Net Neutrality Showbiz Showdown: Hollywood unites against Google/Verizon proposal

[PHOTO: "One Wilshire," a CC-licensed image by Xeni Jardin]

If you have been following the recent Google/Verizon moves regarding net neutrality, there's even more wonktastic action this week as an interesting Hollywood showdown is developing. This past Thursday, four major creative guilds and the MPAA submitted a joint reply comment to the Federal Communications Commission.

This show of solidarity is rare as everyone in Hollywood tries to figure out how to deal with massive revenue losses in the face of copyright infringement. The WGAw then issued their own competing statement taking the opposite position.

In the words of Double Rainbow Guy, what does this meeeeeaaann?

The fun started in 2007 when it was learned that Comcast had been quietly blocking/throttling BitTorrent traffic on their network. This led to a long legal fight, and ultimately, the proposed changes put together by the FCC.

In a nutshell, MPAA, AFTRA, SAG, DGA and IATSE essentially advocate the telco position that reclassifying broadband as a communications service is a bad idea. They believe the telcos will be under less obligation to help in the trade groups' fights against online copyright infringement.

The WGAw asserts that loss of net neutrality will potentially reduce the choices consumers have for enjoying the creative output of their guild, ergo, fewer long-term revenue opportunities. A lot of studio execs and producers in town, as well as some members of other unions, are still pretty upset with the WGAw for their striking activities over the past few years, but I'm surprised this has broken down along these lines.

Both comments acknowledge the need to deal with infringement, but the WGAw seems to be taking a more balanced stance. The whole issue brings several absolutist positions into conflict.

MPAA: Joint Filing to FCC Regarding Internet Theft

WGAw: Protecting an Open Internet and Intellectual Property

Disclosure: my production company is a SAG signatory, though I agree more with the WGAw position in this matter.


    1. @0xdeadbeef: Pretty much everyone concedes that there has been a redistribution within the economy that has negatively affected revenue within the content industries. The US General Accounting Office reported that “in general, literature and experts indicate the negative effects of counterfeiting and piracy on the U.S. economy outweigh the positive effects.” The business models of content providers were created based on the legal model of copyright, so one or both models need to be reformed as a response to new technology and market forces. The final outcomes in the YouTube and LimeWire cases will probably set the stage for what comes next.

      1. I challenge anyone to say that there’s been any measurable damage done to the intellectual “property” industry at all!

        Are people listening to less music, or reading fewer books than before?
        Yes, when obtuse companies continue to rely on obsolete technology and distribution technologies, they may suffer a loss in revenue, so, I can see how, from their point of view, that is bad.

        I have a few friends in the publishing industry and I debate with them about this all the time.

        From the consumer point of view, there has never been more content out there before.

        If content creators absolutely refuse to sell me their content when I offer them money for it, what the hell am I supposed to do???

      2. ANDREA: “in general, literature and experts indicate the negative effects of counterfeiting and piracy on the U.S. economy outweigh the positive effects.”

        Perhaps it’s true. But that’s a pretty vague statement. The only hard data I’ve seen relies on the completely absurd model of:

        “If it was downloaded illegally, then the person would have otherwise bought the product, so therefore it’s lost revenue.”

      3. I’m neither pro or anti-piracy, but I’m pro-honesty/unbiased hard data. Having said that, I’m not going to repeat what others already have said about your unsubstantiated claim…

        But what I’m going to say, Andrea, is that I know you know that what you’ve said to us about so-called “losses” is nothing, but bull.

        1. If you expect a published independent report stating in one sentence that “piracy causes $X in losses,” you’re not going to see that any time soon, if ever. The April 2010 GAO report is often cited as the most balanced summary, and they note that no single approach for quantifying impacts of counterfeiting and piracy can be used, but different studies indicate the problem is sizeable: “It is difficult, if not impossible, to quantify the net effect of counterfeiting and piracy on the economy as a whole.” I don’t know what you consider massive, but I’d say the redistribution within the economy has affected content providers.

          I’m a big free culture supporter. I am a major Wikipedia contributor (over 1,000 articles written), and I believe we need some copyright reforms. But I also feel that creative work has value that deserves compensation if the creator seeks it. Downloading content without paying for it is happening, and to state that it has no effect without hard data is no different than to state it does have an effect without hard data. It’s difficult to quantify the effects, but most people at least agree that it’s a sizeable phenomenon. The LimeWire case will probably result in some interesting data. Nothing definitive in the sense some people expect, but interesting nonetheless.

