Why is Hollywood Against Innovation?

From the Wall Street Journal's Digits Blog:

Apple’s iTunes makes saving music from CDs onto one’s personal computer a simple process, but doing the same with a DVD is much more complicated endeavor. Most DVDs are encoded with digital rights management technology to prevent copying.

Most DVD-viewers think that’s hypocrisy. A study of 1,000 consumers conducted by the National Consumers League found that 90% think that they should have ability to back up DVDs on their personal computers in the same way they are able to do with music from a CD ...

However, a recent lawsuit has been broiling in the courts, with several major Hollywood movie studios suing RealNetworks, a company that makes the RealDVD player.

At first, it was beyond me why Hollywood would be against this type of innovation. Then I learned about the Digital Millennium Copyright Act, a piece of legislation that prohibits backing up DVDs. As FreedomWorks recently pointed out:

There are acceptable avenues of protecting intellectual property, but banning a new product that maintains the DRM encryption and prohibits copying for distribution in the name of fighting piracy makes no sense.  All this does is impose substantial new limitations on consumers and their use of the DVDs they purchase.

When we usually think about corporate welfare, we think about all of the special tax credits and deductions along with all of the subsidies that only the most powerful companies (i.e. the ones with the most lobbyists) get. For the Right to move beyond the simplistic arguments of the past on fiscal and tax policy, we should battle corporate welfare, not only in the tax code but in regulatory matters as well. Many states already have film tax credits which try to "promote economic development" by essentially paying filmakers to produce movies in their states. Just as these film tax credits at the state level is corporate welfare, so are many of the regulatory matters that fly under the radar.

We have to move on from the "tax cuts, tax cuts, tax cuts"-only message and refine a message that can work for those who don't have lobbyists and large political action committees working for them: government should not pick winners and losers in the market.

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Comments

For or against?

This blog is full of posts: "Republicans need a policy on X" without actually articulating a policy on X.  Here's a typical example.  What does Matt Moon think the government should do?  Should it allow the entertainment industry to protect its intellectual property?  A libertarian would say it should. 

I can't speak for Matt Moon,

but I think his point is that the standards need to be consistent across industries: ergo, either both musicians and moviemakers can forbid personal copying of their work, or neither can.   

Personally, I think that the entertainment industry should be allowed to protect its product against piracy, although I see nothing wrong with a consumer being allowed to burn a DVD or CD to their laptop or iPod.  

dmca is immoral.

there is no way for me to make a copy of MY PROPERTY, so that in case the first copy gets damaged, I have an alternative.

Besides, protecting against piracy is a stupid idea...far better business models to be had.

What deals are immoral?

When you rent a video (OK, this dates me), you sign a form not to copy or show to more than 5 people.  Is that immoral.  If you buy a jar and break it, the company doesn't owe you another one.  It seems to me that a company is within their rights to sell you something on the condition that you not copy it.  Then you have to understand that if you break it, that's your problem.

Maybe it's a poor business model.  You can bet that there is an operations research staff making that call.  Are you sure you're smarter than they are?

And what gives with this supposedly conservative web site bashing free enterprise and limiiting their freedom?  I think it's because they don't like entertainers.  If Fox News Corportation wanted to protect Glen Beck profits by preventing clips from being posted on youtube, you would side with Beck.

I'm not one of the true blue conservatives around here...

The DMCA is a way of ending the free market, by physically creating a barrier between the $20-30 DVDs in Asia and the $10-20 DVDs in America.

Corporate Welfare Is Not Free Enterprise

And what gives with this supposedly conservative web site bashing free enterprise and limiiting their freedom?

Government-enforced monopoly is not free enterprise, especially when the controlling law is created for the benefit of the monopolists.

See Dean Baker's recent work on healthcare, patents and ©

Dean Baker just published two pieces on the same issue in Boston Review.

He argues pretty persuasively that "true" deregulation has never been done, and that current copyright and patent regimes merely tilt the playing field in favor of the biggest players. He applies the same reasoning to healthcare, asking why economists ignore free markets  when they talk about medicine.

Where his perspective differs from Matt's is his belief that there's no real way for the government to get out of the way.  It's something I don't see discussed much on the right-- the possibility that deregulation is a misnomer. To Baker, the existence of a market implies that it is regulated-- "deregulation" is just regulation in favor of some parties over others-- and so it's a question of choosing the right rules.

Intellectual "Property"

Afaic intellectual "property" is a monopolistic construct that may well have merit in principle.  (The Founders thought so.)  In practice the balance has been tilted grossly in favor of the monopolist and against the public interest.

The 1998 Mickey Mouse Protection Act is one example that passed a Republican Congress.  Not only is it bad economics & bad public policy IMO, but it favors the entertainment industry that is one of the most leftist institutions in the country.

Bad public policy.  Bad economics.  Using the power of government to help your most implacable polical enemies.  What's not to like, GOP?  Strategery!