Grokster and the financial future of America

I remember being very nervous back when I was in college.

There was very real discussion about the US losing its station in the world as the worlds most powerful
nation. There were hostages in Iran. The Olympicboycott. The Japanese Stock Market was booming and many
thought it wouldn’t be long before our economy would be second to theirs. The US auto industry was under attack by
imports. Inflation was at record highs.

At Indiana University, our school newspaper had headlines from around the state. I knew that Anderson Indiana had
an unemployment rate of more than 20 percent. Numbers that people were suggesting reflected depression era depths.
Other cities were almost as bad.

My fellow students weren’t quite brimming with optimism. As I got ready to graduate, getting an interview was a
battle.

Fortunately for me and many others, while our manufacturing economy was taking it on the chin, the labs at Xerox
and the garages in Silicon Valley, Seattle, New Mexico and the offices on Rte 128 in Mass and in Armonk NY, among
many others, were working late. The personal computer business was getting ready to explode.

The history of computing and in the particular the microprocessor revolution is well documented. What may not have
been nearly as well understood, and this is purely my opinion, is the role it played in revitalizing not only our
economy here in the US, but how we felt about ourselves.

In a scant 5 years, college kids went from worrying whether they could get jobs, to beingpositioned at the
lead of the new personal computer generation. WhenI graduated from college, I had taken 1 computer class
that required me to punch in a Fortran Program on cards and feed them to a huge computer I never saw.The number
of jobs available in the computerfield were limited to “computer scientists.” It changed in what seemed
like a heartbeat.

The class of ’85 was having a blast with each successive release of a new computer, new software and applications
their older brothers and sisters didn’t have a clue about. If you knew how to use a spreadsheet, you could get a job.
If you could write batch files in DOS, you could get a job. If you were advanced and could integrate Local Area
Networks, grasp multitasking, program usingrelational databases, you could pick the job of your choice.

The PC revolutionized the job market for college graduates and more importantly, the business of business.
Personal Computing introduced a new era of productivity and the USA was the leader in personal computer technology.
We were back on top again.

It didn’t stop at PCs.Software was developed for every application imaginable. PCs were connected into local
and worldwide networks. Printers went from modified typewriters to laser. Communications went from modems to
broadband. Online services expanded from the thousands to the millions and that was before the internet and America
Online. We went from Moores Law to Metcalf’s Law.

This technologyrevolution was and has been amazing for two reasons.

First , is that the technology has continued to evolve this long. We may be at a point where we aren’t
suprised to read about new technologies, but entrepreneurs continue to generate new ideas that lead to new products
and services. Technology continues to have a significant impact on the US economy and to create jobs.

Second, is that the government managed to stay out of the way for as long as it did. Who knows why, but our
elected officials managed to let the free markets stay free.Untilnow.

Things started to get a little shakey back in 1998.

In October of 1998 the Digital Millenium Copyright Act was passed. The DMCA was basically a law that set a very
un-nerving precedent.That the government would do what it could to protect the interests of content owners at
the expense of technological development.

The DMCA in and of itselfdidnt kill technological innovation. At the time it was passed it was more
nuisance than anything else. Digital content wasnt all that prevelant and there certainly wasn’t much money in it, so
not many people cared that our tax dollars were being spent to make sure that your internet radio station never
played more than 3 songs in a row from the same artist. Or that it becameillegal to have a 24 hours a day
Beatles (or any other artist)station.

In 1998 few people were buying DVDs. It was easy to buy a VHS tape and make a 2nd copy of it for your own
use.The DMCA rarely touched home for many of us.

In 2005, it’s a whole different ballgame.

You know those DVDs you have thatare scratched? How nice it would have been to be able to make a copy of
themfirst, knowing that the kids are going to get their hands on them and ruin them at some point? You can’t.
It’s illegal. It’s illegal to make softwarethat allows you to make backup copies. You paid a lot of money for
your DVDs. Themovie industry has made billions upon billions from DVDs. Many movies make more from DVDs than
from theatrical release. They get your hard earned money, and they make it illegal for you to make a copy to keep
just in case your DVD gets scratched.That’s wrong.

Its the law ofunintended consequences. Few people knew that DVDs would basically replace VHS in our homes.
Few people had any idea that DVDs would get scratched and be useless with regularity. No one had any idea that trying
to make a protective backup of that DVD would be illegal. It was perfectly legal to do it with VHS tapes.

The law of unintended consequences is never repealed. It goes on forever. Next month there is a case that will go
before the Supreme Court of the United States. MGM vs Grokster. If this case goes the wrong way, that law of
unintended consequence could put a hurt on us in the future.

The case is about whether Peer to Peer software that enables the P2P networks most of us read about and few of us
use, should be illegal or not. The big entertainment companies are pushing the argument that because some of
their content gets stolen through the use of this software, that all uses of the software should be illegal.

The are NOT arguing that there aren’t legitimate reasons to use the software. They acknowledge that businesses and
individuals are using the software for purposes other than those that impact their music or movie businesses. They
just feel that because it impacts their business (they still don’t know if its a postiive or negative impact), in a
way they can’t control, it’s better to make it illegal rather than adapt to the new technology.

In reality this case isn’t about whether music or movies are illegally downloaded using Peer to Peer
sotware. This is purely about control. The entertainment industry wants control over technology that could have
an impact on their business.

