Sony Pictures' CEO Michael Lynton touched off a furor with an article on Huffington Post. His original post is at:
http://www.huffingtonpost.com/michael-lynton/guardrails-for-the-intern_b...

There's a response by Stan Schroeder on Mashable at:
http://mashable.com/2009/05/27/sony-ceo-internet/

Here are the posts:

Guardrails for the Internet: Preserving Creativity Online
Michael Lynton
Chairman and CEO, Sony Pictures Entertainment
Posted: May 26, 2009

In March, an unfinished copy of 20th Century Fox's film X-Men Origins: Wolverine was stolen from a film lab and uploaded to the Internet, more than a month before its theatrical release. The studio investigated the crime, and efforts were made to limit its availability online. Still, it was illegally downloaded more than four million times.

That kind of wide scale theft was very much on my mind when I was on a panel the other day which opened with a question about the impact of the Internet on the entertainment business, and I responded, "I'm a guy who sees nothing good having come from the Internet. Period."

Now, the blogosphere does not take so kindly to provocations like that, and it didn't take long for online critics to compare my words with those of one of my Hollywood predecessors, H.W. Warner, who famously said, "Who the hell wants to hear actors talk?"

But, I actually welcome the Sturm und Drang I've stirred, because it gives me an opportunity to make a larger point (one which I also made during that panel discussion, though it was not nearly as viral as the sentence above). And my point is this: the major content businesses of the world and the most talented creators of that content -- music, newspapers, movies and books -- have all been seriously harmed by the Internet.

Some of that damage has been caused by changing business models (the FTC just announced an inquiry into the impact of new media on the newspaper industry). But the primary culprit is piracy. The Internet has brought people with no regard for the intellectual property of others together with a technology that allows them to easily steal that property and sell or give it away to everyone, with little fear of being caught or prosecuted.

To be clear, my concern about piracy does not obscure my understanding that the Internet has had a transformative impact on our culture and holds enormous potential to improve the prospects of humanity, and in many instances already has. I am no Luddite. I am not an analogue guy living in a digital world. I ran an Internet company and my studio actively uses the web to market and sell our movies and television shows. We create original content for new media.

And yes, new talents have emerged thanks to the democratic and viral impact of the web. Yes, the rise of new distribution platforms for existing content is exciting and rich with promise.

But at the same time, I cannot subscribe to the views of those online critics who insist that I "just don't get it," and claim the world has so fundamentally changed because of the web that conventional practices concerning property rights no longer apply; that the Internet should be left to develop entirely unfettered and unregulated.

In no other realm of our society have we encountered so widespread and consequential a failure to put in place guidelines over the use and growth of such a major industry.

I'm not talking here about censorship, taxation or burdensome government restrictions. I'm talking about reasonable boundaries, "rules of the road," that can help promote the many positive attributes of Internet technology while curtailing its hugely damaging effects. And this becomes even more critical as governments around the world are subsidizing and promoting the ubiquity of high speed broadband to make their economies more efficient and competitive. With this increase in speed, content will travel that much more easily on the Internet. But without restraints, much of that content will be contraband.

I've already seen it happen in South Korea, which has one of the most highly developed broadband networks in the world. But piracy has also become so highly developed there that we and virtually every other studio has recently had to curtail or close down our home entertainment businesses. It's hard to sell a legal DVD when it can be stolen without any repercussions.

Contrast the expansion of the Internet with what happened a half century ago. In the 1950's, the Eisenhower Administration undertook one of the most massive infrastructure projects in our nation's history -- the creation of the Interstate Highway System. It completely transformed how we did business, traveled, and conducted our daily lives. But unlike the Internet, the highways were built and operated with a set of rational guidelines. Guard rails went along dangerous sections of the road. Speed and weight limits saved lives and maintenance costs. And officers of the law made sure that these rules were obeyed. As a result, as interstates flourished, so did the economy. According to one study, over the course of its first four decades of existence, the Interstate Highway System was responsible for fully one-quarter of America's productivity growth.

We can replicate that kind of success with the Internet more easily if we do more to encourage the productivity of the creative engines of our society -- the artists, actors, writers, directors, singers and other holders of intellectual property rights -- yes, including the movie studios, which help produce and distribute entertainment to billions of people worldwide.

