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Is Hollywood Failing to See the Big Picture?

NEWS ANALYSIS

As piracy spreads from music to films, studios may be in danger of acting too slowly to meet changes in technology.

November 09, 2003|Patrick Goldstein | Times Staff Writer

On a Monday morning in late September, just weeks after the music industry hit hundreds of file-sharing consumers with lawsuits, News Corp. Chairman Peter Chernin held an anti-piracy summit meeting in his executive conference room on the studio lot.

On hand was an impressive array of top Hollywood studio brass, including Viacom Entertainment Group Chairman Jonathan Dolgen, Time Warner Entertainment Group Chairman Jeff Bewkes, Warner Bros. Chairman Barry Meyer, MGM Chairman Alex Yemenidjian and Sony Entertainment Vice Chairman Yair Landau.

For The Record
Los Angeles Times Wednesday November 12, 2003 Home Edition Main News Part A Page 2 1 inches; 31 words Type of Material: Correction
Movie piracy -- An article in Sunday's Section A about illegal downloading mistakenly identified 20th Century Fox Group Chairman Peter Chernin as News Corp. chairman, a title held by Rupert Murdoch.

The studio chiefs, along with Motion Picture Assn. of America President Jack Valenti, listened intently as Universal Music President Zach Horowitz, a chief architect of the record industry's anti-piracy strategy, gave a report from the battlefront. Horowitz said a stream of TV reports and front-page stories about the lawsuits, in addition to various educational efforts, seemed to have slowed the pace of illegal downloading.

But Horowitz offered a blunt prediction: In a year, the outlaw file-sharing services that have helped send record company profits spiraling down would be crowded with movies and TV shows. If you're going to file lawsuits, he advised, do it right away before millions of people online are sharing movies and TV shows for free.

Not everyone thought it was time to sue. Valenti launched into one of his signature orations, lobbying the moguls to continue exploring more advanced technological copy protection. When Valenti concluded, according to several people in the room, Chernin told the MPAA chief, "Jack, I totally disagree with you." Chernin urged the studio chiefs to follow the lead of the music companies and move ahead with lawsuits.

When the Fox chief called for a raised-hand vote, it was unanimous. While no one will confirm a specific timetable, the studios have instructed Valenti to begin preparations for lawsuits aimed at avid file sharers, be they junior high schoolers, computer-savvy techno geeks or grandmothers.

If there was any doubt how seriously these entertainment behemoths view the threat of piracy, it came into focus near the end of the meeting. According to several parties in the room, Dolgen, exasperated by the lengthy debate, spoke up, saying, "It sounds like all we're doing here is arguing over the size of the coffin."

*

The music industry's dramatic profit slide, which began with the arrival of Napster and other illegal downloading services, has given Hollywood such a bad case of the heebie-jeebies that when movie executives get on the subject of piracy, they begin to sound like county sheriffs.

"People have been stealing music and now they are out there stealing our movies," says 20th Century Fox Film Co-Chairman Jim Gianopulos. "There is a massive looting going on that's only going to get worse when these [digital video recording] storage devices become commonplace."

The argument over digital entertainment rages from the halls of Congress to college dorms to family living rooms. Ravaged by illegal downloading, record companies have been forced to fire thousands of employees and trim their rosters of low-selling performers.

A group of media companies has sued Replay TV -- a system that allows TV viewers to watch programs when they want -- to prevent the company's digital video recorders from automatically skipping commercials or allowing viewers to transmit TV programs or movies to other Replay users on the Internet.

And in Hollywood, piracy fears prompted the recent MPAA ban on awards season "screeners" -- DVD copies of the year's top films sent to critics and talent guild members. That's set off an uproar that continues despite efforts at a compromise allowing screeners for Academy Awards voters only.

The piracy battle lines are clear. On one side are technology fans and entrepreneurs, such as rock manager Jim Guerinot, who believe media conglomerates are fighting a losing battle trying to rein in the digital revolution.

"You can't protect content -- kids live to hack every new anti-piracy gimmick like they're playing a video game," says Guerinot, who manages the bands No Doubt and the Offspring. "These companies can't be in the entertainment business if they're in the arm-wrestling-litigation business. It's not a game they can win."

In the other corner are media conglomerates such as News Corp. and Time Warner, which have been lobbying for more aggressive legal enforcement, legislative protection and education offensives to protect their content from digital pirates. Warner's Barry Meyer, who instigated the Oscar-screener ban, sees piracy as "a life-or-death issue for our business." In fact, Meyer believes that the word "pirate" doesn't do justice to the crime. "To young people, 'piracy' means something swashbuckling and cool," he says. "A better word would be 'theft.' "

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