Rent Seeking of the Worst Sort
Apparently there is no boundary to the inanity of the MPAA. They’re currently lobbying a bill that would require end users to register any “home theater system.” The reason? Just by purchasing a DVD, we don’t actually have the right to invite our friends over to watch it. Correct me if I’m wrong, but doesn’t the fact that we paid good money for the DVD and the home theater equipment entitle us to watch those movies as we see fit? I could understand if they were seeking compensation from commercial enterprises that screen movies regularly to large crowds, but if anything falls under fair use, I’d say that showing movies to a few friends should. The fact that the MPAA’s definition of “home theater system” covers virtually every non-economy television produced since 1990, it’s obvious they’re targetting the average home viewer. While the registration fee isn’t too exhorbitant ($50), the potential fines certainly are - $500,000 per movie viewed. Even with my limited circle of friends, I could theoretically be looking at millions in fines.
They are also seeking to impose requirements on the consumer electronics manufacturers to include the ability to track and report whatever an end user is watching. This is doubly bad because A) it invades my privacy by reporting my movie viewing habits without my permission to the MPAA, and B) it forces the electronics manufacturers to spend extra money including absolutely worthless features (to me) into their products - extra money which will undoubtedly come from me in the form of higher prices.
Maybe I’m just too consumer-oriented and don’t fully comprehend the vast difficulties faced by movie executives - but from where I sit, this seems like totally insane and unnecessary legislation designed purely to line their pockets. If they really need the extra revenue, perhaps they should consider making better movies, or perhaps raising the prices on their DVD sales (which would of course further stimulate the market for pirated or downloaded movies, but that’s the price you have to pay when you’re already charging more than the market will feasibly bear).
November 30th, 2006 at 9:27 am
I believe this will come down to a court battle over the definition of “public viewing†of movies sold in the consumer market since that has been expressly forbidden since way before DVDs. It may force a reconfiguration of current television viewing areas as sets which are clearly visible from anywhere outside of the residence regardless of whether windows and such are covered at the time has already been in court in a couple of states and has been determined to be a public display. That said, the $500k would certainly be a maximum fine since they can only actually be awarded quantified damages and not some magic and impossibly high figure that might make them feel better (and feel like they actually paid their lawyers for something). This means that they could only find against you for the retail amount of 1 DVD per identified viewer who did not already own a copy (that is, they have to know exactly who and exactly when). The RIAA has already dropped cases when this has come up to avoid creating the precedent and to continue using their legalese bullying. Heaven forbid, if they actually take a case to trial and are awarded a whopping 99¢ per song on someone’s computer (that they didn’t also own the CD for). They can’t win millions over a few hundred dollars of value any more than you can sue someone who broke your table for more than the cost of replacing the table.
I suppose if they come up with new electronics to track viewing it will be essentially catching recorded media up to things like cable and TiVo (which both collect data on what is watched/skipped/replayed, and by whom). However, contrary to what the article suggests, no new technology could be force-retrofitted into existing systems. Additionally, nobody has to provide a communication medium to their DVD player. I can see it now: “And you have to hook your phone line in here…†This would work great for the growing number of households like mine that don’t have traditional phone lines at all. Oh, and what about all of those vehicles with DVD players in them? Is the MPAA going to mandate then that all SUVs are equipped with a satellite communication suite as part of the retrofit? I doubt it.
If the technology becomes mandated in the future, will it cost more? Not really. Technologies that are industry-wide and required on all systems tend to negate themselves. The prices will go up at the rate of inflation within the industry and not suddenly double or any such thing. Economics of scale factor huge here since it would be a whole industry using the same thing essentially as, even if there are “brand flavorsâ€, they will all be an MPAA-specified technology which would have little-if-any deviation from Sony to Panasonic to RCA.
November 30th, 2006 at 10:54 am
First, I can’t believe that even with economies of scale that the cost of players won’t increase as a result of any such mandate. The electronics necessary to track who watches a movie and when, and subsequently communicating that information to the movie studios would be substantial, and entirely unnecessary to the actual functioning of the player itself. I’d imagine it would require some sort of video monitoring system, sophisticated enough to positively identify individuals and capture the entire field of viewable angles, in addition to requiring either some sort of communication system to report data or a sizable storage area to record the data for later recovery. These added “features” don’t provide any benefit to the end user, but they will cost some non-zero sum, and that cost will be passed on to the consumer. Thus I will be paying for something that I neither want or need - merely for the sake of accomodating an industry that is incapable or unwilling to modify its business model to keep up with emergent technologies.
