This is one of the best articles I have read all year.
From AVN / Written by Clyde Dewitt
2007-06-07
Clip Those Wings: Controlling wandering video clips to safeguard your business.
By: Clyde DeWitt
Posted: 11:55 am PDT 6-7-2007The prevalence of video on websites raises a number of issues. Some are legal; others are philosophical.
Video is flying around the Internet like crazy. Video-on-demand rapidly is becoming the preferred method of transmitting adult content. And why should it not be? It is convenient, spontaneous, and private—especially private—but an assortment of issues arises from this phenomenon.
Begin with the unthinkable: The courts unilaterally approved 18 U.S.C. §2257 as written, and as the regulations are written. Well, aside from having to put the 2257 referral links all over your site (according to 28 C.F.R. §75.8(d), the words must read exactly: “18 U.S.C. 2257 Record-Keeping Requirements Compliance Statement.”), there are serious record-indexing issues. For example, a VOD site may have 25,000 titles from 200 different producers. Assuming all the titles post-date July 3, 1995, and there are an average of 10 performers in each title, that requires an index containing the records of nearly 250,000 performers. Let’s index them. Each performer requires an average of, say, three names. You are approaching a million data entries. Now, unless all 200 producers use the same computer program to keep and index their records—improbable, to say the least—someone will need to enter all that data and do it without mistakes. Suppose a data-entry person can enter 60 entries per hour. That’s more than 16,000 man-hours (or woman-hours). If the average data-entry worker costs $10 an hour and you factor in a workspace and equipment (that estimate is unrealistically low), that’s $160,000! Is this a reasonable burden on speech? Hardly!
With streaming video, there is a debate about whether it is more like a website, in which the link must be on every page, or more like a videotape—so if there are “end titles,” the 2257 disclosure must accompany the “end titles”—whatever they are—or appear at the beginning of the movie. The U.S. Department of Justice did not see fit to answer the streaming-video question in the regulations, despite public comments requesting they address it (nor did the DOJ think DVDs were popular enough to merit an explanation of where the 2257 labels must be placed). However, because 2257 is a criminal statute, the “rule of lenity” applies, which means ambiguities benefit the defendant. This is sort of like the baseball concept that the tie goes to the runner. With 2257, on the contrary, it is more like the infield-fly rule, which nobody understands and only exists because it is in the rulebook.
Now, let’s think about the difference between streaming and downloading. First, to be blunt, downloading is really stupid. The reason seems obvious: Once a movie or video clip is downloaded, you can be certain to find it all over PornoTube, XTube, and other file-sharing sites. Streaming at least requires a reasonably sophisticated user to convert the stream into an MPEG file, so there is a better chance your customer—and all his friends—won’t amass a bunch of stored-up content on their computers, thereby eliminating the need to purchase it. The recording industry has collapsed because of file swapping, to the point the adult industry is closing in on its annual sales. But, the adult industry is starting to go south with the escalation of high-speed connections, so that trend stands to change.
OK, enough ranting about downloading.
Regardless whether it’s a good idea, there is a 2257 component to downloading. There is no doubt that downloading a file requires the file to have the 2257 disclosure recorded at the beginning of the MPEG file, or at the end if it has “end credits.” (A link clearly will not suffice, because the MPEG becomes a freestanding movie.) When you are streaming, a link is good enough, if it can link.
Now for another rant, this time about sample clips: Many e-tailers, in promoting DVDs they are trying to sell, put up a clip from the movie in an attempt to promote it. That’s fine, but clips that get too long become scenes, which can be put together by the viewer to turn into his own little compilation, once again eliminating the need to purchase your product. It certainly is easier to take a chunk out of the movie and make it into a clip, but it is much more prudent to do some editing and have a clip that cuts from scene to scene in two- or three-second intervals. Don’t give away your product!
A recent “Legal Angles” column in AVN made note of what plainly seems to be the greatest threat to this industry: the proliferation of sites that are X-rated versions of YouTube and Google’s video-search function. Moreover, people are posting 15-minute clips, and that’s basically a “scene.” Why buy something you can get free, and why in the world would a company that is in the business of selling online viewing want to set up an X-rated YouTube? I won’t mention any names, but you know who you are: Your company name increasingly appears in court documents, situated immediately below the “v.” and immediately above the word, “Defendant.”
Are these people infringing copyrights? That is the zillion-dollar question. The contention that sites such as YouTube make is that they fall under the “safe harbor” provision of the Digital Millennium Copyright Act. Not so, think some folks, because both YouTube and its X-rated equivalents have been sued for copyright infringement. And, in YouTube’s case, there is a well-stocked arsenal on both sides. Still, understand what is at stake. If there were 10,000 copyright-infringing clips on the site—and that assumption isn’t unrealistic—that would equate to a minimum of $7.5 million in statutory damages. Even if willful infringement is not established (which is not a stretch), the $30,000 maximum times 10,000 is equal to $300 million! That’s some serious cash, all riding on whether it qualifies for a safe-harbor bailout!
This column is not going to predict the outcome of these lawsuits, but one thing seems clear: Congress eventually is going to jump into the fray, no matter what happens. On that front, this column will venture a prediction: A compulsory license will be enacted, as it is with music.
The best example of how a compulsory license works is in the American Society of Composers, Authors, and Publishers. You might have noticed ASCAP stickers at restaurants and bars. Here’s how it works: An artist who produces a sound recording—and for this example, we will assume the artist is a one-man band with original music—can’t prevent you from playing it the same way the owner of a motion picture work can. But, the artist can make you pay.
ASCAP is sort of a collection agent. Representatives for ASCAP will show up at a bar with a jukebox and inquire as to whether it has an ASCAP license. If not, the representatives happily will sell a license to the bar’s manager, because the representatives earn commissions. The bar pays the license fee, and then it can play all the ASCAP-protected music it wants with impunity. If the bar is uncooperative, then lawyers are pressed into service, filing suit for copyright infringement. Then the bar pays. Monies collected by either method are distributed to the artists according to some complex formula.
Everyone knows the YouTubes of the world are making a fortune generating traffic. The artists want a piece of that traffic, which is what this war is all about. The two most significant battles in the war will be, first, who wins the lawsuits and, second, how Congress divides the spoils among the “safe harbor” sites and the artists.
Stay tuned!
With the adult industry actually going into a downturn both online and off, there are some issues discussed here that should be seriously considered. Many of the things that webmasters are doing trying to make more money and get more traffic are actually counterproductive to the entire industry. These are interesting times for copyright and digital rights both in and out of the adult world – where things go the next couple of years will be quite interesting.