Transformers 3 Injects $24M into Illinois Economy

by Jordan Aluise 06/30/2011 12:25 (UTC-08:00) Pacific Time (US & Canada)

Not only is Paramount Pictures’ Transformers 3: Dark of the Moon a huge hit at the box office, grossing $13.5 million on opening night; it is also a big money-maker for the state in which it was filmed: Illinois.

The filming of Transformers 3 brought Illinois a whopping $24 million in spending to the state and created upwards of 400 jobs during production, noted the Associated Press in an article today.  This significantly contributed to the record-breaking $161 million in spending and the 8,000 jobs the film industry brought to the state in 2010.

In order to further spark their local economy and generate new job opportunities, the state of Illinois offers great production incentives to filmmakers, making it a popular destination to shoot movies.

As Director Warren Ribley from the Illinois Department of Commerce and Economic Opportunity put it, “The impact of Transformers 3 extends far beyond its 30 days of production in Illinois by providing millions of dollars in economic activity in the state, creating additional employment for Illinois crew, and, once-again, putting Illinois on the map.  As we continue our economic recovery, the film industry will continue to be an important part of our efforts to create jobs and spur economic growth.”

It is great to see what a big part the film industry has in continuously creating new job opportunities and supporting local economies around the United States.

Louisiana Film Industry Invests in Communities across the State

by Kate Spence 06/30/2011 07:56 (UTC-08:00) Pacific Time (US & Canada)

Great piece yesterday out of The News-Star (Movies Bring New Hope to Monroe) on Louisiana’s booming film industry that is spurring local economic development all over the state.  Fueled by a tax incentive that has been in place since 2002, filming has increased exponentially in Louisiana, putting people to work, invigorating local small businesses, and stimulating long-term investment in the state’s infrastructure and burgeoning creative community.

Small towns like Monroe are feeling the direct impact of the film industry’s growth in their home state, and of the economic benefits that on-location filming generates.  According to the article, R2 Productions’ New Hope is one project coming to Monroe, and founder Rodney Ray wants to turn the town into a new filming hot spot. 

Filmmakers who invest over $300,000 on in-state investments in Louisiana qualify for a 30 percent transferable tax credit, with an additional 5 percent transferable employment tax credit available on for those who hire in-state residents.  In 2010 alone, 69 movies and 18 TV series filmed in Louisiana, including Battleship, The Green Lantern and Memphis Beat.

Now third in line behind California and New York for the number of productions produced, Louisiana’s motion picture and television industry is responsible for 16,483 jobs in Louisiana, and $709.6 million in total wages, including indirect jobs and wages.  Over 7,600 are direct film and television industry employees, including more than 2,000 direct production employees.  Over 1,000 movie and TV-related businesses are now located in Louisiana, including more than 450 production-related companies. The state now has 15 soundstages and enough workers to handle 10 film crews at once.  The boom in filming, encouraged by the tax credit, has laid the foundation for a permanent motion picture industry in Louisiana.  

The film industry itself is not the only economic sector that is driven by increased production.  On-location filming has a unique economic ripple effect; when production crews come to town, they rely on local businesses for goods and services essential for their work, including equipment rentals, caterers, hardware stores, and construction companies.  Since 2007, MPAA member studios have paid an average of $101.3 million per year to local vendors, injecting capital directly into local economies.

It’s great to see that towns like Monroe are taking advantage of the opportunities presented by the state tax incentive, and we look forward to seeing more of Louisiana on the big screen. 

California Legislators Hold Hearing on the Ongoing Threat of Piracy

by Jessica Garcia 06/29/2011 09:24 (UTC-08:00) Pacific Time (US & Canada)

A cross-section of leaders from creative industries impacted by piracy and counterfeiting were called upon last week to provide testimony at an informational hearing, “The Ongoing Threat of Piracy to our Economy,” convened by California State Senator Curren Price, Chairman of the Joint Committee on the Arts, and Committee member Senator Ron Calderon.

Held last week on the Paramount Studios lot, the hearing opened with a screening of New York City’s latest public service announcement (PSA) aimed at educating the public on the consequences of piracy. The PSA gives a face to the below-the-line movie industry workers impacted by content theft.

