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Fox's Chernin Decries Piracy

20 Nov, 2002 By: Chris Marlowe

LAS VEGAS -- Peter Chernin appealed to the hearts and wallets of technology professionals Tuesday in an effort to combat piracy.

And just to make sure he got their attention, the president and chief operating officer of News Corp. and chairman and CEO of Fox Group brought out George Lucas to help bridge what Chernin said was a communication gap between their industry and the one they were addressing.

Chernin also used other filmmakers to bolster his point. He paused during his speech at the Comdex technology conference to show a short film that included contributions from Steven Spielberg, Peter Jackson, Baz Luhrmann, M. Night Shyamalan, Ridley Scott, Forest Whitaker, Peter Farrelly, Chris Wedge and DGA president Martha Coolidge. All of them spoke about the importance of movies as an art form and as an inimitable method of communication. They were accompanied by clips from the internationally successful films for which they're known.

From the very beginning, Chernin acknowledged the conflicts being played out on Capitol Hill and elsewhere. "To stand up and represent the media industry before the biggest technology crowd in the world, while it's certainly a great honor, is also the kind of death-defying stunt that's featured in 'Jackass: The Movie,' " he said.

Yet they had a great deal of concerns in common, Chernin said, not least of which was escalating theft. Software piracy is responsible for annual global revenue losses of more than $4 billion, he said, and "the unauthorized downloading and illegal redistribution of copyrighted content has become a looting epidemic."

Even so, Chernin chided certain elements of the audience for their role in enabling piracy. "If hundreds of thousands of dresses were stolen from a Wal-Mart, the police would mount a task force that would make Winona Ryder quake in her boots," Chernin said, whereas digital content theft is not only permitted, "it has been systematically encouraged by a generous supply of Internet services, products and tools."

He cited what he called serious misconceptions that need to be eradicated before progress against piracy can be made. One is the dinosaur theory: that media companies are fundamentally anti-technology through ignorance and fear. The truth is the opposite, Chernin said, and, in fact, these companies have always played a crucial role in the birth and success of new technologies.

Chernin similarly dismissed what he called the "big bully theory" -- that content owners are "seeking to scale back the fundamental freedoms of digital technology" and therefore must be defied.

He categorically denied that was the case, and instead voiced his commitment to time shifting, space shifting and transferring content between devices. "We have zero objection to anyone's ability to duplicate, to record, to play back and to save any copyable content whatsoever," Chernin said. "We're not against fair use; we're against the unfair practices of digital pirates."

The final misconception he addressed was the one he called "the theory of screw the suits" -- that piracy hurts only rich executives who care more about money than art.

People in the short Chernin showed rebuffed this idea. A makeup artist, a wardrobe coordinator, an animal trainer and other below-the-line employees explained that their jobs are at stake. Additionally, directors and producers warned that good movies would never get made if piracy endangered their ability to attract the necessary financial commitment.

Speaking in person, Lucas emphasized that piracy means less investment and less financial and artistic risk taking.

Lucas said the danger wasn't to the executives or the corporations. "Suits are like cockroaches, they're going to survive anything," he said. Instead, the real danger is that only "safe" movies will get made -- "the network television movies" -- to the detriment of event movies like his "Star Wars" titles and small independent art films.

Taking back the podium, Chernin began his appeal to the audience's wallets. "Turning rampant piracy into rewarding businesses may sound daunting, but it's been done before," he said.

The cable and satellite television industry and the DVD industry were almost decimated by piracy in their early years, he said, the former by signal theft and the latter by the reluctance of studios to license their content without protection.

Chernin listed several business sectors that stood to benefit from a partnership between media and technology, including broadband technology, the home networking industry and digital rights management.

"The power of content to fuel the uptake of digital services has been proven, for example, by Napster, which two years ago was responsible for an estimated 80 percent of all broadband traffic," he said.

People weren't going to spend money on new technologies just to get faster e-mail, he continued, and many technology sectors stood to benefit.

"All kinds of next-generation digital business will succeed or fail on the quality of their secure content or as a result of their lack thereof," Chernin said. "I propose we work together, starting now, to make them succeed."

He mentioned RealNetworks, particularly its SuperPass product, and Microsoft's Windows XP Media Center Edition as examples of positive developments.

"Now is the time to forge a dynamic and durable partnership" between media and technology, Chernin concluded. "We will look back at the end of 2002 and call it the starting line for some of our most successful businesses, innovations and ideas, or we will look back with the cynicism born of missed opportunities, and call it our peak."

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