Exactly like stealing cars

Big brother, draconian laws, corporate pandering, guilty until proven innocent and all that. Or maybe not so much. With the passing of the Copyright (Infringing File Sharing) Amendment Bill it would seem that, like so many recording companies and movie studios, our government is refusing to move with the times and instead have decided to stand and fight the inevitable digital revolution. The new law might not be as big a deal as it appears on face value, but it still goes nowhere to addressing the issue of trying to stuff a digital world into a physical pigeon hole.

There was an uproar back in 2009 when an amendment bill (section 92A) was passed that allowed ISPs to cut off a person’s internet access if they suspected them of downloading illegal content, putting the onus of proof on the accused. One of the courageous acts of defiance prompted by this law change was people all over Facebook changing their profile photos to black squares (come on the internet, you can do better than that). This law sought to punish the downloading of illegal content without addressing the problems that caused it, such as hyper-inflated movie prices. To put it in physical world (‘meatspace’) terms, it’s like being arrested for stealing a television and then having to provide a receipt. Of course, it was never intended to be used on every individual who had a sudden desire to watch Joe vs. the Volcano but didn’t want to fork out $3 for a weekly rental (commonly known as a ‘Tom Hankering’). Laws like this are most likely designed to scare people into not doing things by promising more than they can realistically achieve, rather than punishing every possible individual until society has been cleansed.

The new amendment has seen section 92A scrapped and a swathe of changes made to make it slightly harder for people’s internet access to be cut off. A rights holder (Paramount, Sony BGM etc.) informs an IPAP (ISP redefined as an ‘internet protocol address provider’) that they have identified an IP address linked to a specific illegal download. The IPAP then issues the holder of the IP address a warning notice. These warning notices expire after a maximum of 9 months. After three non-expired warning notices an enforcement notice is issued by the IPAP. The IP address holder can then challenge it, in which case the rights owner is notified and can choose to reject the challenge. If rejected it then goes to the Copyright Tribunal and if the IP address holder is found “guilty” they can be issued with a maximum fine of $15,000 and can have their internet account suspended if the Tribunal decides that’s not a completely dickish thing to do.

So, in order to be fined you have to download enough content for the rights holder to take notice. A feat in itself given this country’s extremely low data allowances. You then must do that twice more within 9 months, not including the illegal downloading against the same rights holder within 28 days of the detection notice they issued because they aren’t allowed to issue two notices within that period. You can always challenge them and delay the process, bringing that 9 month expiry ever closer. Once you’ve been issued the enforcement notice and end up in court you’re in trouble. This is where the IPAP will demonstrate that your morally reprehensible acts of piracy have ruined the lives of countless children and are solely responsible for the degradation of modern society, at which point the judge will fine you the amount you saved by not going to the movies and force you to take up one of the other IPAPs offers for free connections and wireless modems. To avoid the horrific fate of having to deal with customer service every 9 months, here are some tips:

* Diversify - download from a number of rights holders so you’re never downloading enough from a single entity to arouse their suspicion.

* Change tack - if you get issued a warning notice, target the rights holder responsible like the rabid pirate they think you are for 28 days straight. Download their entire catalogue of music and movies and then avoid them for 9 months.

* Sleep around - If you really want to continue downloading so much material that every rights holder in the world is issuing you notices left and right, have more than one internet account. They can only target IPs; your details are never released to the rights holder. In fact, when you get sent that second warning notice, change ISP. After the next two warning notices, change ISP. You can pick your favourite two and flit between them every 9 months.

So, other than the fact that this sort of law does nothing to force the studios to rethink their distribution plan or lower prices of existing online content to reduce the need to turn to file sharing, it probably won’t harm the ‘casual pirate’. There may be concerns about rights holders submitting notices for every IP address they find on BitTorrent, but there is a fee associated with each submission payable to the IPAP by the rights holder. It wouldn’t make financial sense for them to target every IP address because they could quickly lose any profits they would hope to gain from legitimate sales.