Kevin Suh, Senior Vice President of Content Protection, Internet, testified on behalf of the MPAA. Informing on the threat of rogue websites, he stated:

The sites, whose operators are located throughout the world, take many forms, but have in common the simple fact that all materially contribute to, facilitate and/or induce the distribution of copyrighted works, such as movies and television programming.

These “rogue” websites are increasingly sophisticated and take on many attributes of legitimate content delivery sites, creating additional enforcement challenges and feeding consumer confusion.

Rogue sites legislation, at the federal level, is needed to address the threat to our industry. 

Other panelists included representatives from the Anti-Counterfeiting Coalition; Teamsters Local 399; the Business Software Alliance; the Recording Industry Association of America; Levi Strauss & Co.; and the Los Angeles County Sheriff’s Department.

The overall message of the hearing was that piracy and counterfeiting is a serious threat to all creative industries, consumers, and the economy.

A webcast of the hearing is available here.

California’s Film and Television Tax Credit Program Fuels Economy

by Elizabeth Kaltman 06/28/2011 16:19 (UTC-08:00) Pacific Time (US & Canada)

Today the Los Angeles Economic Development Corporation released a study about the positive economic impact of California’s Film and Television Tax Credit Program. The LAEDC study illustrates why 40 states around the country compete for film and television productions: because they are a proven job creator and economic stimulus. The study shows that the projects that qualified for the tax incentive in the program’s first two years generated $3.8 billion dollars in economic activity statewide, created more than 20,000 jobs and over $200 million dollars in tax revenues. 

Assemblymember Felipe Fuentes (D-Sylmar), author of legislation (AB 1069) to extend the tax credit for an additional five years, held a press conference today on the set of ABC’s Body of Proof to publicize the data in an effort to ensure support for his bill.  Fuentes was joined by Los Angeles City Councilmember Paul Krekorian, Body of Proof Executive Producer Matthew Gross, and a cross-section of entertainment leaders, including IATSE Local 44 Business Agent Ed Brown and Production Manager and DGA member Cleve Landsberg.

Senator Chris Dodd, Chairman and CEO of the MPAA said of the LAEDC study today: “The motion picture and television industry is overwhelmingly comprised of middle-class workers, and since it was enacted in 2009, California’s production tax incentive has been an important driver in a challenging economy. We applaud Assembly Member Felipe Fuentes’ leadership in the effort to extend this worthwhile program which helps keep high paying jobs in California and increases tax revenues across the state.”

Fuentes’ bill is currently awaiting a hearing in the California Senate’s Committee on Governance and Finance and we are hopeful that this study helps to dispel any doubts about the effectiveness of the tax credit program and easily passes through the Senate.


Studios file reply brief in Zediva case

by Ben Sheffner 06/27/2011 11:26 (UTC-08:00) Pacific Time (US & Canada)

Today the MPAA's member studios filed their reply brief in support of their Motion for a Preliminary Injunction in their copyright suit against the unlicensed video-on-demand service Zediva. The studios' brief rebuts Zediva's arguments, explaining to the court why such cases as Columbia Pictures Indus. v. Redd Horne, 749 F.2d 154 (3d Cir. 1984) and On Command Video Corp. v. Columbia Pictures Indus., 777 F. Supp. 787 (N.D. Cal. 1991) demonstrate that Zediva is violating the studios' exclusive right to publicly perform their works under Section 106(4) of the Copyright Act. And our reply brief explains why the Second Circuit's Cablevision decision does not aid Zediva. As the introduction to our brief states:

 Zediva is clearly violating the Studios’ public performance right under settled law. The statute’s plain language, as consistently construed for decades, makes it clear that the thousands of separate transmissions of the Studios’ films that Zediva sends to users “in separate places” and “at different times” constitute performances “to the public.” 17 U.S.C. § 101; Columbia Pictures Indus., Inc. v. Redd Horne, Inc., 749 F.2d 154, 159 (1984); On Command Video Corp. v. Columbia Pictures Indus., 777 F. Supp. 787, 790 (N.D. Cal. 1991). The only difference between the transmissions in Redd Horne and On Command, and those here, is that Zediva uses the Internet instead of its own cable wires to transmit the Studios’ films. But the Internet does not make Zediva any less liable than the services in those cases. Zediva itself admits that the Internet simply functions as “a very long cable” for its transmissions. Opp. at 8:14. And the cases are clear that streams over the Internet are public performances, even where (as is common) each stream is sent separately to an individual user. See United States v. Am. Soc’y of Composers, Authors, Publishers, 627 F.3d 64, 74 (2d Cir. 2010) (“ASCAP”). The rule Zediva advocates would eviscerate protection for a wide range of works streamed over the Internet.

