Let’s examine a recent article by Edward Jay Epstein in The Wire, “How the Pirates of the Internet Are Killing Hollywood’s Golden Goose”:
Now we learn why Christopher Dodd, the retired Senator from Connecticut, is receiving over $1.5 million a year to head the Motion Picture Association of America.
That would be the same Chris Dodd who — after dooming his chances of re-election with truly unseemly greed, even by Washington’s standards — pledged that he wouldn’t accept a lobbying job where he would peddle his access to his former friends and colleagues in government on behalf of the highest bidder (“lobbyist” is another definition of “whore”). Civil-rights critic Glenn Greenwald wrote a lengthy excoriation of Dodd’s bought-and-paid-for conduct this past week.
So it’s no surprise that Dodd would be working for the MPAA, an organization dedicated to defending huge corporations from any threat by individuals or smaller organizations. As Greenwald says:
In his SOPA advocacy, Dodd has resorted to holding up Chinese censorship as the desired model, mouthing the slogans of despots, and even outright lying. [links in original]
Dodd is now issuing threats to “politicians who accept MPAA campaign donations that they’d better pass Hollywood’s favorite legislation . . . or else”.
Back to Epstein’s article:
The MPAA, the trade organization for the Hollywood studios, is financed by Warner Bros., Fox, Universal, Disney, Sony and Paramount. Each provides about $10 million per year. Aside from efforts to suppress digital piracy, it lobbies Congress and regulatory agencies.
Its crucial job here is to protect the Big Six’s crown jewels: their intellectual properties. Without their libraries of movies, animated shorts, and TV series, they couldn’t survive.
They couldn’t survive because they don’t make anything, they just own things.
Consider Warner Bros. Its library has more than 60,000 licensable properties, including 6,500 movies and 40,000 TV episodes. Whereas its DVD sales have been on the wane, its TV licensing has skyrocketed. In 2010, according to sources at Time Warner, Warner Bros. harvested over $4 billion from worldwide licensing to TV.
Nearly 80 percent came from just four cable customers — HBO, Turner, ABC Family, and NBC Universal’s cable channels. Not only did this far exceed its share of theatrical box-office receipts, which were $2.4 billion in 2010, but this licensing is highly profitable:
The studio pays none of the cost of advertising, prints, or logistics. Almost all proceeds, minus some residuals paid to third parties, go to a studio’s bottom line. Whatever the vagaries of the box office, licensing is the largest and most reliable source of profits for the studios.
“Some residuals paid to third parties” means the royalties these corporations owe to Writers, Directors, Actors, etc. — you know, the people who created the works the corporations own and peddle. And these same corporations are aggressive in their attempts to deny, reduce, and whittle away at the royalties they should be paying to the people who actually make the movies and TV shows they sell.
When you download a Hollywood movie from The Pirate Bay instead of buying it on DVD or watching it on NetFlix, you deprive the studio of their slice of the dough. And that cannot be allowed!
Sharon Waxman lamented:
Why didn’t Hollywood grab the tools of the Internet to explain that when artists get ripped off, everybody loses?
The big studios (and big record labels) try to make that argument, but it’s a hard sell — because it’s not the artists who are being ripped off by illegal downloaders, it’s the studios. The ones who are ripping off the artists are these same studios.
Singer Courtney Love outlined ten years ago how the record labels exploit the creative artists, making millions of dollars from the artists’ works while the artists themselves make nothing. Singer Amanda Palmer detailed a coule of years ago how she made $19,000 in one month using Twitter to speak directly with her fans, while in the same period her label sold 30,000 copies of the record she made and paid her nothing.
(The labels’ response to artists who go over their heads directly to the fans? They want artists to sign “360 deals” — the artists have to pay the label a percentage of everything, regardless of whether the label had anything to do with making that money or not.)
And the movie-making field it’s the same: the big corporations rip off the creative people who actually make the works the audience wants to see. “Hollywood accounting” is the term for fiddling the books to disguise the profits these corporations made, that they have to pay royalties on. Hollywood claims movies like Harry Potter and the Order of the Phoenix haven’t made any profits yet, and have in fact lost money. (And Lucasfilm says that Return of the Jedi, the fifteenth highest-grossing movie of all time (adjusted for inflation), still hasn’t made a profit.) Epstein explains how that works.
Actor and author Wil Wheaton (of Star Trek: The Next Generation fame) says:
I have lost more money to creative accounting [ . . . ] than anything associated with what the MPAA calls piracy. Chris Dodd is lying about piracy costing us jobs. Hollywood’s refusal to adapt to changing times is what’s costing the studios money. That’s it.