STRIKE IN THE DINOSAUR SWAMP

As I write this the screenwriters’ strike is edging toward its second week and no end in sight.

In one sense that’s beneath the notice of this blog. After all, we’re concerned with the new media and society, not with who’s going to get what percentage of which products. In another sense, it represents yet another example of the inability of big media companies to adapt to a radically changing landscape.

My prediction is that sooner or later the strike will be settled more-or-less on the writers’ terms. And it ultimately won’t make a damn bit of difference.

If you’re not sure what all the fuss is about, WebPro has a good video summary

Of course WebPro’s story is mostly from the standpoint of the writers. The media companies aren’t saying anything, which is probably the best thing they can do. First, they’re going to be cast as the bad-guys in this by hordes of drivel-starved television fans no matter what they say.

Second, they’ve been talking out of both sides of their mouth about the revenue potential of the internet, telling their investors that there are huge profits in internet entertainment while telling the writers no one is making money off it.

I’m willing to believe no one is making money off internet television, but that’s irrelevant. The writers are asking for royalties, not an up-front payment and sooner rather than later the entertainment companies are going to be making money off the internet. And more and more of it as time goes on.

Strategically the studios’ position smacks of the kind of especially myopic lawyers and accountants who infest big corporations. This wasn’t planned by strategic visionaries at the studios for darned sure. (Assuming that the phrase “strategic visionaries at the studios” isn’t a completely oxymoron.)

What is going on here is essentially another performance of the Dinosaur Follies. The media company dinosaurs are so busy trying to jostle the writers away from the tasty new growth in the swamp that they’re ignoring the much larger issues screaming down on them out of the sky.

The real problem the entertainment companies face is the same as the one faced by their music industry subsidiaries. Their business model is less and less effective in the world of the new media. You can see this in declining television viewership, stagnant numbers of moviegoers and the faint scent of desperation beginning to waft out of Hollywood and New York.

The decline in television watching has received a lot of attention, but the state of the movies has received much less attention, especially since numbers were up slightly in 2006 after declining in 2005.

In fact the 2006 movie attendance report from the Motion Picture Industry Association of America shows an industry in trouble and heading for crisis. This isn’t just the fact that movie admissions are still off from the 2002 levels. (This is the important number since it represents tickets sold and it dropped from 1.4 billion in 2002 to 1.33 billion in 2006.) It’s the pattern.

What that pattern shows is an industry increasingly relying on its best customers (frequent moviegoers) because it is having trouble attracting customers in general. The numbers also reinforce what everyone has known for the last 20 years. You’ve got to have a blockbuster to succeed.

Rising costs and stagnant ticket sales have pretty much killed the moderately successful movie, just as they have eliminated the moderately successful television series. Increasingly the only way to survive in either industry is to hit a home run with nearly every at bat. (In the case of television it’s generally accepted that if a show doesn’t last for three seasons – the magic number for syndication – it’s not going to make money.)

This need for home runs is a classic sign of an imploding industry being squeezed between rising costs and stagnant demands. Eventually most such industries are either squeezed out of existence or reduced to tiny niches.

The semi-morons running the entertainment industry may not be able to read the writing on the wall, but they can read a balance sheet. One of the reasons for their intransigence in the current strike is that they’re desperate for more revenue – and they’re stupid enough to think they can get it by squeezing the people who make money for them.

Nor is this the most ridiculous notion the entertainment industry has come up with. the MPAA is pushing for bizarre schemes like licensing home theaters (basically any house with a couch and a 29-inch television screen) for $50 a year.

"Just because you buy a DVD to watch at home doesn't give you the right to invite friends over to watch it too,” an MPAA spokesman explained in defending this piece of lunacy. “That's a violation of copyright and denies us the revenue that would be generated from DVD sales to your friends."

Not even a Congress bribed with millions in campaign contributions ($217 million since 1990) would buy that one, but it’s a measure of the studios’ desperation that they’d even propose such nonsense.

However in pushing into the world of the new media, the studios face a more fundamental problem. They don’t understand the differences between internet based media and movies and television. For the most part they’re still thinking in terms of episodic television and movies and ignoring the kind of interactivity and community that comes from with the media they’re trying to invade.

Ironically part of the problem is that the price of poker is going down. It’s getting cheaper and cheaper to produce videos of decent, or at least interesting, quality. What’s more the tools are getting simpler and more powerful, which makes it easier to “break into the movies” online.

To get a tiny hint of where the technology is taking us, take a look at Beowulf, which is hitting theaters this week. With its incredible graphics and blends of animation and actors, Beowulf is anything but a cheap home-made production. However inside a decade those kinds of effects will be readily available to anyone who wants them, just as the breathtaking effects in the original Star Wars trilogy can be reproduced pretty much at will by amateur video makers today.

The critical point in this for the future of the movie industry is that what you can do in a computer you don’t need to do on a sound stage, complete with the large number of experts and associated expenses. Need to fix the lighting? That’s a couple of mouse clicks on the computer, not a crew of highly paid electricians fiddling with the lights for a couple of hours.

Of course there are other features that will play an even bigger part in these new online entertainments. One of the most important is interactivity and the resulting community. Increasingly entertainment is going to be about communities interacting in created worlds. The model is going to more closely mimic World of Warcraft than Beowulf.

