It's our creative property and you need to shut
down your brand of thievery.
Not so fast, reply Grokster and the electronics industry. The original
Napster was nabbed for contributing to copyright infringement because
it listed the names and whereabouts of unlicensed digital music files.
Grokster doesn't do that. It just releases software for individuals to
use at their discretion. Echoing the "guns don't kill people" argument
of those who oppose gun control, Grokster is effectively saying
"peer-to-peer software doesn't steal music, people do." Hollywood
calls that willful blindness.
To the average teenage music fan, Napster and Grokster may be a legal
distinction without a practical difference. The recording studios
estimate that about 90 percent of the files shared using Grokster are
being shared illegally. Searching for a handle in the case after
losing the first two rounds in lower courts, both the Recording
Industry Association of America and the Motion Picture Association of
America have resorted to filing lawsuits against the individual
computer users, too.
The tech titans aren't worried about the teenagers and grandmothers
being hauled into court. But with studios suing Grokster, the tech
firms want to protect the Supreme Court's 1984 decision in Sony Corp.
v. Universal City Studios.
That decision legalized Sony's analog videocassette recorder, the
Betamax. At the time, the motion picture studios said that 91 percent
of all the videotapes made by consumers were copied without
permission. The 5-4 decision was unusual because Justice Sandra Day
O'Connor switched sides late in the session, forcing the case to be
reargued the following term. She eventually joined the opinion of
Justice John Paul Stevens, who took vendors off the hook as long as
their technology was "merely capable of substantial non-infringing
It was a pro-innovation decision, and one very much on the mind of the
current Supreme Court. Justice Stephen Breyer asked whether the Xerox
machine, the VCR, the iPod or even the printing press could have moved
forward with a more restrictive standard. He suggested "the monks had
a fit when Gutenberg" invented his printing press.
"A very important part of the Sony analysis is that new information
technology that benefits consumers is a presumptively good thing,"
says American University copyright law professor Peter Jaszi.
That's one reason the chief of the Consumer Electronics Association
calls the decision "the Magna Carta for everyone who enjoys their
iPods, TiVos, personal computers and electronic products." These
companies see themselves as agents of capitalism's "creative
destruction," vs. the status quo of Hollywood's existing means of
Back in the 1970s, Hollywood feared that the Japanese videocassette
invasion would destroy theater and broadcast syndication revenues. But
Valenti's rhetoric -- he said the VCR "is to the American film
producer and the American public as the Boston Strangler is to the
woman home alone" -- proved hyperbolic. Instead, studios adapted by
creating new revenue streams like cable television and VCR rentals.
Home video rentals now provide the studios with more money than box
A similar pattern happened earlier in the 20th century. The player
piano, the phonograph, radio and television each forced changes in
distribution. Often, Congress revised copyright laws to protect
artists' royalties, but copyright holders also adapted successfully to
Digital technology, however, poses a unique challenge to copyright.
The law gives creators exclusive rights to exploit their works'
economic value. Authors sell manuscript rights to book publishers, for
example, and publishers use copyright law to stop pirate editions that
pay no royalties to publishers or authors. Before the computer
revolution, copyright worked because it was relatively easy to find
pirate printing presses or factories forging bootleg records or films.
The inconvenience of making photocopies, or audio or video cassettes,
kept copyright violations in check.
But the explosion of digital technology and the Internet has changed
that equation. Digital copies are frequently higher quality than
analog, and they don't degrade with each reproduction. And the
Internet in all of its forms -- e-mail, the Web, peer-to-peer -- has
slashed the cost of distribution. That erases one of the biggest
advantages of the entertainment companies.
Can innovation be used to protect creativity? The recording industry
made an attempt to control copying by designing a "serial copy
management system" in conjunction with Digital Audio Tape. Under a
1992 law, audio recorders using DAT had to include this
copy-protection system. These technological controls blocked
individuals from using a taped copy of a song to make another copy.
That angered consumers, however, and the medium never took off.
Computers were exempted from the 1992 law, later enabling millions of
people to "rip" compact discs into compressed digital MP3 music files
on their hard drives. They loved that convenience, and they loved
sharing those unprotected MP3 files.
This brings us back to the current conflict between creativity and
innovation. Single-purpose devices can be retrofitted to stop copying
relatively easily. Audio compact disc recorders, VCRs and cable
television set-top boxes are all built with anti-copying controls
designed to limit users to none or one copy of a song, movie or
television program. But when Hollings proposed the same thing for
general purpose computers, techies decried the constraint on their
ability to program and build digital devices. It went against the tide
of innovation, which was merging technologies not separating and
This freedom to tinker is exactly what the techies fear they could
lose if the Supreme Court sides with Hollywood and against Grokster.
Why? Because every engineering decision and product design would be
subject to legal review by entertainment industry lawyers.
Technology companies from Microsoft to Apple to Grokster say they have
a better way to protect copyrighted content. It involves digitally
scrambling songs, movies and video games with encryption software,
like the technology used to create digital versatile discs. DVD
encryption leaves much to be desired, however; it has been cracked by
a Norwegian teenager who spent three years defending himself against
Nonetheless, the approach has promise because it uses innovation to
protect creativity, rather than using the courts to suppress
It doesn't hurt that user-friendly software like Apple's iTunes and
Microsoft's Media Player stand to profit if they, too, can keep
adapting to innovations and become intermediaries in a more orderly
digital media marketplace.
Meanwhile, however, the entertainment industry will press forward,
striving to extend the scope of copyright further into the digital
world. No matter how the Supreme Court rules, we can expect the
dispute to be back before Congress. When it is, Congress shouldn't
forget that acting in the name of creativity could have dire
consequences for innovation.
Author's e-mail: drew at drewclark.com
Drew Clark is the senior writer for the National Journal's Technology
Daily, an online Web site, and covers the politics of
telecommunications, media and technology at www.drewclark.com.
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