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Theater Owners Shouldn’t Count on the MPAA to “Protect Jobs”

January 25, 2012 , , , ,

Former Senator Chris Dodd has been buttering the popcorn of movie theater owners since becoming Hollywood’s chief lobbyist. So it’s not surprising to see the National Association of Theatre Owners (NATO) and the MPAA commiserating together over what happened to SOPA. They’re united in the delusion that the revolt of Internet users was started and orchestrated by Google–it’s more comforting, no doubt, to paint a large corporation as the bad guy, instead of facing up to the reality of a populist revolt against your own greed and overreach.

Echoing what’s become the most common lobbyist talking point, NATO argues that piracy is “stealing jobs from my members. It’s not Senator Dodd’s big wealthy studio executives, it’s the 160,000 Americans who earn on average $11 an hour at my cinemas. Those are the jobs at stake.” But NATO should not kid itself that the MPAA is concerned with creating or protecting jobs its members’ employees. As Will Wheaton argues, the MPAA is not even concerned about protecting Hollywood jobs. It uses creative accounting and “runaway production”–moving film production far away, often enabled by government subsidies–to boost profits, not jobs. (It’s always worthwhile to remember that trade associations, even NATO, speak for the interests of owners and management, not employees.)

As a matter of fact, the MPAA recently fought to get a regulatory concession from the FCC, “selectable output control,” that gives its members the right to shut off parts of viewers’ TVs remotely. This is purportedly necessary to allow them to show newer movies through video-on-demand. NATO opposed the push to allow Hollywood to do this because it “could have a devastating effect on the member companies we represent.” When the FCC gave the MPAA its wish, Nikki Finke wrote that “Today’s action allows the major movie studios to undercut the entire process of theatrical release. It would put the struggling cinema chains virtually out of business.” The MPAA’s devotion to theater jobs is not exactly solid as a rock.

If I wanted to come up with a caricature of an innovation-hating, protectionist trade association I’m not sure I could invent one as extreme as the National Association of Theatre Owners. Faced with video innovation, it argues for “caution in tampering with a business model that clearly works,” arguing that “It would be irresponsible to put today’s successful model at risk by introducing a potentially destabilizing change in the existing windows platform.” Instead of thinking of ways to compete with Netflix and Redbox, it calls them “bad business models.” (Bad for whom?)

Needless to say I’m not in favor of counter-productively “protecting” jobs by protecting old business models. It’s good that Hollywood wants to experiment with increased video-on-demand. (It’s just that studios don’t need a remote-control off switch on viewer’s DVRs to make more movies available, and they shouldn’t be surprised when there aren’t many takers for $30 “rentals.”) The best thing Hollywood can to to fight copyright infringement is to stop depending so much on artificial scarcity and unsustainable “windowing” business models, and they should do this whether or not the theater owners agree. In fact, if you take the MPAA’s “infringement=lost jobs” rhetoric seriously (don’t), then getting rid of windowing will protect more jobs than any number of domain name redirections.

Talking about “jobs” has been a great strategy for the MPAA, winning over unions, theater owners, and many politicians to their side in the copyright wars. But ultimately a pro-jobs policy is also a pro-innovation policy. As distribution opens up and barriers to entry go down, the total number of jobs in and related to the entertainment industry will go up. The profits might be spread around more evenly and the most successful companies might not be MPAA members. But the actual workers whose interests both the MPAA and NATO purport to be defending will be better served by creation of new jobs rather than the protection of incumbent industries. Even the MPAA, in its incomplete and frustrating way, realizes this (at least when it is not the incumbent industry in question). NATO would be better served if it truly served the needs of its owners by helping them adapt to a changing marketplace rather than fighting against that change. Doing this would be in the best interest of its members’ employees, too.


About John Bergmayer

John Bergmayer is Legal Director at Public Knowledge, specializing in telecommunications, media, internet, and intellectual property issues. He advocates for the public interest before courts and policymakers, and works to make sure that all stakeholders — including ordinary citizens, artists, and technological innovators — have a say in shaping emerging digital policies.