Much like the amendment to section 59 didn’t see parents hauled off in droves for giving a light smack to a child, and was never intended to, this bill will not see you punished for your illegitimate collection of Bieber tracks. These high-profile bills are most effective in the way they raise awareness and make people second guess themselves before committing what they now perceive to be a crime. Unlike the amendment to section 59 however, which was a huge leap forward in the way society operates, this bill merely clings to the notion that a digital copy of a song or movie is exactly the same as a CD or a DVD. I’ve argued for years that ‘piracy’ doesn’t hurt the artists, it hurts the executives. Musicians make the majority of their money from concerts, so they benefit from more people hearing their music by any means. Those responsible for making movies, (actors, directors, best boy grips) still get paid enough money to make Powerball look like a meat raffle (maybe not the best boy grips, who would most likely still be happy with a meat pack). That might not be the case for independent movies I suppose, but the more obscure the movie, the more likely those that watch it paid for the privilege to do so.

iTunes is great for music, but it’s still only marginally cheaper than a physical CD, yet there are no specific production costs per unit sold (except for data storage, which is cheap but not free). Radiohead should have shown that people will pay for music even if they don’t have to. They made $3.6 million without a record company or even a pricing structure. At an average of $3 per album download ($7.5 for those who actually paid) they earned more than twice as much per album as most artists make through traditional CD sales. It might be different for new artists that don’t already have a fan base, but how many more albums would you buy if they were only $3? iTunes would also be great for renting movies if they weren’t only a dollar less than the video store and took less than 18 hours to download. I can download a movie from BitTorrent in about half an hour. If that cost me $3 each time I wouldn’t download any less. A great example of low price equals high profit is the App Store. At $1.29 per app I don’t know many people that hesitate to download something new on a regular basis. The developers get 70% of that. Angry Birds reached 50 million downloads in December 2010. At 90c per download, that’s $45 million they’ve made in a couple of years. That’s $61,643 a day, which is more than I earn in a week. There are plenty more success stories out there too. Maybe not quite to that extent, however if someone takes 6 months to write an app that reaches 100,000 downloads they make $90,000 and all it cost them was time. Many millions have been made out of people sitting on their couch with nothing good to watch on TV and $1.29 burning a hole in their bank balance.

The biggest thing holding back the music and movie industries from fully embracing this sort of pricing structure is that record companies and movie studios are scared of losing profits and becoming obsolete, so they fight to keep it exactly the way it is, potentially taking money away from the artists they claim to be protecting. They do this by working with lawmakers to produce such things as the Copyright (Infringing File Sharing) Amendment Bill. As long as these sorts of laws are perpetuated, digital media will be forced into a style of marketplace and pricing structure that was designed for physical items requiring production, distribution and marketing. All of that takes place digitally now. Rethink the industry to reflect the product; don’t change laws to force the product into the existing thinking. You wouldn’t hear of a law that prevented the development of alternative fuels to protect the profits of oil companies, or legislation that banned the sale of gardening tools to stop people growing their own food. Freely downloading digital media is not the same as stealing a physical item; I hope that in the near future the lawmakers will come to realise that. In the mean time, don’t worry too much about the new law changes. The copy of Twilight your daughter is currently downloading is just as unlikely to get you prosecuted as clipping her round the ear for watching it; and only one of those things is morally reprehensible.

The SkyCity's the limit

I love a good movie. I even love quite a few bad movies. What I don’t love is the ever increasing cost one has to pay for the privilege of seeing the movie on the big screen. There was a time when a night at the movies cost nothing more than a lazy Kate from mum, half for the pre-movie combo and half for the movie itself. Admittedly, there was probably a time when a movie cost nothing more than sixpence from Aunt Mildred, half for the movie itself and half for a to the local opium dealer. I don’t remember those times, and there’s a chance they never existed, so let’s stick with the age of the lazy tenner. As time passed the price of tickets increased. That’s not all that strange, the price of everything increases over time due to inflation, with the exception of air travel, for some reason. It’s important that I note here, before I get swept away by the rant inside, that when I refer to ‘cinema’ or ‘they’, I am really referring to SkyCity Cinemas, who own somewhere in the region of 97% of cinemas in New Zealand. There are plenty of other, non-SkyCity cinemas in New Zealand that may be doing a damn fine job, or a damn lousy one, I just haven’t had much experience with them so I’m unable to comment.