    2. Exactly! More like massive losses in the face of consistently putting out spectacularly uninventive content. It seems to me that Hollywood is blaming the marketplace for turning away from their product instead of blaming their product for disappointing the marketplace. Dead men walking.

  1. I remember hearing this from the record industry about a decade ago: If we put our content online, then we will choose to put out less content, thus hurting the consumer.
    Please don’t make us hurt the consumer!

    Such bull.

    I shudder to think of their proposal for the Internet.
    The content industry needs to stay the hell away from distribution.
    Look what happens whenever the content industry IS allowed a say.
    We have the amazing innovation of… cable television.
    All that these no talent execs in the IP industry care about is manufacturing scarcity with “exclusive content” and other stuff so stupid it makes my head hurt.

    1. Yes, such bull, considering they can’t legislate going to live shows and seeing local bands that need support. Or buying the CDs the band is selling at the venue, or the t-shirts. From what I understand (and I’m not in a band, never have been), that’s where most bands, at least on major labels, make their money, not on record sales – that’s where the record companies make the money.

      So basically, they don’t care whether a band gets a percentage of the gate, they want them to try to profit off $15 t-shirts bumped up to $25 because of printing – they make almost nothing.

      Want pure profit in music? Create, record and distribute it yourself, make your own merchandise on the cheap (screen printing ain’t hard) and don’t involve anyone beyond the band and maybe a booking agent (although that can be done by anyone, so if you don’t want to spend the money on it, don’t).

      1. take a look at how cheap trick is doing things these days. they are taking a D.I.Y. approach and doing fine. they don’t worry much about people stealing their music, either. AND they’re making more money than they have for a long time. (no record co. to share it with.)

    2. Remember when “pay for cable” TV was going to provide ad free programming? Yeah, that worked out well, didn’t it?

      Karl Marx talks about “The means of production being owned by “The People.”

      The internet offers “The People” the means to create and control the “media message.” Letting commercial interests control those means would be a major fuck-up in the media paradigm shift that’s taking place right now.

  2. The fight for net neutrality is not a fight over copyright protection. It is a fight over freedom of speech and the future of democracy.

    The internet is now the public place where we the people gather to take part in the political process and air our grievances to our government. It is the place where we communicate to each other and where we get the news. We can not let private corporations determine how we are able to access the technology that enables this public discourse.

    Corporations will always and only ever do what is in their own best interests. They can not be trusted to preserve the rights of a free people to communicate with each other and with their government. That responsibility rests on our shoulders.

    The fight for net neutrality is the fight our freedom and whether in the future we will live in a democracy or a corporate controlled oligarchy.

    1. “The internet is now the public place where we the people gather to take part in the political process and air our grievances to our government.”

      Agreed, but we need actual legislative protection because, right now, ISPs have no incentive to not throttle and, in time, one company will make a power play and say “deal with it” and in some parts of the country, consumers will have to take it.

    2. You’re putting the cart before the horse. We don’t have “corporate controlled oligarchy”, we have oligarchy controlled corporations AND oligarchy controlled government. Apparently, you prefer government jackboots to private jackboots.

      The answer to bad policies by internet providers, is to make sure there are LOTS of internet providers. That way, if Comcast steps on your bit streams, you can feel free to tell them to take a flying leap. Lack of competition is the problem, and government has made this problem worse.

      If ATT believes there is a market in selling video freaks a premium tier of service, I fail to see why it rises to the level of a federal issue to prevent them from doing so.

      “Corporations will always and only ever do what is in their own best interests. They can not be trusted to preserve the rights of a free people to communicate with each other and with their government.”

      And you really believe government acts in the public interest? If you do, I’ve got some land on Lake Okechobee you’re just going to LOVE.

      Perhaps you’d be more comfortable in China, or Iran, where the government is free to tell the corporations what to do.

      1. Yes, things work out so much better when corporations control the government instead of having government actually regulate natural monopolies.

      2. BrainWash93 — “Jackboots” and “Premium Tiers” . . .

        Greenspan, a free-market zealot, conceded that free markets don’t work and need regulation. And as for one jackboot or another: We need a balance between both.

        ATT “premium tiers” and “new products” . . . this is the sort of “product innovation” that gave us credit default swaps and the global collapse of the investment industry.

        Corporations are seeing the internet as free public access to unregulated discourse. They’re betting they can take control of it and turn a profit.

      3. So you think that government controls corporations. In that case I’ve got some pristine oil-free wetlands for sale in the Gulf at discount prices.