Technology has advanced and gone further than any of us could have imagined over the last 20 years. Go back
just 15 years and even the best forecasters would be shocked at the number of uswho have cell phones, use
email,have DVD players, spend as much time online as we do watching TV, have MP3 players, replaced
ourfilm cameras with digital camerasand more.

The next 15 years will have just as many new devices that we can’t imagine today.

What if they all became illegal?

We are living in a world where information is becoming 100 pct digital. Of all the digital information across the
world that is being created and exchanged, what percent is music and movies? What percentage of that is owned
by Hollywood and the big music companies?

With all the home movies we are creating and saving on our computers. All the digital pictures of our families and
friends. All the personal music created at home.All the corporate data and presentations. All the books,
software, newsletters, newspapers, discussion forums, blogs, websites and emails that are created and saved
digitally. How big a percentage could music and movies be ?1/10 of 1percent? At most ?

Every single one of these items can benefit from the distribution efficiencies created by Peer to Peer
networks. Every person and company in this country that wants to exchange digital data can benefit from
peer to peer technologies. Just because the uses aren’t prevelant or obvious to sometoday, doesn’t mean they
won’t be in 1, 2, 5 or more years from now.

In the MGM vs Grokster case, the fewer than 50 companies who control less than 1 pct of all digital information
are trying to take control of innovation in the technology industry and pry it away from the rest of us.

Everything our imagination creates and touches that can be made digital is at risk if Grokster loses.

What innovations will be condemned by law before they have a chance to come to market because they could have an
impact on Hollywood and the music industry? We have no idea and that is a very scary prospect

Which brings me back to 1980.

The last 25 years have seen unimaginable increases in productivity, creativity, economic development and American
pride becauseamazing people have been able to take amazing ideas and develop them without fear.
Thatfearlessness ends if Grokster loses and the content industry is able is to take on the role of technology
gatekeeper.

There will be a time, as there was in 1980, when we need a spark. When we hope that something new helps us escape
from something old. Let’s not let the content industry steal that opportunity out from underneath us.

One hundred percent of information this country creates from today going forwardwill be stored digitally.
Peer to Peer software will create new ways for us to exchange that information. Do we want to give priority to movies
and music over every other format of information in this country?

I hope not.

This is a call to action. Call your representative. Call your senator. Let them know that you respect the rights
of the content industry, but that protecting innovation is more important.

Our future could depend on it.

One last line that I can’t resist to use as it relates to the MGM vs Grokster case

Software doesn’t steal content…people do.

53 thoughts on “Grokster and the financial future of America

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    Address: 376 COVENTRY ROAD, SMALL HEATH, BIRMINGHAM, WEST
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    BUY ANY 3 OF OUR PRODUCT AND GET 1 AND 50% OF SHIPPING
    FEE..

    We are mobile phones wholesalers.We deals on all brands and
    models of mobile phones such as Nokia,Motorola,Samsung,Sony
    Ericsson,Sagem, Nextel,Sidekick II,Sprint,Ipods, Laptops,
    Mp3 players, PSP, Video Games such as: PS1,PS2,PS3,XBOX 360,
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    below:–
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  4. Tom “How does America end up with a complete moron running the country?”

    Several answers to that

    * You yourself did not do enough to vote your guy in.

    * The process by which we elect people to office is possibly flawed but, by and large, ‘morons’ are unelectable. That the President is not a gifted orator is not in doubt but that he is an able and smart guy is not.

    Comment by Brian Dunbar -

  5. Hi,

    You should run for president!

    How does America end up with a complete moron running the country?

    Maybe you can do something to change the political system. America’s politicians are simply bribed by companies, and don’t even represent the people who voted for them.

    All those bribes lead to stupid laws like the DMCA.

    Comment by Tom -

  6. The EFF maintains a list of “endangered gizmos”:

    http://www.eff.org/endangered/

    Comment by Jack -

  7. I understand the call to arms that’s coming up, but I can’t believe that it will truly be effective. As it stands, despite the many people who understand this topic, the majority of voters are more concerned with more main stream topics than this subset of the technology sector. I think the real way to argue this is actually to take on the companies that back this initiative and effectively market and introduce technologies that will assist them in protecting and profitting in this marketplace, as well as torpedoing efforts to send their pirated goods through normal channels.

    Let me explain:
    The first step is to provide a technology that can be used to protect and distribute. For example http://www.9thx.com is a new company with a variation on an old idea, that will help a content developer distribute their media, by encrypting it and giving a clear sysetm of transport, either through auction, sale or lease. In essence they provide a distribution area where those offended hollywood types and record giants could distribute in a new method. It reminds me of those old disks of shareware, where you could send off for keys to enable specific apps. Sure the shareware method dissolved, but this seems to embrace the concept of P2P as well, since you could also allow the same place that provided the original copy, allow licensing through their storefront. Encryption and distribution give a legal way to share.

    The second step is to show these media companies the benefit of viral marketing and messaging. Already some companies distribute through Kazaa and other sources copies of their popular music or movies that have 2 minutes of good, high quality content, followed by ear splitting resonance and feedback for the rest of the piece. If the media companies would simply replace the feedback with commercials for how to properly access and buy their product and give an avenue to make that download good, they could continue to distribute these trojan downloads, in a method that would discourage piracy and increase sales on someone else’s bandwidth.

