Neutrality Rules Would Cripple Media Industry, Says Viacom CEO

Dauman’s seems to be Viacom’s first public statement against net neutrality. NBC Universal has taken the lead among media companies, with an FCC filing against neutrality that went even further, asking that ISPs be required to use piracy filters (WID June 20 p2).

“Highly snackable” short-form material such as The Daily Show, Colbert Report and “classics” like Beavis and Butt- head, all properties of Viacom’s MTV Networks, are pirated heavily, Dauman said. Swedish P2P site The Pirate Bay gets movies that on average cost $66 million to make and $35 million to market and posts them online even before they hit theaters, he said. Fair-use fighters can’t claim freedom of expression for most content that’s floating around, because it’s in “unmodified, uninterrupted form,” with a hosting or linking Web site making money by running ads with the material. Viacom’s licensing agreements are “eviscerated” when partners question why they should pay for content freely available online, he said. A “vocal cadre” of academics and activists is making the case that copyright “locks up” culture but it really “unlocks new ideas,” he said.

Viacom is not among “media holdouts” from the Internet, Dauman said. The company even uses virtual worlds to spread content through “every nook and cranny of the Internet,” he said. The leading supplier of video to mobile devices, it offers 300 authorized content sites for fans, giving Viacom the top Internet portfolio among entertainment companies, he said. It has no problem with consumers’ paying “indirectly” for content via advertising. Viacom licenses video to Joost and has created its own social network, Flux, on which fans can remix content and share it across a network of publishers, to build a “cohesive experience across all our brands.” Its content has aided an entire “ecosystem” of products from high-def TVs to movie download sites, Dauman said.

‘Perfection’ Not Needed for Partners to Fight Piracy

Dauman left no doubt that Viacom will stand among players on congressional and FCC policy on networks. Media companies’ success is bound up with service providers’ freedom to run their networks, he said. “It would be easy if we had the tools to identify and root out” piracy on the Internet, he said. “It is obviously impossible to check every computer and look over the shoulder of every user to see if they have a license,” and that makes service providers key to protecting copyright. “We don’t ask for perfection,” just that ISPs “do something about it,” as some cable operators do, warning users known to download illicitly, Dauman said. Some ISPs in Europe are making more decisions about the material crossing their networks, he added.

The government must let “free market principles” work for network operators, without regulatory intervention, Dauman said, alluding to net neutrality, though he never used the term. Plans by AT&T and others to use network tools to track piracy is a “factor that weighs against heavier regulation in that sector,” he said. Service providers and others must act “responsibly,” integrating antipiracy tools into their products and educating consumers on copyright, he said. “After all, you want your own intellectual property protected also.”

“The good news is this: We're in a better place than we were last year,” Dauman said. “A consensus is developing” between content and distribution industries. YouTube aside, most technology companies and Web sites are “receptive” to Viacom’s pleas, he said. He cited Microsoft and MySpace as having adopted identification technology to flag pirated content. Dauman said Viacom’s YouTube suit generated many supportive calls from nonmedia executives, showing that piracy is a concern beyond its field. Because of “pressure from Congress and other constituencies,” colleges are identifying students who illicitly share content, he said, referring to the Recording Industry Association of America and its lawsuit and settlement campaigns against students.

International enforcement is a crapshoot, Dauman said. Trade meetings with China often evoke a “sudden burst of enforcement… just for show,” he said. Governments can best help by fitting trade pacts with strong IP provisions when dealing with countries that have serial enforcement problems, he said. At home, let the market work, Dauman said. “We don’t need to meddle in many cases with the market dynamics out there.” Content producers can be innovative, he said. “We must all take necessary risks to follow our consumers to any medium they want, whenever and wherever they want it.” -- Greg Piper

Anti-Counterfeiting and Piracy Summit Notebook…

Children, not teens, are the future for awareness efforts on copyright by the Canadian recording and U.S. game industry, representatives told the conference audience. Surveys show that most Canadian consumers won’t buy pirate goods if they know it enriches criminals, and will buy legitimate goods if pirate versions aren’t available -- but when it comes to the Internet all bets are off, said Graham Henderson, president of the Canadian Recording Industry Association. Online piracy is “widely perceived as a victimless crime,” and there’s “almost no point of reaching out” to 15 to 24 year olds on the topic, Henderson said. “They are literally immune to morals-based messaging.” Instead, CRIA targets parents, “in particular the mothers,” he said. Henderson had harsh words for the Canadian government. “Our enforcement regime is one of the worst in the developing world and our government has failed for over 10 yeas now” to enforce World Intellectual Property Organization Internet treaties. IP theft is “maybe even accepted” broadly by Canadians, because there are “literally no consequences in Canada if you're caught.” Canadian physical-media piracy exceeds that in than the U.S., he said -- for videogames, 34 percent to 17 percent. Canadian conferences on prosperity and economic growth rarely cite IP, nor do think tank reports, he said. Ric Hirsch, senior vice president of IP enforcement for the Entertainment Software Association, painted a brighter picture. Children have “very little understanding or appreciation of what their activities do to the market,” so the ESA is targeting elementary-schoolers, who are more open to adopting the “rules of the road” than older children. ESA developed an IP protection curriculum for K-5 teachers, “complementary” to school lesson plans, because “institutional education” was lacking. Materials can be downloaded from JoinTheCTeam.com. The Canadian government’s anti-piracy icon, Captain Copyright, flopped when critics assailed the effort as heavily one-sided toward content owners (WID Feb 7 p8). Asked what he would do with unlimited resources, Hirsch said state education departments should back up industry, possibly adding IP lessons with anti-plagiarism advocacy. Copyright industries should be targeting mothers’ magazines to get moms to bring up infringement with their kids, said Henderson. Any campaign for schools must be “organic… not something that you're tacking on.” The copyright industry’s main problem is that IP enforcement tilts conceptually toward public safety, touching on fake drugs and bogus car parts, “and the rest of it gets completely lost,” like file-sharing and pirated CDs, Henderson said.