TMV Digital Diatribe: The Big Hurt

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By Ted Cohen

In the Holy war over copyright, the last few days have been pretty interesting. According to my scorecard, there have been two big wins for the content owners/copyright crusaders, with one major battle yet to be decided.

Let’s start with the battle that is playing out right now. On Monday, the announcement in the Hollywood Reporter that Voltage Pictures, the studio that produced the Oscar-winner, “The Hurt Locker” had signed on with the U.S. Copyright Group sent shockwaves through the BitTorrent file-sharing community. From the USCG website: “The US Copyright Group is a company owned by intellectual property lawyers that has one singular mission and focus: to stop movie copyright infringement and make illegal downloaders pay damages for the content they have stolen.

From Washington D.C. to Los Angeles, technology companies and a conglomeration of intellectual property law firms work hand-in-hand with each other to end unlawful downloading and illegal file-sharing of films.” This organization has already filed over 20,000 federal lawsuits against individual BitTorrent downloaders, with 30,000 more filings in the offing, making them an extremely formidable mercenary on this battlefield. According to The Hollywood Reporter , “The genesis of this legal campaign occurred in Germany when lawyers from the US Copyright Group were introduced to a new proprietary technology by German-based Guardaley IT that allows for real-time monitoring of movie downloads on torrents.”

And now the war has a very photogenic poster child in “The Hurt Locker”. This film won early critical acclaim, became a must-see in the Indie circles, and ended up besting James Cameron’s “Avatar” by taking home the Best Picture Oscar at this year’s Academy Awards. However, the film has been a financial failure, grossing just over $16 million dollars, making it the lowest grossing Best Picture ever by a wide margin. The picture leaked onto file sharing sites five months before release then had a major download resurgence after the Oscar win. While admittedly a challenging film for the mass market, the studio pegs a lot of its financial shortcomings on illegal downloading. From their perspective, they did everything right. They made a great movie on a tight budget, were recognized by the industry, but not rewarded at the box office. It’s a bitter pill and someone must be to blame. The film’s creators place a great deal of that blame on piracy, the courts will decide if they are right.

Meanwhile, the seamingly-endless battle between the music industry and LimeWire appears to have come to an end yesterday, with Federal Court Judge Kimba Wood handing down a summary judgement against both Lime Group, parent of LimeWire, and personally against founder Mark Gorton. Her 59-page decision stated, in part, “The evidence demonstrates that [Lime Wire] optimized LimeWire’s features to ensure that users can download digital recordings, the majority of which are protected by copyright, and that [Lime Wire] assisted users in committing infringement.” CNET’s Greg Sandoval wrote yesterday, “The court decision could represent the biggest threat to online file sharing in years. According to a survey by the NPD Group, LimeWire users account for 58 percent of the people who said they downloaded music from a peer-to-peer service last year.” While this battle isn’t over, LimeWire has been dealt a seemingly mortal blow. The next encounter will occur at a June 1st status conference with Judge Wood.

Lastly, there seems to be a truce in the long-running skirmish between the music industry and Project Playlist/, with the announcement of deals with both Universal Music Group and Warner Music Group, rounding out deals with all four majors, as reported by CNET While the financial terms were not disclosed, the general consensus is that this was a very expensive endeavor for Playlist, given the litigation and rhetoric that has surrounded the venture for the past two years. It’s also unclear whether they have settled with the formidable indie community, or with the publishers. There may need be a few more field maneuvers before this battle draws to a close. And will there really be a winner? Michael Robertson gets the last word:

“I wonder which of the following Playlist has in their settlement:

A) Multi-million dollar payment for past infringment.
B) Multi-million dollar upfront, non-recoupable payment to the labels
for future royalties.
C) Agreed to pay 1 cent per song stream.
D) Gave equity to the record labels.

If history is a teacher then it’s E – all of the above. Playlist bought themselves some time so they can stay in the game, but sadly I think they will go the way of Imeem.”

Posted by Ted • Thursday, May 13, 2010 .