    The third step is to continue to improve the quality of the material and the method it is presented. They used to say that the quality of a CD was unbeatable… Several digital format upgrades later, we have better sound. If you can make it faster to download, easier to distribute, and still turn a profit, then the business model can work.

    4th step is actually something that’s got to be done throughout. It doesn’t matter how many of these services they close or outlaw, there will always be services for P2P. If you think about it, file sharing through Instant messenger is basically untraceable, and one of the earliest examples of p2p communication. People will still share files as long as this feature is available, and it will remain available, because AOL is not going to change one of the core features of AIM, and everyone else will continue to compete on AIM’s model.

    For all of the file sharing and trading that is going on, the media vendors need to understand one general rule, and that’s that they aren’t necessarily competing with something that is free, better, or delivers a higher quality product than can be done for the same investment of time and energy. What they’re actually doing is ignoring the advantages of an existing technology, and failing to capitalize on ways they can make something more cost effective, better for their industry, and competitive.

    Don’t bother writing your congressperson, they’re too busy holding up purple fingers or bombasting about how silly it is to have one when you aren’t from Iraq. Instead, find the companies and technologies that can serve these steps, and support them.

    *I am not employed or gain any financial contribution from the http://www.9thx.com, I just used them as an example because they’re a company a friend pointed me to.

    Comment by Jason -

  8. In reply to comment 21 which states:

    “Sure, P2P COULD one day be used by businesses to exchange information”

    Wrong, Blizzard has been doing it for the entire world of warcraft beta. Instead of patches overloading their servers at release, they have it use bittorrent to have efficient (10 mins to get a 200mb file is pretty fast to me) and speedy releases.

    http://www.worldofwarcraft.com/info/faq/blizzarddownloader.html

    I’m sure there’s other groups doing this, and originally http://sp2torrent.com/ was distributing service pack 2 as it was ~250 MB and microsoft didn’t have the bandwidth to distribute it to everybody who wanted it right away. BitTorrent also stops the “FilePlanet” wait syndrome at sites like FileRush.com, where demos of games and such are available via torrent instead of the long line (300people for popular new releases) at fileplanet. Just was trying to give some examples of non-linux non-opensource things using bittorrent legitimately, as well as a business currently utilizing bittorrent.

    Also the people I earlier mentioned doing SP2Torrent also have a video of the Senate’s INDUCE Act hearing at http://p2pcongress.org/ , if you’re interested.

    Comment by Tommy Marshall -

  9. The post started off well.

    “The history of computing and in the particular the microprocessor revolution is well documented. What may not have been nearly as well understood , and this is purely my opinion, is the role it played in revitalizing not only our economy here in the US, but how we felt about ourselves.”

    No argument; the microprocessor revolution did all the preceding paragraph said. More, probably.

    But the post derailed, I think, from this fine start. Yes, the legal case in question is interesting. Sure, we’d all like to be able to copy DVDs without fearing the long reach of the law. But, no, the revolution is over. It will drive the economy, but not give our financial future a boost.

    Look elsewhere for the next revolution.

    My own hobby horse is space access and all that it implies; cheap everything from space, easy access to the _rest_ of the Solar System, where 90% of the mineral wealth is. Things we can’t describe, any more than a 70s era member of the Home Brew club would have been able to describe IM, ubiquitous email, and broadband to the home.

    You may see the revolution elsewhere of course – nanotech, bio science and so on. If I had to guess we’ll see all of them change our economy in ways strange and good, but one will dominate.

    Comment by Brian Dunbar -

  10. This is an excellent piece that seems to capture the dynamics of technology regulation squarely.

    Several of the commentators properly recognized that there is rampant piracy “out there,” and that business is often lost as a result. Where they disconnect, however, is in their assumption that these modern and transformative technologies are the cause of that piracy.

    While it is no doubt difficult to battle widespread infringing use of these technologies, it is not impossible to do so, and even in the days of bootleg tapes on streetcorners, 100% compliance has NEVER been the case. Cheats are going to cheat, no matter what: the issue is to deter honest people from going over the edge.

    On the other hand, a truly insuperable problem is the kind of liability suggested in Grokster, where a technology company is liable to EVERY copyright holder who might complain. That includes you, Mark, for the message to which I am now replying, as well as each commentator — all own copyrights in their works. As does every American who has scrawled text on a piece of paper or a computer. It is, in fact, impossible even to identify the people for whom a technologist might try to settle, let alone to negotiate and obtain clearance for this. This is why the Copyright Act was not made an instrument of technology regulation in the Betamax case, and why it must not be permitted to do so today.

    And even if all that were non-problematice, no negotiation could ever succeed: every new technology works in the interest of some copyright holders, and not in the interest of others, and without unanimous consent of all, the technology will be enjoined.

    Liabliity against non-infringing technologists for providing technology is a recipe for market failure, and will be a result is a loss of American competitiveness and innovation.

    Comment by Andrew Greenberg -

  11. Ethan wrote:

    >The point of the matter is that P2P in the form of Kazaa or BitTorrent, regardless if the creators or others would admit it, was geared towards anonynomous file sharing via file content searching. By common sense, we all know that 99% of the users and traffic taken up by P2P in the consumer space is used to share and retrieve protected content …

    1) Please don’t lump BitTorrent in the same class as Kazaa. Kazaa is a commercial enterprise; BitTorrent was created by a young programmer as a way to solve the problem of sharing large files. Bram Cohen has repeatedly said that people who trade copyrighted files on BitTorrent are just plain dumb, because they’re doing it in plain sight.

