Sometimes you have to let time pass before you can critique your assumptions. Recently, I reconsidered the unanimity of the goals of the content industry after Derek Khanna reprised the motion picture association’s war on the VCR in TechCrunch. Derek Khanna is the ex-Republican staffer who managed to forge his own retirement by drafting a white paper extolling the virtues of copyright reform.
In short, Khanna’s piece recalls how the major motion picture studios fought the introduction of Sony’s Betamax, the first consumer video recorder. Convinced that home video taping and viewing would debilitate the movie industry, Jack Valenti, the president of the Motion Picture Association of America (MPAA) famously vented that “the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.”
In 1976, the MPAA helped to launch a suit against Sony, seeking an injunction against the sale of the Betamax. Sony won at the District Court level, but then lost at the Ninth Circuit appeals, which suggested to the lower court that an injunction might not be a bad idea. Ultimately, through “a highly unusual legal process (and significant luck),” Khanna observes, “the VCR was saved by one vote at the Supreme Court in 1984.” The home video industry was unleashed “on the absolute narrowest of legal grounds.”
Thirty years later, we take this ruling for granted. But not only did the VCR add millions to the coffers of the motion picture industry, it enabled the rise of new entrepreneurial firms such as Netflix, Apple TV, and Amazon Prime movie services. With the concurrent rise of reliable, distributed, residential broadband Internet, these services are now generating millions of dollars in additional licensing fees to MPAA’s members, and are expanding creativity and choice in the entertainment business. And, counter to Valenti’s dire predictions, box office receipts in 2013 still hit record levels.
Khanna’s article made me think anew about the ramifications of the conflict raged by the film industry against new technologies and copyright, and the priorities of publishing. In retrospect, considered more broadly, what technology firms such as Sony and the motion picture industry managed to achieve, despite initially working at cross purposes, was a successful extension of the movie theater into the home, providing Americans a new ability to control the choice and time of viewing both recent movies as well as older classics. Although this threatened the industry’s central revenue model by shortening movie runs in theaters, it greatly extended the ability to draw revenue from film production. Many films broke even or became successful over time only through home rental or acquisition. And many more films are now produced specifically for the home market.
Over the last decade, the Association of American Publishers (AAP) and the Authors Guild have been engaged in their own legal conflicts with the tech industry. But perhaps a more fundamental conflict should be with the MPAA. Arguably, the success of home video has come at the expense of other content industries, including book publishing.
After all, a consumer’s time is zero sum, and content is fungible. Every time my family settles down on a weekend evening to watch a film, that’s immersive time that might otherwise have been dedicated to reading. And even as the major publishers have begun to embrace alternative forms of engagement through gaming, transmedia, and other interactive experiences, the financial behemoth of the content industry remains the big screen, whether it’s 60 inches or 60 feet across. Although the book industry has long provided grist for the film-making mill, the majority of business in one channel is not reflected in the other.
In this light, perhaps it is less surprising, beyond the differing profit margins and revenue models, that Rupert Murdoch is splitting up his company, spinning off publishing into its own separate enterprise under the News Corp moniker while TV and film assets move into the holding firm of 21st Century Fox.
By now, the conflicts between the publishing and movie industry associations should be more visible than they are. Copyright practices and licensing frameworks that benefit MPAA members will not inevitably benefit the publishing community. And as we consume more and more content on mobile screens, which can display e-books, games, movies or TV shows, it becomes imperative for publishing and authors groups such as the AAP and the AG to define very carefully what they want from the future, and to pick their battles wisely.
The AG’s continuing litigation over the Google Books digitization project, for example, does nothing to win eyeballs away from movies or TV. Google Play, at best, is neutral towards publishing. And yet it is precisely the platforms run by Apple, Google, and Amazon that could serve to promote books more broadly to a larger class of consumers.
Too often the content industry seems to pick the wrong battles. Publisher associations are too narrowly focused on books, historically a distinct market, instead of recognizing the increasing flatness of the media landscape. They’d do better to think broadly about the possibilities of mobile and residential access to the Internet than they have to date.