Sony Prexy's HuffPo Plea Is a Floppola

If Michael Lynton really wants some useful guidelines, then he could get behind the concept that those who carry Internet traffic can't play favorites based on the data's source, type or destination. That's called Net Neutrality.
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It wouldn't have been surprising if there was a semi-panicked conversation in the corporate suites of Sony. Michael Lynton, the head of Sony studios, had just been quoted as saying "I'm a guy who doesn't see anything good having come from the Internet."

Some marketing gal or PR guy in the Sony eco-sphere probably realized, hey, our audience lives on the Web. How would it look for our top exec to go around trashing the Net? So, they decided to put out a make-up call here on the pages (well, screens, actually) of Huffington Post in which Lynton would backtrack and say he really does get technology, because, look, he's publishing online. It's just that we need "guidelines" to help the poor, stricken entertainment industry from those who want everything to be free or who will steal material if not given it.

What nonsense.

No one condones stealing. Having huge factories cranking out copies of DVDs. That's stealing. Distributing unauthorized copies of a movie online to thousands of your best friends. That's stealing, and Hollywood has made certain the penalties for this activity are severe. On the other hand, there are circumstances in which what the movie industry considers stealing and what ordinary people might consider stealing are two different things. A rational person might say that if he or she bought a DVD, then that person has a right to make a back-up copy. This is a debate that's been going on for 20 years or more. But the movie business has a different view of the situation. They are in court suing Real Networks over the RealDVD software that allows users to copy a DVD to their computers. The lawyers for the movie industry argued that making even one copy for back-up purposes was illegal.

Putting innovative companies and products out of existence in the name of protecting themselves is nothing new for Hollywood. Companies that allowed users to access music they had purchased, or that made software for personal use, or that loaded DVDs customers wanted onto an iPod the customer had purchased - all shut down by Hollywood.

Hollywood sets copyright policy for the country, through its lobbyists patrolling Capitol Hill, through industry lawyers working in the government and through friendly lawmakers. That's how the concept of copyright, once naively thought by the founders to be for a "limited" time, now extends for decades beyond the original intent. It's why the penalties for raising a cellphone at an inopportune moment in a movie theatre rival what a street criminal might get. All of these came at Hollywood's behest when the industry cries, "wolf." Or, in this case, "Wolverine."

Lynton's plea for "guidelines" for the Internet starts with the fatal flaw. It was a theft of a print of the movie from the film lab that started the movie to its course around the world. Who posted it first? Nobody knows. Like the analogy to gossip in the movie/play, "Doubt," it's like slashing a pillow on the roof and watching the feathers fly all over. But we do know where the fault lies - with the security in the lab that let the wolverine out of the bag.

The theft was devastating for Fox. The film, roundly panned by critics, has so far made a paltry $310 million, on a budget of $150 million. Oh, the agony (not forgetting the ecstasy). That result is more the norm than the exception. For the first two months of this year, in the middle of the worst economic crisis since the Great Depression, January and February set box office records. January receipts were $1 billion; February, $769 million. This trend has been going on for a while, as outside observers ask how can Hollywood continue to have record years, yet still complain that piracy is robbing them of incentives to "creativity," as Lynton does. (Hint: Cooking the "piracy" numbers helps.)

For the past couple of years, Hollywood has set its sights on the Internet, to try to control and shape it to fit Hollywood's needs. That's why it was more than a bit hypocritical for Lynton to say he couldn't agree with those who want the Internet to be "unfettered and unregulated." Of course not. Lynton and his colleagues want an Internet over which they have control.

Lynton didn't mention which "guidelines" he would like. But based on past industry actions, here are a couple he wouldn't mind. First, the industry wants people thrown off of the Net based on accusations of copyright infringement. That's right, no one actually has to be found guilty by a court; a mere accusation is enough. It's that kind of thinking that tanked the European Parliament's approval of a new, generally reform-minded, telecom package. The EP actually voted for an amendment, defying the French, which required a judicial order before taking away Internet access.

Second, the industry wants to look at every bit of information everyone sends to check for copyrighted material. Even now, the industry is waging a campaign in Washington to allow for Internet monitoring of networks built with stimulus grants. They failed to get that condition onto the legislation establishing the stimulus program. But the one thing to remember is that Lynton's colleagues never, ever, give up. Even if such a requirement is enacted, legal use of copyrighted material online will be caught up with the illegal. There is legal use of copyrighted material without permission, like streaming your TV from one place to another over a Slingbox, or for fair use, like a movie review.

If Lynton really wants some useful guidelines, then he and the industry could get behind the concept that those who carry Internet traffic can't play favorites based on the data's source, type or destination. That's called Net Neutrality, but the Hollywood hates that. Some of the biggest names in Hollywood are cooperating with a start-up, Zillion TV, to establish a preferred service for their product - which could well violate FCC Internet Policy rules and violate non-discrimination principles. Hollywood might want to speak out against the anti-competitive bandwidth caps some Internet Service Providers want to impose. They won't.

Rather than establishing "guardrails," Lynton and Hollywood would have run the Internet off the rails. And that result is far worse than anything that would befall his industry.

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