As new digital technologies proliferate, tension between consumers and corporations has increased due to the new challenges confronting entertainment industries. Historically, the anime industry has leveraged the activities of fans through strategic ignorance in order to grow the foreign market in the United States. I am interested particularly in exploring how these fan communities functioned as proselytization commons to develop this market -- that is, how their illegal activities actually created growth and benefits for the industry. These fan activities, however, have also created pressures and potential harms for the industry by demanding a departure from a traditional physical-media business model. Furthermore, since anime fandom is an especially participatory community, rights-holders will increasingly be faced by more unauthorized reproductions of their works and expectations from fans of the ability to engage with this content. I have chosen my sources in order to reflect the multi-faceted perspectives currently competing in the debate over how to balance the interests of creators and fans. In my paper I will examine anime fandom and its relationship with the anime industry as a paradigmatic case of a "hybrid economy," where balance is achieved through cooperation between both groups in order to maximize the benefits of fan engagement while minimizing the harms.

This book by Lawrence Lessig comments about the uses of technologly by major media industries and how they use the law to control innovation.  In writing his book on "how big media uses technology and the law to lock down culture and control creativity," he makes a very strong argument for greater allowances within copyright law for the use and reuse of cultural works. Basing his argument around a long series of particular case studies and anecdotes, he shows the ways in which the current interpretation of copyright law has caused creative and economic harm for the sake of large media companies.  Lessig also goes on to argue that the current "permission culture" does not even effectively combat piracy, and is merely protectionism; he cites many non-infringing uses that have been blocked by interpretations of copyright law.  In Chapter 12, "Harms", Lessig specifically lists the ways in which these interpretations of copyright law have caused harm to American society.  He groups these broadly as "constraining creators", "constraining innovators", and "corrupting citizens" (184-199).

For my project, the most important argument that Lessig makes in this chapter is in his section on "constraining creators." He writes, "There is a vast amount of creative work [using copyrighted material] spread across the Internet.  But as the law is currently crafter, this work is presumptively illegal.  That presumption will increasingly chill creativity, as examples of extreme penalties for vague infringements proliferate... The consequence of [the] legal uncertainty [of which uses are permissible and which are not], tied to... extremely high penalties [such as those for file sharing], is that an extraordinary amount of creativity will either never be exercised, or never be exercised in the open" (185).  This quotation addresses the question in my thesis about innovation and competition and when they can be obstructed by piracy.

 

This study will help me explain why and how copyrighted cinematic materials are pirated.  The purpose of this study was to identify factors that shape the attitudes leading someone to commit digital piracy.  While most scholarship has focused on piracy behavior in general and how to impede it, this paper hopes that by identifying these factors, steps could be taken to intercept these attitudes and behaviors, thus reducing digital piracy.  I found the findings interesting when thinking about the MPA's 2005 Piracy report, which identifies statistical information about the average pirate.  This report is critical to my own research as it identifies the attitudes and behavior leading to committing piracy.  If Hollywood were to pay more attention to the behavioral factors that are involved, their fight might be completely different.  One can infer from the results of the study that certain cognitive beliefs, active beliefs (such as happiness and excitement), age and subjective norms influence the general attitude towards committing digital piracy. Key issues at the heart of this study are the attitudes toward digital piracy as well as the study of ethical behavior.

The authors introduce two methods that have been instrumental in the current fight against piracy - preventives and deterrents. Preventives are simply that - preventive measures put in place that make it so difficult for pirates in order to wear them out and tire them of the process of trying to commit digital piracy. Deterrents try to persuade you with the threat of legal or other kinds of force so that you don't even try to commit digital piracy in the first place. For example, if you hear about someone who has been prosecuted for illegal file-sharing or downloading you might be less likely to participate know what consequences await you. Piracy losses have increased exponentially, indicating that the above strategies are failing. That is why this report is so important - knowing the factors that influence this behavior could lead to a better understanding and creation of measures to eliminate the threat to copyrighted content. What is also interesting of note is that a number of studies have indicated that a vast majority do not see the act of piracy as a crime or an ethical concern.  At the conclusion of the study, two very important cognitive beliefs were identified by a number of subjects: “digital media is overpriced or the individual wants to save money” and “I won't get caught.”