        In fact, you should be proclaiming the Gulf oil spill as a perfect example of libertarianism at work. Government does not regulate corporation, corporation screws up, and their stock price tanks. Problem solved.

        And the environmental disaster is just the reasonable price we pay for living in a free market utopia.

        Thanks for clearing this up for me.

        1. Apparently you suffer from a reading disability, I said we have an oligarchy which controls both government and corporations.

          Actually, the Gulf Oil spill is the perfect storm of government regulation. Deep water ocean drilling is one of the most highly regulated activities in the world. And of course, the government created a HUGE moral hazard by capping liability damages. If those damages were not capped, the insurance companies would probably have been crawling up BP’s butt with an array of microscopes. The government’s action, PREVENTED the market from reining in BP’s careless actions.

  3. What does this double rainbow mean: It becomes obvious that net-bias really just recreates old business models analogous to the video-game console world, with each ISP acting as its own console to the internet.

    If my analogy is correct, then some Hollywood studios would be happy about net-bias as they would be able to strike up lucrative delivery deals with ISPs, while some may be for net-neutrality given they had not flourished as well under the old licensing models due to competition.

    It amazes me that we put all this trust in Google that they are actually starting to behave like a pseudo-governmental body… There is no reason they need to collude with ISPs to protect their business, it almost seems to fly in the face of what’s legal…

    There seems something wrong, dare I say evil about Google these days.

  4. If content providers woke up and realised how they could generate revenue via the torrent model they’d see an improvement in their fortunes. Region blocking, exclusivity etc. doesn’t carry in a global network – take advantage of that instead of trying to influence innovation and technical changes that reach far beyond corporate media.

  5. Once upon a time there was a Public Beach, where people could go and have fun, etc…
    Now it is Private and people have to pay a premium to go there.

    Industry never do things to protect consumers, they lobby the govt, to work for them and be on their side.

    Google is not Violating Net Neutrality, they are opening the debate about it, and nothing is wrong with that.
    Now industry is bleeding because their moves to violate net neutrality will be Exposed on that interesting debate.

    Or you are with Net Neutrality or you are with Industry. Take your pill.

  6. Pretty much everyone concedes that there has been a redistribution within the economy that has negatively affected revenue within the content industries.

    Pretty much everybody who works for the content industries says that. Pretty much everybody who doesn’t work for the content industry points out that their profits have continued to soar each year, and questions the legitimacy of the industry’s claims that a “reduced rate of growth” is the same thing as a “negative effect”. And of course, there is no causal link to copyright enforcement.

    The US General Accounting Office reported that “in general, literature and experts indicate the negative effects of counterfeiting and piracy on the U.S. economy outweigh the positive effects.”

    But if you look into the sources for their reports, they’re just reprinting the claims of the media industry without bothering to compare their accuracy to that of the opponents.

    The business models of content providers were created based on the legal model of copyright, so one or both models need to be reformed as a response to new technology and market forces.

    But the market has already answered this question. CD sales are down, live performance sales are way up, and people are spending more on content than ever before. This isn’t some nebulous proposal, the market has already changed. The industry continues with the fantasy that copyright enforcement will cause people to suddenly spend vastly more of their disposable income on content, when all the evidence suggests that they would just redistribute the amount of money they spend.

  7. Regarding the Cox throttling, I pay money for HBO and I enjoy their programming. I had to go to Arizona (family emergency) and asked my husband to send me a show via torrent. My daughter in AZ received a cease and desist letter via e-mail from Cox because we were receiving this torrent! I pay for it, why shouldn’t I be able to watch it wherever I want?

    If Google and Verizon can help find ways for everyone to enjoy things legally, more power to them! As for Cox, I am grateful they did not bid in the recent sale of our cable network, but I hear bad things about nearly every cable/internet company around.

  8. Given that the US Government Accountability Office can’t substantiate any evidence of lost revenue, , I don’t think it’s appropriate for writers to use any phrase like “massive revenue losses in the face of copyright infringement”.

    There is undoubtedly copyright infringement occurring, but there is little evidence that those who do so would’ve paid for that content anyways. All those arguments have been made. This is a flaw of the industries business models, not the fault of the consumer or even the pirates.

  9. A few follow-ups to the great comments. The content industry is not monolithic, and each segment has its own challenges. Music has seen huge decreases in hard copy sales, which has led to a glut in live performances to make up for that revenue, which has led to market oversaturation, cancelled tour dates, etc. For movies, books, TV, software, etc. there is not an opportunity for making up revenue shifts through live performances. They can’t treat their products as loss leaders to boost other revenue opportunities.

