Hollywood is in full force today on Capitol Hill,hosting “The Business of Show Business Industry Symposium”(pdf) with stars such as Sex, Lies & Videotape director Steven Soderbergh and An Officer and a Gentleman Director Taylor Hackford talking about how central copyright is to the business of movie making.
We don't disagree with that notion of course, but what we don't usually agree with Hollywood about is the means by, and the degree to which, government should protect those copyrights. Over the past 5 years, Hollywood and the recording industry have pushed numerous proposals in Congress, and they have tended to fall into several categories: 1) government technology mandates like the broadcast flag; 2) expanding secondary copyright liability (like the “Induce Act”); 3) expanding the permissions culture (e.g., licensing temporary or buffer copies); and 4) increasing punishment for copyright infringement that falls just short of death by hanging. The good news is that most of these efforts have failed. The bad news is that with a Democratic-controlled Congress and one year until a Presidential election, you can bet your mortgage that they will be pushing these, and other initiatives hard in 2007.
But as time goes on and the public's (and the content industry's) use of technology and digital media change, it makes it harder and harder to make the case for these proposals. Take, for example, our favorite technology mandate, the broadcast flag. For those newcomers to this blog, the FCC's 2003 broadcast flag rules would have given the government the power to dictate technological design, and as a result, limit lawful uses of digital technology. The rules would have required FCC pre-approval for every technology that could demodulate a digital TV signal, as well as for those technologies (like Digital Video Recorders or even cellphones) that are “downstream” from digital TV devices. Public Knowledge brought a court challenge on behalf of it and eight other public interest, library and cyberliberties organizations, and in May 2005 a federal appeals court struck down the rules. Hollywood has been trying to get Congress to reinstate it ever since.
Even assuming that there was ever a rationale for the broadcast flag, does it exist anymore? And would such a rule even be in the best interests of the content industries? Let's take a look:
“High Value” HDTV Content is All Over The Broadcast Dial: Hollywood's rationale for the broadcast flag has always been that they would refuse to provide “high value” high definition television content to broadcasters unless the broadcast flag was enacted. Indeed, in 2002, then-CBS parent company Viacom threatened to pull its HDTV programming in the absence of a flag mandate. But numbers don't lie – most of network primetime programming is broadcast in HD, as is most sports programming. This CNET list gives a look at how many “high value” shows are now broadcast in HD.
The Digital TV Transition is Ending: A related argument is that without high value content, the public would not purchase HDTV sets and the transition to Digital would be stalled. Again, the number of sets sold over the past year and the predictions for 2007 and the future belie this claim. The Consumer Electronics Association analysts estimate that as of January, there are 18 to 19 million HDTV sets in US homes, about twice as many as a year ago. They also project that HDTV sales will jump to more than 25 million sets in 2007 and more than 30 million in 2008. Don't dismiss these claims as self-serving. Jupiter Research and Kagan Research make similar predictions. Also, thanks to a bill passed by Congress last year, the DTV transition will end on February 17, 2009. (if you are curious about the date, think “Super Bowl”) In 2003, broadcasters would have been able to prolong the transition if more than 15% of households in their communities could not receive DTV.
New Hollywood Business Models Would Be Harmed: It goes without saying that the public's propensity for sharing clips of TV show and using that content for mash-ups and parody would be adversely affected by a technology mandate that prohibits any editing or retransmission over the Internet. But what is new is that some broadcast networks are starting to encourage and enable this behavior because they recognize it as a way to build the fan base for a particular show. For example, as I blogged about previously, CBS has struck a deal with Sling Media to permit fans to send short clips of shows to one another. And they have permitted mash-ups of their programming as well. Given that CBS is the number one television network, it is likely that the others will soon follow suit. A broadcast flag mandate would make this kind of activity difficult if not impossible, and fans might redirect their attention to media that allows them more flexibility.
Hollywood would be well-advised to learn from the misfortune of its recording industry brethren and the “unintended” consequences of the Digital Millennium Copyright Act. The DMCA's prohibition on breaking “access controls” permits Apple to tether iTunes to the popular iPod, which has made it just about impossible for any of the record companies to launch a successful online music service. As a result, the recording companies are looking for a technology that will force iTunes to be interoperable while keeping the DMCA intact (good luck with that). So Hollywood should be careful about asking for the broadcast flag – just like the DMCA did to record companies, it could limit their options rather than increase them.