Creative Industries Welcome Landmark Case to Block Newzbin2

by Howard Gantman 07/28/2011 07:37 (UTC-08:00) Pacific Time (US & Canada)

Great news in London today!  A High Court judge ruled that British Telecom (BT) must block access to Newzbin2, a notorious site that links to thousands of stolen movies, television programs, games, music and books in direct violation of a previous order against it.

The ruling had been sought by the Motion Picture Association (MPA), supported by the creative industries in the United Kingdom to prevent Newzbin2 from using BT’s internet service to make money through copyright theft.  An estimated 700,000 members use the Newzbin service, generating the operators in excess of $1.6 million US dollars profit off stolen content a year.

Chris Marcich, President and Managing Director, of our sister organization’s European office, said:

“This ruling from Justice Arnold is a victory for millions of people working in the UK creative industries and demonstrates that the law of the land must apply online. This court action was never an attack on ISPs but we do need their cooperation to deal with the Newzbin site which continually tries to evade the law and judicial sanction. Newzbin is a notorious pirate website which makes hundreds of thousands of copyrighted products available without permission and with no regard for the law.”

And Christine Payne, Chair of the Creative Coalition Campaign, a partnership of trade unions representing workers in the creative industries and organizations in music, film, TV, publishing and sports in the UK, said:
“Thousands of businesses and millions of workers now know that the law of the land applies to the internet.  Online copyright theft deprives businesses of up to 20% of their revenues every year.  Finally, this little known law will help us to protect our property.”

In his ruling, Justice Arnold stated:

“In my judgment it follows that BT has actual knowledge of other persons using its service to infringe copyright: it knows that the users and operators of Newbin2 infringe copyright on a large scale, and in particular infringe the copyrights of the Studios in large numbers of their films and television programmes, it knows that the users of Newzbin2 include BT subscribers, and it knows those users use its service to receive infringing copies of copyright works made available to them by Newzbin2.” 

This is a significant judgment that reflects a clear recognition that under the existing law, Courts can issue orders to prevent illegal activity online. It rejects BT arguments that they have no responsibility to act against copyright theft and states that the order is proportionate.

This comprehensive and unequivocal judgment sets a clear legal precedent which will enable content creators and distributors to secure greater cooperation from ISPs in the UK to address content theft on the internet and in particular to deal with websites that are focused on wholesale copyright theft.

In the end, to effectively fight content theft all the players in the Internet ecosystem – creators, ISPs, pay processors, advertisers, Internet users and more – need to work together to keep rogue sites from reaching and profiting from the global marketplace.  This judgment recognizes that.

Pittsburgh Transforms into Gotham City

by Jessica Garcia 07/27/2011 09:44 (UTC-08:00) Pacific Time (US & Canada)

Pittsburgh, Pennsylvania will transform into Gotham City when Magnus Rex begins local filming this week. Magnus Rex, the third installment of Christopher Nolan’s Batman trilogy, will feature local attractions including Heinz Field, Downtown, Carnegie Mellon University and plenty of opportunities for Pittsburghers to witness a little bit of staged mayhem.

This Warner Bros. film is causing quite the stir as the largest production ever to be filmed in Pittsburgh. The local economic impact of Magnus Rex will undoubtedly be sizable: according to the Pittsburgh Business Times, many local businesses and up to 10,000 extras will be employed to help with the needs of the production.

The motion picture and television industry already makes a major impact in Pennsylvania, accounting for 18,181 production and distribution-related jobs and $756.3 million in wages as of 2009.

Gotham City may be known for its crime and corruption, but this week Gotham City is bringing in millions of dollars and thousands of jobs to Pittsburgh.

New White House Strategy to Combat Transnational Organized Crime Highlights IP Theft as a Threat to U.S. Competitiveness, Health, and Safety

by Alex Swartsel 07/25/2011 15:11 (UTC-08:00) Pacific Time (US & Canada)

It’s troubling to think that buying a bootleg DVD or some other counterfeit product – whether intentionally or unintentionally – could support the same criminal groups that engage in public corruption, human trafficking, narcotics, and cybercrime.  But a report out from the Obama Administration today underscores that that is, in fact, a very real concern.

The White House today released a new National Security Council Strategy to Combat Transnational Organized Crime, the product of a comprehensive study and interagency dialogue on the threat posed by organized criminal networks operating across borders.

The strategy highlighted intellectual property theft and noted that the dollar value of counterfeit goods seized by customs at U.S. ports and mail facilities doubled between 2003 and 2010, from $94 million to $188 million. 

In an Executive Order declaring the threat of organized crime to be a national emergency, President Obama wrote: “Significant transnational criminal organizations that … engage in the theft of intellectual property not only erode U.S. competitiveness, but also endanger the public health and safety through the distribution of tainted and counterfeit goods.”