    As several people noted, the diversity and choices have exploded as the means of production have become more accessible. The big question mark is the means of distribution, and what that model will look like.

    It’s disingenuous to assert that copyright infringement has had no measurable economic effect on content providers. It’s more accurate to say the effect is very difficult to measure.

    Finally, all of this is more complicated than “you’re with us or you’re against us.” Production and distribution have overlapping goals as well as conflicts. Consumers and creators have overlapping goals and conflicts. Government and business have overlapping goals and conflicts. Consumers and government have overlapping goals and conflicts.

    For instance, some creators just want as many people as possible to enjoy their work, and they don’t care about the money. In order to get their work in front of as many people as they can, they need to engage distribution in some manner. People who are good at making stuff often can’t or won’t learn the arcana of getting it out there, because they’d rather focus on making more stuff. There’s a certain point where lack of money affects their ability to create, and if they don’t get money for their work, it has a chilling effect on their ability to create more.

    The current legal and business models are undergoing a paradigm shift, and that’s always an interesting and exciting time. I think most people understand the need to support creators of culture, and I personally think it’s important that a culture have shared experiences to keep it connected. The problem is that some people have an interest in maintaining the status quo, and that’s not always in everyone’s best interests. Sorting that out is never easy, as we see in this case.

    1. I’m not saying that certain segments of the content creation industry haven’t been hurt by recent advancements in technology.
      I’m just saying that it’s their fault and their responsibility, not ours.

      If, for example, I ran a video store, and I insisted on only stocking VHS cassette tapes, and REFUSED to supply DVDs for my customers, then it would be MY FAULT when I lost money.
      It wouldn’t be right of me to try to get a law made banning DVDs, or calling my former customers thieves.

      The music industry has been especially obtuse, and proudly so.
      Technologically, they could have had an Apple Music store in 1997!
      They could have partnered with AOL or MSN, and sold 5M mp3s to people over dialup.
      Online sales could have easily made up for declining sales of physical media.
      It’s not like this is far fetched, MANY people were asking for this and proposing this.
      The only way that the music industry would tolerate online sales is with asinine DRM that made their content virutally unsellable (Remember Pressplay, or Musicnet?)

      Remember Hillary Rosen, president of the RIAA saying that the internet was just a fad and that as soon as they defeated Napster things would go back to the way they were before?
      That kind of deluded attitude is still big in the music industry.

      They had to be dragged, kicking and screaming, every step of the way, by Steve Jobs.

      Only, what, a year ago, did they finally start selling industry-standard mp3 music directly to the public?
      I wouldn’t know, they lost me as a potential customer almost a decade ago.

      They’re like a video store that only sells Beta tapes and then whines that nobody buys them.

      If the movie industry offered me content in INDUSTRY STANDARD format, instead of some retarded proprietary DRM format, I will consider buying it.

      Are they actually conceited enough to think that I’m going to go out and get a windows box, just so that I can consume their content???
      Yeah, just as soon as I go out and buy a beta-deck.

      And that kind of conceit infests the publishing industry too.

      I think they need to be reminded who they work for.

      Don’t even get mee started on them.

      I need some moar wine wine helps me rant.

  10. Just so you all know, Andrea’s company got hit pretty hard when someone released their DVD set online.

    “The theft of our little video projects and distribution for online download has consumed more than 90% of the revenue from those sources: unlike stealing a 99¢ song from Britney Spears multi-million dollar empire, even a single theft of one of our videos by online piracy erases a percentage of income equivalent to one months web hosting fees for TSroadmap, an invaluable resource for many of the 4,000,000+ annual visitors in desperate search of information and support, alongside the forum at GenderLife and the other resources we offer. And thats just the web presence.”

    I know this argument is normally about The Little Guy vs Big Megacorp. Many of the above arguments people are making above are valid and I completely agree with them.

    However, in the case of Little Company, piracy can significantly hurt them. To deal with this, Deep Stealth has changed their strategy recently but I’d be surprised if their finances are better off today than they were before this happened. I also recognize that some companies don’t have sufficient reserves / cash flow to survive through something like that.

    In their case, they were probably in the worst case scenario, small company, effectively one product with what tends to be a fairly tech savvy audience who wanted privacy. They really don’t have the ability to sue to recover damages or offer settlements without it really sounding like blackmail.

