Entertainment Industry Needs New Business Model, IP Attorney Says

Lora Bentley

The concept of the Anti-Counterfeiting Trade Agreement is a good one, considering the Internet has made piracy much more of a global problem. The Congressional International Anti-Piracy Caucus emphasized that when it released its international piracy watch list this month. And, of course, it's helpful if the countries most affected by the problem approach it in a similar manner.


But the tech industry is concerned because the proposed language in ACTA appears to add new requirements to existing U.S. copyright law, as well as gloss over some elements of U.S. copyright law that have been developed in case law rather than by statute. The ins and outs of the "fair use" exception are an example, intellectual property attorney Jim Burger told me recently.


He said:

The U.S. Trade Representative... keeps saying "We're not going to change U.S. law." That may be true, but what they're actually doing is putting handcuffs on U.S. law so that it can't change unless those changes line up with ACTA...The IT industry is still in disagreement with the content industry over the metes and bounds of the fair use exception [to U.S. copyright law]. These are all going to have to be battled out, and to all of a sudden say, "Oh, you can only go this far," is wrong.


But the even bigger problem, according to Burger, is that the entertainment industry needs a business model makeover, and pressing for more control over content to address piracy isn't going to fix that problem.


He explained:

The content industry has had this wonderful "ipso facto" correlation argument which, actually, on the correlation basis, is wrong...[They say,] "Because of Internet piracy, we lose $81 billion and 170,000 jobs from the U.S. economy."... That means people didn't spend $81 billion on content. What did they do with the money? Did they burn it, bury it or stuff it in their mattress? No. They saved it, invested it, or bought other things with it. It all went into the economy somehow.


What really happened, he said, is a shift in the way we spend our entertainment dollars. CD sales were at their peak from 1999 to 2001. As CD sales declined, DVD sales grew. Then, as DVD sales leveled off and CD sales continued to drop, digital download sales skyrocketed. The entertainment industry needs to address the trend.


Simply put, Burger said, "It's not a legal problem, it's a business model problem." And ACTA is politics.

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May 30, 2010 3:19 AM Andrei Mincov Andrei Mincov  says:

Critics of today's copyright laws often contend that instead of trying to control the use of their works through copyright, "old industries" must adopt "new business models" that would address the public's desire to have unlimited access to content and impracticality of copyright enforcement in the context of the Internet. Usually adoption of such new business models is offered as a remedy for the growing number of copyright infringements.

In my new article, Failed Business Models of the Past, Eh?, at http://mincov.com/articles/index.php/fullarticle/business_models/ (http://bit.ly/b2TceK), I explain why adoption of new business models has nothing to do with abandonment of the underlying principle that the owner of copyright should be allowed to decide how its content is used. If a business decides to use their property in an inefficient manner, it is perfectly OK to let such a business fail. We should not "save" this business by stealing from it the property that we think it uses inefficiently.


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