When technology changes, rules must, too

FORGET ABOUT PIRACY, the real problem for the entertainment industry in the 21st century is the growing irrelevance of the rules it now uses to buy and sell copyrights.

These days you can still sell the syndicated rights to Seinfeld in Chicago and make another exclusive deal in New York and Los Angeles. But, needless to say, the growth of the Internet is making geographic boundaries meaningless.

And it’s not just the Internet. Satellite companies find it very useful to take the network signal from Los Angeles and offer it to high-paying subscribers who live in New York — or visa versa. All this is making content-rich industries worry about losing control of their product once it gets into the marketplace.

Sometimes that loss of control has resulted in some pretty silly efforts at control. For instance, when J.K. Rowling made a recent book tour of the United States to support her ridiculously successful Harry Potter series, she was forced to announce that she would sign only books printed in the U.S.

That’s because thousands of families in the U.S. had refused to wait for the book to be published by Scholastic Trade here and ordered the book directly from England via Amazon.com.

It’s not clear how many of the thousands of 10 year-olds who lined up for autograph were turned away in tears.

A GOOD INDICATION of copyright owners’ growing distress was the recent attempt by Major League Baseball to sneak a provision in the recently approved satellite reform bill that would effectively ban Internet companies, such as AOL, from putting TV station signals on-line. Once it was in the bill, the Motion Picture Assn. of America and its member companies began lobbying hard to keep the provision in the bill. The language was eventually yanked by members of Congress at the bidding of AOL, but hearings on the issue have been slated for the new year.

At those hearings, Internet and satellite companies will argue that if consumers in Los Angeles want to watch a TV station based in Detroit, the government should not stand in the way.

The powerful broadcasting industry will argue that any change in the current system will undermine the values of local broadcasting. In the studios’ ideal world, Internet and satellite companies would be allowed to retransmit broadcast TV station signals only after they had gone back to the studios and syndicators and negotiated their own copyright deals for carriage.

Satcasters and cablers say that would put them in the impossible position of negotiating hundreds of licensing agreements for each station they retransmit. So far, Congress has agreed and has granted cablers and satcasters a “compulsory license” that allows them to pay in to a royalty pool that is then distributed to the copyright holders.

One possible solution is that the studios, syndicators and others create a clearing house for copyright royalties much as ASCAP and BMI do for music.

Another possibility is that it may be time to put free-over-the-air television to rest. Since the technology is close at hand, why not charge viewers an a la carte price to watch individual television programs.

IT’S PRETTY CLEAR that technology can’t be restrained too much longer. Even if Congress passes a law that prevents AOL from creating a Website that allows you to pick which of the 1,500 TV stations in America you want to watch, it will be difficult to stop some enterprising sophomore from creating that same Website. At least with 1,500 channels, there should be something on that’s worth watching.

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