 

Author Fred von Lohmann discusses the role of the 'gatekepers' (such as exhibitors, insurers, distributors, and broadcasters) when filmmakers may have to clear copyright uses in their own works. While fair use is supposed to protect the transformative uses of copyrighted materials, many gatekeepers and large broadcasters and studios are failing to honor the principles of fair use. Instead, we are seeing more of what von Lohmann calls a 'clearance culture' in which full expression is stifled at the hands of media gatekeepers. The content controllers are requiring clearances for every instance of copyrighted material in films, even if it falls under fair use. This is causing many films either to be abondoned during production or distribution or for filmmakers budgets to be severely drained by obtaining clearances. In terms of relevance to my own project, the role of the gatekeepers helps to explain why the full potential of online film distribution has not yet been explored. Although this article focuses mostly on fair use and copyright clearance, when I read this article it made perfect sense why some directors (such as the more established Edward Burns or the newcomer Madonna) reject the traditional distribution system for many different reasons, and choose to distribute through online platforms such as iTunes.

The rise of internet distribution offers new outlets for filmmakers who can not afford the traditional methods of distribution. von Lohmann identifies two distribution options: video hosting sites such as YouTube or Yahoo Video that can get your film to an audience for free and immediately, as well as by purchasing bandwidth from an ISP and running your film online via a filmmakers' own server.Internet gatekeepers such as a YouTube or an ISP are more lax than traditional ones due to the safe harbor provisions of the DMCA. In the case of online video content sites, they use a 'notice and takedown' policy to enforce copyright infringement violations. In order for a video hosting site to be free from monetary damages incurred through a copyright infringing video posted by a site user, the host must issue notice to the user that the content requires them to takedown their video, followed by a 'counternotice' option for the user's benefit in the event that a user wants to challenge the takedown. So long as the site removes the copyrighted content in a timely manner and follows this procedure, they will remain exempt from prosecution.

If a filmmaker decides to host his own video by buying a service from an ISP, a similar safe harbor under the DMCA protects the ISP's from any possibly copyright lawsuit. Under this provision, ISP's are not required to follow the 'notice and takedown, counternotice' steps as outlined above. They are viewed as only the 'pipe' in providing access, not an entity that can enforce the content present on computers owned by others and therefore out of its control. As in video content sites, ISP's do not act as middlemen in any copyright lawsuits, therefore leaving the filmmakers or other users to work out their own disputes with copyright owners directly.

 

This article by Lawrence Lessig, a professor at Stanford University, describes Viacom’s lawsuit against YouTube as preempting to Congress’ role in determining copyright law.  Lessig cites to case law and the Constitution to conclude that sound policy and history support deference to Congress when major technological innovations alter the market for copyrighted material.  He claims that Viacom is trying to play an end run around Congress and the 1998 Digital Millennium Copyright Act (“DMCA”) with its lawsuit against YouTube.

Lessig explicates that the DMCA was intended to protect copyright owners while making it possible for internet service providers to avoid crippling copyright liability.  It achieved this result by immunizing the internet service provider from liability for infringing material posted by its users as long as it removed the infringing material upon notice by the copyright holder.  According to Lessig’s article, the statute expressly places the burden of policing content on the copyright holder and not on internet service providers like YouTube.  Through its complaint, Viacom is trying to shift that burden onto YouTube. Lessig claims that Viacom, not satisfied with a Congressional statute, is turning to the courts to “update the law.”  According to this article, it is not the role of the courts, but rather the role of Congress to modify the DMCA’s safe harbor provision.  He states that Viacom’s lawsuit will result in the internet facing years of uncertainty in litigation and possibly undermining the intent of Congress to forge a cooperative relationship between copyright holders and online service providers through the DMCA’s statutory framework.  The underlying assumption in this article is that YouTube will have a valid defense under the DMCA to Viacom's claims of infringement.  This article provides me with an excellent analysis of an essential case pertaining to the laws of the DMCA and I can use the Viacom vs Youtube lawsuit as a case example in my project. 

 

This article from the Economist describes the potential future of Hollywood if it would embrace the internet as a legitimate ancillary market.  America’s film industry dreads the threat of piracy leading to the cautious adoption of the internet as opposed to the television which was instantly accepted as a popular medium.  The article focuses heavily on the current distribution options that are available to filmmakers and consumers, both legally vs. illegally, and ideas as to why Hollywood has been slow to act in using the internet.  The author suggests that in order for money to be made, more choices need to be available to consumers.   FilmOn.com and MovieFlix are two of the currently available options, however the former fails to carry a number of popular titles, while the latter focuses on true independents, straight-to-video, and student productions.   Great for niche audiences but certainly not good for studios.  Apple's iTunes is another option.  At the time of this article's writing, Apple was allowed by all six studios to distribute, but only via a rental agreement, offering no download-to-buy options.  If download-to-buy options were to be allowed, the writer contends that sales would be sufficient enough to show studios the internet's potential, which in turn would hopefully make Hollywood more comfortable with this new distribution tool.

