Big Content's Big Blunders: Anti-piracy measures in the entertainment and copyright industries Dee Majek Filmvetenskapliga Institutionen / Department of Cinema Studies Examensarbete 15 hp / Masters of One Year Thesis 15 credits Filmvetenskap / Cinema Studies Magisterskurs (15-30 hp) / Masters of One Year course (15-30 credits) Vårterminen / Spring term 2013 Handledare / Supervisor: Maaret Koskinen Big Content's Big Blunders: Anti-piracy measures in the entertainment and copyright industries Dee Majek Sammanfattning/Abstract This thesis examines the on-going anti-piracy and anti-file sharing measures taken by media conglomerates and big content as misguided attempts at addressing changing consumer expectations and social and technological norms. These measures include legislation such as the Stop Online Piracy Act (SOPA), Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act (PIPA), Anti-Counterfeiting Trade Agreement (ACTA), and Cyber Intelligence Sharing and Protection Act (CISPA); and litigation against both extremes of the spectrum: from the world's largest file sharing search engines like The Pirate Bay, and cyberlockers like MegaUpload, to private citizens who illegally downloaded a few movies or a few songs. The manner in which the entertainment industry's largest, most expensive, and highest-profile anti-piracy measures in the recent years have been received by groups from IT corporations to human rights organizations, researchers, politicians, legal and internet experts, and millions of citizens worldwide are of focus; and how this translates into an unpopular public image is explored. Piracy is underlined as a service and distribution problem, and various international studies are presented in exploring the relationship between illegal downloading and legal purchases. Keywords File sharing, piracy, digital distribution, copyright infringement, anti-piracy, copy culture, SOPA, PIPA, ACTA, CISPA, The Pirate Bay, MegaUpload, Steam, Aaron Swartz, Pirate Party, MPAA, RIAA, Netflix, HBO, Cybernormer, BitTorrent 2 Contents Introduction ........................................................................................... 4 Differing Definitions: Immaterial Property as Information, Copying as Sharing, and File Sharing as Culture ....................................................... 9 Greedy Scofflaws or Valued Customers? Illegal Downloads and Legal Purchases are not Mutually Exclusive ............................................................................................. 14 Market Cleaning: Restrictive Legislation to Combat Perceived Distributional Competition .................................................................... 21 Missed Opportunities: Adaptation Takes a Backseat to Litigation .............................. 26 SOPA / PIPA / ACTA / CISPA / etcetera ................................................................. 32 Image Problems ................................................................................... 39 An Ongoing History of Bad Blood, Scandals, and Persecution .................................. 42 Conclusions .......................................................................................... 47 References ............................................................................................ 50 3 Introduction These separate stories sing a common theme. If “Piracy” means using value from someone else's creative property without permission from that creator... then every industry affected by copyright today is the product and beneficiary of a certain kind of piracy. Film, records, radio, cable TV... The list is long and could well be expanded. Every generation welcomes the pirate from the last. Every generation – until now. - Lawrence Lessig, Free Culture1 In the past decade, we have seen a wide array of aggressive, litigious anti-piracy measures being taken by media conglomerates and copyright trade associations, from sweeping, heavily-criticized copyright enforcement bills to law suits against not only founders of the world's most trafficked file sharing sites, but also against individual file sharers and private persons. As Lawrence Lessig questions, “was Walt Disney a pirate? Would doujinshi be better if creators had to ask permission? Should tools that enable others to capture and spread images as a way to cultivate or criticize our culture be better regulated? Is it really right that building a search engine should expose you to $15 million in damages? Would it have been better if Edison had controlled film? Should every cover band have to hire a lawyer to get permission to record a song?”2 I'm not entirely new to the topics discussed in this thesis. I have been following developments in file sharing lawsuits and politics for years, largely via tech news reports and journalism citing academic studies and legal proceedings. While this thesis by no means constitutes any conclusive report, I have attempted to map out the most prevalent (and more publicly accessible) pattern of industry behaviour when it comes to file sharing, which predominantly take the form of highly aggressive anti-piracy measures. I discuss file sharing as a basic reality of the digital era and internet culture, and how the largest and most organized, and most expensive industry efforts concerning it have been received by academics, journalists, specialists, and, perhaps most importantly, the public at large. Of course, blanket terms such as “the industry” and “big content” are generalizations. In this thesis, I use them in reference to a number of media conglomerates and copyright trade associations which I specify whenever relevant in the coming chapters, including the Motion Picture Association of America, the Recording Industry Association of America, the International Federation of the Phonographic Institute, Time Warner, Viacom, News Corporation, Disney, Universal Music, Comcast / NBC Universal, and so on. 1 Lawrence Lessig, Free Culture, [New York: The Penguin Press, 2004], 61 2 Ibid, 78 4 The central finding in my discussion of high-profile anti-piracy measures is that illegal file sharing is not per definition antithetical to purchasing behaviour, and that as such the actions taken against it in the past decade are grossly disproportionate in their severity and ramifications to any industry losses, real or imagined. Naturally, this cannot be discussed effectively without relevant antithetical arguments, which from the side of big content often takes the form of the “file sharing is theft” analogy that I scrutinize from multiple angles throughout this thesis. In the chapter Differing Definitions, a number of university studies on file sharing and purchasing behaviour have been selected based on their academic merit, scope, and extent of research; with the aim to explore the relationship between illegal downloads and legal purchases. An effort has been made to select studies from various nations in order to invoke the international quality of internet trends. I have also selected studies based on chronology, that is, to discuss not only the most recent findings but also those from a decade back, in order to hopefully provide some degree of historical comparison. In the chapter Market Cleaning, I discuss the copyright industry's apparent preference for restrictive, heavy-handed legislation rather than for adaptation and incorporation of emerging technological innovations and evolving digital business models. I question the fruitfulness of discussing the finer points of to what extent it's morally wrong for kids to be downloading songs and movies, when copyright lobbyists are making concerted international efforts to police the internet in a fashion vigorously opposed by famous human rights organizations, IT market giants like Google and Facebook, and millions of citizens across the globe. As is the core of my thesis, there is a disproportionality at work that to me precludes the consideration of file sharing as a threat that somehow justifies these measures. While discussing the Stop Online Piracy Act (SOPA), the PROTECT IP Act (PIPA), the Anti-Counterfeiting Trade Agreement (ACTA), the Cyber Intelligence Sharing and Protection Act (CISPA), and similar legislative attempts by big content, I cite corporations such as Google, non-profit digital rights groups, academics, legal and tech experts, tech journalism, and politicians to give breadth and scope to the multitude of problems associated with these acts and bills. Of particular significance to my discussion of anti-piracy blunders is that file sharing is a social and culture norm, as is established in Cybernormers research and the University of Amsterdam's 2010 study “Legal, Economic and Cultural Aspects of File Sharing,”3 whose findings I discuss at some length. Because of this normative nature, industry attempts at criminalizing file sharing become untenable when the vast majority of youth are participating, and there is essentially no social stigma 3 Nico van Eijk, Joost Poort, and Paul Rutten, ”Legal, Economic, and Cultural Aspects of File Sharing,” Communications & Strategies, nr 77 [1st Q. 2010]: 35. 5 associated with illegal downloading. As I examine in the chapter Image Problems, private persons have in the past and are currently facing millions in fines for downloading and file sharing a few songs or movies. These lawsuits may aim to make examples of small-time file sharers in order to make an example for the general public, but I posit that they only serve to heighten youth disregard for