    2) I would wager that while the vast majority of files on P2P networks such as BitTorrent contain infringing content today, that percentage will go steadily down in the years ahead as people begin realizing that, yes, they can create their own video, audio and photos, a lot of it is going to be very watchable, and some of it is even going to be damn good.

    We’re launching Ourmedia.org later this month — the global home for grassroots media — and hope to incorporate BitTorrent technology soon afterward — using BitTorrent so people can trade *legal* files.

    Comment by JD Lasica -

  12. I read this article on C. Followed link to your blog. Come to think of it, I think I have heard of you before. But anyways. I am with you on this one 101% and, I mean, you are making a major point. The clogged arteries are trying to stifle.

    Comment by Paramendra Bhagat -

  13. Why did Suprnova close? The first link explains that.

    http://methlabs.org/forums/showthread.php?t=31725

    What is trying to take it’s place. Spyware riddled, money hungry programs.
    http://yahaa.no-ip.com:8001/forum/showthread.php?t=2674&highlight=exeem

    Where’s the rant about spyware? I had a program take over my PC and place a long distance call. Why aren’t the people who put that on my PC going to jail?

    http://www.ripoffreport.com/reports/ripoff118513.htm

    These are the people who should be in front of a judge.

    Comment by Aquariuz -

  14. Tom Ford – I agree with you completely, and I think your estimate of 75 percent of p2p downloads being illegal material is quite low…I’d quess upwards of 90 percent, personally. But the issue for me is the future of p2p technology, not the dissemination of illegal material.

    The easiest parallel to draw is between the clients of p2p and the end users of the VCR. The VCR made it possible for people to record things and share them (illegally) with others, albeit on a much more personal level. Xerox did the same thing – it was now possible to make a million copies of a copyrighted work illegally, but due to the many legal uses of the technology, there are copiers in almost every office today (save for the mythical ‘paperless offices’). Just because new technology opens the door for piracy does not mean that door can be closed, probably ever.

    And today, VCRs have opened the door for DVRs, which allows us to record television whenever we want, and skip through commercials. And despite what the entertainment industry wanted me to believe, teevee is still around even though I’m not watching their commercials. I honestly can’t remember the last time I could afford a product advertised on the idiot box anyway. But true to market-fundamentalists everywhere, TV has adjusted (minimally) – there’s more product placement in shows, and Tivo is apparently running banners when users fast-forward.

    But it never would have happened if not for the VCR being ruled a legal technology (well, Betamax really).

    Xerox is the same. Although unforseen at the time, those xerox machines have been replaced by machines that can turn any document into electronic form, then email it to someone or bind it and turn it into your own book. Would it have been possible if a few publishers had been successful in claiming, “Hey, some people are making illegal copies of our work! Let’s shut down these wannabe Gutenbergs!” Of course not. Now we can all have happy jobs standing in front of fancypants copy-machines. Go progress!

    p2p is exactly the same. Think apple would have made tons of money in 2004 from their iPod if all p2p networks were shut down? They would probably like to think that everyone would just buy their music from the iTunes store, but that’s not very realistic. Apple capitalized from the new technology, while the entertainment industry went kicking and screaming into the night.. “b-b-but…Chairmain Powell!! DO SOMETHING!” He laughed, then wisely resigned.

    Comment by Anton -

  15. Is it the P2P that makes people download illegal content? No,it really is the people who provide this content who are to blame. Let’s kill Grokster, and try to kill Bit torrent.

    Now think, someone who is talented enough with computers to break copywrite protections, someone who can make a game playable, or make a program work without the keys. Stopping P2P programs is going to stop them? All they are doing is going to move to IRC or the undernet where they began.

    Maybe the focus should be on the people who provide hacked software or pirated materials.

    P2P programs have a lot of good uses when downloading. BT increases your download speeds.
    Even on the Bit torrent sites where people share, you’ll find half the content is legal.

    Suprnova quit providing bit torrent content on the web and just went underground. Not because of legal threats, but because they weren’t making enough money for the time they were investing. Now they are involved in the Exeem program (Filled with spyware) trying to make money.

    Next they will stop speeders by removing the wheels from cars.

    Comment by Aquariuz -

  16. Figures I have to see the obligatory mentions of the patriot act. Governemt is supposed to ensure our security, NOT stifle innovaiton by protecting Hollywood elitists. Trusting archaic judges who probably won’t even take a few minutes to learn what the hell peer to peer means. This posting is very forward thinking and I commend you. This is very scary that 80 year old judges are going to make this call! Yikes! Hop all over those phones people.

    Comment by Rob Thrasher -

  17. Mark, The problem is one of culpability. Clearly, there is widespread theft of digital goods on the popular P2P networks. The DMCA (and court decisions that define its processes) gives copyright owners a process to find out who these infringers are. Suing the music sharers isn’t good PR. Grokster will determine whether the network operators can be sued.

    I am a small independent software developer. I rely on copyright protections and a general respect of copyright as a basis for my existance. If people can share with impunity, post serial numbers and cracks, etc… what incentive do honest people have to pay for my products? My paying customers love my products. I can’t do it for free though. This pays my bills, gives me a home, a decent living. Without the sales, I end up having to work in a dumb job I don’t enjoy. Without a general respect for copyright, I won’t have sales. What chump buys what they can take for free? To me, Grokster is about instilling some respect back in the market for the concept of copyright. Nothing more. Nothing less.