The author suggests that Hollywood is so slow to act in using the internet distribution method because the industry takes major financial risks daily. Any changes to its existing business model would indicate taking an even bigger risk.  An important fact noted by the author is that Hollywood has always been slow to acknowledge new technologies, from cable to the VCR to VHS, even to DVD's.  Adopting the internet whole-heartedly will also allow studios to maximize their vast film libraries, considering that most store retailers do not have enough shelf space to stock all that's available (or could be available).  If you make more content available for DVD, effectively selling more films, they can be more affordably priced.  This effect on pricing could help deter piracy substantially.  Other obstacles mentioned include the popular consumer preference to view movies on their television screens, not computer screens, as well as the lack of common standards between websites and devices which enable the downloading of content from the internet to then be viewed on television.  Besides having to change their business model, Hollywood's exclusive 'windows' practice, a system that follows a film from theatrical release to on-demand, to DVD, to online for example, would be in jeopardy.  Hollywood is fixed to this system; though the overall time of different windows has shortened considerably, it doesn't seem that the studios are interested in abandoning this process any time soon.

 

This article by Author Timothy B. discusses what the DMCA has unintentionally done with anit-piracy or anticircumvention measures; it has created a lack of innovation due to these technology protection measures that are only fairly effective and do not solve the problems the MPAA faces.  Lee begins with a quote from Robert Frost: "good fences make good neighbors" (2). It's pretty safe to say that fences are effective in establishing and maintaining private property rights. In this scenario, digital rights management, the technical measures placed on digital media such as CD's and DVD's, are the fences of intellectual property and copyright. DRM provides content owners a strict level of control not previously available under copyright law - control that hinders the creativity and free thinking that tech firms employ in order to revolutionize and expand their products. The article discusses how plenty of new technologies have allowed customers to purchase and view media in brand new ways, ways that the film studios don't always immediately condone. In the past, Hollywood has been very hesitant towards new technologies, from cable, to the VCR, to DVD's and now the internet.

In discussing the fight against piracy, the author identifies three significant actions that Hollywood and the recording industry take (or have taken) to deter and reduce the act: lawsuits, PR campaigns, and digital rights managment technology. These actions may keep someone who is not technologically informed from committing piracy, but for the most part these solutions have done little to help in the fight.

The DMCA's anticircumvention provisions have created many problems, including the unhealthy corporate misuse of the DMCA in trying to destroy competition.  Not only are competitive tech firms brushed aside under this act, but academic research has been stymied (again, by corporate bullies who don't want product flaws and misrepresentations to go public).  Under the DMCA, too much power is put in the wrong hands, hands that want only to protect their 'property' and possible financial revenues.

 

This book by William W. Fisher focuses upon the issues of how technological advances in digital entertainment and the internet collide socially, economically, and legally.  Major film studios and the recording industry fear that their traditional business models are in trouble due to piracy.   These industries label the developers of file-sharing software and file-sharing internet sites thieves, as well as the users of such sites.   Using the power of copyright infringement laws, these media giants have created lawsuits against technology firms both big, and small to discourage the consumer culture of remixing, downloading, burning.  These major industries are fighting with everyone it seems, even among their own.  Fisher asks 'how did we get into this mess? And how are we to get out of it?' (6).

Fisher proposes three ways in which the recording and film industries can be reshaped, two of which involve changes to the current copyright system.  Proposal number one asks that studios and recording companies stop looking at copyright as property.  Fisher believes that a limiting of copyright protections would offer more selection and decrease piracy.  The second idea is to treat entertainment industries as public utilities, placing a large amount of governmental control over them.  Again, more selection and competitive pricing would lead to less piracy.  The third proposal suggests a complete overhaul of the current copyright system.  Content owners will be given a unique identifier for each piece of protected material.  A government agency will be set up to track each ID and see how often it is downloaded, watched, remixed, etc.  A copyright tax would be implemented to pay for said agency and monies from this tax would be distributed to content owners based on a scale determined by the agency when analyzing the 'performance' of content.

The latter two of Fisher's suggestions call for heavy governmental controls over creative industries. The intersection of business and art has frequently encountered issues.  This book is highly essential to my project because it discusses possible solutions to the copyright and piracy issues.

