Random Acts of Litigation

It started with empty threats, which then led into advertisements in popular magazines like Entertainment Weekly, which has now led into subpoenas and which will eventually lead to litigation?

Ever since losing a major decision that said that the parent companies of services like Kazaa were not responsible for the actions of their subsribers, the music industry has finally decided to fight back against the likes of Kazaa and Morpheus by going after the end users.

That's all fine and dandy for protecting your copyright (or at least scaring a few people into not using the services), but what does it say about the state of your industry when you're suing your own customers?

This all also happens at a time when finally a few legitimate sites are beginning to show success in terms of offering paid music downloads.

Apple's iTunes and Buy.com's buymusic.com are both off to a pretty good start in their respective marketplaces, and both offer a legitimate way for users to download music to their computers and portable entertainment devices. Is this really a good time to start pissing off the people who like digital music?

Of course what's happening right now in the music industry is just a prelude to what could happen should any of these tactics prove reasonable effective.

Online movie piracy is in it's infancy right now. Currently the files available for download off the Internet are big, bulky and generally of pretty poor quality. But with video compression techniques getting better through technologies like MPEG4 and Divx, and Internet connection speeds getting faster, it's only a matter of time before downloading a movie becomes as commonplace as browsing a studio's website.

The Motion Picture Association of America and the studios that it represents are undoubtedly paying very close attention to what happens with the nearly 900 subpoenas filed so far against end users by the music industry. Should the scare tactics and fear uncertainty and doubt created by a flurry of small lawsuits prove an effective tactic, expect the studios to follow suit. If it proves to be an abysmal failure, expect them to take a more tactful route.

Of course, the real answer lies in looking at what is happening in the music industry thus far. If you offer consumers a reasonably priced alternative to piracy, they will take advantage of it. Given the choice, most consumers prefer to buy rather than steal.

A few small operations offering downloads of movies currently on video, DVD and Pay-Per-View are starting to pop up, and they're showing early signs of some success. Where the studios are going to have a harder time is in allowing films that are closer to first run to be downloaded.

They're also going to have to realize that one of the big advantages of online movie downloads is that the library can grow to an infinite size, and the capital cost invested in each title is minimal when compared to the risks associated with large runs of DVDs, videos or even theatrical prints.

And to add insult to injury, devices like Sony's PSX and probably things like the Playstation 3 and the X-Box 2 are going to be Internet-enabled and offer Tivo-like functionality. Two things that scream out for the ability to watch movies on demand.

Eventually, people are going to want the choice between going to the movie theatre to see Spiderman VII or downloading it and watching it on their Internet-enabled home theatre system. If the studios don't give them that choice, the market will find a way around the studios (legitimate or not).

It's very important that the movie studios take a leading edge role in allowing movies to be downloaded legitimately online, and that the infrastructure be in place when the market is ready for it. It's a classic chicken and egg scenario, and if the studio is smart they'll have lots of full cartons of eggs by the time the chickens show up.

If you walk into a store and are allowed to look at the merchandise, but then there's no checkout counter, the only way consumers can get their hands on the merchandise is to steal it. If the movie studios and MPAA are smart, they'll learn the lessons that are there from the mistakes the music industry has made and start working on a good, efficient cash register that offers fair pricing.

If they're not smart, they'll start hiring more lawyers.