    Mark, I hope you would think about and address the concerns of the small copyright holder.

    Comment by Brad Hutchings -

  18. Great stuff everyone. It’s not only a nuisance when corporations sleep with the government, to stifle technology. It is the fear of what greater damage they can do down the road with their inability to allow the market to progress because of the fears of a few. But you already know this…

    What is needed? Objectivity. As well as content that can be distributed via p2p or other means, while protecting the rights of the artists, and the companies all at the same time. Who could ever complain about that?

    I am working as a part of a team on a new technology/concept (patent pending) that will impact these p2p scenarios. Our team is working toward meeting the evolving demand for the secured distribution of content protecting the artist, the provider, and the consumer all at the same time. Drop me a line if you want to know more…

    In any event what will occur if MGM wins out? How many future programs are just not going to be allowed to operate because of the outcome of this case? Time to hoist my DON’T TREAD ON ME flag again.

    Comment by Dino -

  19. The United States Constitution included a copyright clause, which provides: “Congress shall have Power . . . to promote the Progress of Science . . . by securing for limited Times to Authors . . . the exclusive Right to their respective Writings.” Derived from proposals introduced by James Madison and Charles Pinckney,this clause was adopted in its final form without any debate.

    The lack of copyright protection before DMCA created the opportunity for a lot of cheap or free downloads that competed and continue to compete unfairly and directly against works made artist.

    The actions of the Entertainment industry is only just. A growing number of publishers and creators of content have become very concerned about the situation and have reasonably sought to obtain a more level playing field for their content on the internet.

    Contemporaneously with the development of the DMCA, the Entertainment industry needs to explore the possibility of creating a better pricing and distribution strategy in order to protect copyright conventions afforded to them under Federal law.

    It’s high time that the prices of DVDs were lowered. It is also time that the Entertainment industry start testing the idea of sending movies directly into homes.

    Comment by sterling -

  20. This is the Great American Telephone and Telegraph Robbery.

    http://dotnetjunkies.com/WebLog/paul/archive/2005/02/01/49725.aspx

    Comment by Paul Mooney -

  21. Tom Ford – You are correct of course that there are a large percentage of people who use P2P networks for illegal purposes. However, that should not restrict those of us who want to use it for legitimate reasons. I recently started using bittorrent to collect live music from “jambands” that allow trading. Everything that I am doing is 100% legal and bittorrect is a wonderful technology that allows me to obtain the shows much faster than a straight FTP. Why should I not be allowed to do this just because there are others who are abusing the system? Should we ban all guns because some people do bad things with them? Maybe ban driving since most people speed?

    As Mark and others have said, this is all about control. The media companies have consistently screamed that “the sky is falling” with each new technology. You can go all the way back to music companies complaining that playing music on the radio would kill their record sales. And we can all see how prophetic that ended up being.

    Comment by MattR -

  22. Yes, Anton, some people (ie “geeks” like yourself) are using P2P for legit reasons…

    what percentage of people are downloading music they haven’t paid for? Half? 75%??

    IMHO, I would say it’s easy to assume that 3 out of 4 people that use P2P are downloading digital content illegally, and not using it for some reason that would never involve the court system.

    and I wouldn’t be surprised if 75% was a low estimate, to be honest.

    (anyone have stats on this?)

    Sure, P2P COULD one day be used by businesses to exchange information, BUT, if P2P exists in its current form in 5 years, will people have stopped downloading digital content illegally? NO!

    That’s why the media companies have taken steps to protect themselves from more loss of profit.
    *I’m not saying they’re right or wrong, but they do have a point, and they do have a right to protect the content they produce…*

    which is why Mark charges admission to Mavs games… he’s not just gonna GIVE IT AWAY…

    if people don’t want to pay to see the games anymore, should he be the one to change and say “ok, I guess I won’t charge admission anymore, b/c it’s my responsibility to change”

    no. that would be dumb.

    Comment by Tom Ford -

  23. Thanks for this post, Mark. Great points.

    I also agree with poster #18, Matt: He’s right — the market always adjusts to what there’s demand for. And dying industries always try to cling to the last vestiges of their power…

    I’ve always found it ironic that Hollywood claims to be a “creative” industry, but it’s almost 100% driven by the adage, “That’s how it’s always been done!” It’s an industry that’s deathly afraid of change, and terrified of anything new it sees coming down the pike…

    Comment by Kate -

  24. Others have listed some websites for reference, but I’ve found when you make a “call to action”, in this case you would like readers to “Call your representative. Call your senator.”, you often get better results if you give them some help or leads on how to do so.

    Mind you, I do not believe in writing the letter for them or speaking for them, but giving them info like a phone number to call or webpage with the contact info does wonders.

    Here is one that provides the phone numbers and email addresses or urls for web feedback of every US senator:

    http://www.senate.gov/general/contact_information/senators_cfm.cfm

    As for representatives, here is the site where you can pick your state and type your zip code (with the extra 4 digits) and it returns who your rep is and as well as a feedback form to fill out:

    http://www.house.gov/writerep/

    Regards.