As for the inability of the MPAA to mandate some sort of communication medium - I believe that is the intent of the proposed legislation. The HDMI connection cables already include bi-directional communication between connected devices to support the DRM encryption - assuming you can get some connection to a network connected device (such as the aforementioned cable set-top box or TiVo) you could theoretically route information without much difficulty. If the MPAA can enforce a mandate requiring all consumer devices to include means to track and record user viewing habits, I can’t imagine that it would be that much more difficult to include a means of disabling playback on any device that doesn’t provide a communication medium. Thus the end-user has the enviable choice of A) using his player but providing a communication medium to transmit his viewing habits, or B) letting the pretty piece of expensive electronics sit unused (or at best feature-limited).
My primary issue with this whole scheme is that it is entirely unnecessary - the MPAA should be seeking profits by making a good product and selling it at a fair market price. They shouldn’t be lobbying for protectionist measures and forcing all consumers of a different industry to foot the bill for the technical implementation. Even if the added features necessary to implement the tracking measures were free, the whole idea is still abhorrent, as it gives the MPAA substantial compensation without any real effort on their part, and it enforces the idiotic standard that every individual who ever views a movie, even once, should pay the full price of a DVD purchase of that movie - something that has a substantial counter-precedent in the rental industry.
November 30th, 2006 at 12:14 pm
From what I read, the “tracking†mandate would be in the form of an authentication similar to online product activation, not an elaborate scheme of DVD-activated spy cameras built into the various players and installed all over the viewing area. Any addition should be no more complicated than adding a means of communicating with MPAA systems and a firmware update in the player; at worst it would require an EULA-like acknowledgment to begin playback. In any case, the bulk of the process would be on the MPAA’s dime (possibly passed on as marginally more expensive movies) because they would be the ones responsible for storing the authentication and such for future retrieval. Any requirement to keep information about your viewing habits stored and protected on your own system (as would be required by the complex monitoring, storage, and communication scheme you reference) would never hold up in a 5th Amendment case, and would sit entirely in the hands of the organization wishing to collect such data.
The “spy camera ID thing†would never make it past any sort of privacy test, even in the ultra-liberal 9th Circuit Court. Many cities have had surveillance cameras used in public areas (where your image is specifically not protected or “privateâ€) to look for and identify known criminals and terrorists shot down on privacy grounds. I can’t see that such a thing introduced by a commercial enterprise into private homes could come to pass before law enforcement use of similar technology to protect the public is universally accepted.
They could never get the communication mandate to fly because nobody has to have cable or any other way to electronically access beyond their own walls. Nobody has to own a phone or subscribe to a pay television service in order to also own a DVD player. We expect the presence of these things because we use them, but we are not everbody or even most people. Also, as I indicated before, there are entire markets of DVD devices which are specifically designed to be used in areas that are not natively supported by any means of communication (like moving vehicles). It is possible that systems could be sold which would require a communication method to use, but nobody has to buy those and they certainly couldn’t be the only thing on the market. In fact, it could prop-up a secondary market in repairing older machines that are not MPAA monitoring enabled as those machines are presently cheaper to replace than repair. Maybe they could “bribe†people into hooking them up by packaging special features into the DVD which can only be accessed by first authenticating via the net, but there are just too many other options available as the MPAA has no monopoly on how we get our entertainment.
I agree that the whole mess is a poorly focused used of the MPAA members’ resources. However, they do have the right to lobby for their perceived interests, and they do have the right to help get legislation passed that will ultimately ruin their industry. If your worst outlook on this comes to be reality, then the entire retail movie industry could come crashing down as people combat the tactics by spending their dollars elsewhere. If people still pay what could be thousands of dollars for a $50 player and consent to having commercially monitored cameras that they have no control over watching their homes from the inside, then the people have gleefully accepted the additional expense of money and privacy to watch their favorite movies. In any case, the consumers will make the choice because it is a free market.
