SXSW Lesson 2: Big Copyright Doesn’t Get the Web

SXSW Log ImageIn yesterday’s SXSW Lesson regarding what the Web didn’t learn from SOPA and PIPA, I made a promise to address how the major copyright industries, in particular the record labels and the movie studios, distrust the Web.

Though this might seem to be a “duh” lesson to learn from SXSW, there had been some movement in recent weeks, especially following the SOPA/PIPA ordeal, to open up a dialogue between the two sides. Cary Sherman himself participated in such an effort last month (with mixed results) and, despite the battle scars, there seemed to be a willingness on both sides to at least try.

SXSW should have been a great place for some of that dialog to happen, but it didn’t.

Searching through the panels, I found none that had any major representatives from copyright industries (this could in part be to how early the SXSW panels are picked). No representatives were no the trade show floor, no events were being held by major copyright holders and the conversation was completely one-sided.

While I’m sure that there were plenty of representatives and events at the film and music conferences, they weren’t at the Interactive, at least not in a way I noticed. The Copyright Enforcement Group, one of the biggest players in the Bittorrent lawsuits, had posters up in the Interactive areas but was primarily present for the overlapping film portion.

It became clear to me pretty quickly that big copyright doesn’t understand the Web and, even worse, isn’t trying to understand it. It’s a huge mistake because, even ignoring piracy, the Web is a big part of the future for any creative industry with movie streaming, MP3 downloads and eBooks all rising in popularity.

But while all of this is true, the lack of understanding is odd because, deep down, they really are so much alike.

The Back Story to Hollywood

In the early 1900s, the movie studios were almost exclusively east coast operations, specifically in and around New York. However, in and around the 1910s, the studios began to flee to the west coast.

There were several reasons for the move, including longer days and more sun, which made shooting movies easier in the days before very bright electric lights. However, one of the big motivating factors was Thomas Edison’s patents on several elements key to recording film. Edison had been successful in shutting down many productions in New York and the studios decided to move where Edison couldn’t as easily enforce his patents rather than paying up.

(Note: There is a misconception that the move to Hollywood was driven by a lack of copyright protection in the state of California, however, that does not appear to be the case.)

However, Hollywood did grow up and become an industry unto itself. While there are many criticisms of the studios’ accounting practices and respect for intellectual property, it’s very unlikely that something as egregious as the exodus to Hollywood would happen today.

The Internet, however, closely resembles the Hollywood of the 1910s. Instead of moving to California to escape Edison’s patents, the many (often questionable) startups move to countries like China and Ukraine to avoid Hollywood’s copyrights. Does that make it ethical? No. It wasn’t when the movie studios did it a century ago and it’s not right today, but it is the same mentality and spirit at play.

The truth is though that every creative industry, be it publishing, music, movies or art all began with a rebellious streak and a desire to something big, a desire still held by the artists within it. If these industries want their maturity to not equal becoming antiquated, they have to find some of that spark again and be ready to do exciting and brave things once more.

Kindred Spirits Unite

The tech industry’s frustration with the big copyright holders is that they are seen as dinosaurs that are standing in the way of progress. Big copyright sees the Web is a bunch of companies and individuals that want to get/distribute/sell their content without renumeration. On matters of perception, i a battle of anchors vs. freeloaders.

The truth is that the Web is going to mature as an industry. Though piracy will always be a problem, through a combination of laws, social norms, technology and business models, the Web will stop being so much of a rebel media and become, more or less, the media.

Much of that process is already happening. The recent legal battles such as Grokster and Megaupload have steered more and more companies away from piracy. While piracy is still a concern, it’s becoming more and more of an outlier, something fewer and fewer actual customers do. Sure, there’s a very long way to go and probably decades more of settling in the future but businesses are generally realizing it’s better to work with copyright holders than against them.

But the true magic isn’t going to happen until the big copyright holders catch some of the infectious optimism of the tech industry and starts working with them openly to find great ways to change media. Sure, iTunes, Spotify and Netflix, etc. are all great, but they are extensions of offline models brought online.

This won’t be easy to do and the tech industry will have some growing up too, including losing some of its feelings of entitlement (more on that tomorrow), but the true power of the Web as an industry and a business model won’t be unlocked as long as the content and the tools are kept in separate buckets. However, they won’t be mixed until everyone involved can be ensured they will be compensated appropriately.

There’s no easy way to do that but it can’t be done at all unless people are talking and, for that to happen, someone has to take a risk and big copyright had a chance to do just that at SXSW and missed it.

That, most likely, will remain the case until big copyright truly understands the Web. Because, only when you understand it, can you truly get excited by it and only then are you motivated to see what it can really do.

Hopefully this understanding will come sooner rather than later.

Bottom Line

In the end, one of the things the big copyright holders need to realize is the urgency of this issue. The Web moves at a much faster pace than they do. A year to a movie studio is barely enough time to greenlight a major film, for a record label it might be enough time to produce an album and a publisher might get a book out in that time.

However, on the Web, companies can be founded, become overnight successes, get bought out and closed down all within the space of 12 months. The Web is not patient and by next SXSW the climate is going to be very different.

If big copyright insists on holding its conversations at “safe” conferences with only a few tech representatives, it won’t truly understand the Web nor will it begin to really get involved.

Passion comes through emersion and emersion is scary. However, if you don’t understand the direction much of your business is going, you’ll never take full advantage of it and both industries will suffer greatly.

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