    Comment by Brian -

  25. I am confident Grokster will prevail, for no other reason than historical precident.

    Many times througout history we’ve seen entrenched industries trying to slay new technologies to protect decaying business models. Sometimes it works for awhile; but the technology always wins, and the market adjusts.

    I expect history to repeat itself.

    Comment by Matt -

  26. Update (see 6 & 8 above):

    Spoke with Allison at EFF. She told me the lawyers asked her to make special note of callers/e-mailers who had info about legitimate uses of P2P, and she passed my info on to said lawyers.

    More as developments warrant…

    Comment by Frank Ruscica -

  27. John P #12 I was not going to post anything political to avoid comments like yours.
    But I did-My bad! October of 1998 the Digital Millenium Copyright Act was passed during the Clinton Era.
    My point was if this case goes to MGM it is a sign of worse things to come.(IMHO)
    I am sure the GOP wouldn’t mind a few more friends in Hollywood.”W”s choices will impact our futures for many years after he is out of office.
    He will most likely have the chance to appoint at least 2 SC Justices and will apoint a Chief Justice for sure.
    You don’t think this admin is in deep with the SC?
    Scalia/Cheney shared a sleeping bag on a duck hunt.
    The SC ruling on the 2000 elections and the 2004 election results are both clear examples of “the law of unintended consequence” that “could put a hurt on us in the future”.
    Mark has already gone on record he thought”W” was a better choice to lead the country.But I have to ask did people take into consideration SC appointments?.

    Comment by dan -

  28. For whatever it’s worth, I don’t think anybody can seriously argue that a Democrat (i.e., Kerry or whomever) would have stood against Hollywood monopolies and on the side of P2P. The Democratic Party’s ties to Hollywood are at least as pronounced as the GOP’s ties to other industries.

    The SCOTUS interpretation of our constititutional rights is the only thing that can save us in the near term.

    Comment by Charles -

  29. Great post, Mark! You probably already do this, but I’d like to convince people to contribute to the Electronic Frontier Foundation (www.eff.org).

    I’d also like to disagree with poster #9 – I personally use p2p software like bittorrent for linux distributions, but that’s because I’m a bit of a geek. Downloading 3 or 4 iso images (which is the data from an entire CD) from one ftp site could take hours or days because you’re downloading directly from only one source. With BitTorrent, you’re downloading from everyone else who has the file, and when everyone contributes just a small amount of data, the transfer is done in minutes (as long as lots of users are downloading at the same time). THAT is innovation. The more people who use it, the better it works, which is the exact opposite of how websites work (we all know the term ‘slashdotted’ right?)

    Now, doesn’t this sound like a technology which could probably be applied to other areas of the internet, like the web?

    Anyway, my point is that if the Grokster case had gone to the Supreme Court earlier (and was ruled against), BitTorrent might never have existed – and this technology would never have developed.

    And Mark, I also have to agree with poster #12 – if you vote, you have a right to complain, but you cannot tell me you didn’t see these restrictions coming, especially with this president. Rights of individuals are under attack from corporate forces out to make money, and George Bush will go out of his way to make sure they are victorious and consumers are stuck in a dependent cycle, constantly feeding these industries.

    Okay, after re-reading that last part, I sound a bit like a nut. But you have to be a little crazy if you wanna make it through this life without Prozac.

    Comment by Anton -

  30. Mark, as a partners in 2929 Entertainment and owners of a large chunk of Lions Gate Films you and Todd are taking home profits from these DVDs. You and Todd are part of the film industry so perhaps you could write about the steps the companies you’re involved with are taking to create a shift.

    Comment by Drew -

  31. Dan: “Your points are well taken however-you surprised me at the end by your “Call to Action”
    We are dealing with a Supreme Court that put “W” in office.
    We now have “W” for another four years!If MGM vs Grokster goes MGM’s way. Just imagine what the Supreme courts decisions will look like after “W” gets a couple of his appointees in the Supreme court!
    Trying not to get too political but-Did you think about that when you voted for him?”

    Oh come one. I am not a big W fan myself, but don’t go pretending that the Supreme Court is somehow under his thumb. The job of the SC is to accurately interpret law and the Constitution. Thier decision on “putting W into office” was not political it was legal. Usually it is the Republicans trying to politicize the view of the SC to rile up thier middle and working class support, the left should not stoop to that as well.

    Also, you seem to think W would come down in favor of MGM. While they certainly are a big corporation, remember they are also Hollywood, and probably not very big supporters of W. I think he would come down on the innovation helping business side instead.

    Comment by John P -

  32. Actually Tom Ford, I think Mark’s point is that even if we don’t use the software in that way at the moment, what’s to say it wouldnt be a great thing to do in 5 years..if it isnt banned?

    Comment by Maarten -

  33. Sadly, the US has come to this: http://www.msnbc.msn.com/id/6888837/

    Comment by Maarten -

  34. I agree with Mark, that many “freedoms” associated with digital content have been restricted b/c someone (hollywood, music companies) has a potential to get screwed in the process.

    But Hollywood, etc. does have a point…

    I don’t know many people that use P2P for LEGAL purposes, something that they are using to promote their business, or to share home movies and pictures with family….???

    I think that sounds pretty outrageous by itself, that people are using Grokster or BT to share family movies with… uh, their Grandma….? If Grams IS on the internet, you’re going to just send her an email with an attachment, wouldn’t you? If I had to walk my grandparents through the process of installing BT (heck, even finding the site for downloading) I would consider that a painful experience.

