How You View SOPA Depends on Where Your Financial Interests Lie

By Gary Kim January 05, 2012

The Motion Picture Association of America (MPAA) might be one of the more-unusual and more-powerful lobbies in Washington, D.C. It has precisely six members, including the six major U.S. motion picture studios, namely Walt Disney, Paramount Pictures, Sony Pictures, Twentieth Century Fox, Universal Studios and Warner Bros.

That’s about as good a working definition of “Hollywood” as you could come up with. Historically, “Hollywood” has opposed new technology almost every step of the way, which is why it is no surprise that Internet and technology firms have one position on the Stop Online Piracy Act, while the MPAA has the opposite view.

On the other hand, it also is true that technology firms tend to misunderstand “Hollywood,” tending to believe that because something new and better can be done, it should be done, or will be done.

The history of innovation in visual media and performance suggests Hollywood hasn’t changed, in the sense that content interests support the SOPA. Generally speaking, global Internet application providers and ISPs have pointed out that such rules are tough and expensive to enforce. But Hollywood is true to form in supporting SOPA.

It also is fair to note that content owners generally oppose new forms of content distribution. In the 1920s it was the record business complaining about the advent of radio. The argument was that records could not compete with free, an argument that continues to have resonance.

Sometimes changes are forced upon content owners, though. In the1940s, movie studios had to divest their “theater” distribution channels. At the time, they owned over 50 percent of the movie theaters in the United States.

Most do not know, but in the 1950s, the broadcast television industry successfully managed to get regulatory bodies to put important restrictions on cable television operators.

In the 1970s, it was video cassette recorders that MPAA fought.

In 1998, the MPAA got congress to pass the Digital Millennium Copyright Act (DMCA), making it illegal for consumers to make a digital copy of a DVD that they had purchased.

In 2000 it was the digital video recorder, namely TiVo, which would destroy the TV advertising business.

In 2006 broadcasters sued Cablevision to prevent the launch of a cloud-based DVR.

Today it’s the Internet Hollywood generally "hates."

In retrospect, one generally can argue that the music and movie business has been consistently wrong in claiming that new platforms and channels would be the end of the businesses.

It would be correct to note that in some cases the newer forms have displaced much of the market share, usage and potential revenue and growth that might have occurred otherwise.

In each case, some would argue, the new technology produced a new market far larger than the existing markets that were surpassed. But that still is an important observation. New distribution methods and platforms routinely do change the flow of revenue within the content business.  

It is understandable that a copyright owner is worried about protecting copyrights. But skeptics might say the issue is less "copyrights" and more "revenue and business models."

I admit I spend little time thinking about SOPA. But to the extent it turns application providers and ISPs into "content police," it will add a layer of cost, complexity and overhead that is economically inefficient and burdensome. Lawyers might like that. But most of the rest of us, including most who believe efficiency and nimbleness matters, will not be so happy.

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Gary Kim is a contributing editor for TechZone360. To read more of Gary’s articles, please visit his columnist page.

Edited by Rich Steeves

Contributing Editor

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