In New Zealand the inflation rate is currently 4.3%. So if a movie cost $5 in 1992, due to inflation alone it should have cost $7.38 in the third quarter of 2009 (thank you RBNZ for the handy calculator). Instead, movie tickets were $15.50 in the third quarter of 2009. But wait, you smugly decree, you were a child in 1992, a child’s ticket would have cost $5, not an adult’s. Smugly noted. However, in the third quarter of 2009 a child’s ticket cost $9.50. That’s more than $2 higher than inflation. Not all that much for the individual, but when there are more movie cinemas than ever, implying that movie attendance is higher than ever, that’s a lot of extra profit for movie industry. I’m sure a similar situation exists for adult ticket prices.

During the age of the lazy tenner, 1992, the highest-grossing movie was Aladdin, bringing in US$504,100,000, that’s NZ$931,276,556 at the 1992 exchange rate (thank you again RBNZ). That’s a lot of money, especially when the movie only cost US$23 million to make. You would assume then, accounting for inflation, that in 2009 the highest-grossing movie would make about US$777,122,000. After all, there was a recession on, times were tough, biggest financial crisis since the Great Depression. Ahh, but when you’re eating soggy newspaper for dinner and living in a shoe box in the middle of the street, what better way to spend the money you earned shining shoes outside the local speakeasy than visiting the world of Pandora in ground-breaking 3D. A world where creatures are almost identical to those on Earth but with an extra pair of limbs; a world where nobody ever takes down their Christmas lights; a world where it’s somehow more cost effective to transfer the consciousness of a biologist into a genetically matched Alien body to go out and observe the local flora than it is for them to simply wear one of those gas masks. It’s also a world where inflation means nothing. US$777,122,000? Try doubling it. In less than a month Avatar grossed US$1,346,805,340 worldwide. That’s 10 digits right there. Titanic has only managed to gross US$1.8 billion in 12 years. Granted, charging an extra $1.50 for the novelty of seeing it in 3D (which is totally worth it by the way) helps boost profits. It’s not like it was the only movie to post an obscene profit in 2009 though. Harry Potter raked in US$934 million, Ice Age 3 got US$887 million and Transformers 2 took in US$835 million. Good lord, even Alvin and the Chipmunks managed to get their grubby little paws on US$177 million, and that was just in a week, or should I say in a 'squeak'? No, definitely not.

The rise in movie ticket prices, therefore, can’t be because of inflation, and since inflation takes into account increases in the average wage, it can’t be blamed on the high-rolling individuals the cinemas employ. Movies are continuing to haul in more money than Scrooge McDuck could swim in, so it’s not a failing movie industry that’s driving the price up. I’d like to say its pure greed; however I don’t have all the facts. What if the mob has SkyCity’s daughter and is demanding they increase their ticket prices at a slightly greater rate than inflation over a 20 year period or they’ll kill her? What if SkyCity is in some sort of corporate competition to see who can offer their customers the least value-for-money? Well, if the latter is the case, I hardly think SkyCity can win. The tobacco companies not only charge a lot for a product that costs very little to produce, but they actually say on their packaging that using their product will kill you or worse and people still freely hand over their money! We’re still a good few years away from paying $25 to sit in a cinema while being heavily irradiated, so for now you can rest assured that at least buying a movie ticket is better value than a packet of cigarettes.

I think I lost the point somewhere in the last paragraph. I’ll try and get back on track long enough to wrap this up. Movie companies, like most other companies, exist solely to make the biggest profit they can. I’m sure there a few very wealthy people sitting in a room screaming “another 50 cents!” and rolling around on the floor laughing as they watch more and more people flock to fill up the ever-increasing numbers of cinemas. To those people I begrudgingly quote Brian Tamaki: enough is enough. We get it, you all make a lot of money and you’re diamond-encrusted lifestyles are very impressive. But please, why don’t you try offering us, the loyal customers, a brief respite from your profit-mongering so that we can enjoy the cinema without having to decide between a couple of hours in Pandora and a weekend in Wellington. I promise if you cut a little off the top, maybe taking it back to the age of the lazy tenner, without the combo, I’ll see twice as many movies. That’s a 33% increase in profits. And even if others don’t follow my lead then worst case scenario is that you lose a bit of that wealth and have to go back to simpler, gold-encrusted lifestyles. I’m sure James Cameron can lend you a few million if times get really tough, he owes you that much.