The Megaupload case has created worldwide interest due to its ramifications. The outcome of this case could determine the future of file sharing, not only on a wholesale basis but on a personal level as well.
I've been following the Megaupload case with great interest and was going to start this post yesterday but decided to wait for the outcome of Dotcom's bail hearing, which we now know has been denied.
Beyond the criminal aspects of this case which have yet to be proven, there's something very unsettling about this whole media circus because its akin to a schoolyard bully marking his ground and demanding tribute.
This story is not about justice, it's about disrespect. It's about the street corner drug dealer not paying the Don his due. When Big Content says Megaupload is guilty of piracy, they're not really concerned that people are illegally downloading copyrighted content from the site. They're enraged that Dotcom is making money off their labor and he's not paying them a cent. And that's the whole point. It's a question of money and not justice.
For decades the Hollywood bigwigs have languorously sat behind huge oak desks smoking illegally obtained Cuban Cohibas while their media output produced millions in earnings. In the process, the media moguls have become complacent believing their goose would lay golden eggs forever.
Enter the young upstart. Seeing the complacency of Mr. Hollywood's ways, he decides to rattle his goose's gilded cage. And that's got the media moguls fuming. Still, this isn't the first time this has happened.
One of the earliest copyright infringement cases using new technologies is the Betamax Case (Sony vs. Universal) of 1984. Basically, the Supreme Court held that Sony, maker of VCRs, "was not liable for creating a technology that some customers may use for copyright infringing purposes, so long as the technology is capable of substantial non-infringing uses. In other words, where a technology has many uses, the public cannot be denied the lawful uses just because some (or many or most) may use the product to infringe copyrights." Sound familiar? Clearly, based on the latter statement, we have a precedent for the legality of file sharing sites.
But there's more. I mentioned the complacency of media moguls and their current business model. A recent global study by Social Science Research Center, and backed by Canada's International Development Research Center, seems to agree. Following several years of independent investigation in six emerging economies, the report, Media Piracy in Emerging Economies, concludes that piracy is chiefly a product of market failure, not a legal one.
Simply stated, nature abhors a vacuum. Innovators saw a market opportunity which Hollywood has largely dismissed or is still trying to assimilate. I put my own case as an example. I like many of the American TV series and like to watch them as soon as they come out. However, living in Europe I often have to wait a year or two before the current season is aired. And that's assuming the show I'm interested in is picked up by local networks. To top it off, by the time the show is aired, it's dubbed. So, I tried logging into Hulu.com and other similar sites to watch the shows online. However, these services are not allowed to operate over IP addresses outside the U.S. I've even written them stating that I would be willing to pay a monthly fee to access their content but current contractual constraints prohibit them from providing their service overseas. There are many people like me all over the world and we are largely ignored. So what's a person to do?
I don't know who's right or who's wrong and, quite frankly, I don't care because I know innovation will win out in the long run. Innovation is an unstoppable force and Hollywood its unmovable object. This is a wake up call for Hollywood. Sooner or later they are going to have to accept market innovation and design new ways of delivering content to users. They may even have to make a deal with the devil himself.
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