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Hollywood vs. the Internet:
Changing Attitudes
Jacob Schale
Academic affiliation: Oklahoma State University
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The distribution of electronic media is reaching a turning point. The views and fears of those on either side of the issue of illegal file-sharing are well-justified, but the push for use of encryption technology is unnecessary. Content providers such as Universal Music Group have been in the business of selling CDs and other prepackaged media in stores. These content providers are gradually awakening to the fact that some consumers are willing to pay for legally downloadable content. There is a growing interaction between technology companies, like Internet Service Providers (ISPs), who push for limitless user accessibility and those content providers who seek to preserve profits. Although freely downloadable material on the Internet is popular, it has not been proven that sales of digital media have been negatively impacted. In addition, newly available, legal download services that provide media are growing in usage, showing that encryption technology in the future will not be necessary. The indication is that increasingly more people are willing to pay to obtain content legally and subscribe to broadband services.

The ability to freely download content and infringe copyrights is a serious issue to those who provide digital media. "The Tech Faction and the Content Faction both supported the Digital Millennium Copyright Act (DMCA) of 1998," according to Mike Godwin in his article titled "Hollywood vs. the Internet" (175). This act "prohibits the creation, dissemination, and use of tools that circumvent [Digital Rights Management] technologies" (Godwin 175). The difference in the approach each side takes varies on how important encryption will be in the future. The Content Faction includes companies that produce media such as DVDs, CDs, and television shows. These companies would let encryption technologies be their line of defense against file-sharing because, so far, digital media has been relatively easy for people to decrypt and distribute freely.

Some groups think that pushing for installed encryption technology in hardware is not the way to gain consumer support. The Business Software Alliance (BSA), which represents a large portion of the Tech Faction, thinks that the Digital Rights Management encryption technology is overreaching. The Tech Faction includes ISPs, computer software makers, and digital technology companies that are geared toward giving users as many options as possible with their digital media. Emery Simon of the BSA notes, "We are strongly [anti-piracy], but we think mandating these protections is an abysmally stupid idea" (Godwin 175). Indeed, Godwin does not show that illegal downloads negatively impact profits at all. The users who download all of their music illegally, through Kazaa for example, may be offset by those who are exposed to more content and eventually buy it legally. Moreover, putting encryption chips into new hardware would be an expensive path for the technology industry to take; a solution to a problem that may not even exist.

Part of the reason for such a proliferation of illegal downloading networks is the fact that no substantial "pay-per-use" systems were set up in time for content companies to make a profit. Further, users saw the new illegal networks as a necessary evil, and a way to conveniently obtain content for which no legal method to download existed. On the other hand, technology providers have always been in the business of giving the user as much control as possible. Godwin notes that, "consumer adoption of broadband services…has been slower than predicted" (177). The reason for this slow adoption is not due to a lack of available providers, but due to the prohibitive price of broadband. By now these services have become more competitive, inexpensive, and accessible than ever because the Tech Faction and Content Faction are working together to provide more to their users. Now legal ways to download music, such as Apple's "iTunes" service, are getting more users to gravitate toward legal downloads and toward an increase in broadband use in general. In fact, according to Apple (www.apple.com), iTunes sold more than seventy million songs in its first year.

In addition, an increase in music downloading has not proven to have negatively impacted CD sales. Large media companies have for about a decade seen consumers trend away from buying physical media toward downloading files from the Internet. Now, companies like Sony Music Group make the claim that music downloads are cutting into their CD sales. Damien Cave refers to a new study in his article titled, "Don't Blame Kazaa." According to the April of 2004 results of this study by economists at Harvard and the University of North Carolina, file-sharing is not the cause of declining CD sales. Over a year and a half was spent tracking download statistics and the sales figures of albums. Harvard professor Felix Oberholzer-Gee states, "If it were true that increases in downloads decrease sales, we should see that whenever we have fluctuations in downloads, we would have fluctuations in sales. That's not what we've found" (Cave 17). If file-sharing is not directly impacting CD sales, then perhaps consumers are using these services to discover music they would not have ever known about. Further, consumers may be purchasing more CDs thanks to the increased exposure that the Internet has brought about, and this may be counteracting much of the illegal file-sharing that goes on.

Putting new encryption technologies in place will only slow the growth of media sales. Already, there are proposals to develop digital television technology that would greatly limit the ability to copy content. However, by including these systems, Godwin states, "All you've done is develop an incentive for both inquisitive hackers and copyright 'pirates' to find a way to strip out the watermarks" (174). Experienced hackers consistently find ways to bypass systems that are designed to block them out. Encryption is, at best, only a temporary solution to stop pirated software dissemination. Technology companies and content providers all agree that some legal protection is necessary. Increasingly vigilant prosecution of people who download illegally has redefined what consumers are willing to pay to get legal content. Consumers are weighing their options and now deciding that paying a dollar to download a song is much better than facing the risk of being prosecuted in the future.

One thing that large CD producers such as Sony Music Group are doing to protect themselves is to file litigation against illegal file-sharers; both companies and individuals. According to a Rolling Stone article written by Matt Byrne titled, "BPI litigation threat means even the kids aren't alright," the strategy of going after law breakers is working, at least in the United States. Byrne says, "A survey of Internet users in the US (by research group Pew Internet & American Life Project) found that the percentage of downloaders had halved since the first Recording Industry Association of America (RIAA) lawsuits in 2003." Newly appearing music downloading services are feeling more confident they can enter the market thanks to the vigilant prosecution of file sharers. Even Microsoft is getting into the music business with a new service and plans to sell music and other content over the Internet.

The ramping up of litigation has broadened the typical Internet user's awareness of file-sharing risks. "A spokesman for the [British Phonography Industry] claimed that 74 percent of illegal files are placed by 16 percent of users," (Byrne 11). Users on college campus networks seem to be the most prolific file-sharers, so unsurprisingly college students have become the main industry target. "We're not necessarily targeting university networks, but we want to send a stronger message," says Stan Pierre Louis, the RIAA's executive vice president of legal affairs (Cave 18). Going after this core of file distributors should be the industry's focus. "Everyone will face consequences if they violate copyright" (Cave 18). Students will choose to avoid making themselves a target when the fire gets hot enough. Now that litigation is catching up to technology, attitudes on file-sharing are more likely to change.

Illegal content proliferation would be best taken care of by a system of laws, defined rights, and prosecution of lawbreakers along with a convenient system of distribution from providers. This is where technology companies stand today, which is why they have been reluctant to support intrusive encryption technologies. Instead, the pressures of litigation are providing the cornerstone. It is up to the Tech Faction and the Content Faction to discover that Internet downloads are already changing the media industry. Moreover, these groups must cooperate with each other to shape a new environment. Internet users are gravitating toward new services which allow them to try and buy content in a convenient way. Providing quality services to Internet users will pave the way for building a more fair experience. With systems such as Apple's "iTunes" being used more each day, consumers who are willing to pay for content are becoming more commonplace.

Works Cited

Byrne, Matt. "BPI Litigation Threat Means Even the Kids Aren't Alright." The Lawyer 26 Apr. 2004: 11.

Cave, Damien. "Don't Blame Kazaa." Rolling Stone 29 Apr. 2004: 17-8.

Godwin, Mike. "Hollywood vs. the Internet." Speculations: An Anthology for Reading, Writing, and Research. Ed. Jason Landrum, Matthew Lynn Sivils, and Constance Squires. Dubuque, Iowa: Kendall/Hunt, 2003. 172-79.

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