  11. @Robbo: Bumper sticker sentiment isn’t really helpful on matters like this. A major component of net neutrality is no discrimination against lawful content. What’s at issue here is unlawful content under current law: infringed creative works. Unfortunately, that’s entangled in the other financial interests of a few large profit-driven telecoms and cable companies. NCTA v. Brand X eroded net neutrality and thus free speech, and this is the next battle in that war. But this has an added layer of creative rights, which is what makes it more complex than simply free speech. I think we all need to watch these alliances forming between creative trade groups and distribution channels, because it goes way beyond a simple first amendment issue.

  12. Not even sure how to approach this, but this article immediately loses all potential validity when the author decides to be hypocritical.

    You can’t make broad, unsubstantiated statements that have for the most part, been disproven (and in some cases, the opposite conclusion reached) such as:
    “Hollywood tries to figure out how to deal with massive revenue losses in the face of copyright infringement.” (see for example:;txt)

    And then, when people point that out, or have their own statements on the cause/affect, etc, respond with:
    “It’s disingenuous to assert that copyright infringement has had no measurable economic effect on content providers. It’s more accurate to say the effect is very difficult to measure.”

    As a creator, incidents like this irritate me just as much as those who claim creators shouldn’t be allowed to make a living off their work. Maybe even more so, because it then becomes easier for those types to break apart valid discussion, or for the general public to ignore valid claims.

    There needs to be equality, balance and for the love of all that’s holy, honesty… or else we’re all just beating our heads into a wall. Please stop creating divisions with outrageous claims, it directly contradicts the “overlapping goals and conflicts” approach. I’m going to stop now, because the more I type, the more irritated I’m getting.

    1. The problem is that people want media, and they want it now, right now, and they want it for a fair price. $5.99 is not a fair price for a television episode, neither is $2 for a song.

      We need to remove the unnecessary middle man at this point. For instance.

      Someone needs to setup a web based bit torrent distribution service.

      Myself and the 30 million TV viewers will each pay $30 a month. Let each of us choose from a list of television programs and pick 25 shows for us to “subscribe to”. The service provider then pays $1 from our $30 to each show we “subscribe” to, and pays it to the producers of the show for the month. That would be something like $360 million a year paid directly to the producers of the show, no cable or network distributors, no advertising, just consumers paying the creators to create for them. If a show sucks, then the revenue will decrease, and the show can try to fix it, or can continue to make whatever they can with the money they do receive from their subscribers. Anyone at anywhere in the world could have access, and as more people sign up, the more shows can be added, and the shows can make more money. Customers could vote on pilots, with a portion of the money paid to the service a month, and polls could be taken to figure out what new shows should be created based upon customer input. If a show sucks, it dies, if it’s great, the more money they make, and it’s all profit. It will also put an end to “Neilson Ratings”, no more will a good show that people watch be canceled by a network executive. And because there are no ads being bought, store prices can come down (there is no reason a box of powdered soap needs to cost $10 in 2010). People get the shows they want, creators get paid to create, and people get it when they want it, how they want it.

      I am more then willing to pay for television media, but not more than $30 a month total. If someone can create the above scenario, then they can have my money. I bet they would get the money of every current television subscriber out there.

  13. Perhaps you’d be more comfortable in China, or Iran, where the government is free to tell the corporations what to do.

    Perhaps you’d be more comfortable in Iraq, which is a Randian’s dream come true.

  14. As to tiered content being a democracy-ender– democracy didn’t end when the main source of public news was a newspaper, no? And yet newspapers certainly had (and have) an editorial slant to both the content they choose to carry and how they choose to present it.
    How would this be different?

  15. The question needing some sober evaluation is if Internet connections are subject to “Common Carrier” rules or not. The complication of including issues not having any bearing on “Common Carrier” status is unfortunate. To make what we currently call “The Internet” subject to rules that erode neutrality risks replicating the old fable about golden geese.

  16. Strongly agree with the commenters on the tendentiousness of the whole “massive revenue losses” line of argument, and then the hairsplitting rearguard defence to the fact that there are no convincing figures anywhere that this is true. For example, I would love to know where this 90% figure that was quoted by a third party above for the writer’s losses on her torrented DVD. If it’s calculated the way I think, you just interpreted every shared copy as a lost sale. The weakness of that logic is what’s behind everyone’s objections to this line of argument. Those two things do not equate, and all of the industry’s calculations and I’m guessing this third party’s 90% as well, are based on this assumption that for some reason its proponents always seem utterly blind to, sometimes to the point of wilful ignorance.

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