Yesterday the 34 movie studios represented by the Australian Federation Against Copyright Theft (AFACT) lost their Federal Court appeal against internet service provider iiNet. A victory for ISPs? No. It resolves nothing.
If you came in after intermission, you’ll pick up the plot quick enough. AFACT said iiNet’s customers were illegally copying movies, which they were, but iiNet hadn’t acted on AFACT’s infringement notices to stop them. AFACT reckoned that made iiNet guilty of “authorising” the copyright infringement, as the legal jargon goes. iiNet disagreed, refusing to act on what they saw as mere allegations. AFACT sued.
In the Federal Court a year ago, Justice Dennis Cowdroy found comprehensively in favour of iiNet. It was a slapdown for AFACT. AFACT appealed, and yesterday lost. Headlines with inevitable sporting metaphors described it as two-nil win for iiNet.
But read the full decision and things aren’t so clear-cut.
One of the three appeals judges was in favour of AFACT’s appeal being dismissed. Another was also in favour of dismissal, but reasoned things differently from Justice Cowdroy’s original ruling. But the third judge, Justice Jayne Jagot, supported the appeal, disagreeing with Justice Cowdroy’s reasoning on the two core elements — whether iiNet authorised the infringements and whether, even if they had so authorised them, they were then protected by the safe harbour provisions of the Copyright Act.
There’s plenty of meat for an appeal to the High Court, and that’s exactly where this will end up going. Wake me when we get there.
What’s particularly depressing is that in the two years since AFACT first started down the litigation path there seems to have been precisely zero progress in the movie industry’s thinking about how to best adapt to this new world in which the internet exists and — goodness — is used by people.
Part of the problem is that while they portray themselves as “the movie industry”, what they really are is “the movie distribution industry”. In the digital era, distribution costs are tending to zero and in-home cinema set-ups are commonplace, paid for by the viewers. Yet the industry imagines it can still make the same profits as before.
Perhaps it’s time the movie industry paid attention to what happened with the music industry, and to one word: iTunes.
As Business Insiders’ Chart of the Day showed last week, the golden age of the music industry was a decade ago, when almost everything was sold on CD and global sales were about $15 billion annually. Of the $20 you paid for that CD, maybe $1 went to the performers. The rest was for “the industry” — CD replication, shipping, record company marketing, and margins from wholesaler to suburban music stores. Ninety percent of the retail price was, essentially, paying for distribution rather than music.
It took someone outside the traditional music distribution industry, Apple, to create a digital distribution model. One that took “only” 30% of the retail price. Apple’s iTunes Store is now the largest music retailer on the planet.
What’s needed is a new distribution model for movies, one that takes advantage of the digital world rather than treating it as the enemy. And one that faces up to the fact that people’s entertainment choices are changing, with time and money moving from passively watching movies and TV to including interactive entertainments such as gaming, Facebook games such as Farmville and even watching the movies their own friends and families are making.
If all this sounds familiar, you’re right. All this has been said before. Many times. People have pointed to US-based Netflix: “Instantly watch as many movies as you want. For only $7.99 a month.” Many times. But for some reason the movie industry here in Australia isn’t listening. Why is that?
That wouldn’t be the same Justice Dennis Cowdroy to whom The Australian recently took the knife?
I’ve worked in the music “industry” for more than 20 years, not as an artist but one of those people who sold and promoted the cassettes, vinyl, CDs as well as the DVD business. I think people at record companies and studios may be liked even less than what pony-tailed ad execs were in the 80s, some of it’s fair enough (your turn studio bosses, newspaper bosses). I still do work in another part of the music world but my livelihood no longer relies on people buying CDs. I decided the fight wasn’t worth having, and the war had already been won. The industry I entered in 1984 has irreversibly changed and I had to change with it. It wasn’t easy but it was necessary. I’m now deeply immersed in the myriad solutions that have been offered up by the new world order and it’s great. While this fight rages on in the courts the industries (both music and film) has shifted where they have almost become unrecognisable and the new frontier shows no signs of losing momentum.
Win, lose or draw, I’m just not sure there will be anything left to fight over.
But for some reason the movie industry here in Australia isn’t listening. Why is that?
Who knows why they aren’t? Maybe they are but the current set of online delivery options are crap… along with broadband speeds. Current speeds are simply not up to streaming a HD quality movie. Compression techniques are pretty decent these days but perhaps they’re still not up to a level that someone would be willing to pay for… still don’t know if a compressed file would stream that well under most broadband speeds currently available in Aust.
I’ve tried Sony’s Video Delivery Service and its pretty average. Takes a day or so to download a 4Gb video file and no streaming available – i have to wait until its fully downloaded. It’s a lot easier to just visit the DVD store or spend a few hours waiting for a crap quality torrent to download.
I think we won’t see anything until speeds improve high quality products. No one would pay for low quality and no one wants to wait 4 days from date of purchase to watch a film.
Simon I think you’re right; you can get movies on iTunes but the catalogue is limited and expensive. That said I couldn’t count how many HBO shows especially that have been consumed by file-sharing (The Sopranos, Mad Men, Flight Of The Conchords, Californication, Entourage,etc) but who knows how their sales to networks and via DVDs have been impacted.
I think when a movie is downloaded as easily has a song has been for years now, a court ruling will do little to change what is fast becoming the norm and completely acceptable according to research in the UK with people who download music (especially those below the age of 30).
I agree: roll on the NBN.