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Old 07-06-12, 20:29   #1
The Enigma
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Default ...Ruined Relationship With ISP It Sued Over Piracy

Hollywood Has Ruined Relationship With ISP It Sued Over Piracy
by enigmax

In his presentation to the “The Future of Audio” hearing yesterday, RIAA chief Cary Sherman spoke of the music industry more frequently steering towards voluntary agreements for dealing with online infringement, such as the “six strikes” deal struck with ISPs recently. But what can happen when agreements can’t be reached? After Hollywood couldn’t get an ISP to voluntarily play ball they sued – and lost – and now find themselves being chastised by the ISP in public.

In November 2008 and after three years of voluntary discussions that went nowhere, the Hollywood movie studios under the banner of the Australian Federation Against Copyright Theft (AFACT) decided to would be a good business decision to sue ISP iiNet.

Their aim was to hold the ISP responsible for the copyright infringements of its subscribers, an effort that ultimately failed in April this year.

For two and a half years, iiNet – who never engaged in any wrongdoing – were distracted by this massive legal action. Many of their key staff had to take huge amounts of time out from their normal roles in order to fend off the Hollywood attack dogs.

With the case now closed iiNet is getting back to its core business, but it’s apparent that the bad taste left behind after the earlier failed negotiations and subsequent legal action is going to take longer to go away. Reading through a blog post today by iiNet chief regulatory officer Steve Dalby, one has to wonder if the damage will ever be repaired.

Dalby’s article precedes a closed-door meeting today between Australia’s major ISPs, AFACT and other rightsholders, a consumer group, the Internet Society of Australia and the government. The topic is once again online infringement and from Dalby’s tone today and comments he made previously, it’s clear that iiNet have already lost faith in the process.

“I don’t need a crystal ball to tell you that the likely conclusion will be negligible change; as has been the situation since the 2005 Australia – US free trade agreement was signed,” Dalby writes.

“Little, if anything at all, is to be gained by engaging with rights holders for a commercial solution.”

The notion that rights holders cannot be negotiated with towards any mutually useful end is hugely problematic. As highlighted yesterday by RIAA chief Cary Sherman, negotiated agreements are now high on the recording industry’s agenda for moving forward, with ISPs and search engines for example.

But of course, the RIAA and its overseas counterparts haven’t yet sued an ISP in frustration after failing to get what they want, although publicly attacking Google is moving dangerously close to alienating a potentially useful partner. Hollywood has taken the nuclear option, however, and the results are visible on Dalby’s blog in black and white.

“AFACT and other rights holder bodies don’t care much for consumers. As you may have read, Neil Gane of AFACT thinks consumers are “unreasonable” to tell their suppliers of entertainment what they want.

“Actually, AFACT don’t have any customers in Australia, they are all in California, which unfortunately means that consumer pressure is unlikely to have much impact on their strategies. iiNet have suggested that they focus on what the market is demanding, but it’s a waste of breath. Their masters have set the agenda and rights holders will only do their bidding.

“A solution needs to be found but as far as AFACT goes, you might as well be talking to a brick wall,” Dalby continues.

It seems then that having failed in four years of negotiations and more than two and a half years of litigation, the people the studios need onside have already lost faith in reaching a voluntary agreement second time around.

That only leaves two options – having the law changed to favor Hollywood or giving those “unreasonable” consumers what they want. Place your bets gentlemen, please.

...and another 'duh' moment arrives.

I wouldn't limit it just to the ISP that the major labels and studios have teed off. I can tell you that personally I long ago got teed and went on boycott when the RIAA started sue'em all and have never relinquished nor backed down on it.

You see, the fundamental dynamics changed for the music labels. There was a time when the CEO and the senior management for music labels consisted of musicians. As such they understood what the bottle necks were and issues for musicians existed. They had things set up like training courses for the long term viability of the bands. The bands were taught how to maintain long term interests and methods to keep themselves on the charts and in the public eye. But no longer do they do that.

Now these big corporations are run by the lawyer and accountant. You can see it in their actions every time something comes out with their names on it. The lawyer's answer is the court. The accountant's answer is someone else picking up the costs for something they want. What's changed is the musicians' answer was good will to the fan that kept them known and in the money.

As a result you now have ISPs and other businesses along with the fans in a hate relationship with the majors. You can not expect long term profitability under those conditions. That is exactly what the majors are attempting.

No other business except the IP businesses will not allow you to return a purchase you are not happy with. It's a fundamental of how you keep the customer happy. Look around at all the major businesses in your life and see where they don't allow you to return an item you are unhappy with. They all do it to build customer relations and good will. But the majors don't care about that.

Here again we see that the lobby groups, created to be the lightning rod so the majors don't have to take the blame, not working and not willing to work because of past misdeeds.

In all this scheming, years ahead of time, to get things their way, they have not taken into account the one thing they really need and are fighting their fight all the wrong ways to achieve. They need the good will of their customers to continue long term.

It's only the majors that are having problems. Indies are doing really well, in record numbers, in record income. They don't have the over head of the majors to pay and can do what the majors don't. Offer price cuts that are realistic or even offer it for free to build that customer good will. As a results, ticket concert prices are far lower and record numbers are coming to see them.

When you compare this to $200 to $1000 seating tickets for big name bands, such as The Eagles or McCartney and Wings, it's not hard to see why the record numbers are there. It always comes down to money and control and the majors are in a loosing battle with the customers they need to keep them afloat.

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