The strategy includes commitments from the Administration to:

  • Prioritize “us[e of] the National Intellectual Property Rights Coordination Center, an interagency and international law enforcement task force established in 2000 and led by ICE, to assist with combating intellectual property theft and maintaining the integrity of public health, public safety, the military, and the U.S. economy,”
  • “[P]lace special emphasis on IPR violations and cybercrimes due to their particular impact on the economy and consumer health and safety,” and
  • “Implement the Administration’s joint strategic plan on intellectual property enforcement to target, investigate, and prosecute intellectual property crimes committed by TOC.”

Good for the Administration for calling attention to the connections between intellectual property theft and organized crime, and for reiterating the government’s pledge to take action. 

Leading State Economic Development Organization Joins the Fight for PROTECT IP

by Vans Stevenson 07/25/2011 08:43 (UTC-08:00) Pacific Time (US & Canada)

Earlier this month, the State International Development Organization (SIDO) sent a letter to the Senate in support of the PROTECT IP Act, the bill crafted to fight foreign rogue websites that traffic in counterfeit goods and stolen films and music.  SIDO is the premiere U.S. organization dedicated to supporting state international trade agencies and is the only national organization focused exclusively on state international trade development.  

“As part of the President’s National Export Initiative, U.S. small and medium-sized exporters (SMEs) are charged with the lofty task of doubling America’s exports by 2015,” SIDO’s leaders wrote. “As such, it becomes increasingly important to identify threats and strengthen enforcement against intellectual property (IP) theft and other harmful practices abroad and that negatively impact American exporters. Criminals have turned to the Internet, abusing its virtually unlimited distribution opportunities to expand their illicit activities.”

As an important vehicle for economic development in the states, SIDO has a first-hand understanding of the importance of protecting legitimate channels of trade by confronting foreign based rogue sites that would rob Americans of jobs and states of revenue.  We commend them and look forward to working with them to get this critical bill passed.

The Enduring Legacy of Harry Potter

by Jordan Aluise 07/21/2011 12:05 (UTC-08:00) Pacific Time (US & Canada)

After Harry Potter and the Deathly Hallows: Part 2 premiered at 12:01 on July 15th, 2011 people across the nation, or better yet, across the world, were saying it was “the end of an era.” After fourteen great years of reading J.K Rowling’s fictional world of wizards and witchcraft, and of watching her story translated into some of the highest grossing films of all time, audiences everywhere have been captivated by this story.

"It was everything you could want to cap off, in our lifetime, one of the greatest film sagas ever that I've experienced," one man gushed to MTV.

 “In a way it’s like my childhood is ending, but whenever I miss it I can always pick up one of the books or watch one of the movies and it brings up all the memories from growing up,” said Val Irigoyen from Chicago.

"You have it pictured one way in your mind, but then seeing it on the screen, just seeing how the directors bring it out, and so far, I've been very pleased," announced filmgoer Bill Croft from Augusta, Georgia.

"Even though I have all of the books and know the ending, Harry Potter doesn't seem over until this movie comes out," explained Amanda from Worchester State University.

This type of reaction from viewers is what every filmmaker hopes for. In many ways, the Harry Potter films are a terrific example of what’s best about the world of the movies - the ability to capture the hearts and imaginations of diehard fans of the book and Potter novices alike, to bring beloved characters and places to life, to unite dazzling special effects with a story driven by relationships and emotional power, and undoubtedly, to bring down the curtain with all of us wanting more.

Even though the Harry Potter film franchise has come to an end, its unforgettable story will never leave us. We’re sure these timeless movies will be watched over and over again, just as the books that started it all will be read and beloved, for generations to come. As Harry Potter creator J.K Rowling once said, “The stories we love best do live in us forever.” Harry Potter is definitely one of those stories.

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Discovery Institute Defends PROTECT IP Act

by Howard Gantman 07/20/2011 13:05 (UTC-08:00) Pacific Time (US & Canada)

The Discovery Institute’s Technology & Democracy Project acknowledged the true economic cost of content theft and defended the approach taken by the PROTECT IP Act in a great article published yesterday by Senior Fellow Hance Haney.

Commenting on content theft’s drain on the U.S. economy, Haney said:

“The fake goods deprive U.S. intellectual property rights holders of billions of dollars per year, many believe. Since the income they would have earned will never be taxed, nor can it be used for investments in new capacity and to expand employment, their economic losses affect all of us.”

On the misdirected focus of Protect IP’s critics, Haney continued:

“So far, many commentators seem to be focusing not on the jobs this bill could create or save throughout the nation's economy, but on how it might impact an Internet culture that wants to believe Internet content ought to be free. Of course the Internet reduces transaction and distribution costs. The Internet places downward pressure on the prices for many products and services. But nothing is free. There are laws of economics just as there are laws of physics.”

Rebutting detractors of the bill, Haney reiterated what the bill would actually do and deflated allegations one-by-one, concluding:

“The PROTECT IP Act is not a nefarious piece of special interest legislation. The unanimous vote in the Senate Judiciary Committee last year reflects the fact that better enforcement of intellectual property rights is in the national interest, particularly during a period of high unemployment. Ultimately, the PROTECT IP Act is about protecting jobs and private investors.”

