By John T. Aquino for Intellectual Property Watch
WASHINGTON, DC – That the US movie industry’s intellectual property is essential for the economic well-being of the industry and the nation was one of two major themes in the Motion Picture Association of America’s (MPAA) all-day 6 February symposium, “The Business of Show Business” in Washington, DC.

James Glassman, senior fellow at the American Enterprise Institute, called intellectual property “the crown jewel of the US economy,” which “will be the major factor, especially in export, in US growth for years to come.” The other theme was the detrimental effect of movie piracy on that growth. The reason for this MPAA symposium, said film director Taylor Hackford, was that there is fear in Hollywood. “You can feel it. Everyone is worried as to whether there will be even a business plan in the near future.”

“The business of show business is serious business,” said Michael Lynton, chairman and CEO of Sony Pictures Entertainment. “We face serious and new challenges. Hollywood isn’t what it used to be – we’re part of big conglomerates, not just making movies. With the advent of DVDs, we began digitising our product and are able to deliver it right to people’s homes. But it’s also frightening because the same technology that makes this business possible also makes a new business possible for film pirates.” Saying that the movie executives had learned hard lessons from the music industry, Lynton concluded, “We need strong laws to protect intellectual property, to defend legitimate content from illegitimate hands.”

Washington lawmakers responded. “One thing I’ve learned from Lenox Avenue is you don’t push my country around,” said New York Democratic Representative Charles Rangel, chairman of the House Ways and Means Committee. “They steal 90-95 percent of our talent in the motion picture music industry. We have threatened to take them [China] to the World Trade Organization. Well, as far as I’m concerned, I don’t want a level playing field. I want a fair advantage for all American businesses.”

Senator Dianne Feinstein, a California Democrat, held up a copy of the film The Good Shepherd that her staff had downloaded from the Internet the night before. “There go the IP rights of this film,” Feinstein said. “We’ve got to be vigilant; when necessary, we should change the laws. One area to look closely at is the transition from analog to digital and the implications of that. We should also work to use the same technology to protect a work that is used to pirate it.”

Academy Award nominee actor Will Smith told the audience that those whose income was affected by piracy were “not just Tom and me, but wonderful people creating these products.” Panelists throughout the symposium cited figures of the film jobs that had left the US because of high costs and the lack of profitability for 7 out of 10 films.

Some panelists conceded that there were other contributing factors to the cost and profitability issues, including high salaries and percentages of the gross given to star actors. Feinstein complained that “too many movies have little redeeming value. They exploit sex and violence just for the sake of sex and violence; they degrade women and dehumanise individuals.” But the thrust of the day was on the harm caused by piracy.

Not a question of technology

Hackford told in detail of his fourteen-year effort to make the movie biography of Ray Charles. “IP is a wonderful term, but what it comes down to is our work, what we create.” Having been turned down by every Hollywood studio, Hackford found a multimillionaire who loved Ray Charles’ music to invest $35 million. “But he wanted his money back, of course. It isn’t called the ‘movie art form’, it’s called the ‘movie business.’”

After the film was made, only one studio – Universal – offered to distribute it. Hackford recalled walking down Canal Street the day his movie Ray opened in New York City and finding DVDs of the movie, made from a camcorder used in a theatre, being sold off a stand for $15 each. Ray made $75 million and could have earned a lot more, Hackford said, if it had been allowed to play in the theatres up until the day of the Academy Award ceremony. But the executives at Universal wanted to rush the DVDs into release to combat the piracy. “If the investor is afraid of even being able to earn his money back because of the detrimental effects of piracy, then we won’t be able to get financing for independent films like Ray,” Hackford said.

Scott Martin, executive vice president of intellectual property for Paramount, took a hefty verbal swing at YouTube, saying it had a significant responsibility to police against the postings of copyrighted films and television shows on its site. YouTube does filter its site for pornography, Martin said. “They can police their site. But YouTube’s business decision is that it will benefit from piracy.”

Noting that YouTube had just made a content-sharing deal with Warner Bros. in exchange for filtering out unauthorised postings of its copyright material, Martin claimed that YouTube was basically saying, “Do a deal with us or we’ll steal your content.” Darcy Antonellis, senior vice president, worldwide anti-piracy operations for Warner Bros. Entertainment, said, “This is not a technology issue. It’s about respect for property.”

Representative Howard Berman, Democrat from California and chairman of the House intellectual property subcommittee, observed that Google, which purchased YouTube last year, “is selling lots of ads that run against content, some of which is pirated.” Berman still praised YouTube for distributing the clip of Virginia Senator George Allen using a verbal slur. Allen lost the election, and “as a result the Democrats control the Senate,” he said. More seriously, Berman listed things his subcommittee wants to do, including: enabling the Justice Department to focus more attention on piracy and to build stronger relationships with the Internet service providers (ISPs); working with universities on what occurs on their Internet systems; and focusing on trade agreements.

But Martin said there is no silver bullet. “Strict privacy rights in Europe prevent going to ISPs, even through court proceedings. Watermarking films to see which print was the source of piracy is seen as an invasion of privacy.”

A few panelists pointed to some hopeful signs. Antonellis noted that research shows that “the awareness that taking copyrighted material without permission is wrong has gone up. Consumer education is working.”

And yet, when asked what scares her most, Oscar-winning producer Lili Zanuck said she worried that some place along the line the reason “we fell in love with movies in the first place,” the joy of telling a story and entertaining people, will be lost.

John T. Aquino may be reached at info@ip-watch.ch.