This is utterly alien to the ‘sit back and take what we push at you’ model of traditional studio products. That mismatch alone is going to make it hard for the studios. And there are a lot of other problems I’m not going to try to go into just now.

So how will the writers come out of these fundamental changes? Probably better than the studios but not as well as they will out of the strike. Writers are a notoriously adaptable bunch, and most of us are able to turn our hands to a lot of different kinds of writing. While screenwriting is about the most highly specialized form of fiction writing out there, and screenwriters are in their own way prisoners of the system they’ve enjoyed over the decades, the flexible ones will do all right.

AND NOW FOR SOMETHING COMPLETELY STUPID

Personally I think "intellectual property" is surrounded by its very own stupid field.

It seems like every time the subject of copyrights, patents, or trademarks emerges, someone, usually a big corporation, gets enmeshed in the stupidity field and does something really, really dumb.

But now comes the defense industry with what has to be the all time low in stupefying copyright/trademark incompetence. The really bad thing is it isn't something new. It's been going on for years.

Big defense contractors are demanding -- and getting -- licensing fees from model airplane companies for making models of military aircraft!

This is so breathlessly dumb on so many levels words (very nearly) fail me.

Legal idiocy aside, this is a classic case of giving yourself a pedicure with a tommy gun, both practically and from a PR standpoint.

Now let's see... Who designs these aircraft and other vehicles for our oligarchy of bloated, inefficient defense contractors? Why engineers, of course. And where do we get engineers? From engineering schools. And who enrolls in those engineering schools? Why young men and women who have a desire to design and build things? And where did they get this desire? From building things in their youth, like, oh, I dunno, Model Freaking Airplanes!

Wanna bet that the French, the Chinese and the Indians aren't doing everything they can to aim their kids toward engineering by encouraging them to do things like build model airplanes. And what are our defense contractors doing? Right. They're demanding money so people can produce model kits that kids can build.

But of course that doesn't matter. In a few years we'll outsource all that design work to places like India and China anyway, and we'll buy more of our aircraft from the French. So who cares whether our kids get interested in the grubby details of engineering? Meanwhile, full speed ahead and soak those little so-and-sos for all we can get. Teach them what American capitalism is really about, by God!
Engineers? We don't need no steenking engineers. We got lawyers!

Nor are the amounts of money insignificant be it noted. The licensing fee amounts to up to 8 percent of the cost of an $8 plastic model. You have to be familiar with the hobby business to realize how big a bite that represents out of everyone's razor-thin margins.

The second little detail is this business is a PR disaster in the making for an industry that needs all the good, or at least neutral, PR it can get. At a time when the cost of our high tech toys has doubled from the confident estimates of contractors and the DOD a few years ago (The F-35 has gone from $30 million to $60 million, or more) the last thing the contractors need is to be seen as a bunch of penny-pinching money-grubbing SOBs.

Siphoning money out of children's pockets does wonders for that image.

While the amount of money might be a big concern for the model airplane companies, most of whom are tiny by defense standards, it isn't even pocket change for LockMart and the other hybrids that charge us stupidly large amounts of money for their products. In fact the few thousand dollars a year they collect on each of these deals probably doesn't even cover the costs of the legal thuggery involved.

And people are starting to catch on. There's a bill in Congress to end this nonsense and I'd love to see the defense bozos trying to defend their stand. Should be more fun than watching cigarette execs swear under oath that nicotine is not addicting.

Ironically the defense leeches are getting support from their minions (in the original sense of the term) in the Defense Department. As another story on this massive case of institutional dumbth notes:

The Pentagon, however, “strongly opposes” Andrews’ provision, devoting an entire page to the issue in its latest authorization appeals package. Such appeals are typically reserved for last-ditch efforts to save big DOD programs from funding cuts.

DOD “can envision no valid reason why a trademark owner should ever be compelled to allow another entity to use that intellectual property, even for reasonable license fees,” the appeal says.

Obviously someone at the Pentagon needs to get his or her eyeglasses cleaned -- or to get a new guide dog.

Or alternatively they can just spend a minute looking at how much it costs the Air Force to recruit someone to work on the real thing. If the clowns in the Defense Department had a lick of sense -- and could manage to get their noses out of the defense contractors' back pockets -- they'd not only prohibit licensing fees, they'd subsidize the model companies for helping them get recruits.

However this particular piece of military yahooism serves as an adequate introduction to the legalities of this tissue of nonsense.

First, of course, those military designs were developed with taxpayer money -- potloads of it. The designations, such as F-22 Raptor, were assigned by the government. Where do these vultures in pinstripes get off demanding money so kids can built toy replicas of American military designs?

I doubt seriously the basic shapes and external details of any aircraft, military or commercial, even be copyrighted, under the functionality provisions of the copyright law. Granted these guys are claiming trademark, not copyright, but I think that's even shakier for much the same reasons. But who's got the money to fight an arcane trademark case in court against the contractors and their law firm of Rich, Greedy & Powerful? They're sucking in so much money from the public trough they can bury just about anyone.

And even if by some miracle the outline of something like the F-22 can be copyrighted, or trademarked, what moron decided that the design should be owned by the company that built the thing with government money?

But enough. This is an utterly silly, massively stupid and finally pointless exercise. It simply demonstrates once more -- if there is some cave-dwelling Kallikak out there who still needs a demonstration -- how completely our intellectual property laws are broken.

(Whew) Thank you. I feel much better now.