    My main point is that I haven’t used a Napster-type program since Napster’s heyday a few years ago…. and when I used it, I was downloading mp3s and clips from SNL and more mp3s. I wasn’t using for “legitimate” or “constructive” reasons.

    Did colleges start restricting bandwith to Napster b/c moms and dads were downloading pictures and movies of fraternity/sorority activities?!? NO! The kids were using P2P to download music, etc. b/c it’s FREE.

    Comment by Tom Ford -

  35. Hmmm…

    Maybe the idea is to call the EFF and see about working together to detail the domino effect that starts with P2P-distributed Land of OpportuniTV (see comment #6 above), and culminates with lots of good jobs being created…

    So I’ll make the call once it’s 9 AM their time, and see what I learn…

    More ASAP…

    Comment by Frank Ruscica -

  36. Your points are well taken however-you surprised me at the end by your “Call to Action”
    We are dealing with a Supreme Court that put “W” in office.
    We now have “W” for another four years!If MGM vs Grokster goes MGM’s way. Just imagine what the Supreme courts decisions will look like after “W” gets a couple of his appointees in the Supreme court!
    Trying not to get too political but-Did you think about that when you voted for him?

    Comment by dan -

  37. What is needed, then, is content that 1) the creators would *thrill* to see distributed via P2P, and 2) catalyzes the creation of good jobs in the immediate term.

    Enter Land of OpportuniTV, a startup comedy about making America the Silicon Valley of customized lifelong learning and career services, the global market that Peter Drucker says will be the biggest over the next 30 years.

    Details are coming online at http://www.opportuniTV.com

    Some reviews:

    “Frank [Ruscica, creator of Land of OpportuniTV], you are a good man. Have you thought about joining this team? Your only alternative, of course, is venture capital. But their usual models require getting rid of the ‘originator’ within the first eighteen months. With Netscape it took a little longer, but you get the idea.”

    Randy Hinrichs
    Manager, Learning Sciences and Technology Group
    Microsoft Research
    December 1998

    “Hi Frank, Thanks for your time today. If you would like to provide us with further information about your [business plan for a CLLCS startup], we would be happy to review it in more detail.”

    Tristen Langley
    Draper Fisher Jurvetson
    June 30, 2004

    “I just spent about an hour surfing around [the business plan] with a bit of amazement. I run a little company…We are a team of folks who worked together at Amazon.com developing that company’s personalization and recommendations team and systems. We spent about 1.5 years thinking about what we wanted to build next. We thought a lot about online education tools. We thought a lot about classified ads and job networks. We thought a lot about reputation systems. We thought a bit about personalized advertising systems. We thought a lot about blogging and social networking systems. Eventually, we came up with the idea behind 43 Things.

    …I guess I’m mostly just fascinated that we’ve been working a very similar vein to the one you describe, without having a solid name for it (we call it ‘the age of the amateur’ or ‘networks of shared experiences’ instead of CLLCS, but believe me, we are talking about the same patterns and markets, if not in exactly the same way). Thanks for sharing what you have – its fascinating stuff.”

    Josh Peterson
    Co-Founder/CEO
    The Robot Co-op
    December 12, 2004

    Comment by Frank Ruscica -

  38. Beautifully written by Mark, but I disagree to an extent. The point of the matter is that P2P in the form of Kazaa or BitTorrent, regardless if the creators or others would admit it, was geared towards anonynomous file sharing via file content searching. By common sense, we all know that 99% of the users and traffic taken up by P2P in the consumer space is used to share and retrieve protected content (and for those who don’t know, P2P of this sort takes up the most traffic in consumer Internet usage – beyond even e-mail, or web surfing! I know, I work at an ISP and analyze traffic usage data). If we are talking about the conceptual benefits of P2P as in file transfer from one client to another with locations as the agents of definition rather than the content, then Hollywood wouldn’t care – and in fact, this “P2P” technology already exists – it is merely regular file transferring. Just because P2P network can be used for legitimate purposes, these uses are merely, in my opinion, pleasant unexpected side effects; we should not use it as an argument. Long story short, the P2P networks we see now is a DIRECT consequence for the want to get, otherwised paid content, for free and was developed so. I feel that Hollywood has an absolute right to be concerned because the 1/10th of 1 percent that their content represents of all digital files is much more than that when you count it as the percentage of what they produce…I mean, what movie or music can not be had nowadays on P2P?

    What I do agree with Mark (as he has wrote before) is that Hollywood is handling it all wrong. Instead of lawsuits, they should think of new business models to take advantage of the new technology. They should embrace and twist it to an acceptable model rather than shy away from it and try to kill it – because if they do, they would loose the opportunity to truly utilize technology to better the experience of their customers. Hollywood (if looked at as a whole) is pretty much a “monopoly” of sorts. They earn more than enough (look at how much those movie stars and studio execs make) and is, of course, reluctant to change a good thing. Technology has played a hand in “breaking up” this monopolisitic behavior, and as such, the government should realize it and not make a grave mistake in limiting the affects of technology as a catalyst for innovation and change.

    Comment by Ethan -

  39. Mark Cuban, I call YOU to action to donate $100 million to independent public education about this matter. Let them know that you respect the rights of the content industry, but that protecting innovation is more important.

