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The Day After Tomorrow: MGM vs. Grokster

Posted on June 23, 2005 by feeling entropy

I don’t know anyone who doesn’t like music. I’m not assuming such humans don’t exist, but I am claiming they are a rare breed. For the rest of us music loving people, there are some decisions being made in the near future that just may change our music influenced lives: The MGM vs Grokster case.

For those of you who have never seen a movie, can’t make it out to Las Vegas when your buddies plan a trip, don’t pay attention to that roaring lion before Tom and Jerry episodes or just live under a really big rock, MGM is Metro Goldywn Mayer. Grokster does not have their own Vegas casino, however Kazaa and Morpheus are very closely tied in with Grokster, and those two other names may start ringing some bells. These three p2p (peer to peer) filesharing programs utilize the same network.

MGM is unhappy that people are able to download content created by MGM via these networks. They don’t make money when people download their expensively made media for free, so what do we do here in America, settle this in the court room.

This reminds us of the 1984 trial now referred to as Betamax, Sony Corp. of America vs. Universal City Studios, Inc. Allow me to water this down for you. The movie makers feared that with VCRs, people would halt all spending on the movies that they normally were going to theatres to view, and the fall of the movie industry was upon the world. Being alive today we know this didn’t happen. Home movies have been a huge money maker for the movie industry.

Why am I mixing movies and music? Are they different? Isn’t this court case about music and the internet, where did movies and video cassettes come into view?

Those may not be your questions, but they were mine, which is why I attended “The Day After Tomorrow” seminar held in San Francisco, CA yesterday June 22, 2005.

The agenda had lawyers speaking, journalists note taking, some food, and a real life struggling artist from Santa Monica, CA for some first hand artist insight.

During the introduction, a nice factoid was brought up that isn’t very well known. Similarly (to the Betamax story previously noted) Radio, Color TV, Photocopying, Cameras, Computers, and DVDs all stirred a similar buzz before the industries realized that these means don’t collapse their market, they expand it. By a simple glance back in history it’s almost trivial to foresee that p2p filesharing will in some way put millions into the pockets of music and movie companies.

First to speak was, Attorney At Law, Andrew Bridges. “The world will change tomorrow or Monday”, he said. (I assume that judges golf on Fridays hence the Thursday or Monday verdict announcement.) Hollywood does not incorporate encryption to their products. P2p filesharing networks don’t code filters that block copyrighted material from being transferred. Who is responsible for protecting copyrighted material? Who is responsible for the abuse of technology? If you control the content, should you also be able to control the technology or network that your content is used on? All the answers are riding on the court’s decision. More is at stake here than music, all information pertains to copyright, even that secret diary you keep under your mattress.

Listening to Mr. Bridges speak put me into an episode of Law and Order. He pronounced words like a lawyer does (on TV), used his hands to make points, and was wearing a well tailored suit. The difference here is that his presentation was about iPods, Kazaa, Napster, and MGM. It made me realize that this is much bigger than dorm rooms and college kids. In the middle of his presentation (held on someone else’s computer) a chat window popped up with “yt?” (short for ‘you there?’). That made me laugh, I could then relate more to them. These guys may be in suits and talking about millions of dollars, but they’re internet geeks just like you and me.

Michael McGuire from Gartner G2 was next up to the Power Point slides. He briefly gave out some stats which were acquired last month. 25% of those polled don’t pay for music if it’s free, and also feel that $0.99 is too much to pay for a song. He said that 45% of the people aren’t afraid of prosecution, which is up from previous polls.

Next up to bat, Fred Von Lohmann from the EFF (Electronic Frontier Foundation), who started with “The music industry has been failing the fans for decades”. He then stated, “The music industry has turned its back on the fans, and it’s paying for it.” Right off the bat, I felt what this guy was saying, see my rant on this topic here ((link to 3times article)).

The internet is not just in the United States, so if p2p is deemed illegal, then it will simply move from this country to one that doesn’t have anti p2p laws. Fred says that the things to keep your eye on are the companies that can’t leave the US, like Apple, Intel, Xerox, Verizon, etc. Another thing to keep an eye on is Congress, and how they will be asked to “fix it”. The MPAA (Motion Picture Association of America) has their top guys working on this issue, it’s a top priority for them and they don’t take things lightly.

Finally it was Perk’s turn to speak, but first he played us two of his own songs. Perk is a musician who moved from North Carolina to Hollywood in order to peruse a career as a musician. Perk’s timing was not in his favor, because this little program called Napster just came out during his adventure. Napster forced the record company doors closed in fear that they’d soon be extinct, leaving Perk on the cold Hollywood streets record contract-less.

Perk has mixed feelings about internet and music. He loves the fact that people in Australia can listen to his music, and purchasing CDs off his website ((insert perk’s website here)). Yet he feels a dull chest pain when his buddies say “Hey Perk, my friend liked your CD so much that I burned them a copy of it.” Where does Perk get money to buy those famous Pink’s hotdogs when people give his work away? I asked him how he makes money, and he said concert tickets and t-shirts. Women’s tank tops were his largest selling item, and made more money than CDs and tickets. If Perk was a clothing designer then I’d feel happy for him.

These issues don’t just hit home to all the independent Perk-like musicians. Technology inventors are seeing risk, the may need a lawyer by their side each time they make an advancement in technology. The network providers are also seeing some heat if the verdict sways in MGM’s favor. Lastly and by far the most important is me, the consumer. I am the one that makes things happen. I buy the technology, listen to the music, go see the movies, and rent the DVDs. If I’m not pleased, then something has to, and will change. After attending this event I am confident that the people making the decisions are not only educated and informed, but also care about the outcome. In the end we’re all just the consumer.

This event was brought to us by Mercora. They showed us what Mercora is all about and I decided that they’re stuff is so cool, it deserves a separate article, so keep an eye to the street and an ear open for more about them. Imagine a p2p software that read and understood the copyright laws first.

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About

Jeremy Toeman is a seasoned Product leader with over 20 years experience in the convergence of digital media, mobile entertainment, social entertainment, smart TV and consumer technology. Prior ventures and projects include CNET, Viggle/Dijit/Nextguide, Sling Media, VUDU, Clicker, DivX, Rovi, Mediabolic, Boxee, and many other consumer technology companies. This blog represents his personal opinion and outlook on things.

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