Tuesday, September 06, 2005

Learning to Share

Studios scrambling to adapt to fast-changing DVD marketplace
go to original article ... or email me for article text
"Wagner, the company's co-owner, said under his model, theater owners share in the revenue made from distributing films on DVD and other media.

"We want the exhibitors to be a part of this because they should be and from my perspective, they always should have been," Wagner said"

This one almost knocked me onto the floor. Honestly, who would have ever thought that a studio would want to share copyright revenues with ANYONE (including creative forces, investors, etc) especially the exhibitors who are so clearly dependent on their content to make a living?

I think it's great. Obviously.

I think there is a lot to gain from lining up the studio and exhibitor interest like this. It also raises some extremely interesting peripheral issues. The relationship between Wagner's studio and the Landmark exhibition chain isn't your typical distribution relationship. Landmark and Magnolia are both owned by the same parent company, which naturally lines up their interests. But what Wagner's saying isn't a contrived excuse for vertical integration and tiptoeing on antitrust territory. He's right. Theaters and studios are in it together. It's just the nature of their relationship. Both are middlemen for connecting creativity with the masses. Splitting theater chains from studios in the 40s through the notion of antitrust violations may have temporarily disarmed the studios, but they just found new ways to dominate. And now, not only are the majority of creative forces getting the shaft, but theater operators are at a constant disadvantage as well.

And if you'll indulge me one small tirade, someone should really take aim at the device by which all studios maintain their power. They have basically unlimited power over copyrighted material. One thing I've been learning over and over again from Epstein's "The Big Picture" is that content is indeed king, and studios own all the content. What the book leaves out, though, is that this relationship makes absolutely no sense. Basically studios pay actors, technicians, artists, producers, etc a fixed fee and package their work into a collection of copyrights which they then lord over the general public into perpetuity. The resulting revenue stream into eternity is vastly richer than any fee they pay to the people who actually make the movie. They stamp out dvds or digital copies of the content at little to no cost and make their actual profits because of the intellectual property rights they secured at the time of making the movies. My favorite part of all of this, is that I found out that generally, the studios don't even invest financing in the individual movies. They only provide all the peripheral services to move the movie into their marketing machine (which is very expensive). But meanwhile, no one actually makes money off the lasting value of content except the studios.

And why should this be? Some high profile hollywood names get royalties, but really they shouldn't be paid in this manner either. They did a service once, and they were paid for it (often very well). The fact that people want to see it over and over again is service that should be paid to the people who actually help them do this (and put in some sort of work). The DVD pirates that hollywood loves to villify are actually in my mind, doing more actual work on the movies than the hollywood studios are. They're putting in their own labor and bringing people a service they want. And it costs the creative forces nothing. The studios never let their accounting give money back to creative contributors, so they get what they get up front. So the "stealing" they point out is actually fair competition. Pirates compete with studios as dvd distributors and movie theaters as content deliverers. It's only technically stealing because of an outmoded and totally exploited notion of copyrighting that is meant to protect creative forces, but fails miserably in doing that.

So what needs to happen? Someone needs to to dismantle the copyright system. The entire library of creative content should have a far more limited lifetime before it becomes public domain. There needs to be a system that keeps "copyrights" or something like them in place only until a producer or creative force has a reasonable chance to recoup the costs of creating that material. After that, the content should be free to anyone.

The key here is allowing people to recoup the costs and risk of an expensive undertaking such as filmmaking. Not allowing people the potential to make a great deal of money on their investment. Unfortunately (for creative talent everywhere) this seems to contradict the fundamental value of capitalism, and this is still America.

And in America, the studios would either quickly squash any legislation aimed at taking away their main source of money and power, or find some equally effective way of dominating (historically at the expense of other people)

But if you think about it, this is the proposition that makes the most sense when you think about what people are everyone is trying to do. What everyone needs is the most efficient way of getting movies out of the minds and hearts of the creative talent and into the eyes and ears of the general public, distributing the value as evenly as possible along the way to the forces that make it work.

So consumers pay content providers (cable and satellite networks, movie theaters, dvd manufacturers, etc) for providing them with movies they want to see. The content providers in turn pay the creators for giving them new material to give their customers. Nowhere in this equation do we need studios to act as the permanent stewards of the movie copyrights. As long as the creative forces have some way to recover their production costs, movies can go free to go into a public domain market like any furniture, vegetables, clothing, or any other commodity. Their value is precisely how much they cost to produce plus service markup.

Destroying copyrights probably won't be an easy task. Patents and all other notions of intellectual property will have to be reformed in the process. I can't fathom how any of that would ever get moving. But it's the right thing to do.

Tirade over. Getting back to Wagner, I think this move may be a step towards simplifying the distribution problem. It's certainly subscribing to the idea of distributing value among all of the involved parties. It's also chopping down one of the mythical services of the studios: generating content. If movies can be distributed directly to widespread theatrical release, without the assistance of major studios, maybe all the talent would want to start doing things on their own. Next all we would need is someone with access to all the market data that studios have to produce the same moneymaking formulas and strategies that they learn through analysis of theatrical releases. If they could make the same predictions and recommendations, the studios would be pretty much useless.

Taking out copyrights would speed things up though :) But everyone wants their copyrights. This is America.

Does anyone know any hollywood copyright lawyers?


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