 

This memorandum summarizes briefly each title of the DMCA; it provides an overview of the law’s provisions although for purposes of length and readability a significant amount of detail has been omitted.  Overall, it renders the more technical language and organization of the law itself into a much more straightforward form.  The Digital Millennium Copyright Act (DMCA) is a United States copyright law, created by the Copyright Office,  which implements two 1996 treaties of the World Intellectual Property Organization.  The DMCA was created as a way for copyright law to be adapted to the questions raised by digital technologies.  The most controversial section of the DMCA added a Chapter 12 to Title 17 of the United States Code; this section contains the infamous "anticircumvention provisions", criminalizing any attempt to break through digital copy protection (CSS encryption on DVDs, etc.).   Another section of the law removes any liability for online copyright violations from online service providers as long as they adhere to certain broad guidelines. There is also the possibility of application for exemptions from the DMCA for non-infringing uses, which require circumvention of encryption.

Under the Clinton administration, the DMCA was passed in an attempt by congress to address emerging digital technological advances that threatened copyrighted material.  American copyright laws were quickly becoming outdated and often useless.  Thus, Congress decided to move these areas of legislation into the digital age. The DMCA put a ban on any implement (both physical instrument and software) whose intended function was the circumvention of copyright safeguards. This legislation targeted devices such as VCRs, but focused mainly upon burgeoning internet technology such as peer-to-peer clients. DMCA Title II, for example, provides safe harbor to Internet Service Providers that comply and adhere to copyright guidelines, and agree to block the access of users who are shown to be committing copyright infringement.

This memorandum is extremely valuable to my overall project because the DMCA is an essential element in the MPAA’s campaigns against cinematic piracy and copyright infringement.  The DMCA provides the guidelines for piracy and digital technologies and therefore this memorandum will be a crucial asset to the basis of my final paper.

 

In 2004, the MPAA commissioned a study conducted by LEK, an international strategy consulting firm, to provide an accurate and detailed assessment of the film industry’s worldwide losses to piracy and the demographic profile of those engaging in piracy. The survey results are “the most comprehensive picture of film piracy to date, capturing losses due to both internet and hard goods piracy, the cost of piracy to domestic and worldwide industries, and the profile of the typical pirate in various markets.”  This pdf file provided by the MPAA’s website is extremely valuable to my overall project because it provides many of the answers asked in my thesis.

In total, “the major U.S motion picture studios lost $6.1 billion in 2005 to piracy worldwide,” an obscene amount of revenue that has been lost due to the vast expanse of digital technological piracy.  The majority of those piracy revenue losses were from outside the United States, where “piracy rates are highest in China, Russia, and Thailand.”  Overall, “the worldwide motion picture industry, including foreign and domestic producers, distributors, theaters, video stores and pay-per-view operators, lost $18.2 billion in 2005 as a result of piracy.”  The rest of the study breaks down exactly where those losses were incurred and how much from specific countries.

Of course, this study cannot be entirely accurate.  However, it does provide essential input to my project and the results of the study are simply startling.  The amount of profit stolen from the motion picture industry is astronomical and rather ambiguous, although this study provides valuable insight and a crucial implication of how vast film piracy has become since the development of digital technologies.

 

This article by Fred von Lohmann and Wendy Seltzer explicates the implications of the innovation of new technology as impeded by changes caused by the DMCA to US copyright law.  Passed in 1998, the DMCA grants copyright owners increased control over the uses, access to, and technologies used in conjunction with media content.  Despite this increased control, the threat of piracy has become stronger, thus affecting revenues for entertainment and media industries.

The terms of the DMCA make it illegal to circumvent technologies known as 'digital rights management' or 'technological protection methods' put in place to restrict certain uses of media such as 'ripping' or copying.  This aspect of the DMCA has been heavily contested. Special technologies, or 'digital locks', were developed to protect the control over the uses of digital media such as DVD's and CD's.  It is illegal not only to produce software or devices that aid in this circumvention, but to circumvent in general.  A major concern for scholars, lawyers, and concerned consumers is the turning tide in copyright law.  What was once granted for a limited-time and considered an encouragement for artists to produce has shifted to a private sphere aimed at protecting the monetary and intellectual wealth of content producers.

The authors conclude the article by lamenting that Hollywood's great story-telling is doing a number on Washington, which in the end is only going to hurt consumers as well as the future of entertainment and tech industries.  I believe that Hollywood is only hurting themselves by trying to place more controls over content; they are limiting the opportunities for technological progress and consumer convenience.  This article's arguments dissect the many different consequences of DRM technologies and provide me with specific examples of how these technologies are obstructing innovation.