Over the past few weeks, there has been much debate over SOPA (“Stop Online Piracy Act”) and PIPA (“Protect Intellectual Propery Act”). These are two bills that were fast tracked in Congress to protect piracy of American and Foreign Intellectual Property. For those of you following the debate, the Internet Community took on the Creative Community arguing that Free Speech is more important than protecting Intellectual Property. As a result, both bills have effectively been destroyed. Up until now, I had not wanted to get involved in this debate. But, I believe the side of the people creating this product has not been given a fair hearing. In fact, the debate has been controlled almost totally by the Internet Community even to the point of a shutdown of Wikidpedia and other popular sites about one week ago in protest of the pending legislation.
One very good article was written from the content creator’s side by a friend of mine and fellow conservative Ron Maxwell. The article “Piracy, Jobs and Expression” pretty much said all that I have to say. However, I would like to add a little bit more to the debate.
Many of the people throughout the world and especially those within the United States believe that all of us in the movie and/or music business are living in big Beverly Hills mansions and have so much money we cannot count it. This is furthest from the truth. As Maxwell points out, most of the content in motion pictures and the music industry is created by average working men and women that are doing everything in their power just to pay the bills. Sure, there are the Steven Spielbergs and Tom Cruises. But, they are the exception and not the rule. The rule is that most of the people in our industry are middle class families just trying to make ends meat.
Approximately ten years ago, the attacks on our industry by the Internet began with the infamous Napster web site. At that time, motion pictures contained way too many pieces of information to be threatened by streaming and downloading. So, music became the first battle in the war. I’d hate to say it, but that battle was won by the Internet Pirates. What’s left of the music industry is a shadow of its former self. There are not too many people employed in it any more and those that are, are becoming scarcer by the moment. In fact, the only music that really sells anymore is country as their fan base is so loyal they still by CD’s. The remainder of the industry is now live touring, which, by the way, in the past was a loss leader and was done just to support an album or single. Now, the touring is the only means of income for most performers.
Music publishing exists only to the extent that the performing rights societies, i.e. ASCAP and BMI, can collect royalties from TV and Radio Stations. The sale of sheet music has gone the way of record sales in that almost any piece of sheet music can be acquired on the Internet for free in the same manner that the songs themselves can.
Now, as a result of much faster downloading and much larger hard drives and RAM, the motion picture industry is facing the same problems. We are losing billions of dollars in revenue each year as a result of Internet Piracy. In fact, the DVD business has virtually ceased to exist in Spain, Russia and Thailand. More countries are soon to follow. And, in those countries that still have a DVD industry, revenues are falling at an alarming rate.
The result of all of this is that the motion picture industry is getting smaller. Studios are only making tent pole pictures. Dramas and mid-budget projects are ceasing to exist at that level. The independent world is down to three real companies at this point with the merger of Lionsgate and Summit. After that, you are basically down to the companies that can barely afford to produce a few pictures a year. The result is that fewer movies are being made and fewer people are able to make a living in the industry. As in most of the American economy, the middle is being weaned out.
If things continue at the current rate, the movie business will cease to exist as we now know it. And, what is being done about this? Up until now, only threats to stop the piracy. SOPA and PIPA were the first two pieces of legislation that may have actually cut into the rise of Internet Piracy. But, unfortunately, groups like Facebook, Google, Yahoo and Wikipedia saw these pieces of legislation as an affront on their Freedom of Speech. In fact, the Libertarian movement has taken the sides of the large Internet providers and has literally thrown the Entertainment Community collectively under the bus.
Now, granted neither of these bills would have stopped piracy and maybe they were drafted a bit too broad to protect the legitimate providers, but something must be done. As you should know, entertainment is one of the top exports of the United States. In fact, it is number one in most if not all years. It is one of the largest industries that is still dominated almost entirely by the United States. We must do something to protect it. If not now, there may be nothing left to protect in a few short years.
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