Zediva’s near-total reliance on Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (“Cablevision”), in arguing that its performances are private, is misplaced. Cablevision repeatedly said that its holding applied only to a service that transmitted from one “unique copy” made at the direction of a unique user to that same user. Id. at 135, 138, 139. Zediva concedes that the facts of its service are different than those that were critical to the Cablevision court’s holding. Opp. at 9. The case does not assist Zediva.

The equities cry out for an injunction. Video-on-demand (“VOD”) over the Internet is an important and fast-growing market. Legitimate participants recognize they have to respect the rights that Congress created and obtain licenses to exploit companies that have tried to jump-start a business by violating copyright owners’ the Studios’ public performance right. Zediva is just the latest in a line of rights. Notwithstanding the oft-repeated cries of “we’re small,” and “an injunction will destroy our business,” courts have not hesitated to issue injunctions to protect the rights of content owners and licensees who play by the rules that Congress established. The Court should grant the Studios’ Motion.

Our motion is scheduled to be heard before Judge John Walter of the Central District of California on July 25. Here is the MPAA's set of FAQs on the case.



PROTECT IP and the Venture Capitalists

by Michael O'Leary 06/24/2011 14:44 (UTC-08:00) Pacific Time (US & Canada)

Yesterday, as you may have seen, a group of venture capitalists sent Congress a letter about the PROTECT IP Act.  Part of the letter repeated arguments we’ve heard before suggesting that the bill would somehow undermine the architecture of the Internet – many of which have been debunked here and here.  It’s clear that this bill would have no negative impact on the Internet.

But the writers of this letter raised another point that we wanted to address.  They wrote:

The bill is ripe for abuse, as it allows rights-holders to require third-parties to block access to and take away revenues sources for online services, with limited oversight and due process.

Revenues sources?  Here’s the thing: the bill doesn’t address any revenues that would be relevant for the ventures these investors support. 

Let’s take a step back.  The PROTECT IP Act is meant to put a stop to rampant theft of American-made movies, TV shows, and other content by foreign illegal websites, in two basic ways.  First, the bill would make it so that U.S. consumers can’t access those illegal sites in the first place, which in some cases not only stops theft, but protects those consumers who might otherwise fall victim to identity theft or fraud online.  Second, PROTECT IP would shut down the financing that lets those illegal sites stay in business, by getting the U.S. companies that provide rogue sites with advertising services and plumbing like payment processing to stop doing business with them. 

Obviously the rogue sites themselves profit from U.S. consumers – either by charging a fee for stolen content or for hosting advertising for other companies – but the only “revenues sources” the bill covers come from transactions with criminal sites.  Put another way, the bill would only kick in if a U.S. company is providing financial services to an illegal site, and a court asks it to stop.  So our question is this: when the writers of this letter say PROTECT IP would “require third parties to … take away revenues sources for online services,” are they saying businesses like Facebook and Twitter depend on these illegal sites for revenues? 

That doesn’t make sense. 

This bill simply won’t apply to the writers of this letter, or to the ventures they’re backing.  It applies only to sites whose sole purpose is criminal activity, and if American companies are making money by facilitating that criminal activity, it asks them to stop. 

In the end, theft is theft, and it hurts all of us.  What if a criminal had stolen and duplicated the code that runs Facebook?  So you can imagine the harm that comes when the work of a small filmmaker, who poured her life savings and that of her family, is stolen just after release and sold around the world, with all the returns lining criminals’ pockets instead of going back to the filmmaker to repay her investors and fund future projects.  We can’t stand by as criminals profit from the hard work of the millions of American men and women of the creative and entertainment industry. 