    Comment by Peatey -

  40. The DMCA reaches too far, agreed. P2P networks do need to be held accountable for their content though, remember Napster dragging on for months that it was impossible to control what was available through their service, that was bull.

    Look at what happened with bittorrent, the leading sites shut down and a constant crackdown, of course new ones are always springing up and IRC/newsgroups are always around, but suprnova (etc) going cut down on alot of BT traffic.

    But that’s the problem, media companies (more importantly, the consumer) need a solution, not just a ‘fix’ of stifling p2p.

    Macrovision has the CDS family, this copy protects music files AND allows you to drag and drop your tracks onto your PC. Your cd can still be played in 99.9% of cd players too. How long before DVDs get this way?

    Is HD-DVD/Bluray going to have any decent form of copy protection? the worrying thing is hearing some of these execs say “oh it’s 50GB, nobody will transfer that amount over the internet”. They seem oblivious to the fact that technology changes, very rapidly…maybe they hope if they ignore it long enough, it’ll go away?

    I remember reading somewhere about your desire to start a digital music company, what happened with that?

    Comment by Adam -

  41. You know Mark, you hit the nail on the headl. It’s a sad day when mega corporations step in and decide what should be legal or illegal. Now, I don’t have a degree in political science or anything, but from what I understand, the will of the people is what should decided what is legal or not in a democratic society. Perhaps Europeans are right. American’s are a bunch of idiots. We run around screaming things like “freedom” and “free speech” but rarely do we exercise that “freedom” anymore. More and more the American public is allowing their elected officials (whose pockets are being lined by Big Business) to take away more and more of our freedoms.

    First, it was the DMCA which took away a persons right to innovate. Like the college professor and his team that cracked Adobe’s encryption scheme to demonstrate that it was flawed and really offer no protection. Instead of being thankful that someone had shown the flaw in their program, which in turn could be correct to make it safer, they instead opted to be one the first companies to enact the DMCA. They threatened legal action, based on the DMCA, for things like copyright infringement, reverse engineering, stealing trade secrets and the like. All because this professor and his team wanted Adobe to know that their encryption didn’t work and wanted to make suggestions about how to make it better.

    Then came Oct. 24, 2001 and the passage of the USA Patriot Act. The USA Patriot Act is a wholly unconstitutional piece of legislation that violates a number of Amendments (First, Fourth, Fifth, Sixth and Eighth). The Patriot Act was passed during a time when the country was attacked by terrorist. It was written and passed into law in around 45 days without debate or hearings.

    One of the biggest problems with the Act is that it allows the FBI to monitor (read Spy) on people, American citizens, without probably cause. That means the FBI can do wire taps, read your email, monitor your web habits, follow you around, look at your library records and your medical records, etc. etc. without a court order and without just cause. Oh, and they can also do a search and seizer without a warrant if they feel it MIGHT help an investigation. They can now detain people for unlimited amounts of time, with reason, without warrant, without court permission, and without a trial date.

    It’s a sad day in America. You think you are free, you send your sons and daughters and fathers half way around the world to die so someone else can live in a free society but you don’t even recognize that your freedoms are being stripped away one by one.

    Peace.

    Mitchell

    USA Patriot Act Links:
    http://bernie.house.gov/civil_liberties/index.asp

    http://www.aclu.org/SafeandFree/SafeandFree.cfm?ID=12126&c=207

    http://www.eff.org/Privacy/Surveillance/Terrorism/PATRIOT/

    DMCA Links:
    http://www.eff.org/IP/DMCA/

    anti-dmca.org/

    chillingeffects.org/

    Comment by Mitchell -

  42. A-men.

    We’re legitimate content creators and we’re starting to benefit from P2P by offering consumers free viewings of our ad-supported videos, which look better than half of the comparable content on traditional TV.

    Who’s the loser in this P2P application? How could this ever harm “Hollywood”? Other than a little competition, God forbid.

    The notion that the Supreme Court could possibly outlaw one of our most promising long-term opportunities is…well…BEYOND “frightening”.

    In short, monopolies often get fat and lazy. Evidently, facing competition head-on is too much work; they need the government to protect them from free market forces, and if they can pretend that their own business interests are somehow tied to the public good, they might have a shot.

    If it weren’t so true, it would be laughable.

    Comment by Charles -

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    Comment by femors -

  44. NOKIA N SERIES FOR SALE PLUS A YEAR WARRANTY!!!!
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    Comment by lisbon orlando gonzales -

  45. NOKIA N SERIES FOR SALE PLUS A YEAR WARRANTY!!!!
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    Comment by lisbon orlando gonzales -

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    Comment by emmanuel david -

  47. BUSINESS PROPOSAL LETTER.
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    Comment by henry -

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    Comment by download -

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    Comment by james brown -

  50. I just don’t have much to say lately. I haven’t been up to much lately, but such is life. That’s how it is. I’ve just been letting everything pass me by , but maybe tomorrow. Shrug.
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    Comment by phone bell -

  51. I think we can do best in my China.

    Comment by software -

  52. Sure. I’m agree with you.

    Comment by source -

  53. Free markets serve the interest of individuals and small businesses. Regulations are not enacted to protect the little guy, but rather for the sake large corpratist interests.

    Here is a good article out today on this topic – http://www.fff.org/freedom/fd0411e.asp

    Comment by MPH -

Comments are closed.