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Why Harvey Weinstein’s Latest Anti-Internet Outburst is Wrong.

· April 26, 2013

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On most days, another anti-Internet outburst from Harvey Weinstein wouldn’t qualify as news, but it’s a slow Friday afternoon.

At a Washington event today, the Hollywood producer and Miramax co-founder reportedly complained about Google and YouTube, alleging that consumers can view full-length movies online for free, and demanding legislation to regulate online platforms.  Jason Horowitz, tweeting for the Washington Post, said:

This isn’t a surprise; it is par for the Weinstein course.  He previously received attention for his widely-reported but dubious prediction that the Obama Administration would flip-flop on the Stop Online Piracy Act (SOPA) in the post-election period.  Following that, Weinstein offered remarks similar to his outburst today in a wide-ranging interview, complaining that:

“the internet shortchanges writers, directors and producers in our industry. Their work–10 minute clips, 15 minute clips, whatever–gets shown all the time and they never get any money. The Director’s Guild doesn’t get any money, the Writer’s Guild. Journalists don’t benefit when their stories are taken, and given a link. It would be like me launching a newspaper–call it Link—where I can have the greatest journalists in the world working for me without paying them. It’s inconceivable….  If BMI and ASCAP can monitor the music business, we need a BMI and an ASCAP to monitor these businesses. This will be the one legislation for our industry that I’ll press. We need for writers, producers, studios, and journalists to be protected.”

Setting aside Weinstein’s peculiar hypothetical here, the fact that he lumps news into this narrative suggests that his problem is not copyright infringement at all — for which extensive and potent legal remedies exist.  The problem with news is that traditional media outlets are to some extent competing with individuals using blogs and Twitter, individuals who have decidedly different cost structures.   It’s competition, and there’s a lot of it.

How substantial is that competition?  YouTube generates hundreds of millions of dollars for the music industry alone; PSY’s popular “Gangnam Style” stood to yield $2 million in revenue as of last year.  Over 3000 partners use Content ID, including major broadcasters, studios and labels, who have claimed more than 200 million videos on the site.  (YouTube’s ContentID, it should be noted, is the industry gold standard for DMCA compliance.)   That is a significant amount of content, and revenue, and a non-trivial amount of that revenue is going to creators who are not Hollywood insiders.

This raises another subtext to this morning’s outburst: services like YouTube and Blogger provide tools to people who are upsetting the established content business model.  These platforms enable creative individuals whose motives are not pecuniary.  That is, a substantial number of Internet users write, blog, perform, and create video because they desire attention, reputation, an audience to influence.  The long tail has a soapbox.  It doesn’t just receive; it transmits, and that makes it competition, some of which isn’t necessarily looking for monetary compensation.

And because “the long tail” has a different cost structure, existing content producers are hard pressed to compete.  Competition is tough.  Getting Washington to regulate is easier.

Competition

Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.

Intellectual Property

The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.