We agree, and hope to refocus the debate over PROTECT IP on the important economic issues at stake: American jobs, the future of creative investments, and the U.S. knowledge-based economy.

L.A. Times Writer Mischaracterizes LAEDC Study, Ignores Well-Researched Findings

by Vans Stevenson 07/20/2011 12:37 (UTC-08:00) Pacific Time (US & Canada)

Michael Hiltzik, generally speaking, is one of the more thoughtful opinion writers on staff at the Los Angeles Times, but his latest missive, which takes issue with a recent report on California’s film production tax credit prepared by the Los Angeles Economic Development Corporation (LAEDC) and sponsored by the MPAA, needs a reality check. 

First, some context.  We asked the LAEDC, a highly respected, decades-old think tank whose policy and economic expertise has been relied upon by government agencies, educational institutions, and businesses for many years, to analyze whether the production tax credit enacted by the California legislature in 2009 and signed into law by Governor Arnold Schwarzenegger was producing a benefit to the economy, the workforce and government. 

In keeping with its reputation for rigorous, high-quality research, LAEDC employed the IMPLAN economic impact modeling system, a respected and widely-accepted methodology for local economic analysis.

Based on this analysis, LAEDC found that the production tax credit program is a pretty good deal for California: The first $200 million spent by the state (discounted to $198.8 million) generated more than $1.5 billion in production spending and more than $3.8 billion in total economic output.  Even more importantly, it generated over 20,000 jobs. 

The program is not a subsidy of motion picture and television production –  in fact, it generates a POSITIVE return on the state’s investment:  for every $1.00 the state invests in qualified motion picture and television projects, state and local government get $1.13 back.  If Mr. Hiltzik’s question is whether that’s a good use of taxpayer funds, that kind of return on investment should be a pretty convincing answer.  Indeed, the study’s conclusions are very conservative; LAEDC did NOT include tourist related follow-on economic activity, nor did it include capital expenditures by entertainment companies.  So actual economic benefits to California from supporting film production could be even greater.

Unfortunately, Mr. Hiltzik’s column didn’t provide any evidence that LAEDC’s results were incorrect.  Instead, he took shots at the integrity of the researchers.  That doesn’t feel like a productive contribution to the discussion, to us.

As with any public policy program, it’s always possible that the production tax credit could be improved.  While LAEDC’s job was not to make recommendations on how to do that – perhaps the Times could assist LAEDC with resources to undertake such a study – the researchers did analyze two types of production that are ineligible for the production tax credit: large budget feature films and network television series. LAEDC found both types of productions would return a positive investment for state and local government.

It’s also worth noting that this year, in the face of steep budget deficits, many states have sustained and in many cases, improved and enhanced their production incentives, finding them to be sound investments in jobs and economic development, including, Pennsylvania, Oregon, Wisconsin, Ohio, Georgia, South Carolina, North Carolina, Rhode Island, Connecticut, New Mexico, and Massachusetts. 

It’s disappointing that Mr. Hiltzik seems so eager to discount a solid, well-researched report by a highly reputable group of researchers.  And it’s a shame for California’s economy and the talented industry workers struggling to do their jobs closer to home that he can’t see the benefit in this modest and cost-effective program.

Independent Filmmaker Shares His Take on the Impact of Content Theft

by Jordan Aluise 07/20/2011 09:19 (UTC-08:00) Pacific Time (US & Canada)

We listened to a great podcast today with Jason Stall, an independent filmmaker who talked with Music Technology Policy’s Chris Castle about his recent documentary, Blood Into Wine, and how content theft has affected his work and the commercial success of his films.

After talking briefly about what went into creating Blood Into Wine, a documentary about Maynard James Keenan, a singer turned successful winemaker, Castle got right down to business, bluntly asking Stall, “When you released the picture, was it pirated?”

Stall laughed before he replied with the inevitable yes: “I wish I was more shocked but even during the time we were screening it in the theaters, a copy that had been signed for and everything else had made it out before we were even done with our theatrical screening… We thought we had done everything [to prevent content theft] but we turned our heads for a second and it was out there… the explosion was crazy.”

“Once we had a DVD release, within the first week a site popped up that had 23,000 downloads within a very short period of time,” he said.

To help listeners fully understand the way in which content theft affects independent filmmakers, Stall explained the process step by step:
“When you can no longer present on the front end a business model that has a potential as a return for anybody, it becomes pretty hard to find the investors, so that’s the money side of it. Then let’s take the creative side. If you can’t raise the money you did before, quality is going to go down, quantity is going to go down and you’ve crushed the creative process.”

Independent filmmakers like Jason Stall depend on the revenue they earn from viewers who pay to watch their movies and documentaries.

When their films are stolen at such an overwhelming rate, it becomes much more difficult for producers like Jason to persuade investors to back future projects – meaning fewer great new films for all of us.

If you would like to find out more about Blood Into Wine, visit the film’s website here!

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