The fundamental issue here is this: the writers of this letter, like so many others, think we have to choose between technological innovation and creative expression.  That’s a false choice.  Technology and creativity are inextricably intertwined, and work in concert, not opposition.   But it shouldn’t be too much to ask the innovators to play by the rules.  That’s all the PROTECT IP Act does – it’s a smart, narrowly-crafted bill whose purpose is stopping theft, not slowing innovation.

The letter cited a number of exciting, successful businesses representing partnerships between creators and technology companies to make content available legally.  We couldn’t agree more – Netflix, Rhapsody and Pandora are exciting partnerships and have proven that these legitimate models can work.  Everybody can get behind that kind of innovation.

Internet Engineer George Ou Debunks Claims PROTECT IP Will Break the Internet

by Paul Brigner 06/24/2011 11:40 (UTC-08:00) Pacific Time (US & Canada)

Internet engineer George Ou has written a forceful response to claims that the PROTECT IP Act will “break the Internet” by allegedly undermining the Internet’s architecture. 
Those arguments suggest that PROTECT IP would interfere with a protocol that allows users to connect to websites more securely and that technology used to prevent access to rogue websites would be ineffective. 
Ou makes two particularly compelling points.  First, in response to concerns about the security protocol Secure DNS (DNSSEC), Ou points out that the purpose of that system is to facilitate users’ secure access to legal, legitimate websites to support online commerce and protect personal data. 
“[S]ecure access to an illegal site is moot because the purpose of the Protect IP court ordered filters is to prevent any access to that illegal site,” Ou writes.  “These opponents of DNS filtering never make the claim that DNS filtering will compromise DNSSEC in the general case for websites that aren’t blacklisted with a court order.  DNS filtering is not a threat to legal websites implementing DNSSEC.” 
In other words – you shouldn’t need to be able to connect securely to illegal rogue sites, because those sites shouldn’t exist in the first place.
Ou’s second point responds to criticisms of technology in which domain name systems prevent access to certain sites, noting that Paul Vixie, one of a group of engineers who signed a white paper opposing PROTECT IP, had himself developed a system to protect users from accessing risky websites:

The thesis of the letter opposing the Protect IP Act is that protecting Intellectual Property is important but DNS filters are ineffective and dangerous.  Yet Paul Vixie is the inventor of DNS filters, so it is self-evident that he does not think his invention is ineffective.  Vixie simply believes that protecting Intellectual Property is not important enough to deserve the protection of his technology.

This is an important paper that should help shed some light on the debate around PROTECT IP. 
The bottom line, of course, is that while some people use technology to commit crime or fraud, technology can also be one of our strongest weapons to fight theft of our creative works – and one of our strongest partners in making those works more widely available to the people who want them.  Now that’s real innovation.

Video Streaming Bill Targets Criminals, Not Lip-Syncers

by Howard Gantman 06/23/2011 15:29 (UTC-08:00) Pacific Time (US & Canada)

We’ve seen a lot of suggestions lately that new legislation aimed at criminals who steal and disseminate American-made movies, television shows, live sporting events, and other creative works would lock up YouTube lip-syncing babies, including this editorial from DailyKos.

But it’s simply not true.  The Commercial Felony Streaming Act (S. 978) is intended for criminals engaged in massive theft that seek to profit off the hard work of others.

That’s another important point – this kind of streaming is actually already illegal, but it’s classified as a misdemeanor, not a felony.  The Commercial Felony Streaming Act toughens the penalty for this behavior to close a loophole in current law that imposes weaker penalties for streaming illegal content than for downloading illegal content via peer-to-peer transfers.  Streaming and downloading are different technologies, but criminals are using them for the same purpose—stealing movies and TV shows made by the millions of men and women whose work in the entertainment industry helps support them and their families.  Super 8 is actually a great demonstration of the power of the creative community to create jobs and generate millions of dollars in economic activity – the film was shot largely in Weirton, West Virginia, employing hundreds of local residents as extras and relying on local businesses to support the shoot, as Kate wrote earlier this month. 

This is a straightforward bill with a straightforward mission that we should all be able to agree on – ensuring that when we enjoy the movies or TV, it’s the people who make them that benefit, not the people who steal them.


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