November 30th, 2006 at 2:32 pm
Maybe we read different articles, but the one I linked above, included the following:
(emphasis mine) Motion sensors and biometric technology is a substantial step above and beyond mere product activation. Indeed, if the MPAA wants to have any chance at successfully prosecuting someone who “illegally” displays a video, they will need to have some sort of information on who was present during the presentation. Relying on the owner of the DVD/Home Theater to accurately report all individuals present would be like asking the coyote to guard the chicken coop.
It’s also incredibly naive to assume that the MPAA will foot the bill for these devices - I personally can’t think of a single case where such has been the case. Rather, the content companies typically “blackmail” the consumer electronics industry into succumbing to their will. After all, what good is an electronics device that has no content? An iPod without any music is merely a horrendously expensive fashion accessory. As such, Apple agreed to have their programmers design and develop a method of protecting any content (the Fairplay DRM) and the means of distributing that content (iTunes Music Store). The HDMI, the electronics manufactures are required to implement the HDCP encryption scheme on both ends of every connection, just to ensure that no device in the chain can illicitly off-load the digital signal and copy it. I’ll readily admit that it’s possible (even probable) that the content companies may have some hand in the development of these technologies, but I’d highly doubt that they are footing 100% of the bill.
As for the “spy camera ID thing” argument - you are correct in the assertion that market forces would apply, and perhaps drive the industry out of business. However, today’s consumers are incredibly addicted to content - even the banal BS the MPAA/RIAA is shoveling these days - and will likely not pay too much attention to any potential drop in privacy. As evidence, I give you the Sony rootkit scandal where thousands (millions?) of computers were infected with the most heinous of all malicious software variants. Then consider the increasing specificity of unread EULAs that grant companies virtually every right up to and possibly including custody of your first-born. There’s also the illusion of added security provided by the invasion of privacy by the government - the scanning and recording of all international phone calls or the increased “security” at airports. The average consumer doesn’t care that his privacy may be somewhat compromised so long as he gets what he wants. As for the legal ramifications - the public surveillance cameras were shot down because they aren’t there by the willing consent of those being photographed. With a system like that proposed by the MPAA, the consumer would presumably be informed of the surveillance and so long as he is willing to submit to the invasion of privacy the system shouldn’t have any legal obstacles to overcome. Simply by purchasing the device, the consumer is voluntarily waiving his rights to privacy, likely by one of the aforementioned EULAs.
Your objection to the communication mandate is likewise untenable in the current atmosphere. There are already many devices in circulation which only allow severely degraded performance if you don’t include the proper connections - HDMI being the most prevalent example. If you have a HDTV and a high-definition video source (HD-DVD, Blu-Ray, or HDTV content from OTA, Cable, or Satellite), you may not get real HDTV resolution without the proper cable connections. In the next few years the HDCP mandate will take effect, forcing all high-definition pathways to respect the encryption or be forcibly downgraded to a standard definition signal. In effect, the content companies have setup a system where you can buy the latest and greatest equipment but unless you conform to their standards of viewing you won’t be able to utilize that technology to its fullest extent. Making an added requirement of an external communication line (something that very few consumers would likely object to, given the current popularity of TiVo, bi-direction Cable/Satellite communications in the high-end, and the continuing prevalence of land-line telephones in the low-end) in order to achieve full quality seems like a very minor step. Taking a further small step to completely prevent access without the communication line doesn’t seem that unlikely.
I personally see this as a totally ludicrous step by the MPAA. I would hope that any moderately informed congressperson would see this for the blatant money-grab that it is. It just seems ridiculous that the MPAA should have any claim to having “a right to know what’s showing in a theater”, or claiming that copyright extends to the point of restricting access to the original consumer of a product. The latter blatantly defies nearly 200 years of copyright precedent - should the owner of a book be unable to loan it to a friend? Does a family of five need to purchase five individual copies of The Land Before Time just because their two-year-old adores it? Should that same family be forced to buy an additional 6 copies when the toddler playgroup feels the urge to watch? This is purely a case of the MPAA attempting to squeeze money out of the consumer by utilizing technical means which were unavailable in the past, and utilizing the government to grant them the power to make sure the consumers comply.
Of course, just because I think something is ludicrous doesn’t necessarily mean that the world at large agrees with me.