But, without standards of commerce and more action against piracy, the intellectual property of humankind will be subject to infinite exploitation on the Internet. How many people will be as motivated to write a book or a song, or make a movie if they know it is going to be immediately stolen from them and offered to the world with no compensation whatsoever? And how many people whose work is connected with those creative industries -- the carpenters, drivers, food service workers, and thousands of others -- will lose their jobs as piracy robs their business of resources?

Internet users have become used to getting things when they want it and how they want it, and those of us in the entertainment business want to meet that kind of demand as efficiently and effectively as possible. But what has happened online is that if it is 'beyond store hours' and the shop is closed, a lot of people just smash the window and steal what they want. Freedom without restraint is chaos, and if we don't figure out some way to prevent online chaos, the quantity, quality and availability of the kinds of entertainment, literature, art and scholarship we need to have a healthy, vibrant culture will suffer.

In my own household I know it is my responsibility, along with my wife, to monitor how my family uses the Internet for school work and enjoyment. And I know the web can play a big role in our daughters' future. But I also want their future to be filled with the kind of music and books and films and other creative sparks that have enlivened my life and our culture through the years.

Because actually I'm a guy who wants to see lots of good things come from the Internet. But it's not going to happen the way it should if we do not act now to safeguard the fruit of our world's most imaginative and talented minds. Period.

Response:

Sony Pictures CEO and the Internet: Somebody Call the Waambulance
by Stan Schroeder
May 27th, 2009

Sony Pictures Entertainment CEO Michael Lynton has written a long post about the impact of Internet on the entertainment industry over at Huffington Post. Techdirt offers an excellent paragraph-for-paragraph rebuttal (or, a different point of view, if you will), but Lynton’s argument can be summed up in one sentence.

Mr. Lynton is mad at the Internet because it allows people to easily copy copyrighted content, and he wants to create rules (guardrails) that will make it harder for them to do it.

Without going into details about copyright, piracy, business models, and the entertainment industry (or the fact that the entire post stems from the fact that Lynton had recently said he “doesn’t see anything good having come from the Internet”), let’s step back and ask a simple question: what is the Internet?

Strictly speaking (Wikipedia (Wikipedia reviews) definition), it’s “a global system of interconnected computer networks.” What are networks good for? Sharing information. In practice, this means it’s a system that makes it easy for people to share information.

Mr. Lynton largely ignores this fact and goes on to compare the Internet to the introduction of the US Interstate Highway System. “It completely transformed how we did business, traveled, and conducted our daily lives. But unlike the Internet, the highways were built and operated with a set of rational guidelines,” he says. This is where he’s wrong, because that comparison doesn’t stand; but before I explain how, let me add another important quote that shows that Mr. Lynton actually knows he’s wrong, he just can’t stomach that fact:

“I cannot subscribe to the views of those online critics who insist that I “just don’t get it,” and claim the world has so fundamentally changed because of the web that conventional practices concerning property rights no longer apply..“

Unfortunately for him, this is exactly right. The Internet is nothing like the Interstate Highway System. It wasn’t created by the government as part of a plan, it emerged from a small project (ARPANET) and absolutely no one could predict where it was going. The rules he mentions are - the bigger part of them, at least - necessary for the highway system’s operation, while Internet chirps happily without the rules he’d like to impose. Most importantly, the Internet did fundamentally change the way we live our lives. You want a travel-related metaphor for the Internet? Then imagine someone inventing Star Trek-style human teleportation, and its impact on the car industry.

Now, what Mr. Lynton is suggesting (without offering any clear solutions) is imposing rules to this system that will make it easy for copyright owners (read: big corporations) to control the way their content is used and shared. Specifically, he wants to make it harder to share certain kinds of information on the Internet.

As I’ve often pointed out, trying to stop sharing is trying to fundamentally alter the Internet and it’s never going to work. Mr. Lynton is trying to instill sympathy over all the hard working people who are going to get hurt by the Internet. Mentioning Wolverine, however, and its premature Internet leak does not really help, since the movie was a huge box office success.

Ultimately, even if he were right about the entertainment industry going down in flames because of the Internet (instead of its unwillingness to adapt to the Internet), it wouldn’t matter; the forces that are at play here are too strong to be changed by trying to regulate the Internet in the way he wants, especially 40 years too late. He, and everyone else involved in the entertainment industry should try to help their businesses, as well as businesses that depend on them, adapt to the new situation and make the best of it, instead of, well, whining.